Overtime, extra shifts and delivery scenarios

Why it matters

When demand does not fit into the normal shift, the first reaction may be to lengthen working time. But overtime, an extra shift and a delivery arrangement require different resource conditions. In one, the existing team stays for a set time longer; in the other, all the required tasks are opened in a new time slot. If the equipment is available but a skilled inspection task is not covered, the extra hour in the schedule does not turn into production. For this reason an option first passes the workability test and is then ranked by cost. Comparing unit rates alone can hide that one of the options does not reach the delivery time or does not carry the required support.

The common boundary of the comparison is the same product mix and the same delivery date. Adding to one option, and removing from the other, expenses that the normal shift will incur in both options is misleading. Expenses arising from the additional decision are shown separately; if payment is made for the entire block, the price of only the used part is not taken. If setup, maintenance, transport or supervision support causes an additional expense, it is stated in the scope. If an expense that was not given is to be assumed zero, it is written that this is an assumption of the training calculation. A cost calculation looking exact does not fix an incomplete expense boundary. Why the cheap option is cheap must be reproducible.

The delivery level also needs an explicit denominator. The ratio of acceptable units completed on time to units demanded and the ratio of orders delivered in full to the number of orders are not the same measure. If a small part of an order is missing, the unit ratio can come out high and the full-order ratio low. Also, production completed after the delivery limit reduces the backlog at the end of the period; it does not retroactively raise the on-time delivery rate. The decision table states which measure is used. The same measure is kept in all options and late output is tracked separately. That way an increase in total production is not presented as delivery success.

Part of the extra capacity may go unused once demand is met. This slack can provide protection against uncertainty; but it is not automatically sales. If production beyond demand is made, inventory, obsolescence and change risk arise. If it is not produced, the price of the purchased capacity may still be incurred. Both cases must be kept visible. The purpose in this lesson is not to choose the lowest per-minute price in every condition. It is to make a reasoned decision by separating the cost, the remaining protection and the workability of options that meet the same delivery. If there is no data on uncertainty, no particular delivery probability is promised; only the given scenario is calculated.

Formula