Alkesh Dinesh Mody Institute of Financial & Management Studies
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How to Increase Productivity in an Organization
Project submitted to Prof. [Link]
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Acknowledgement
We thank our Director Dr. Chavan & Prof. Mr. Sanjeev Thakur for this great opportunity & allowing us to complete and present this project. We also thank Prof. M. N. Aswani for his support, help & guidance as without him, it would be very difficult for us to complete this project. Also we thank our friends & colleagues to share their resources (Laptop, Pen drive) as and when we required it without hesitation. At the end, we also thank the college & its staff for providing us the class rooms, computer lab, Wi- Fi connectivity & Library which made it really easy for us to browse & explore more content about the topic & thus, it made the project really simple & Enthusiastic.
Thanks & Regards
Group Members
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Prepared By SYBMS
Div B
Year 2011-12
Sr. No Name
1 2 3 4 5 6 7 8 9 10 Ben Samrat Mukherji Sanket Narkar Hakim Nulwala Akshay Pandit Poonam Parab Rutika Patade Preetam Pathak Aalam Pathan Garrick Pereira Vivek Pradhane
Roll No Signature
61 62 63 64 65 66 67 68 69 70
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Index
Contents
Introduction Productivity Evolution of Productivity Productivity Improving Techniques Bibliography
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6 6 7 8 15
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Introduction
Whether you have 3 employees in your company or 300, it's essential to continually review, reinvent and reinvest in the resources that keep it visible and viable in a competitive market. Taking steps to improve your organization's productivity includes motivating your workers and providing them with the best tools possible to perform their job. Productivity principles can serve as the blueprint for a start-up company as well as nonprofits seeking to increase volunteer enthusiasm. Who survives a treacherous economy? Even America's most productive companies not only live through turmoil but also thrive in spite of it. This article discusses particular attributes necessary to be productive. The best practices offer ideas for any organization seeking to improve productivity at ever-higher levels. As usual, the best practices involve workers, and how those workers are selected, trained and treated both in the short term and in the long run.
Productivity
Productivity is a measure of the efficiency of production. Productivity is a ratio of production output to what is required to produce it (inputs). The measure of productivity is defined as a total output per one unit of a total input. Productivity growth is important to the firm because it means that the firm can meet its (perhaps growing) obligations to customers, suppliers, workers, shareholders, and governments (taxes and regulation), and still remain competitive or even improve its competitiveness in the market place.
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Evolution of Productivity
Since the beginning of the Industrial Revolution, some of the major contributors to productivity have been as follows: 1. Replacing human and animal power with water and wind power, steam, electricity and internal combustion and greatly increasing the use of energy 2. Energy efficiency in the conversion of energy to: useful work, process heat or chemical energy in the manufacture of materials 3. Infrastructures: canals, railroads, highways and pipelines 4. Mechanization, both production machinery and agricultural machines 5. Work practices and processes: The American system of manufacturing, Taylorism or scientific management, mass production, assembly line, modern business enterprise 6. Materials handling: bulk materials, palletization and containerization 7. Scientific agriculture: fertilizers and the green revolution, livestock and poultry management 8. New materials, new process for their production and dematerialization. 9. Communications: Telegraph, telephone, radio, satellites, fiber optic network and the Internet 10. Home economics: Public water supply, household gas, appliances 11. Automation and process control 12. Computers and software, data processing
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Productivity Improving Techniques
Raise Productivity to achieve and improve Competitive Advantage The "Productivity Gap" is the difference between the time it "should take" and the time it "did take" Productivity can be raised through
Performance Management Time and Motion Studies Lean Processes Cost Reduction Tools Work Measurement Process and Methods Improvement Labour Standards
Time/Work Processes Kaizen / OEE SMED 5 S's Process Mapping Value Stream Mapping Resource Planning
Performance Management
Performance management (PM) includes activities that ensure that goals are consistently being met in an effective and efficient manner. Performance management can focus on the performance of an organization, a department, employee, or even the processes to build a product or service, as well as many other areas. Performance management as referenced on this page is a broad term coined by Dr. Aubrey Daniels in the late 1970s to describe a technology (i.e. science imbedded in applications methods) for managing, behavior and results, two critical elements of what is known as performance.
Time & Motion Studies
A time and motion study (or time-motion study) is a business efficiency technique combining the Time Study work of Frederick Winslow Taylor with the Motion Study work of Frank and Lillian Gilbreth.
