How to Improve Productivity of Your Workforce

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  • THE CONCEPT OF PRODUCTIVITY & ITS IMPLEMENTATIONBY T.M.JAYASEKERA

  • THE CONCEPT OF PRODUCTIVITY & ITS IMPLEMENTATIONPRESENTED BY T.M.JAYASEKERA B.Sc. Eng. MBA,C.Eng. FIE,FCIWEM,FIM.,FIMGT,MSLIM, MICE(Lond)Managing Director -Innovative Skills (Pvt.) Ltd291/50.Havelock Gardens ,Colombo -6-Tel/Fax594378

  • PRODUCTIVITY

    What is it?Why do we need it?How do we measure it? How do we improve it?How do we implement it ?

  • RESOURCES OF AN ORGANIZATIONWhether Public or Private;The resources that are available to them are:Land & BuildingsMaterialsPlant, Machines & EquipmentEnergyPeopleMoney

  • DEFINITION OF PRODUCTIVITY

    Very simply,Productivity = Output InputFor any type of organization

  • EXAMPLES OF OUTPUTWhether the organization is public or private the outputs are ;Accomplishment of a taskLength of an outputDistance travelledNumber of pieces producedWeight of production

  • EXAMPLES OF OUTPUT(Contd.)

    Volume of outputValue of outputNo. of documents processedTime taken to carry out a jobNo of jobs attendedNo. of customers served

  • EXAMPLES OF INPUTLabour force or man hours, man days. Etc..Labour cost (Rs)Area of land(in hectares)Kg. Of material or material cost in Rs.Volume of material or fluidLength of materialsquare area of spaceUnits of powerTime etc.

  • IMPROVING PRODUCTIVITY

    Output = Input Methods of improving ProductivityIncrease output while input remains sameDecrease input while output remains sameIncrease input resulting in a very large increase in outputDecrease input by a very large amount with a resultant small reduction in output

  • TYPES OF PRODUCTIVITY MEASURES

    Single Factor productivityMulti Factor ProductivityTotal Factor Productivity

  • OTHER THOUGHTS ON PRODUCTIVITY

    Productivity is an attitude of mindProductivity means doing something better today than yesterdayProductivity means continuous improvement

  • ACCORDING TO MICHAEL PORTERThe wealthy nations they are the productive nations

    Productivity makes you wealthy, it allows you to support high wages, it allows you to support high returns on capital Michael Porter

  • WHY PRODUCTIVITY IS IMPORTANT

    Higher standard of living Higher GDPper capitaHigherInvestment HigherProductivity

  • ARE WE STILL THE SECOND HIGHEST IN ASIA IN LITERACY?

    NO!

    We are not even in the first ten today.Countries with stronger economies have beaten us.

  • THE NEED OF THE HOUR

    Massive Investment !Massive increases in productivity !

  • THE BASIC APPROACHES TO PRODUCTIVITY IMPROVEMENTInvestment in high output and modern plant & equipment and new technology - capital intensive approachImproving the efficiency and effectiveness of existing resources - better management approach

  • THE TWO ASPECTS OF PRODUCTIVITY

    The soft or qualitative aspects - to create an environment conducive to productivityThe technical or quantitative aspect - to measure productivity

  • THE SOFT ASPECTS OF PRODUCTIVITYProductivity cultureTeam workQuality workDelighting customersWork ethicCaring for the work force

  • The quantitative aspects of productivity

    By this is meant the concepts behind productivity measurement and their application to performance measurement at the economy and company level

  • PRODUCTIVITY LEVELS

    National ProductivityIndustry ProductivityCompany ProductivityDivisional ProductivityBranch ProductivityIndividual Productivity

  • NATIONAL PRODUCTIVITY

    = GDP EMPLOYED WORK FORCE

    This is a single factor productivity measure and therefore wrong inferences may be made by comparing one country with another

  • PRODUCTIVITY OF SRI LANKA

    How do we compare with others in Asia

    What inferences can we draw

  • ORGANIZATION PRODUCTIVITY- HOW TO MEASURE ?

    The best method is to useAdded Value( as output) per single factor of output(Added value measures the wealth creation)

  • Calculating Added ValueThe subtraction method:(Wealth Generation Approach)Added Value = Total output less Bought-in materials and services The Addition method(Wealth Distribution Approach)Added Value = Labour cost + Depreciation + Taxes + Interest + Profit

  • EXAMPLES OF ADDED VALUE

    Added Value per employeeAdded Value per Rs of labour costAdded Value per Kg of materialAdded Value per KWH of powerAdded Value per litre of fuel

  • MICRO-LEVEL PRODUCTIVITY INDICATORSRatios which measure:CompetitivenessLabour productivityCapital productivityBusiness Returns & profitabilityProcess Efficiency

  • COMPARING PRODUCTIVITY

    Cross sectional comparison

    Time series comparison

  • PRODUCTIVITY IS ALSO...

