Labor Cost Optimization

Background:

A mid-sized food manufacturer was struggling with high labor costs due to overstaffing and misaligned scheduling.

Challenge:

• Excess employees scheduled regardless of demand

• Increased operating costs drove down EBITDA

• Inefficient use of skilled labor

Actions Taken:

• Designed a temporary labor deployment strategy based on demand

• Introduced pre-kitting/batching so operators focused only on blending

• Established a one-week locked schedule for workforce stability

Results:

• Labor cost per pound reduced by $0.10 → over $3M annual savings

• Upskilled blender operators and increased output by 8,000 lbs per shift, avoiding capital investment in a new blender

• Improved scheduling outlook and reduced headcount by 12%, delivering $400,000 in savings