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It is a major part of scientific management (Taylorism). After its first introduction, time study developed in the direction of establishing standard times, while motion study evolved into a technique for improving work methods. The two techniques became integrated and refined into a widely accepted method applicable to the improvement and upgrading of work systems. This integrated approach to work system improvement is known as methods engineering and it is applied today to industrial as well as service organizations, including banks, schools and hospitals. Time and motion study have to be used together in order to achieve rational and reasonable results. It is particularly important that effort to be applied in motion study to ensure equitable results when time study is used. In fact, much of the difficulty with time study is a result of applying it without a thorough study of the motion pattern of the job. Motion study can be considered the foundation for time study. The time study measures the time required to perform a given task in accordance with a specified method and is valid only so long as the method is continued. Once a new work method is developed, the time study must be changed to agree with the new method.
Lean Processes
Lean is a Team Based continuous improvement process designed for long term maximization of company resources. Lean is an approach to achieving manufacturing excellence based upon the continued elimination of waste. Waste is defined as activities that do not add value to the product. Lean Manufacturing utilizes techniques and principles that improve efficiencies of value added activities. Value Added Activities: Transform raw materials and information into parts or products. Non Value Added Activities: Consume resources that do not contribute to the physical change of the product.
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Cost Reduction Tools
Cost reduction is the process used by companies to reduce their costs and increase their profits. Depending on a companys services or Product, the strategies can vary. However, it is important to remember that every decision in the product development process affects cost. Companies typically launch a new product without focusing too much on cost. Cost becomes more important when competition increases and price becomes a differentiator in the market. Main Cost Reduction Tools: Supplier consolidation Component consolidation Re-source to low cost countries Request for Quotations (RFQ) Supplier cost breakdown analysis Function analysis / Value analysis / Value engineering Design for Manufacture / Design for Assembly Reverse costing Cost driver analysis Should cost Product benchmarking Design to cost Design workshops with suppliers Competitor benchmarking
Work Measurement
Work measurement is the application of techniques designed to establish the time for an average worker to carry out a specified manufacturing task at a defined level of performance. It is concerned with the length of time it takes to complete a work task assigned to a specific job. Work measurement helps to uncover non-standardization that exist in the workplace and non-value adding activities and waste. A work has to be measured for the following reasons: 1. To discover and eliminate lost or ineffective time. 2. To establish standard times for performance measurement. 3. To measure performance against realistic expectations. 4. To set operating goals and objectives.
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Process and Methods Improvement
In organizational development (OD), process improvement is a series of actions taken by a process owner to identify, analyze and improve existing business processes within an organization to meet new goals and objectives. These actions often follow a specific methodology or strategy to create successful results. Process improvement is also a method to introduce process changes to improve quality, reduce costs, or accelerate schedules.
Labour Standards
Labour standards refer to conventions agreed upon by international actors, resulting from a series of value judgments, set forth to protect basic worker rights, enhance workers job security, and improve their terms of employment on a global scale. The intent of such standards, then, is to establish a worldwide minimum level of protection from inhumane labour practices through the adoption and implementation of said measures. From a theoretical standpoint, it has been maintained, on ethical grounds, that there are certain basic human rights that are universal to mankind. Thus, it is the aim of international labour standards to ensure the provision of such rights in the workplace. While the existence of international labour standards does not necessarily imply implementation or enforcement mechanisms, most real world cases have utilized formal treaties and agreements stemming from international institutions.
Time/Work Processes
Time is a part of the measuring system used to sequence events, to compare the durations of events and the intervals between them, and to quantify rates of change such as the motions of objects. The temporal position of events with respect to the transitory present is continually changing; events happen, then are located further and further in the past.
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A work process consists of a sequence of concatenated (connected) steps. Emphasis is on the flow paradigm, where each step follows the precedent without delay or gap and ends just before the subsequent step may begin. This concept is related to non overlapping tasks of single resources. It is a depiction of a sequence of operations, declared as work of a person, a group of persons, an organization of staff, or one or more simple or complex mechanisms. Work process may be seen as any abstraction of real work. For control purposes, work process may be a view on real work under a chosen aspect, thus serving as a virtual representation of actual work. The flow being described may refer to a document or product that is being transferred from one step to another.
Kaizen / OEE
Kaizen, Japanese for "improvement", or "change for the better" refers to philosophy or practices that focus upon continuous improvement of processes in manufacturing, engineering, game development, and business management. It has been applied in healthcare, psychotherapy, life-coaching, government, banking, and other industries. When used in the business sense and applied to the workplace, kaizen refers to activities that continually improve all functions, and involves all employees from the CEO to the assembly line workers. It also applies to processes, such as purchasing and logistics that cross organizational boundaries into the supply chain. By improving standardized activities and processes, kaizen aims to eliminate waste. Kaizen was first implemented in several Japanese businesses after the Second World War, influenced in part by American business and quality management teachers who visited the country. It has since spread throughout the world and is now being implemented in many other venues besides just business and productivity.
