Unintended Consequences of Cutting Technical Headcount

This post was written by Stephen Malyszko, president and chief executive officer of Malisko Engineering, Inc.

In the automation community, we routinely hear that reducing head count is one of the better ways to cut operational costs in a manufacturing plant. From some perspectives, this assertion makes sense, especially if management is looking for short-term cost reductions to bolster the plant’s net operating profits, meet their performance goals, and receive their annual bonus. There is nothing wrong with this approach as long as it is balanced with a longer-range plan for addressing the unintended consequences of cutting head count, particularly if technical resources are the ones facing the ax. Short-term cost reductions are routinely nullified and overwhelmed by reduced operational efficiency and increased project costs when the focus is purely on reducing head count. Let’s explore what has been occurring for at least the past 15 years as a result of cutting technical head count.

Replacing technical resources

When technical resources leave a manufacturing plant, they often take along tribal knowledge of equipment and technologies, where to find documentation and troubleshooting techniques, and who to talk to for answers or to get something done, as well as good working relationships with the personnel who run the facility and production lines. Through these attributes technical resources have, behind the scenes, helped keep the plant’s production rates, quality, and operational efficiency at positive levels. Technical resources tirelessly performed daily tasks with pride, because they knew they helped keep the plant running smoothly.

When the decision is made to cut technical head count, however, that tribal knowledge, that behind-the-scenes work, that pride in accomplishment, walks right out the door as the technical resources complete their exit papers and pass through the plant’s security gate for the last time. From that point forward questions quickly arise, such as:

  • Who will the third-shift line operator call when a machine stops running?
  • How long will it take before a technical resource comes to the downed machine to help get it back up and running?
  • Who is going to make sure we have the latest software and firmware revisions in our controllers, human-machine interfaces, and instrumentation?

What plants routinely experience is that after a technical resource is gone, production efficiency is directly affected when the line has less support to keep it up and running. When technical head count is cut, operators, particularly those on second and third shifts, struggle with getting timely, and sometimes qualified, technical support. A downtime incident that used to take 10 minutes to fix now takes hours. Or, in some cases, the fix must wait until first shift of the following day, because the decision was made not to have technical-support resources on the back shifts.

The high-level discussions about the merits of cutting technical staff should include the cost of downtime, the cost of missed opportunities, and how to make up time lost waiting for the right technical person to show up and help fix problems. When these issues are examined up front, companies are more likely to view keeping technical assets as a worthwhile risk-avoidance investment to the plant and company.

Not keeping documents and drawings up to date, because that costs money, adds no tangible value, and is, therefore, an unnecessary expense

This statement is true as long as the plant operates smoothly with no issues; no one plans to make any additions, modifications, adjustments, replacements, or demolition in the plant; or the plant has no requirements to meet any regulatory, federal, state, or local compliance rules or policies. This rarely, if ever, occurs in manufacturing automation. A plant’s production, scheduling, quality, utility, and maintenance groups work to constantly improve the plant’s operational efficiency through change. Accurate documents and drawings are an essential first step to having successful projects that are on time and within budget. When the directive is given to stop updating documents and drawings, projects suffer. More time and money have to be spent retroactively investigating and updating the information before proceeding with the work. More time and more money is needed in the long term when information is not kept up to date in the short term.

Let’s work hard to carry the message to management that cutting technical head count only costs the company more in the long run. Keep your technical resources on the payroll. They help you make your year-end numbers, so you can get your well-deserved bonus.

About the Author
Stephen Malyszko is president and chief executive officer of Malisko Engineering, Inc., which he founded in 1994. He has a master’s degree in electrical engineering from Colorado State University and was honored as their 2011 electrical engineering alumni of the year. Malisko Engineering is a certified member of the Control Systems Integrator Association.

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A version of this article originally was published at InTech magazine.

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