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Operational Research

You can always be more efficient

Operational Research is all about using analysis to improve decision making. Dr Angela Moore uses mathematical modeling, statistical analysis, optimisation, sequencing and scheduling techniques to create simple heuristics you can employ to run your operation more efficiently.

angela@oranalysts.com

Using Your Absence Rate To Become More Efficient

What do you use your Absence Rate for? Most managers use the Absence Rate as a bench mark: do we have the same Absence Rate as other departments, companies, national average, etc. But Absence Rate is far more than a statistic or target. Your Absence Rate can help you predict and manage the future.

Absence Rate is simply a percentage; it’s a tool to help you manage your business, group or department. However, if you don’t understand what it is telling you then you can never use it to its full potential.

Absence is remarkably stable, what happened last year will happen this year if nothing has changed. So if you have not changed personnel, procedure etc. Why should this year be any different to last year?

This means that you can use last year’s Absence Rate to estimate what will happen this year. You can use your Absence Rate to plan resources, your Absence Rate will allow you to quantify the problem and create an Absence Management Plan to cope with any probable scenario.

So if your Absence Rate is 3% and you have 30 staff on shift how many do you expect to be absent? Well most managers would take 3% of 30 staff and say on an average shift I would expect that 0.9 people were absent. That is a very good starting point. However because you are looking at the average you can’t see the distribution. This limits you. If you only have this statistic then that is all you can do. The average manager would look at this and say that I will have 0.9 of a person absent from each shift therefore I should schedule 31 to be on shift and then I can cope.

However the reality is somewhat different than the average. In reality a 3% Absence Rate with 30 staff on shift means that there is a 40% probability that no one would be absent from a shift at all. So that means that on 40% of the shifts per year you would be overstaffed. Being overstaffed is inefficient and expensive but also, if you don’t have a job for them, it is disruptive to the other people on shift. They are then often reorganised so the extra person is not wasted, which takes time.

Then there is a 37% probability that one person would be absent from a shift. So 37% of the time you would be correctly staffed. This means that on the remaining 23% of the shifts you will still be understaffed because more than one person is absent from a shift. So you haven’t solved the problem, you have actually incorrectly staffed more shifts than if you had ignored absence entirely because now you are incorrectly staffed on 63% of shifts, where as you would have been incorrectly staffed on 60% of shifts if you had ignored absence.

The problem is that Absence is costly. Absences can cause multiple problems for an organisation. They include:

  • Financial costs,
  • Stress,
  • Fatigue,
  • Loss of production,
  • Loss of business,
  • Lower morale,
  • Poor reputation,
  • Poorer products,
  • In extreme circumstances they can put lives at risk and endanger the environment

So ignoring it is not an option for most organisations. Alright, so if putting one extra person on shift was not the ideal solution, what is? Let’s go back to the Absence Rate, on the average shift 0.9 people will be absent, but this means that on some shifts you will have more than 0.9 people absent. In fact there is a 17% probability that two people will be absent from a shift, a 5% probability that three people will be absent from a shift, and a 1% probability that four people will be absent from a shift.

If you knew the distribution of the probability you could plan your resources more carefully. So you need a way of covering for up to four people off any shift. Besides putting extra people on shifts there are lots of other solutions to consider:

  • Overtime
  • Work double shifts
  • On-call cover arrangement
  • Agency staff
  • Time off in lieu
  • Go short
  • Banked Hours
  • Use Managers
  • Borrow staff from another department
  • Temporary staff
  • Hiring additional staff
  • Bank staff
  • Sub-contract part of the work
  • Accept the reduction in income

The important point is that once you know the scale of the problem then you can organise your resources more effectively, saving money and producing a better, more consistent quality of product/service.

To help you in this endeavour we at C-Desk Technology have written an e-book “Understanding Your Absence Rate” for all managers, aimed at helping managers gain a better understanding of what their Absence Rate is really telling them and then how to use it more effectively.

C-Desk Technology has worked with many organisations round the world, to help them manage their shift operations more proficiently. A large part of this work is about managing Absence. We help companies understand their Absence Rate, and then help them create the policies and procedures to ensure that Absence never effects their operations. Our new e-book has examples of how absences affect operations and then calculating how much resource is required to manage the problem.

This e-book has look-up tables which convert Absence Rate in to the number you would expect to be off shift. The look-up tables range from 0.5-10% Absence Rates for up to 50 people on shift. The tables cover 100 shifts per year (probability), 260 shifts per year (office hours), 365 shifts per year (each day), 730 shifts per year (12-hour shifts for 24/7 operations) and 1095 shifts per year (8-hour shifts for 24/7 operations). This can be scaled using the 100 shifts per year tables to make it usable for any combination of shifts.

Understanding Your Absence Rate is available from Amazon for only £6.59.