Time tracking for job costing?

Hello All,

I'd like your ideas and suggestions for a good solution for tracking employee time for job costing purposes.

My current situation is that our business is growing (from a two man shop 3.5 years ago to 7 guys now), which is good, but has kept me hopping to keep up with the processes necessary to keep on top of things.

We are a fabrication and machining job shop and our work typically has a lead times ranging from ASAP to 3 weeks.

Job travellers would be great, but I haven't figured out how to implement them in a useful way due to the fact that we typically have several people working on the same job at the same time, but in different departments.

Ideally I would like to know how much time is spent per job, and the distribution of time between departments and employees. I.e. saw cutting took 2hrs, plate cutting was 1.5hrs, machining was 4hrs, welding was 2.5hrs etc. Tracking the employee time would give me a better idea of where to concentrate training time etc. I'm thinking that the ideal system would also tie in with a timeclock system for employee time and attendance to simplify payroll.

So, ideas? Things to avoid? What have you tried that has worked well? Please share.

Thanks in advance.

Leviathan

My 2 cents..

DO NOT waste people's time gathering data you are not going to use/analyze. Nothing pissed
me off more than wasting time filling out paperwork that is just going to sit and gather dust.
If its going to be used and analyzed to make things better.. Fine...

I'll tell you what didn't work for me.. Having people log their own time... They would forget, and
then you have no data..

Start and stop times didn't work either, especially if they were doing multiple things..

People time and machine time... 2 different things and tough to figure out how to time/cost it out..

If its an hour run time, and one guy takes 2 minutes to swap a part out, do you record the 2 minutes, or
do you record the hour?? Setup time eats up machine time and people time.

Need to throw actual productivity and part count in there too..

I found the easiest thing was to have one "supervisor" fill out paperwork at the end of the shift and make a
best guess as to how much time was devoted to what job. Didn't matter anyways, nobody ever looked at it.

Good luck... Its not an easy thing to do in a job shop..

Agree with BobW said, don't keep track of data that you will not use. I wrote a program in Microsoft Access (database) that keeps track of labor hours, material, subcontracting, tooling costs, vendors data and several other things. I looked at off the shelf systems (like Job Boss) but they were more suited to production. I'm a 10 man job shop that makes tooling and gages, rarely more than 5 of anything. A custom written data base works good for us. I have a 16 year history of every job we have done that I can search for any descreet character (job number, part number, material size) and use it daily to quote jobs as well as find out how close my quote was to actual time on the job. It's invaluable on repeat or similar jobs. It all started with a very detailed flow chart that was used to create the flow in the data base. You would have to write the flow chart, you may need a database programmer (and some patience) to design the data base. I've actually thought of marketing it as a product, but I'm too busy running the shop. Employees have to either record time on each job manually or on a tablet(and machine used if you want to track it). Has to be done daily before they clock out,by the end of the week, it's too late. We simply record each employees time on each job and type of work (milling, turning , grinding, sawing, EDM ,assembly etc).

Thanks for the input so far, some good points made. Also glad to hear that there is not a super obvious solution to this...at least I know I'm not blind.

Anyway here is a little more information to help clarify my goals/needs:

Mostly interested in tracking people time at present, most of our work is manual and/or very labour heavy vs pure runtime.

Also general shop productivity is easy enough to measure because we track our other costs fairly closely so we can usually tell week over week if things are profitable or not.

Tracking people's time is primarily so we can identify the jobs that we do well on vs those we don't so we can determine the cause and make necessary corrections if possible. Training being a huge part of that, most of my staff has less than 5 years experience and those have more production based experience.

I'm not interested in trying to track to the minute or have a ton of paperwork that is going to drain productivity. But need something ore than I have now so I can better identify the losing jobs and have a better handle on the work distribution throughout the shop.

As you have both said, tricky business.

Keep the advice coming.

