Which of the following stasements about striving to reduce labor costs per pair produced at each of the company’s production farities is troe?
As long as labor productivity at a company’s production facility is in the range of 3,400 to 3,600 pairs produced per workec, then labor costs per pair produced at that facility will closely match the labor costs per pair produced of other companies having production facilties in that same region.
The easiest way for a company to achieve low labor conts per pair produced is make sure that all of its production facilities are equipped with new footwear-maling equipment rather than refurbished equipment.
Companies producing branded footwear with a 7 -star or higher $Q rating are very unlikely to achieve labor costs per pair produced that are below the industry average in a given region whereas companies producing branded foctwear with an S/Q rating no higher than 4 -stars or less in that same geographic region are virtually assured of having labor covts per pair that are betow the legion’s induntry average.
Company managers each year should seek to search out a combination of base pay increases, incentive pay per non-delective pair produced, total compensation, and expenditures for best practices training at each production facility that is projected to yout the towest feasidte tabor cont per pair prodaced.
The most effective way for a company to achieve labor costs per pair produced that are below the indurtry average is to give workers lage increases in base pay (above 10%6 ) annually and to keep incentive pay below $0.75 per non- delective pair produced
Leave a Reply