Quantcast Indirect and Overhead Labor hours

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concentrating as much Emergency/Service work as possible in the E/S Work
Center, the other Work Centers are freed for additional programmed and
scheduled work. However; judgment must be used because support shops, such as
Sheetmetal and Machine Shops, do many small jobs independently as well as work
for other Work Centers.  These jobs require large and expensive equipment, and
the transfer of such work to the E/S Work Center would require equipment
duplication.  In general, the E/S Work Center should be performing work
requiring portable hand tools and equipment.  Work requiring large shop
equipment or special skills not available in the E/S Work Center, regardless
of the size of the job, should be accomplished by the parent shop.
(b) Productive Effort.  The desirable percentage of productive effort
to total labor hours for Maintenance and Utilities Divisions combined is in
the range of 68 to 72.  Although some variances should be expected during
periods of abnormal leave, usually the summer months and December, any indices
of less than 68 percent for protracted periods should be investigated for
excessive overhead assignments.
(c) Labor Performance.  This provides an indicator of how well shop
forces were able to meet allowed time for work that was planned, estimated,
and scheduled.  Labor performance may be monitored from information obtained
from the Report on Variations on Completed Job Orders.  Trends should be
monitored. For example, if a current month's Branch performance is 96,
performance would appear satisfactory. Conversely, an index of 85 would
appear to require immediate corrective action.  However, if the index of 96 is
a steady drop from 99, and the 85 a steady rise from 75, the opposite would be
true.  Also, a performance rate of 90 on work amounting to only 30 labor hours
is not as important to management as a 90 percent performance rate on work
amounting to 3,000 labor hours.
(d) Productive Labor Hour Control.  The desirable percentage for the
Maintenance and Utilities Division, separately or combined, is in the range of
80 to 85.  Variances from this range should be expected in Work Centers such
as Emergency/Service or Pest Control.  Productive labor hour control shows the
shop's total productive labor hour percentage expended on work that was
programmed, planned, estimated, and scheduled.  To help obtain maximum
control, management should regularly review the Standing Job Orders - Not
Estimated percentage with a view of reducing it to the minimum.
(2) Indirect and Overhead Labor hours.  The desirable range of total
Overhead to total Productive labor hours for Maintenance and Utilities
Divisions combined is 28 to 32 percent.  Although some variances from this
range should be expected during periods of abnormal leave, any Maintenance and
Utilities Divisions combined percentage higher than 32 for protracted periods
should be investigated for excessive overhead assignments.  For individual
Work Centers and Branches the range is variable, depending upon the type of
work accomplished.  Work Centers with highly repetitive work such as
janitorial, refuse, and trash collection, should have less than 28 percent.
Only under unusual circumstances should a Work Center's overhead exceed 35
percent.  Frequently a high overhead rate is caused by a dwindling productive
workforce without a compensating adjustment in supervision.
11.  REVIEW AND CORRECTIVE ACTION - EACH SUPERVISORY LEVEL.  Each Branch and
Division supervisor is responsible for taking corrective action, where
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