The multi-locations manufacturing units, energy stations and large infrastructural ventures face one single hurdle in conducting their business operation, and that is handling thousands of contract workers in different locations.
In a situation where the handling of contractors takes place through manual documents, biometrics system or spreadsheets, which are all regional, the companies suffer from compliance risks, higher billing cost, fake contract labor, and liabilities as per the Contract Labour (Regulation & Abolition) Act (CLRA) and Factories Act.
This gap in the operational process can be addressed through the Centralized Contract Labour Management System (CLMS), known as LaborWorks™. The SPC Methodology™ of Scrum Systems forms the foundation for the system. A contract labour management software can provide the centralized platform required to manage these processes.
Flaws of Fragmented Management of Contractors
Since all manufacturing units/sites will manage their own contractor management and time tracking process individually, the companies will face the following problems:
- Non-uniform Implementation of Compliance Checks: Meaning that while one plant will check whether PF and ESIC contributions are made by the contractor, the other one will fail to check whether the labour license of the contractor is valid and his/her medical clearance completed.
- Ghost/Duplicate Employees: Due to lack of duplication of employee identities across sites, those employees who are banned from performing the work due to safety breaches at one site can continue performing the work at another plant under the another sub-contractor.
- Over-charging of Contractors: Manual muster sheets cannot provide any way of auditing the time worked against hours billed monthly.
- Audit Implications: Any statutory flaws discovered during an audit performed by a labour inspector may lead to being either fined or closed down.
How Does a Centralized CLMS Make Things Easier in Multi-site Plants?
A modern day CLMS assists corporations to move their mindsets from managing damages to preventing such damages in advance.
[Contractor Portal] ──> [Enterprise CLMS / Cloud Engine] ──> [Plant Access Gates]
1. Single Platform Onboarding of Contractors and Workmen (Know your Labor)
With the help of a contractor self-service portal, the labor vendors will have to furnish KYC documentation, address proof, domicile proof, and government ID proof.
- Blacklisting and Deduplication: Make sure that the laborers that have been previously blacklisted or banned do not move from one plant to another.
- Prerequisite Clearances: Ensure that mandatory safety induction kiosk process, pre-employment medical checkup, and PPE issuing process are completed before the badge/ID activation.
2. Locking of Turnstiles in Real Time
In the case of CLMS, there is dynamic control of biometric and turnstiles. For instance, where the CLRA license of the contractor exceeds the authorized manpower, work order has expired or the workman does not have ESICing the turnstile.
- No Need for Manual Override: Access control can be done through software rules to avoid any security breaches.
- Warning for Expiry: Automatic SMS/ Email alert will be sent to the contractor to inform him about the expiry of his license, insurance or work order 30 days before the expiry of the license.
3. “Verify before You Pay” Contractor Reconciliation
LabourWorks™ automates the process of manual verification of time cards versus contractor invoices:
- Model Bill Creation: Using biometric data from the turnstile logs and shift schedules, it creates an exact model bill in accordance with minimum wage legislation.
- Green Channel Processing: In case when the vendor’s invoice matches the automatically generated model bill within certain tolerance limits, the system automatically processes the invoice for ERP payment.
A contract labour management system helps centralize these contractor records, compliance checks, access controls and billing processes across multiple plants.
4. Just-in-Time Mobilization through the Use of Point of Control Terminals (POCT)
In order to coordinate the workforce at various manufacturing locations, it is important that there should be accuracy in the floor visibility. In conjunction with the use of the Point of Control Terminal (POCT), the plant managers will make use of mobile apps for the mobilization of manpower for certain CNC machines, assembly lines and packaging units.
5. ERP System Integration of Multiple Systems (SAP/Oracle)
Centralization is what achieves optimal efficiency as far as the integration of the contractor’s information in the enterprise resource planning system is concerned. The CLMS interface would be directly linked to SAP or Oracle to accomplish the following:
- Budget Control: To impose budget limits at the plant level prior to generation of POs or Work Orders.
- OT and Time sheets: To ensure that all OT is approved within legal maximums in accordance with the Factories Act.
Multi-Plant CLMS Architecture: Quick Overview
| Strategy Pillar | Siloed Plant Approach | Centrally Managed LabourWorks™ Approach |
| Identification | Physical papers kept at site cabinets | Biometric KYC with de-duplication in all the sites |
| Legality Compliance | Monthly end-of-month sample checks | PF, ESIC and Licence check while entering in real time |
| Control Access | Guard checks the physical gate passes | Blocking in turnstiles through biometrics if non-compliance |
| Invoices Processing | Weeks long paper invoice vs register checks | “Check before you pay” bills through green channel billing |
| Audits & Reports | Manual collection of fragmented registers | 300+ registers pre-configured in accordance to CLRA & Factories Act |
Compliance Registers & Analytics for More Than 300+ Audits Readymade
The audit process under Indian labor laws demands comprehensive paperwork by each state. An online standardized website provides documentation for all the manufacturing units through registers, including the below-given ones:
- Contract Labour (Regulation and Abolition) Act, 1970: Forms XII (Contractor’s Register), XIII (Register of workmen employed), XVI (Muster Roll) and XVII (Register of Wages).
- Factories Act, 1948: Registers of adult workers, overtime register, and leave register.
- Executive Dashboard: Information about total strength of the unit, shifts distribution, overtime spend and contractor’s compliance score in India.
Multi-Site Contractors Management through Labor Works™ & SPC Methodology™
The control of many contractors working from different geographical locations doesn’t have to be complex with the possibility of non-compliance and uncontrollable expenditure for billing. The automation process through LabourWorks™ and SPC Methodology™ will provide efficient governance and complete statutory compliance.