    EFFICIENCY (Doing things right) + EFFECTIVENESS (Doing the right things) Do the right thing and do it right now

  • MISCONCEPTIONS ABOUT PRODUCTIVITYPeople fear, hate, feel let down, complain about productivity, very often because they have misunderstood it.

    There are several misconceptions about Productivity

  • MISCONCEPTION - I

    Productivity = Production

    Productivity is merely a more sophisticated word for production

  • MISCONCEPTION - II

    Productivity means only Labour Productivity

  • MISCONCEPTION - 3Productivity can be increased by getting people to work harder TRUE TO SOME EXTENT But this is labour intensity NOT real productivity. Real productivity means working more intelligently not harder

  • MISCONCEPTION -4

    Higher productivity causes retrenchment and large scale loss of jobs

    This may happen in the short term but the long term benefits outweigh this disadvantage

  • Misconception -4(Contd.) If there is low productivitythen in the long term there will be severe, large scale loss of jobs.

  • MISCONCEPTION - 5

    Productivity is relevant only in manufacturing andnot relevant elsewhere

  • MISCONCEPTION - 6

    Productivity can be increased by cutting costs across the board

  • MISCONCEPTION - 7Productivity and Quality are trade offs. You cannot increase one without affecting the other

  • MISCONCEPTION - 8 Productivity is directlyrelated to profits. In other words a profitable organization is always aproductive one

  • MISCONCEPTION - 9

    Productivity is relevant only in an open economy

  • MISCONCEPTION - 10

    Productivity is only for commercial enterprisesand not for the public sector

  • MISCONCEPTION - 11

    Productivity is for organizations and not for you and me

  • SO DO NOT GET MISLED BY THESE MISCONCEPTIONS

  • HOW DO WE IMPROVE PRODUCTIVITY

    First point to rememberis the M I G cycle

  • THE M I G CYCLEMEASUREIMPROVEGAIN SHARE

  • THE PROFIT GOAL

    PROFIT = REVENUE - COSTS

  • MAJOR STEPS

    Analyze the Revenues Analyze the Costs And then Prioritize

    Find the Vital Few Components of cost

  • ANALYZE REVENUE SOURCES

  • ANALYZE COSTS

  • CLOSELY LOOK ATLabour costsMaterial costsEnergy costsFinance costsOverhead costs

  • IMPROVING LABOUR PRODUCTIVITYImproving working conditions- lighting, ventilation, noise(music), temperature, work timesUsing appropriate and better toolsErgonomics and better work station layout.Improving factory, stores & office layout.Improving the method/process - use 5Ws & IHImproving the nutritional status of the workerImproving industrial housekeeping(5s) and safetyImproving welfare facilities and worker motivation

  • USE THE BRAINS OF THE WORKER Quality CirclesStaff Suggestion SchemesKaizen System(Seiri-sort,Seiton-Set-order, Seiso-clean-up-Shine Seiketsu- standardize, Shitsuke-Sustain-Training & Discipline)Self Directed Work Teams3 Mu -Muda(Waste), Muri-(Strain),Mura(Discrepancy)

  • IMPROVING CAPITAL PRODUCTIVITY

    Implement TQM Reduce Working capitalReduce floor spaceUtilize machinery & equipment betteretc..

  • IMPROVING MATERIAL PRODUCTIVITY

    Cheaper materialAlternative materialCheaper sourcesBetter utilization

  • IMPROVING ENERGY PRODUCTIVITY

    Improve power factorReduce wastageChange processes for less heatingStudy working proceduresetc.

  • QUALITY OF WORK FORCEUse A system of comparison based onWork force performanceWork force characteristicsWork force organization & practices

  • PRODUCTIVITY STARTS WITH YOUThink of productivity every minuteBe organized - do 5sImplement 1 is best campaignOne hour meetingsOne page memosOne copy documentsOne minute telephone calls

  • IMPLEMENT A Kaizen cultureStaff suggestion schemeSmall group activities5sAn environment which appreciates productivityConvince the work force of benefits

  • THIS IS THE NATIONAL