Monitoring hidden labor costs with timekeeping software

////Monitoring hidden labor costs with timekeeping software

Keeping track of labor costs can be extremely difficult within a manufacturing environment. With numerous sites of operation and scores of workers with various employee designations, accurately calculating payroll costs presents several challenges to managers. Working in conjunction with Microsoft Dynamics NAV, a state-of-the-art timekeeping software solution can alleviate many of these concerns by automating time collection and payroll responsibilities.

Accounting for the hours worked by a large number of disparate employees is no easy task. For example, the Cleburne Times-Review reported that Johnson County, Texas, officials had difficulty keeping track of how long staff members were on the clock due to the high number of part-time, off-site and third-shift workers. Many employees did not operate out of any office where their time cards could be accurately logged in, leading to concerns about wasteful payroll spending. The county deployed a timekeeping software suite to gain oversight across its employees' activity, allowing officials to better monitor their time on the job.

Reducing manufacturing payroll costs
Within a manufacturing environment, these concerns can be amplified, with numerous workers stretched across entire supply chain networks to monitor. According to Manufacturing Business Technology contributor Gregg Gordon, manufacturers are often forced to estimate their labor costs, inevitably leading to inaccurate payment models and wasteful spending. One example Gordon gave regarded a scenario in which a customer requests a delivery be expedited. The manpower needed to facilitate this request may negate any increased revenue the business will see from the more expensive service and the continued support of a satisfied customer. Manufacturers can better monitor their payroll costs with a robust time-keeping software package in place.

"An automated workforce management solution brings all these scattered elements together and allows manufacturers to allocate actual variable labor costs to production," Gordon stated. "This helps account for how every labor dollar is spent, even when the labor picture includes complexities such as different wages, premium pay, partial shifts, and team allocation — or when the value stream extends beyond production and includes engineers, distribution and field support. Variable labor costs can be attributed directly to their specific products, helping manufacturers determine the actual contribution margin of their products and services."

There are numerous ways in which timekeeping solutions provide greater operational oversight and reduce payroll costs, including:

  • Oversee the progress made on production orders
  • Automate data collection processes to eliminate entry errors
  • Integrate and streamline payroll systems to reduce validation duties

For more information on improving efficiency with technology like timekeeping software, download the free white paper entitled "Keeping the Physical World and the Virtual World in Sync" from DMS today.