The Labor Development Group (LDG), was formed by individuals who invented, refined & implemented Simplified GainSharing systems at various distribution centers throughout the USA. They soon dedicated themselves to the concept of dramatically increasing warehouse productivity & quality by using this exceptional incentive system based on the principles of individual performance, coupled with sliding scales & no caps.
LDG implemented Simplified GainSharing in numerous distribution centers, some of which are now in their sixth or seventh year of implementation, all successful with high performance workforces responsive to Simplified GainSharing. These operations benefited from this labor consulting to the tune of millions of dollars in savings. The members of LDG are convinced that once a management team understands how to harness the decision making of line employees in a distribution center, a call center or hourly office environment, the sliding scales with no caps unfailingly generates significant labor savings & gainshare payouts. The secret lies in developing a consistent corporate governance; LDG calls the program the Corporate Administrator.
Simplified Gainsharing installations in distribution centers in the wholesale hardware & hardlines industries are currently averaging a net labor savings of $7,500+ per year per participating blue collar or hourly employee. To be conservative, LDG recommends DC managers use a figure of $3,500 to determine the potential annual savings for the specific distribution center or network. If your DC has 100 hourly employees, it’s safe to forecast a $350,000 annual net labor & quality savings from the use of Simplified GainSharing. Likewise, a network of 1,000 hourly employees can expect to see net $3.5 million in annual savings, as a rule of thumb. LDG is so confident in the program, that it guarantees clients a minimum of $2,500 savings per participant in the first year of implementation or your money back!
We have successfully implemented simplified gainsharing in our distribution warehouse, now we are ready to input something into our manufacturing site. Any suggestions on how to get started?
Sorry for the tardy reply, but we’ve been having some administration problems. We’ve had no direct experience with putting Simplified GainSharing into a manufacturing site, but the topic has come up before, and Ron & I are developing a few theories about how to do it.
Where there’s more ‘blue collar decision making’ occurring in distribution centers, as opposed to factories where machines drive much of the production, we believe that several core components are transferable to factories. For example, sliding scales with no caps; focusing as much as possible on individual incentives as opposed to team; converting gainshares to an hourly wage instead of a lump sum bonus; and perhaps most importantly, seeking the workers’ ideas on how to measure individually — all these would lend themselves to a factory plan document.
This is a lengthy topic and perhaps too lengthy for a blog response. We would be happy to discuss it in a conference call, if that would be helpful. As always, all information obtained from blog posts or resulting from blog posts, will be free of our usual consulting fees, so feel free to request a phone call from us.
After our chat last week regarding implementing Gainshare into our manufacturing site, I went ahead and followed your suggestions of keeping to the core features. We got a few of our key people together and presented these features to them;
1. Keeping to as individual an incentive as possible
2. Using the sliding scale incentive
3. Adding it to their actual wages
4. Keeping the payout time as short a possible
5. Making sure there is a buyout component
6. Looking to get 2/3 back in savings.
As I conveyed to you I was concerned that the machines controlled too much of the timing to the point that it would be difficult to get any improvement out of the team, however the more we conversed it became clear that there were in fact a number of areas that the employees themselves thought there was potential to improve on (just as you suggested, I would find). Yesterday we set some standards to compare against, next week I hope to complete the booklet so we are all clear on the terms and conditions of the program and hopefully within 2 weeks we will have the program up and running.
I have to say the team was so excited about the idea of implementing the program. They have all heard how well employees from our distribution location have been doing on the program and they are definitely eager to join. Management is thrilled that I had a chance to speak with you and that you were able to guide me through how to make the program work outside a distribution warehouse as they have seen the success gainshare has brought to our warehouses both in dollars saved and employee morale. Money for raises hasn’t been so good for our employees over the last few years, but gainshare has definitely quieted those concerns.
I look forward to sharing with you how gainshare has benefited us in our production facility.
Pat, I would again like to thank you for taking the time to call me and help me get gainsharing into our Production facility.