TMG GainSaver


TMG GainSaver is a companion model to our yard cost estimator (TMG FastQuote) and focuses on the potential savings in medium to large scale operations that could be derived from relatively small changes in productivity. It is a "What If" model that postulates the question: "What if I could shave a minute off my current switching move times and what could the potential labor savings be? As with our other model, we offer you a place to focus in on the yard and think about what could be and the potential results attached to those thoughts. Particularly for larger-scale operations, the numbers can be quite dramatic. So, take some time and think about "What If". And if you like the results that you see give the MAHARRIS Group a call and let us work with you to turn your "What If" into "What Is".

How It Works

TMG GainSaver is a parameter-driven model that calculates potential direct labor savings associated with one minute improvements in yard switching move times. It requires the three (3) fields of information from TMG FastQuote plus two (2) additional pieces of information that include annual number of ONE WAY switching moves and the average move time in minutes for a yard move. TMG GainSaver can be used in conjunction with TMG FastQuote model or as a stand-alone. If you have started with our cost model, then the information that you input will carry over to our TMG GainSaver model. The color-coding of the fields remains the same with mandatory fields highlighted in grey, orange fields may be optionally changed from their initial values and white fields are the actual calculations from the model. And to make sure that we are talking apples-to-apples, we have included data definitions for key fields to assist in putting the right information into the model and in interpreting model results.

What's In The Results?

TMG GainSaver results are presented in tabular format and start first with what you have defined as your current average move time in minutes and calculates basic statistics that ultimately estimate how many minutes are needed to perform your annual moves and allow for basic necessary activities such as breaks and driver inspections of the equipment at start and end of shift. Those required minutes are divided into the annual number of man-hours (supplied by you) to calculate the theoretical number of Full Time Equivalents or FTEs. Each column decrements the average move time by 1 minute so that you can see the cumulative effect of reducing move times by multiple minutes.

Unlike our cost estimator, TMG GainSaver estimates only the potential DIRECT LABOR SAVINGS and does NOT address other potential equipment related savings. We did that to keep the model conservative and simple. Once the model has estimated the number of FTEs or drivers that will be needed given your volume and move times, the change in headcount is converted into a corresponding change in direct labor cost that includes the following cost components:

  • Driver Wages
  • Driver Taxes
  • Driver Healthcare
  • Driver Retirement
  • Driver Workers Compensation
  • Driver Paid Time Off
  • Payroll Administrative Costs
  • Uniform Costs

Interpreting the Results

TMG GainSaver, like the cost model, is estimating potential changes in labor at a very high level and represents an approximation only. It is a starting point not an absolute. And granted, when the detailed move analysis is performed it is possible that there may be certain operational requirements that may preclude some savings. But in many cases, improving productivity either through improved move times and/or reduced non-productive time is entirely feasible without sacrificing service. TMG GainSaver is focused more on productivity improvements through change in move times but it can also highlight operations that may have too much driver capacity given the current move time and annual volume. Alternatively, it can produce results that may appear erroneous and suggest that the operation does not have enough drivers currently.

Consider the following scenarios and outputs from the model examples below. Each of these three examples starts with a current driver count of 19 and 187,500 switches per year.

Example 1: Current Operation is At the Theoretical Headcount

In this example Gainsaver calculates an identical amount of resources as the current operation at 19 FTEs given the volume and current move time of eleven minutes. If the move time is reduced by one minute to 10 minutes, then 2 FTEs may potentially be removed for a savings of $87,000.

  Current Operation
         
Average Move Time For One Way Moves in Minutes 11.0 10.0 9.0 8.0 7.0 6.0
Estimated Headcount Change From Productivity Gains 0 -2 -3 -5 -7 -8
Estimated Change In Direct Labor Costs If Productivity Gains Are Achieved $0.00 ($87,369.36) ($131,054.04) ($218,423.40) ($305,792.76) ($349,477.44)

Example 2: Current Operation is Over the Theoretical Headcount

In this example, the current operation is at 10 minutes per move and has 19 drivers. The model is calculating that even with no change in move time, that the theoretical headcount needed is 2 less or 17. This represents an opportunity for savings by examining driver capacity in relation to material flow and looking for opportunities to better schedule resources.

  Current Operation
         
Average Move Time For One Way Moves in Minutes 10.0 9.0 8.0 7.0 6.0 5.0
Estimated Headcount Change From Productivity Gains -2 -3 -5 -7 -8 -10
Estimated Change In Direct Labor Costs If Productivity Gains Are Achieved ($87,369.36) ($131,054.04) ($218,423.40) ($305,792.76) ($349,477.44) ($436,846.80)

Example 3: Current Operation is Under the Theoretical Headcount

And finally, it is possible for the model to produce what may appear to be erroneous results where the model indicates that more drivers are needed for the current operation than you have actually input. In the example below, the user input 19 drivers as the current headcount with a 13 minute move time. The model is estimating that what is actually needed is 4 MORE drivers for a total of 23. In this case, there is not savings but an actual increase in cost. One interpretation could be that the operation is getting supplemental driver assistance from other sources such as their own linehaul fleet or an outside provider. The more likely explanation is that the volume and/or the move minutes need to be re-examined and adjusted for accuracy.

  Current Operation
         
Average Move Time For One Way Moves in Minutes 13.0 12.0 11.0 10.0 9.0 8.0
Estimated Headcount Change From Productivity Gains 4 2 0 -2 -3 -5
Estimated Change In Direct Labor Costs If Productivity Gains Are Achieved $174,738.72 $87,369.36 $0.00 ($87,369.36) ($131,054.04) ($218,423.40)