Thanks,

Leviathan

Sent from my SM-N900V using Tapatalk

i record time on longer jobs using excel and it will auto calculate time average and count number of times recorded. thus i can know what average of last 50 times a part is done.
.
i record any problems that caused longer than normal times as a trouble shooting tool to know what needs work to fix the problems from occurring again
.
some people refuse to record times mostly cause it might show them wasting time at times. same as some people refuse to record dimensions of part as if parts are out of tolerance they would be admitting making out of tolerance parts or if they lie they might later be found out to not be telling the truth. and some people are just lazy or have no discipline and refuse to do anything they think is extra waste of time work.
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i find if you tell workers they will get more pay raises if they cooperate and not get pay raises if they do not cooperate or team players get more pay raises then they will not view it as a waste of their time

in addition to what Bob said, I worked at a place where we had to fill out our time cards with how much time we spent on each job, everyday. Complete PITA, but the claim was they needed the data to quote things more competitively. That's all nice and makes sense. However, the owner would be standing there every morning with a bunch of time cards in his hand, bitching to everyone, Why did it take 2 hours to set this up?, why did you only run 10 of these in 8 hours? etc. So you can't have your cake and eat it too.

The following is what I understood about your problem.

You have several people working on the same job at the same time, but in different departments and you want to know how much time is spent per job, and the distribution of time between departments and employees. Most of your work is manual and/or very labor intensive. You need something other than what you currently have so that you can better identify the losing jobs, have a better idea of where to concentrate training time and have a better handle on the work distribution throughout the shop.

Here are my opinions:
It is a common feature of fabrication shops that multiple workers simultaneously work on the same task of a job or multiple tasks of a job. We do not usually find such feature in machine shops which make parts.

If your workers can record, with the help of a shop floor data collection system, their start and finish times on each production task they work on, then you can meet your objective. An electronic shop floor data collection system can help you. See whether software tools like Tractivity can help you and see how much manual effort is needed to run them on shop floor. In fact, job tracking information greatly helps even production scheduling.

If you have a fairly good estimate of how many hours each task totally takes, then a good scheduling tool can also be helpful. It can show you the distribution of time between departments and employees (based on the estimated times) and supports what-if analysis for identifying training needs for certain skills. This can be done by tools which can optimally assign multi-skilled workers to production tasks as discussed on the page, Scheduling of Multi-Skilled Workers .

At my first real job we kept a simple time sheet and noted time on a job, with a symbol for function like g grind, b Blanchard, M Mill, Dt drill & tap, error if we massed up a job. We were even asked to note excessive time in the pot like being sick.
Shop was 20 to 30 man most of the time. Time sheets only took a small amount of our time and let the owner know bidding and if there was a problem procedure that might be fixed.
The day boss was the owner's son in law and also a worker.
it was a team shop and if having a problem anyone/everyone was quick to help.
If you did something stupid.. "clean machine" would be often noted so not killing a job bid with an error..

The thing I hate about any paper system used on the floor is that someone, somewhere has to enter this data into your spreadsheet or whatever.
So its easy and fast on the floor but you waste time in the office.
Used PCs are cheap. You can put them on the floor in many places and let the operator directly enter the time into a spreadsheet.
A touch of VBA and it's just as fast and easy as noting it on a piece of paper and you eliminate the overhead.
Don't create a paperwork form jungle. Don't track or record information you will rarely use.

I think one should track oops to the job, it happens and has to get paid for somehow. Machine Clean would be a bad place to put this time as others will not get a grip on reality. Deal here is the job lost money and should show it along with notes that help understand how and why a oh-poop occurred.
One should never have to hide or bury the normal human flaws that pop up in the process. Start doing this and you are lying to yourself and everyone else.
Sometimes tracking is too focused on "making numbers". We all puck up once in a while, this should be accepted and welcome.
Bob

My advice to you is to avoid costing your jobs based on standard cost accounting methods as your post "suggests". You are at a cross roads...will you pony up the dollars to resource the collection of granular detail needed to squeeze cents out of your team members? Or will you determine ways to make your team members more successful, safe, efficient and effective? One investment can lead to soul crushing minutia...the other to inspiring and trusting others to support your growth strategy.

I highly suggest that you consider measuring your team's performance via a sales/employee measure or some sort of rate that suggests you are growing and they are supporting the growth.

Some great resources out there to talk to...look up Jerry Solomon or Brian Maskell's material to give you some ideas. I have personally worked with Jerry and I highly recommend his material as it will give you a no-nonsense alternative to going down the road EVERY freaking company has gone down as it relates to job-shop costing.

If you have other questions...PM me.

Congratulations on growing! You are really achieving something. Good job!

Do not inhibit your employees with paperwork. Very bad. Have your employees do what they do, weld, bend, whatever. Do NOT have them do anything except what they do.

