Paramount Farms

Paramount Farms grows 100 million pounds of pistachios and 25 million pounds of almonds a year on 40,000 acres of trees in the San Joaquin Valley in Lost Hills, California. Its goal? The 17-year-old, privately held company is striving to boost its pistachio crops by 50 percent in the next five or six years and double its almond yields in three years ... all while becoming the low-cost producer of nut products worldwide.

Pinpointing product P&L

In order to achieve its ambitious growth and cost-control targets, Paramount Farms needed to know exactly how much labor was required to fill a particular order. The goal: know not only the quantity and the quality of a particular order but also how much it cost to fill.

"Under the previous DOS-based Kronos system, employees only swiped their cards at the start and finish of each shift and there was no way to quickly pinpoint the hours (and, therefore, labor costs) for an individual job," explained Gregg Maggioli, director of engineering. Although employees themselves would hop from one bag line to another to fill different pistachio and almond orders throughout the day, their hours were lumped together for a given day. "The only way to guesstimate the cost of a particular order was to tally up all the labor and products used in a day and then apportion these costs among the total output," added Tim Benshoof, plant accounting manager. "This system was logical but far from exact," he said.

What Paramount Farms needed was a schedule-based (as differentiated from part-based) system that would directly charge employees' time to specific customer orders as they switched from one machine to another, even though it was all the same product.

After researching different options for nearly a year, Paramount Farms selected Kronos' Workforce Timekeeper software as the best solution.

"So far, the training has been easy enough," he said. "We've had minimal, if any, problems with initial instruction. And very few (of the lead people) have had more than a high school education."

Looking to the fruits: savings, accountability

The payoff of Kronos' Workforce Timekeeper is expected to be significant and multifaceted when the implementation is complete throughout its workforce, which varies from a base of 800 to as high as 1,200 in peak season.

"Paramount Farms could save $1 million to $2 million a year with an increased yield of only 1 to 2 percent," Maggioli said. "This is a very realistic and achievable goal by pinpointing job costs and improving line management," he said.

"Because the Workforce Timekeeper system links customer orders directly to work schedules, the company will know exactly what it cost to complete an individual order," Benshoof said. "For the first time, Paramount Farms will be able to assess the profit and loss for each product based on actual knowledge instead of guesswork," he said.

"This is very important in terms of pricing," Maggioli added. "There may be some orders we aren't making money on. This will be a big plus for us in weeding out products that are priced too low or trimming prices on others and enabling us to be a lot more aggressive in the marketplace."

"In addition, the new system enables lead supervisors to call up employee data quickly and transfer whole groups from one cost center to another with a single click," Maggioli said. Previously, the information could be retrieved only one employee at a time, which was too cumbersome because employees switch back and forth among 10 different lines during a workday.

"The Workforce Timekeeper system also improves data access and, in turn, plant management," Maggioli said. "Because the online schedule is job-based, supervisors can check it any time and instantly get a sense of how the work is progressing. Previously, labor reports required a five-day turnaround. But now, management has instant access to what's happening on the shop floor and can spot and correct problems quickly."

"The real-time picture of labor activity has one more big benefit," Maggioli said."It eliminates the need for 700 to 1,000 pages of labor-related paperwork as well as the full-time job of a clerk who processed them," he said.

"In addition, supervisors now can post printouts of the previous day's work by the timeclock so employees can check their hours the next morning and correct any errors before their paychecks are issued," he said.

"The biggest benefit of Workforce Timekeeper is that the data is open to everybody. They can run their own queries and reports and customize them for their own needs," Maggioli said. "And we can do a P&L on every product in this plant."