Determining and critical factors for achieving business objectives

In relation to labor as a decisive factor in achieving business objectives, since the competitive advantages achieved by service companies are associated with the service process and with the resources companies have to provide them and with the resources that the companies have to provide them.

Therefore, the company should not only consider the collective bargaining agreement, but also respond to the needs and hopes of workers and employees, to count on their maximum effort, since they bring talent, efficiency and experience and invest the best years of their lives in the success of the company.

In this order of ideas, labor is defined as the human effort involved in the process of transforming raw materials into finished products, the wages, salaries and benefits of the factory personnel, paid by the company, as well as all the obligations to which they give rise, are the cost of labor.

The aforementioned author goes on to state that this cost must be classified in an appropriate manner. The salaries paid to the people who participate directly in the transformation of the raw material into finished product and that can be fully identified or quantified with it, are classified as direct labor cost (MOD) and become part of the second element of the production cost.

Wages, salaries and benefits paid to production support personnel such as factory officials, supervisors, material warehouse personnel, maintenance personnel, among others, and which cannot be fully identified or quantified with the production of specific product items, are classified as indirect labor cost (ILC) and are accumulated within indirect charges.