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Large company in the medical device sector
Standardized payroll processing & daily management
Background:
Payroll is carried out by the company's HR team, and the salaries of employees and officials are calculated by different individuals. The processes aim to be standardized, improve their quality, and ensure the timeliness of various stages during the payroll period.
Problem:
Errors often occur in payroll processing, both from the calculators and supervisors, and these errors are usually noticed only after the calculations by the employee. About five percent of calculations contain errors. Supervisors do not always adhere to agreed schedules, and approvals and changes to the calculation criteria are submitted late and/or incorrectly. Often, the calculations need to be corrected afterwards. More working time is spent on payroll than desired (reduction need about 30%).
Objective:
To reduce the number of errors to one-fifth (--> 1%) and to create and document a clear process and monthly rhythm for the calculations. Monitoring of the rhythm using Lean daily management.
Implementation:
Both processes (employees and officials) were described using value stream mapping, and the major pain points and problem areas were highlighted, with corrective actions planned for them. New processes were documented and rhythmized with target timelines into a monthly calendar, and a monitoring model was created with Lean daily management to address deviations immediately upon their occurrence.
Result: The number of payroll errors decreased by about 90% (from 5 --> 0.5% of all calculations). With the tracking of responsibilities and target timelines of supervisors and payroll, practically all tasks (e.g. hour approvals) are carried out on schedule. As a result of improved quality, overall working time is less.
