Nail Your Labor Productivity Numbers

JLC Online: Estimating labor costs for an in-house crew is the most severe challenge facing estimators. That’s not surprising, because labor cost is the most difficult number to get right in cost forecasts for many types of production. In manufacturing, actual labor cost often varies from the projected “ideal” cost of labor by 100%. By the time bathroom breaks, overly long pauses for lunch, chattiness, absenteeism, turnover, equipment breakdown, and the impact of hazards on the factory floor have been figured in, labor hours actually spent to produce a given item may bear no resemblance to the hours projected in a manager’s quiet office.