Which Shift Earns Its Keep

How to read this sheet

A shift should run whenever the price beats what stops when it stops - its power, its wages and the material it consumes. Fixed cost belongs on this sheet only to be reported, because it does not change when a shift is cancelled and a number that does not change cannot inform a choice that does. Between the lowest break-even and the full absorbed cost the two rules disagree, and inside that band every shift looks like a loss and every shift is worth running; a mill that shuts them there loses the contribution and keeps the fixed cost. The tariff column is what usually decides the ranking and it is usually entered as an average, which destroys the whole comparison. In a spinning mill power is around four kilowatt-hours a kilogram and therefore the largest conversion cost, so an off-peak night tariff can beat a night wage premium and a higher night waste rate put together - which is why the night shift is so often the cheapest to run and the evening shift, sitting in the peak, the dearest. Several things are outside this. Maximum demand charges are billed on the peak across the whole month, so cancelling one shift rarely reduces them, and a mill that expects it to should model that separately. Statutory constraints on night work, the cost and notice of standing labour down, and whether people re-hired later are the same people at the same efficiency are all real and none is money this sheet can see. Nor is the effect on delivery: shedding a shift lengthens every lead time in the plant, which is a queueing question rather than a costing one.