Staff and union initiative raises firm’s productivity

Distribution company RS Components has cut costs significantly and increased
productivity by involving employees and unions in the business strategy.

It needed to introduce more products to its range and expand its markets
overseas, so a decision was taken to radically change the way employees worked
at its plants in Corby and Nuneaton.

Staff were working just over five hours a day, overtime was running at 20
per cent and absence levels were at 11 per cent.

Tony Smith, head of operations for the distribution company, told an IIR
conference on flexible working practices that, until 1996, RS Components had
been held back by its methods and its confrontational relationship with the
union, Usdaw.

The firm decided to engage the unions and workforce in the business
objectives, Smith said.

The firm’s supervisors took part in an eight-week training course,
culminating in a presentation in which each of them had to put forward an idea
that would save £1,000. As a result of the ideas generated, RS Components made
operating savings of £400,000.

The company also held workshops with union representatives to involve them
in the business strategy and explain the challenges facing the company,
including competition, range expansion and customer demand.

Smith said all employees were kept informed of what was happening through
weekly verbal briefings, monthly written reports and quarterly presentations.

As a result of the changes, RS Components reduced labour costs by £2m,
absence levels to 5 per cent and overtime to 4 per cent.

Today, the company distributes 135,000 electrical, electronic and mechanical
components from its two sites, compared to 46,000 in 1995, and has cut
operating costs by more than 2 per cent.

By Ben Willmott

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