Overall equipment effectiveness (OEE) is a hierarchy of metrics created by Seiichi Nakajima in 1960's which evaluates and indicates how effectively a manufacturing operation is utilized. The results are stated in a generic form which allows comparison between manufacturing units in differing industries. It is not however an absolute measure and is best used to identify scope for process performance improvement, and how to get the improvement. If for example the cycle time is reduced, the OEE can also reduce, even though more products is produced for less resource. Another example is if one enterprise serves a high volume, low variety market, and another enterprise serves a low volume, high variety market.
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More changeovers will lower the OEE in comparison, but if the product is sold at a premium, there could be more margins with a lower OEE. OEE measurement is also commonly used as a key performance indicator (KPI) in conjunction with lean manufacturing efforts to provide an indicator of success. OEE can be best illustrated by a brief discussion of the six metrics that comprise the system. The hierarchy consists of two top-level measures and four underlying measures.
Single-Minute Exchange of Die (SMED)
Single-Minute Exchange of Die (SMED) is one of the many lean production methods for reducing waste in a manufacturing process. It provides a rapid and efficient way of converting a manufacturing process from running the current product to running the next product. This rapid changeover is key to reducing production lot sizes and thereby improving flow (Mura). The phrase "single minute" does not mean that all changeovers and start-ups should take only one minute, but that they should take less than 10 minutes (in other words, "single-digit minute"). Closely associated is a yet more difficult concept, OneTouch Exchange of Die, (OTED), which says changeovers can and should take less than 100 seconds.
5 S's
5S is the name of a workplace organization methodology that uses a list of five Japanese words which are seiri, seiton, seiso, seiketsu and shitsuke. Transliterated or translated into English, they all start with the letter "S". The list describes how to organize a work space for efficiency and effectiveness by identifying and storing the items used, maintaining the area and items, and sustaining the new order. The decisionmaking process usually comes from a dialogue about standardization which builds a clear understanding among employees of how work should be done. It also instils ownership of the process in each employee.
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Process Mapping
Business process mapping refers to activities involved in defining exactly what a business entity does, who is responsible, to what standard a process should be completed and how the success of a business process can be determined. Once this is done, there can be no uncertainty as to the requirements of every internal business process. A business process illustration is produced. The first step in gaining control over an organization is to know and understand the basic processes (Deming, 1982; Juran, 1988; Taylor, 1911). ISO 9001 requires a business entity to follow a process approach when managing its business, and to this end creating business process maps will assist. The entity can then work towards ensuring its processes are effective (the right process is followed the first time), and efficient (continually improved to ensure processes use the smallest amount of resources). The main purpose behind business process mapping is to assist organizations in becoming more efficient. A clear and detailed business process map or illustration allows outside firms to come in and look at whether or not improvements can be made to the current process. Business process mapping takes a specific objective and helps to measure and compare that objective alongside the entire organization's objectives to make sure that all processes are aligned with the companys values and capabilities.
Value Stream Mapping
Value stream mapping is a lean manufacturing technique used to analyze and design the flow of materials and information required to bring a product or service to a consumer. At Toyota, where the technique originated, it is known as "material and information flow mapping". It can be applied to nearly any value chain. Hines and Rich (1997) defined seven value stream mapping tools they are: 1. 2. 3. 4. 5. 6. 7. Process Activity Mapping Supply chain responsiveness matrix Product Variety Funnel Quality filter mapping Forrester effect mapping Decision point analysis Overall Structure Maps
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Resource Planning
Distribution resource planning (DRP) is a method used in business administration for planning orders within a supply chain. DRP enables the user to set certain inventory control parameters (like a safety stock) and calculate the time-phased inventory requirements. This process is also commonly referred to as distribution requirements planning. Enterprise resource planning (ERP) systems integrate internal and external management information across an entire organization, embracing finance/accounting, manufacturing, sales and service, customer relationship management, etc. ERP systems automate this activity with an integrated software application. Their purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders. ERP systems can run on a variety of computer hardware and network configurations, typically employing a database as a repository for information. Manufacturing resource planning (MRP II) is defined by APICS as a method for the effective planning of all resources of a manufacturing company. Ideally, it addresses operational planning in units, financial planning, and has a simulation capability to answer "what-if" questions and extension of closed-loop MRP. This is not exclusively a software function, but a marriage of people skills, dedication to data base accuracy, and computer resources. It is a total company management concept for using human resources more productively.
Bibliography
[Link] [Link]
Books Ref:
1. Productivity Techniques, Srinivas Gondhalekar and Uday Salunkhe 2. Productivity Management: Concepts and Techniques, Sawhney S.C
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