#1 Rule: profit is a function of chemistry. Chemistry is magic. Keep that chemistry flowing!

Management: you can see what everybody is doing. Walk around. Forget papers. I can, in a glance tell what everybody is doing where I work. You should be able to do the same. If you cannot SEE what everybody is doing, retire.

Focus: the biggest problem a fabricator faces is doing a lot of low profit jobs. The key to making more money is to focus on high profit jobs. Focus on your core skills and only take jobs that mesh with those skills. Don't let yourself get strung out working on credit for a big client. Focus on what you do best, reject all the rest, and sue people who don't pay in 30 days IMMEDIATELY. I know a guy who went bankrupt doing a big job for AMC Theaters and he went bankrupt when they went bankrupt. Don't follow in his footsteps.

jscpm said:

Congratulations on growing! You are really achieving something. Good job!

Do not inhibit your employees with paperwork. Very bad. Have your employees do what they do, weld, bend, whatever. Do NOT have them do anything except what they do.

Click to expand...

I agree with a lot of what's been mentioned here but especially like this post. I'll say it this way: DO NOT implement any steps at data collection that distract from the task at hand (i.e. making parts). Even if you get a "fancy schmancy" ERP system that has the capability of "scanning" (i.e. clock in & out), SKIP THAT FEATURE (it just slows the work down, workers can skew the #'s to some extent, and the only reason to do it in the first place is that the work is taking to long to get through the system so you can tell where it is).

Here's the best thing to do:

1. You quote your work (or at least I'm assuming you do) so you have some idea on how long the work at least "should" take.
2. Figure out some way to track your performance, ideally weekly. Since some of your jobs are up to 3 weeks, this will be a little inaccurate but take the jobs that got done that week and then compare them to the total hours you paid people who make up the quoted work. If you can, break this down by department (saw, cut, weld, machine shop, etc.).
3. Over time, you're looking for trends. Ideally, you want to show that "hours paid" (off your time cards) are less than "hours sold" (quoted) meaning that you're doing better than "par". But even if they aren't less, you can still monitor week-week on how they are trending.
4. Take those numbers/trends and start real "systematic" problem solving. Where is set-up taking too long? Where is machinery braking down or are people waiting on info? Are some jobs just quoted too short or too long? Take all this info and relate it back to how you quote and how many jobs you win/lose.

The premise here is that the war (your business) is not won/lost over one battle. It's won/lost over a bunch of battles and you need to see what kind of mistakes are being made. Involve employees in the effort on the problem solving end which is "not having them make parts" time but is better then having them just track data.

This is just a very short description I'm writing with a severe head cold so hopefully it makes sense. Maybe I can add this: If you continually look at it from the "job by job" end, you'll end up with a bunch of rationalized excuses where you can easily say "Oh the mill went down", "we ran out of material", etc. where you want to find out which one of those are happening a lot in a what that' effecting your business.

Hope this helps. I know it works as I've helped several shops implement this kind of a basis for problem solving.

The Dude

This issue is coming up in our shop right now. We are a startup and if we don't capture some real costs we might be losing money we don't know about. I was a contractor in my first career. I had about 18 guys in the field and a large part of our work was time and material. If we didn't capture the time and the material we lost money fast. What worked best in that environment was an expensive 3 part with two carbons time and material sheet. Employees kept one copy and had to turn in the other two every day, no end of week BS. At the end of the job the customer got a copy with the invoice and we had a copy in our files. To eliminate losing money from misfiled timesheets we entered the job number, sheet number, hours, and materials into our computer (1979) and after that a secretary could handle the billing.

Next time around I started a manufacturing company. We really struggled with cash flow because we built equipment for the commercial greenhouse industry which is extremely seasonal. When we asked the SBDC to help they told us small companies never know what their true costs are. Our system was simple. The shop foreman typed brief job instructions and quantity right on a time card for every part we needed to make. He assigned the task to a shop guy and handed him the card. If two guys were working together they each got a card. They punched in and out until the task was done and handed in the card to get another task. Our computer programmer wrotw us a little program. You entered the in and out times and it did the total time calculation for that card. The SBDC consultant was shocked at how accurate our costing was. The cards went in the file by part number and we had a record from one batch to the next to compare.

