Manufacturing Workforce Management Guide for Small Businesses

The manufacturing sector is in a constant staffing crisis. Efficient manufacturing workforce management, however, can help mitigate problems arising from worker shortages.

Manufacturing is in a staffing crisis

The manufacturing sector is chronically understaffed. An aging workforce, shortage of skilled workers, and retention problems have led experts to worry that by 2033, nearly 2 million US manufacturing positions could go unfilled if current labor gaps persist.

Similarly, in the UK today, 36% of vacancies in manufacturing are proving hard to fill due to a skills and experience gap.

An understaffed sector, however, means that you have to make your existing workers more efficient while avoiding overworking them. Properly managing your manufacturing workforce enables you to do so by introducing SOPs and accurate planning.

What is manufacturing workforce management?

Manufacturing workforce management is the process of organizing, scheduling, and coordinating the people who perform production work. It means ensuring the right number of workers with the right skills are available at the right time to keep production running smoothly.

In practice, this includes:

• Hiring and training new production workers
• Planning labor needs based on upcoming production orders.
• Assigning workers to departments, machines, or operations according to their skills.
• Balancing workloads so no team is overloaded or left idle.
• Tracking attendance, time, and performance, often tied to shop floor reporting.
• Adjusting staffing when demand, rush orders, or worker availability changes.

The key goal is to align capacity with demand. When workforce management is done well, production runs on schedule, equipment stays utilized, and overtime or last-minute hiring is minimized. When it’s not managed, bottlenecks appear quickly: machines stand still while waiting for workers, lead times get stretched out, and customer deliveries are delayed.

How to manage your manufacturing workforce as an SME?

Efficient manufacturing workforce management hinges on balancing labor with actual production needs and adhering to schedules. The most reliable approach is to plan based on actual demand and capacity, then adjust when conditions change. Here are the best practices of manufacturing workforce management:

1. Plan labor according to demand

Start with your production plan, not headcount. Once work orders are scheduled, you can see how many operators, welders, assemblers, etc., are required per day. This avoids overstaffing when there’s no work, and prevents shortages when production peaks.

2. Assign operations to departments and skill groups

Group work by the skills needed. This makes demand visible: if five welding operations overlap tomorrow, you need five welders. If there are few assembly tasks to be done next week, those employees can be reassigned or cross-trained.

3. Keep workstation utilization as the priority

Machines and lines are expensive, labor is more flexible. Schedule production to maintain good machine loading, then plan workers around that schedule. Don’t shape production around labor unless you have no alternative. This ensures a high throughput and short lead times.

4. Cross-train wherever possible

The smaller the team or the more variable the demand, the more cross-training matters. When one person is absent or when demand shifts, cross-trained staff keep production moving without constant rescheduling.

5. Use real-time shop floor reporting

Track who worked on which job, for how long, and with what results. This doesn’t have to be complex – for example, MRPeasy’s Internet kiosk app enables workers to log in and press a start and stop button to report their operations. The point is to have accurate feedback so planning remains grounded in reality.

6. Adjust capacity based on worker availability, not daily attendance

Don’t rewrite the schedule every time someone is sick. Plan capacity based on the average number of skilled workers typically available. Over short periods, some days will fall behind and others will catch up. This keeps planning stable and realistic.

7. Communicate changes early and consistently

When demand changes, shift planning does not need to be dramatic. Weekly scheduling meetings, clear daily job lists, and visible production boards help everyone stay consistently aligned.

Manufacturing workforce management with ERP software

Modern manufacturing ERP systems support workforce management by forecasting labor demand, showing daily staffing requirements by department, and helping companies adapt when skilled labor availability varies. This ensures staffing decisions are based on real production needs rather than guesswork.

In ERP systems like MRPeasy, the Human Resources Planning view provides a clear forecast of how many workers are needed per department for each day. When operations in the routing are assigned to departments, the system calculates the maximum number of parallel operations scheduled in that department on any given day. For example:

	Day 1	Day 2	Day 3	Day 4
Department 1	10	12	8	10
Department 2	10	10	10	9

This number isn’t arbitrary. It’s based on real jobs already scheduled:

• If an operation is assigned to a department, one worker is required.
• If another operation in the same department starts only after the first one ends, the same worker can handle both.
• If two operations overlap, two workers are needed.

This gives a realistic view of how many workers you actually need to execute the schedule, assuming one worker cannot perform two tasks at the same time.

The benefit is straightforward: you can see in advance where labor is a bottleneck and adjust accordingly, instead of reacting when production stalls on the shop floor.

Workforce planning in the larger scheduling picture

When planning production, labor usually follows this priority order:

1. Materials – If the components aren’t available, production can’t start.
2. Workstations – Machine capacity is expensive and must be utilized efficiently.
3. Workers – Labor is more flexible and can often be negotiated or reassigned.
   

Because of this, the ERP first schedules materials and workstations, and only then assigns workers. Trying to schedule workers first often leads to poorer machine utilization, longer lead times, and ultimately lower throughput.

The goal is to keep equipment loaded optimally, and then balance workforce availability around that plan.

Planning when worker availability fluctuates

Few manufacturers have perfectly predictable labor availability. Skilled workers may rotate, shifts vary, people get sick, and seasonal peaks come and go.

One practical approach is to schedule capacity in the software based on the average number of skilled workers available. For example, if you typically have five welders:

• Schedule capacity for five welding workstations.
• On days when only two welders arrive, production will fall behind slightly.
• On days when eight are available, production catches up.
  

This avoids constant manual rescheduling and keeps lead time estimates reasonably accurate over time.

Therefore, with a manufacturing ERP system:

• You gain visibility into daily labor requirements per department.
• You prevent production delays caused by understaffing.
• You maintain higher and more stable equipment utilization.
• You reduce firefighting and last-minute schedule juggling.
• You plan labor strategically rather than reactively.

In short, ERP turns workforce management into a planned, predictable part of production instead of a daily scramble.

Key takeaways

• The labor shortage is structural, not temporary. With more vacancies than qualified workers, small manufacturers must focus on making the most of the teams they already have.
• Workforce management aligns labor with real production demand. Planning starts from production orders and workstation capacity, not headcount or gut feel.
• Cross-training and skill-based assignment reduce bottlenecks. The more team members can switch tasks, the less disruption from absences or shifting priorities.
• Stable planning relies on averages, not daily attendance. Schedule capacity based on the typical number of skilled workers available; let strong days balance weaker ones.
• ERP software brings visibility and predictability. By showing labor needs per department per day, ERP helps prevent delays, improve machine utilization, and reduce last-minute scrambling.

Frequently asked questions (FAQ)

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