Time management - Productivity
Productivity
This relationship can be simply stated as the ratio of Output to Input (both measured in some fashion).
The formula indicates that Productivity can be increased by either increasing the Output or reducing Input.
Let’s examine an example for company A producing Whizzo Springs.
First example| Production (output): | 15,000 items |
| Hours (input): | 500 (total hours worked by say 50 members of staff) |
| Productivity: | 15,000 / 500 = 30 per hour. |
Let us say that we are desperate to improve market share (always desirable) or maintain market share (due to competition) we may make a strategic decision that we need to reduce the manufacturing costs.
How can we do this?
Well we must increase the Productivity, that is the number of items produced for every man hour cost.
How can we do this?
We can either increase the Output or reduce the Input (or both).
Second example (increase Output)| Production (output): | 17,500 items |
| Hours (input): | 500 (total hours worked by say 50 members of staff) |
| Productivity: | 17,500 / 500 = 35 per hour. |
The manufacturing cost per item of this process is less (85.7% of the original, 30/35 x 100).
To do this (with the same number of staff of 50) we must have improved the performance of the personnel or introduced process improvements to, for example, the machinery used.
Note: We are not asking the workforce to work longer hours as the productivity rate would be exactly the same. We could have trained the staff better either in their work practices (Time Management) or in their use of the necessary machinery, understanding of process requirements and documentation.
Third example (reduce Input)| Production (output): | 15,000 items |
| Hours (input): | 429 (total hours worked by say 50 members of staff) |
| Productivity: | 15,000 / 429 = 35 per hour. |
The reduction in the Input to 429 hours could be achieved by improved practices, as above or of course the combination of reduced manpower (downsizing etc) and the improved practices (which must be put in place or Productivity would drop).
Another example would be a combination of these.
Many Japanese industries have lead the way in ‘right first time’ practices to improve the output ‘process’ and the use of Statistical Process Control techniques can improve the quality output.
It is an important point to remember that productivity is not just about quantity but also quality.
Statistical Process Control (SPC) can help in particular industries To identify the relationship between quantity and quality. You may maximise quality at the expense of quantity and vice versa. You may accept a lower standard of quality for increased output. Costs involved in attaining these levels are also critical. However, this is a very large topic in its own right.
Assuming that the average manager is only 33% efficient then raising the bar to 66% (which should be achievable) would improve Productivity by 200%!
Bear in mind that much of manufacturing is now supported more and more by documentation and office work.
Time Management can make this improvement.