Now we are trying something similar and we are not a job shop so all drawings come from our engineering. We are printing that time card right on the shop drawings. Part drawings have a timecard down the side and assembly drawings too. So the shop guys get handed a drawing, punch in, make parts, punch out. Return drawing to engineering with all the notes and markups. The cost gets calculated in the office and entered into the ERP system that gives us the total cost of our complex product. For tasks that don't actually have a drawing a simple timecard will be used. The key is the shop foreman collecting the drawings as soon as the task is complete. Absolutely no sitting down at the end of the week entering times! Very light additional work for the shop guys. The engineer gets the changes, notes and the labor for his design. The cost of the parts can be handed off to someone else to enter in the ERP system.

An important point. In the 30 years I've been using a computer I have never seen anyone successfully implement a process that they couldn't figure out how to do with just paper.

Tracking time . . . Are you selling minutes or parts? Don't lose track of what your true costs are by measuring worker minutes. How many minutes will you waste collecting data, compiling data, coming up with a 'time of manufacture' and then try to determine an accurate 'shop rate' so you can determine whether you made or lost money. It is too late now for that job.

Instead let your bank account track your performance by watching the bottom line. Decreasing? Then increase your quotes a little.

Red James said:

Tracking time . . . Are you selling minutes or parts? Don't lose track of what your true costs are by measuring worker minutes. How many minutes will you waste collecting data, compiling data, coming up with a 'time of manufacture' and then try to determine an accurate 'shop rate' so you can determine whether you made or lost money. It is too late now for that job.

Instead let your bank account track your performance by watching the bottom line. Decreasing? Then increase your quotes a little.

Click to expand...

Sounds good, when you add up the winners and losers you made a little money and are happy. Me,I want to figure out which ones we don't make money on and stop doing that kind of work. I don't mind working hard. I mind a whole lot working hard for no money.

I used to work in the commercial greenhouse industry. I had a customer that would toss about 10% of what they grew every year, because they couldn't accurately predict what would sell the most of. I kept arguing that the 10% they tossed ate 100% of the profit from about 30% of what they did sell. So if they grew a little less than they knew they could sell they could do 30% less work for the same profit. They tried it. They worked less hard, grew a better crop because they weren't overloaded, charged more money per unit and made more money. They got the tossed material down to less than 1/2 of 1 percent!

Bad jobs in your shop have the exact same effect.

issues with 7 men ? you are jocking, right ? you are the boss or what ?

just take a break, relax your mind, and i am sure that you will figure it out

to the original question:
. you will NEVER get your employees to accurately track their time. i have tried doing it every way possible
. the best solution is to do it yourself once and set a baseline then multiply that part of the baseline that is employee labor by .35 to .40 which is a labor efficiency that was the average of what i personally tracked for many years and later confirmed in a business training course

We use Job Boss. The guys login when they start the job and logout when they're done. If the 30 sec, to walk over and login is an issue then there's bigger problems. It tracks all the time and info you need and has many features you will find useful.

Any nr of solutions.
Any nr of motivators.

Most if not all posts re: employee reluctance with this stuff are true.
And I agree on the comments on real lack of numbers/typical company, that I have also referred to multiple times over the years.
Both small and large companies.
Large companies do worse than small ones, in fact.

I am very, very experienced in this type of stuff, and we grew several companies, up to a public IPO, using this data/efficiency stuff well.
I know of no ideas or solutions, that are generic.
Most stuff is custom, somewhat, since details vary, and details do determine, ultimately, Your profitability.

Large-corp-type stuff sucks monkeyballs.
Is mostly very costly, and very bad, technically/resource wise.

But employees are also people, and actually do also understand pretty well where their paycheck really comes from.
Profits.
Employees are quite willing to go through a little bit of extra pain..
when management makes clear the reasons, will help/change any parts too onerous, goes through it with them, etc.

Most of my management / IT stuff, in the mentioned "productivity" stuff,
means most people usually get a very disfavourable view of me.
Most of it is seen as "terrible".

It is extremely profitable, to the company, and results in
-excellent uptime,
-excellent worker productivity,
-excellent profits.
This allows the company(ies) to grow, and (more) people to get paid (more).
I very much dislike the seeming-ogre role as such, but very much like the profits derived from it.
(Ogre substituted for a**e).

Generally, people want to work in ways that are not too productive - mostly since they are accustomed to it.
Thus, they resist change, and ..
very much resist change that adds them extra work, of a silly, dull, technical nature- as seen by the workers.

