When overtime climbs, the usual response is to hire or to accept it as the cost of demand. In our experience that diagnosis is often wrong. Overtime is frequently a symptom of work that isn't planned against a known standard, so nobody can say whether the hours are actually needed.
Why overtime persists
Without labor standards, a supervisor has no way to tell a full day's work from a light one. Schedules are built on habit and the loudest customer. Hours drift, rework interrupts flow, and overtime gets used to catch up on problems that planning would have prevented.
What a labor standard actually is
A standard is a reasonable expectation for how long a defined task takes, set from direct observation of the work at a sustainable pace rather than from an estimate. Once standards exist, a daily workload plan compares the hours available with the hours the work requires. The gap is visible before the shift starts, not after the overtime is already spent.
What it looks like in practice
- A three-site aerospace manufacturer ran touch-labor overtime at 30% of hours. With master scheduling, daily operating reviews, and supervisor-level reporting in place, it fell to 17%, with 8 to 12% as the target.
- A precision-parts supplier to major automotive and equipment OEMs had no standards for any part number. Standards for every part number, daily workload plans, and a daily review meeting delivered $213K in annualized savings, and on-time delivery recovered to 95% or better within 90 days.
- A manufacturer's field service organization rebuilt its labor model and cut field service overtime by 35%, worth $469K annualized.
Where to start
- 01 Pick the one area where overtime is highest.
- 02 Observe the work directly, with 10 to 20 observations per activity, and set reasonable expectations from observed best practice.
- 03 Build a daily workload plan that compares available hours with required hours.
- 04 Review planned against actual every day, with a named owner for each variance.
The point
Overtime control isn't about asking people to work less. It is about knowing what the work requires and planning to it. The first gains usually come quickly, because the gap between planned and actual hours has never been visible before.