Mitsubishi Motors North America — Manufacturing Division
Major Auto Manufacturer Controls Labor Costs and Improves Workforce Productivity with Kronos
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Mitsubishi Motors North America, Inc. – Manufacturing Division (MMNA – Mfg.) is an automotive assembly operation located in Normal, Ill. MMNA – Mfg. is the only Mitsubishi Motors passenger car assembly plant in North America, with a current production capacity of 135,000 vehicles per year.
MMNA – Mfg. decided that its new workforce management system had to do more than just collect time and attendance information. It had to support and quantify daily improvements in the productivity of its workforce to help ensure future competitiveness. And Workforce Timekeeper™ was the easy-to-own solution MMNA – Mfg. was looking for. "A key factor in our choice of Kronos® was that we could use the standard product without customizations," recalls Accounting Manager Andy Whaley.
With Kronos, MMNA – Mfg.’s managers are able to compare actual labor information with real-time data from the budgeting system. And they’re able to identify excess headcount in various areas throughout the plant. Having the right number of associates on the line has contributed an impressive improvement in the plant’s HPV (hours per vehicle): a $1.3 million savings over a 12-month period.
Automation eliminates productivity-killing processes
Before Kronos, MMNA – Mfg. relied on a manual system for timekeeping, payroll, labor reporting, and other workforce management needs: paper timecards were collected by supervisors. They were totaled and processed for payroll. And then they were sorted and compiled to produce labor reports. The process was labor-intensive, time-consuming, and ineffective as a labor-reporting tool.
Enter Workforce Timekeeper. "We selected Workforce Timekeeper along with Kronos’ data collection devices," recalls Whaley. "Now our employees only have to swipe their ID badges through these terminals, and their labor information is immediately captured and stored. It’s fast. It’s easy. And it helps us make management decisions for each shift."
Consistent application of pay rules minimizes compliance risk
Consistent application of numerous — and sometimes complex — pay rules has made addressing the needs of a unionized workforce much easier for MMNA – Mfg. "As an automotive assembly operation, we must comply with the MMNA – Mfg./United Auto Workers (UAW) Collective Bargaining Agreement," says Whaley. "Our Kronos solution has streamlined this process and made it easier to support these requirements."
"We began by documenting all of the pay rules, including third shift maintenance, seven-day operations, and other issues like 24-hour rules," Whaley explains. "Once these rules were documented by payroll and verified by HR, we worked with our Kronos consultant to configure the pay rules to our system. With Kronos, we are assured the pay rules are applied consistently with minimal exceptions."
Real time reporting reduces labor costs
MMNA – Mfg. didn’t stop with improving its timekeeping and payroll processing functions. It also upgraded the way it uses labor data for reporting. With Kronos, the company can now access real-time, on-demand labor reports. This means the end of picking up reports in a central location and distributing them around a 2.5 million square foot facility. And the dawn of actionable reporting from the convenience of each manager’s work area.
"Supervisors can produce an hours report and post it for associates to review, ensuring that employees’ punches are collected and associates will be paid correctly," Whaley remarks.
MMNA – Mfg. also enjoys its ability to easily access high-quality, granular information to generate reports on overtime hours. Managers use Workforce Timekeeper’s sorting capabilities to see which employees are working overtime. A single, accessible report is quickly generated and helps management make labor better decisions. "We strive to be a lean and flexible organization, and Kronos enables us to target our cost-reduction efforts," Whaley says.
And that’s not all. Another example of improved labor reporting is the use of the authorized versus actual report. "It’s our most effective report, and gives us an instantaneous, real-time view of how each group and section performed — actual hours versus authorized hours — for the most recently concluded shift," says Whaley.
Reducing excess hours means big savings
Instant access to labor data helps managers determine on a daily or weekly basis if they have more manpower than necessary. If this occurs, managers ask volunteers to opt out early for the day. This process saves the organization labor hours. And employees enjoy the occasional opportunity to go home early.
"We can easily generate these reports each day, and they help us keep the appropriate amount of associates on the line," explains Whaley. "This has enabled us to save between $50,000 and $100,000 in labor costs each month — a major part of the overall savings we have realized with Kronos."
"The results are very exciting," Whaley concludes. "Accountability is way up, and excess hours are way down. Workforce Timekeeper has given us the labor reporting tools we need to support operations management and continue implementing productivity improvements."