Dana Automotive Systems Group Solves Shop-floor Problems with Kronos® Workforce Central
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Dana Automotive Systems Group Australia manufactures drive shafts, axles and differentials for cars and trucks. It employs approximately 1,200 staff at six locations across New South Wales, South Australia and Victoria. The company has operated in Australia since 1928 and is now part of the global Dana Corporation, which has headquarters at Toledo, Ohio, in the United States.
The manufacturer's manual time-keeping systems were prone to errors, causing financial penalties, a great deal of work for payroll and human resources staff and poor relations between shop-floor employees and management. Starting in September 2005, it implemented Kronos Workforce Central 5.2 and Kronos 4500 Touch ID terminals across five of its six sites, with the final site soon to be implemented.
The workforce management application immediately made a marked difference in the accuracy of staff pay, reducing the workload on payroll and HR staff and improving employee relations. The technology provided real-time information on workforce trends, allowing the company to iron out issues such as tardiness that sapped productivity. The system provided greater insight into overtime and other liabilities and helped the company meet its regulatory requirements.
Error-prone manual payroll caused friction
Dana Automotive Systems Group Australia traces its history back to the foundation in 1928 of engineering firm Coote and Jorgensen Limited in inner-Sydney suburb Camperdown. The firm manufactures automotive components such as axles, differentials and drive shafts for cars and heavy trucks. It has a workforce of around 1,200 staff spread across six locations in three states.
Like many manufacturers, Dana Automotive Systems Group relied heavily on paper-based timesheets and manual processes to pay its shop floor staff. With complicated enterprise bargaining agreements and overtime allowances at some sites, this was an inefficient and inaccurate process.
"Managers would enter time into a Microsoft Excel spreadsheet and this would use macros to calculate regular time and overtime for each employee," said Annette Davies, Chief Accountant, Dana Automotive Systems Group. "Managers often had to rely on memory to ensure they were putting in the correct data. Inevitably, this led to errors."
"The HR people at the plant spent most of their time dealing with payroll queries and the pay office always had to do a second pay run to correct mistakes. We had to pay penalties if employees were short paid. People could get very upset and it was not a good environment to work in."
As a subsidiary of a US firm, Dana Automotive Systems Group had regulatory requirements under the Sarbanes- Oxley Act to keep accurate records of staff working hours and pay, and the manual systems were not compliant.
"Two of our plants use just-in-time manufacturing techniques and this finely tuned system means it's a big problem if someone shows up late for work," said Davies.
"when they do we have to call an agency and pay a temp for four hours. These costs were also adding up. Since partnering with Kronos, these costs have dropped."
Kronos Workforce Central helped drive efficiency
Recognising these issues, Dana Automotive Systems Group implemented Kronos Workforce Central 5.2 and Kronos 4500 Touch ID terminals at three sites in September 2005.
"We received strong recommendations from colleagues to use Kronos and we discussed it with a company in our area that had recently implemented the software," said Darren Chand, Payroll Manager, Dana Automotive Systems Group. "Kronos was a major player in the market, it had good customer references and the software provided all the functionality we needed."
Now the system has been implemented, on arriving at work employees simply enter their unique identity numbers and scan their fingerprints at the Kronos 4500 Touch ID terminals. They repeat this process at the end of the day. From this data, Kronos Workforce Central calculates regular and overtime hours.
"At the end of each day, managers can log on to the web interface and approve everyone’s hours," said Chand. "On Monday mornings, I can immediately see who has approved their staff hours and who hasn't. Once all the hours are approved, I press a button and it all gets imported into our MicrOpay payroll system. The whole process takes about half a day."
Initially, Dana Automotive Systems Group needed to overcome staff resistance to using a biometric identity system.
"Kronos gave us a lot of support and provided materials to help us demonstrate to staff that their personal data would be kept secure and only used to establish their identities," said Chand. "In the end, everyone saw the benefits of having a system that ensured people were paid accurately. We also made sure managers and office staff also used the system, which made the shop-floor employees a lot more comfortable with it."
Having successfully implemented Kronos Workforce Central at three sites, Dana Automotive Systems Group expanded its use of the product to an additional two sites, which was completed in April 2007. At time of writing, the company’s sixth site at Yennora, Sydney, was also looking to implement the system.
Improved accuracy and fewer complaints
Dana Automotive Systems Group found the most immediate and noticeable benefit of implementing Kronos Workforce Central was a dramatic increase in the accuracy of pay.
"Once we implemented the system, payroll errors dropped from around 10 each week to almost none," said Chand. "My phone stopped ringing."
"The payroll office is always a busy place and you need time up your sleeve to deal with anything out of the ordinary. Now that everyone gets paid accurately, my life is so much easier. The system doesn’t make mistakes."
"The HR people also found their time wasn’t taken up investigating payroll queries and this allowed them to focus on other tasks," said Davies. "It also built a lot of trust between employees and the company and made the environment a lot more stable and pleasant to work in."
Reducing manual data entry allowed the company to reduce its payroll staff by two. Now two full-time staff and one part-time person handle pay for more than 800 employees.
"Thanks to Kronos Workforce Central, I can make better use of my time and give better service to my customers – the staff and managers," said Chand.
Real-time insight into attendance and accruals
Kronos Workforce Central gives Dana Automotive Systems Group management real-time insight into staff hours and attendance. Sophisticated reporting capabilities help managers examine site – or company-wide trends or provide insight into individual employee behaviour.
"The system made it easy for us to see which staff members were regularly coming in late," said Davies. "This allowed us to address tardiness issues and reduce our reliance on agency staff. We also discovered that at one plant, an entire shift was walking out the door 25 minutes early every day. It's hard to say how much that is worth in dollars, but it has to be substantial.
In addition to recording clock-in and out times, the Kronos 4500 Touch ID terminals allow staff to check their hours, pay, overtime and leave accruals. This further reduces the number of queries to the pay office.
"The system also gives management firm figures on our overtime liabilities and leave accruals," said Davies. "We’re now looking at ways to use this information to create rosters that minimise our overtime and leave costs."
Meeting regulatory requirements
Kronos Workforce Central has addressed a range of regulatory compliance issues for Dana Automotive Systems Group.
"The Sarbanes-Oxley Act requires companies to accurately capture attendance data if they pay people by the hour," said Davies. "The new system means we can definitively say that people worked the hours they’re paid for."
"When the Australian Government introduced the Work Choices legislation, it had similar requirements that we were easily able to meet."
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