Labour Pooling: Impacts on Capacity Planning

Abstract

Cross-training workers to perform multi-skilled jobs is one of the modern trends in job design. As companies engage in downsizing, the remaining workforce is expected to do more and different tasks. This paper presents a formal definition and a practical solution for optimizing the size and cost of the pool of multi-skilled workers for production units operated under batch manufacturing. The pool size is optimized through a search procedure applied separately to just-in-time (JIT) and Level production plans, which are derived from the stones heuristic. The method allows direct calculation of the cost savings from labour pooling. This paper was inspired by consulting in the food industry, where implementation of these results has significantly reduced labour costs.