7.2.1 2nd Shift and Overtime
Each production line has a 1st Shift Capacity, which is the number of units, in thousands, that can be produced each year by running a single eight hour shift. Companies can produce up to twice the 1st Shift Capacity by running a 2nd Shift and/or Overtime. 2nd Shift means workers arrive at the end of the 1st Shift and work a full 8 hours. Overtime means workers stay on past the first 8 hours of their shift.
In the Production area’s Workforce Complement row, the This Year (%) cell conveys the percentage of the Needed Complement that will be hired this year. 100% means that every job slot will be filled. While you can enter a percentage in excess of 100, the system will reject this entry and only hire the Needed Complement.
As a matter of policy, your company might want to hire fewer than the Needed complement. For example, a company buys automation that will become operational the following year. The managers know that next year the company will not need as many workers. The company can save recruitment costs this year and separation costs next year if it asks 1st Shift employees to work on Overtime versus hiring 2nd Shift workers who will be let go in a year’s time.
However, Overtime can erode a company’s Productivity Index.