They do not accept that the small extra time, minutes per day, saves the company typically 100$ or more, per day, per person.
Explanations are mostly futile.

I could add multiple anecdotes and experiences.

One example.
I cannot be called, will not answer, by telephone.
Email only.
This forces everyone to write what they need, why, when, and what was wrong etc.
*Everyone* resents that.
THEY must then prepare their case, collect the data needed, explain their problem, properly.
Because the email record is there, and it is easy to refer to it, later, in case of complaints about lack of response/solutions/etc.

*Everyone* would much rather waffle on the telephone, not have actual data re: actual problem, case nr, what is affected, symptoms, etc.
But when they bother to define the problem, it is solved in about 1/10 the time.
Counterpart:
This also forces (good, complete) responses, fast, since the emails clearly show if a response/solution was not done in a timely manner.

I would suggest, initially, this.
Put cardboard blanks with jobs. Yes, on paper.
Everyone needs to sign their own estimated work/whatever data, per job. Pass it with the units, daily.
NOT per unit made.
2 secs per day, per person.

*Management* must collect them, initially, every day.
They must read them. Comment on them. Every day, initially.
Only way to get employer buy-in.
"Guys, this is important. We really need to do this.."

Later, after 30+ days, it is a routine and any secretary etc can do it.
And someone somewhere can enter whatever from the cards in any IT stuff you finally develop.
If You do.

Minimise IT.
And what You do, do it well. This makes it expensive.
Thus, minimise it.

It is very much more profitable to spend say upto 3000$ / workstation / person on say IT station/keypad/iPad with keyless bluetooth user-recognition, than all have users spend a minute or two per day on some silly password/username scheme.
And most times, the 3000$ can be bought for 500$.

More-expensive is not better, by a long shot.
Cheapest-purchase is often also expensive.

Another real-world example re:costing.
Not directly related, but illustrates what I referred to re:efficiency.

I recently spent 18.000€ on a printer.
We print a fair bit, so a full set of cartridges/month at 500€ /month, from HP.
"Compatibles" did not last, in heavy use.

Mostly to get the very-fast, very-good dual-side scanning capacity, with a dedicated hardware processor to compress PDF files.
It is an extra piece of hw, seldom sold, of about 2000€ iirc.

We were spending == 3 hours a day, work hours, scanning stuff. On a 2000€ printer.
Paper jams, relatively common.
Affecting 10 plus workers productivity.

The big machine scans at 100 pages / minute, both sides single pass, at 300 dpi.
The PDF files are 1/4 the size.
And yes, this is really important, since we do about 350 docs per day.
Database is about 20GB/30k docs.
Scanning is now a non-issue, less than 15 minutes per day.

Total costs dropped from 500€ / month to under 200€ / month.
Including the printer (free on pay for use).
60 hours work time saved, at == 3000 € value/month.

Moral:
Details are critical.

Often, some things and decisions that seem obvious or everyone-does are wrong.
Question everything.
Question Your assumptions.
YOU can potentially do better than boeing/IBM/google/Telefonica/ATT.
Yes, it is possible - on some things.

E.g. the core skill of boeing is selling airplanes/finance/reliability/political connections.
They do really well at it.
Since that is not what You do, it is perfectly well possible for You to make profits in what is not their core skill.

NB
I made no suggestions on practical improvements You might do.
We have no details, and besides it gets into sensitive territory.

I tried to point out ways of progressing, and real-world examples of real value being created, in a significant manner, outside the typical box.

This is a bit like the auto industry.
They buy expensive machines for too much money.
The cost/piece is too high.
Most people here, or many, could make the typical auto component cheaper in decent medium quantities.

But, crucially, the auto companies would never buy from them, nor should they, perhaps.
There is a very-low risk of failure, but real, from a small-time component supplier with cheap machines.
If and when such problems occur, the related cost to the auto company is huge.
A delay might cost 1M$/hr, with 10.000 - 20.000 workers not being productive, due to a single part being delayed or not up to spec.
Thus, the auto manufacturers cannot and do not take the risk, and prefer to pay double to bigger / better resourced companies.

My POV is somewhat controversial.
Also driven by the fact that mostly, I previously competed with the large global companies, mostly doing better than them, for lower costs at end-user prices.
And a better solution, by technical fundamentals.