Mitsubishi Motors North America Inc. recently upgraded its workforce management system to the latest version of Kronos' Workforce Central suite. IndustryWeek spoke with Mitsubishi Finance Manager Andrew Whaley about his company's experience using the software system.
IndustryWeek: How long has Mitsubishi used the Workforce Central system?
Andrew Whaley: We originally implemented it in 2000, and we've gone through a couple of upgrades since.
IW: Does Mitsubishi use Workforce Central at all of its North American business locations?
AW: Yes. We use it at our manufacturing plant here in Normal, Ill., and throughout our sales organization and our service parts warehouses. It basically covers all 1,800 of our employees, about a thousand of which are associates—in other words, plant-floor workers.
IW: Tell us about the evolution of how you've used the system through the years.
AW: We've gotten better at it each time we've done an upgrade. The first time, Kronos did most of the work for us. For the most recent upgrade, we were able to do more of the work ourselves in terms of reformatting our reports.
In the beginning, one of our main goals was to get daily time information, which we did not have access to. We were using paper time cards and then inputting them into our payroll system. So it was two and a half weeks, at a minimum, before we were getting any labor information. It was very time-intensive in terms of our payroll process. But even worse than that, all of our payroll data was old, and our manufacturing executives and management couldn't really use that data for managing the process on the floor.
So the original benefit was to be able to see that data more in real time. The next morning we'd be able to look back and see how many hours per vehicle we had used the day before. That way, if we wanted to make adjustments, we could in a much more real-time setting.
Continuous Refinement
IW: How has your most recent Workforce Central upgrade helped Mitsubishi manage its workforce better?
AW: When we first used the system, we had to pretty much write those reports ourselves. We had a DBA—database administrator—that wrote an Oracle report out of the database that was underlying the Kronos system. So we had a very technically oriented person in our systems department that was writing those [reports] out of the core database underlying Kronos.
With this latest version, we've been able to get away from those bolt-ons to the system, as we call them. Through the improvements Kronos has made, those are now more part of their core software, so our payroll people can write their own reports out of the standard Kronos Version 6.
So we've been able to move away from those customized bolt-on reports and move to more the standard Kronos product, so that when we have future upgrades, those will just transition over with it, rather than having to rework our customized reports. That's one of the big advantages of them continuing to refine their product.
IW: How does Workforce Central compare with the system you had before it?
AW: We had tried to put in a system that was based more on a mainframe system, and we had actually successfully implemented it for staff, but it was all customized written code, and we were never able to make it work for our associates on the floor. So we abandoned that effort and went with Kronos.
We really didn't have a good system for our associates on the floor previously. We were using paper time cards, and the group leaders would fill out and sign the time cards for each associate. It was not a very exact process. We had opportunities for keying errors, as well as addition errors on the time cards. There were a lot of problems with trying to track time that way.
IW: Mitsubishi has a unionized workforce, and there a lot of complex pay rules associated with that. How has the Workforce Central system helped you from that standpoint?
AW: That was a big help in terms of standardization—just to make sure that all of the group leaders were interpreting the payrolls in the same manner. There weren't major problems before, but sometimes there were complex overtime rules and so on, and occasionally you'd get a different interpretation, say, in the stamping shop than you'd get on the final assembly line.
So when we put in the Kronos system, we made sure that we were able to iron out any differences. And when you have to program it into the system, there's no gray area; it's all black and white by the time you get it done. So we were able to make sure that all of the payrolls were interpreted exactly the same way across the plant.
Leveling Lines to Cut Costs
IW: Has the system reduced your labor costs?
AW: Yes. The biggest way that we've been able to reduce our labor costs is we have a certain number people that we need in each station along the line, and each group along the line, on a daily basis, to make our planned production. So if we have a few extra people in one area and a few less people down the line, it allows us, very quickly at the beginning of a shift, to reallocate that labor so that it's being used in the most efficient manner. Maybe one group leader, if they have an extra person, will loan out that person for a day to another group leader that's short. So that's one source of savings: leveling the workforce across the lines.
A second way is that if we do have a few extra people across the whole line compared to what our production needs are, then the group leaders have the ability to offer what we call opt-out early, which means a few of the associates would be able to go home on an excused unpaid absence. They wouldn't have to take a vacation day—they could just be excused to go home. So if they have, for example, a project they're working on at home and they want to have a day to work on it and not have to use a vacation day, they can do that.
If you add up enough of those, you do develop a significant cost savings over the year, which you might not have been able to do before because you wouldn't have been able to react quickly enough to know how many excess people you had, then reallocate the labor, then let a certain number of those people go home on the the opt-out early [program].
That has been a pretty significant source of savings that benefits both the company and the employees. It gives them the freedom to go work on something that they need to work on, and it reduces the overall cost for us.
IW: Has the Workforce Central system helped Mitsubishi in terms of its competitiveness in the auto industry?
AW: Yes, I definitely think so. One of the measures that we use is hours per vehicle. We track daily how many vehicles we're producing on our line, and then analyze the total number of labor hours. And obviously the more efficient we can be in that measurement, the more competitive we are in the industry.
It enables our management to measure and then actually do something about it. If we're over the number of hours per vehicle target that we would have for any particular month, then we can adjust our labor and perhaps offer a few more of those opt-out earlys to try to bring our numbers within our target.
