Productivity and Quality Management Sixth Lecture

Last Lecture Improving Productivity – Historical Background – Productivity Growth Productivity Improvement Factors (1 st Theory) – Soft Factors – Hard Factors Productivity Improvement Factors (2 nd Theory) – Technical Factors

This Lecture Improving Productivity Productivity Improvement Factors – 2 nd Theory Organizational Factors Management Factors Production Factors Government Factors Finance Factors Government Factors

BACKGROUND

Productivity improvement factors Productivity Improvement is not just doing things better. More importantly it is doing right things better. The production process is complex, adaptive, ongoing social system. The inter-relationship between labor, capital and the social organizational environment are important in the way they are balanced and coordinated into an integrated whole. Productivity improvement depends upon how successfully we identify and use the main factors of the socio production system.

PRODUCTIVITY IMPROVEMENT FACTORS 2 ND THEORY

Factors that affect Productivity The eight main factors that affect productivity are:

TECHNICAL FACTORS

Technical factors Facility Location Layout and size Design of machines and equipment Minimization of bottlenecks Research and Development Productivity Improvement technologies

PERSONNEL FACTORS

Personnel factors Employee productivity is synonymous to organizational productivity. Human capital is the most important capital. Certain personnel factors if catered properly can ensure improvement in productivity of any organization. Improving Productivity

Personnel factors a)Behavioral scientists believe that individuals are motivated to act in a certain way by a desire to satisfy certain needs. Improving Productivity Maslow's hierarchy of needs

Personnel factors These factors greatly influence the productivity of the employees of any organization. Improving Productivity

Personnel factors At the bottom of the hierarchy are physiological needs. These are the basic needs that must be met to sustain life itself. Satisfying ones physiological needs will be the primary concern of any person and until one has done so one will not be concerned with any other issues. However, once workers feel reasonably sure of fulfilling their physiological needs, they will seek to satisfy the next need in the hierarchy, that of security. Security is taken to mean a feeling of protection against physical and psychological harm, as well as security of employment. Improving Productivity

Personnel factors For workers who have already satisfied their physiological and their security needs, the next motivating factor is that of affiliation, that is wanting to belong to a group or an organization and to associate with others. Next on the hierarchical scale is the need to be recognized, and this is followed by the need for fulfillment (also called “self-actualization”). This last need expresses the desire of people or workers to be given an opportunity to show their particular talents. Improving Productivity

Personnel factors Improving Productivity b) The right individual should be selected for suitable posts.

Personnel factors c) Proper training and development activities should be encouraged. Improving Productivity

Personnel factors d) Better working conditions and work-environment should be provided. Improving Productivity

Personnel factors e) Opinion or suggestions of workers should be given importance. Improving Productivity

Personnel factors f) There should be proper transfer, promotion and other personnel policies. Improving Productivity

Personnel factors g) Job security should also be given. Improving Productivity

ORGANIZATIONAL FACTORS

Organizational factors Simplify – Reduce the number of layers – Reduce and eliminate bureaucracy – A simple type of organization should be used. – Empower employees Improving Productivity

Organizational Factors Promote cooperation and information sharing – Teamwork – Cross-functional teams – Knowledge and information sharing systems Improving Productivity

Organizational Factors – Authority and Responsibility of every individual and department should be defined properly. – The line and staff relationships should also be clearly defined, to avoid conflicts. – There should be a division of labor and specialization as far as possible. Improving Productivity

MANAGEMENT FACTORS

Management factors Management should develop better relations with employees and trade unions. Should encourage the employees to give suggestions. Should provide a good working environment. Improving Productivity

Management factors – Management should always strive towards creating better communication with the workforce to improve the productivity of the organization. Improving Productivity

Management factors – Management should lead the employees towards better productivity by using leadership strategies for productivity improvement. Improving Productivity

Management factors Leadership Strategies for Productivity Improvement: – Create a clear and simple vision – Build a culture supported by core values – Assembles an effective management team – Apply a consistent business strategy – Avoid layoffs – Develop a motivated workforce – Use system’s approach to eliminate waste Improving Productivity

Management factors The management of organization should be scientific, professional, sincere competent and future-oriented Improving Productivity

Management factors Managers should possess imagination, judgment skills and willingness to take risks. Should make optimum use of the available resources to get maximum output at the lowest cost. Use of the recent techniques of production by the management. Improving Productivity

PRODUCTION FACTORS

Production factors a) For higher productivity, production should be planned. Improving Productivity

Production factors b) Production coordination and control are a must for high productivity. Improving Productivity

Production factors c) Quality of raw-materials used should be high for greater productivity. Improving Productivity

Production factors d) Standardization of the production process Improving Productivity

Production factors e) Management of the inventory to minimize cost and maximize productivity Improving Productivity

FINANCE FACTORS

Finance factors a)There should be a better control over both fixed capital and working capital. Improving Productivity

Finance factors b) There should be proper Financial Planning. Improving Productivity

Finance factors c) Both over and under utilization of capital should be avoided for better productivity. Improving Productivity

Finance factors d) The management should see that they get proper returns on the capital which is invested in the business to improve productivity. Improving Productivity

GOVERNMENT FACTORS

Government factors a) The management should have a proper knowledge about the government rules and regulations. Improving Productivity

Government factors b) Should also maintain good relations with the government. Improving Productivity

LOCATION FACTORS

Location factors Productivity also depends on location factors such as a) Law and order situation Improving Productivity

Location factors b) nearness to market and to the sources of raw-materials Improving Productivity

Location factors c) skilled workforce: Improving Productivity

Conclusion These eight facets of any organization are the key to its productivity. Hence effective and efficient practices, as suggested, can lead to significant productivity improvement in any organization. Improving Productivity

Summary Role of Productivity Operations Management Efficiency Versus Effectiveness Production and Productivity Example of Productivity

Improving Productivity