Labor Efficiency on an Ecoat Line

Event Time

Wednesday, April 29 3:30 PM - 4:00 PM

Event Information

Title: Labor Efficiency on an Ecoat Line


Labor rates are measured by most ecoat operations.  But is there a better way to track labor efficiency?  Learn how Max Coating uses a Labor Efficiency Ratio (LER) to better understand what's happening on the shop floor and what really drives profitability.

Type: Learning Station II: Management


It’s no secret: ecoat lines can be expensive to operate.  A successful plant must cover the cost of materials, utilities, repairs and maintenance, not to mention the capital investment associated with what are often complex, multimillion-dollar lines.

But the single largest daily expense for many ecoat operations is labor.  Most ecoat managers track labor religiously.  Usually this is expressed as a labor rate as follows:

                                                                Labor Rate = Labor/Revenue

For example, if a shop spends $2,000 per day on labor and produces $10,000 in revenue, the labor rate would be 20%.

But is it possible labor rates don’t tell the whole story?  Are there other metrics that might include labor but help better define success and failure on the shop floor?

At Max Coating, we think the answer to these questions is “yes.”  In fact, we developed a metric we call Labor Efficiency Ration (LER) to tell the real story of how our lines are performing.

This presentation will describe what LER is and how Max Coating uses it as a powerful measuring tool on a daily, weekly and monthly basis to guide efficiency, continuous improvement and ultimately profitability.