Pttqm Module 1

PTTQM (BU-3) Module 1

SUBJECT: PRODUCTIVITY TECHNIQUES & TOTAL QUALITY MANAGEMENT

MODULE 1

1. What is productivity?

Productivity is a measure of the effective use of resources, usually expressed as the ratio of

output to input.

2. Distinguish between production and productivity.

Point of

DifferenceProductivity Production

DefinitionIt is defined as the rate at which

goods are produced.

It is defined as the act of manufacturing

goods for their use or sale.

UseIt is the utilization of resources

to form goods.It is the actual process of conversion.

Work doneIt is the amount of work one

gets for a certain spending cost.

It is the amount of work done or

manufactured that is the output.

Measurement It is the measure of efficiency. It is the measure of produced goods.

3. Mention the use of productivity ratios.

Productivity ratios are used for

Planning workforce requirements

Scheduling equipment

Financial analysis

4. Distinguish between efficiency and effectiveness.

Efficiency is determined by the amount of time, money, and energy – i.e. resources – that are

necessary to obtain certain results. In order to meet our daily production quota, we commit a

specific machine that uses up energy, make operators and maintenance personnel available,

and provide raw materials. For example, if we are able to meet our daily production with less

energy and fewer operators, we have operated more efficiently.

Prof. Raghavendra, KSM, Bangalore Page | 1

Productivity = OutputsInputs


Effectiveness is determined by comparing what a process or installation can produce with

what they actually produce; therefore, effectiveness does not tell anything about the

efficiency – the amount of resources that have to be committed to obtain that output. If we are

successful in manufacturing better product in the same time period, effectiveness will

increase. A valuable discussion could be whether ‘good product’ should be seen as ‘Good

product with customer demand’ to prevent over-production.

Productivity is determined by looking at the production obtained (effectiveness) versus the

invested effort in order to achieve the result (efficiency); in other words, if we can achieve

more with less effort, productivity increases.

5. How do you measure productivity?

Productivity measurement

Since productivity is measured as a ratio of output to input, we have various measures of

productivity depending on whether a single input is used or multiple inputs are used. When

just one resource (such as labour or capital or material) is used, the productivity is referred to

as single factor or partial productivity.

When input consists of several factors such as land, labour, capital, material, machine, energy

etc., productivity is referred to as multifactor or total productivity.

Partial measures

Output / labor, Output / Machine, Output / Capital, Output / Energy


http://oeecoach.com/wp-content/uploads/2012/09/efficiency.jpg


Multifactor measures

Output / Labor + Machine, Output / Labor + Capital + Energy

Total measure

Output / All inputs used to produce them

Productivity measures are useful on a number of levels. For an individual department or

organization, productivity measures can be used to track performance over time.

This allows managers to judge performance and to decide where improvements are needed.

For example, if productivity has slipped in a certain area, operations staff can examine the

factors used to compute productivity to determine what has changed and then devise a means

of improving productivity in subsequent periods.

Productivity measures also can be used to judge the performance of an entire industry or the

productivity of a country as a whole.

These productivity measures are aggregate measures. In essence, productivity measurements

serve as scorecards of the effective use of resources.

6. Explain the factors affecting productivity.

Factors affecting productivity

Capital

Quality

Technology

Management

Other factors affecting productivity

– Standardization

– Use of Internet

– Searching for lost or misplaced items

– Scrap rates

– Safety

– Shortage of IT workers



– Layoffs

– Labor turnover

– Design of the workspace

– Incentive plans that reward productivity

7. Explain the ways of increasing productivity.

Many companies have formal programs for improving productivity. Whether they have a

formal program or not, companies are constantly looking for ways to improve quality, and

reduce downtime and inputs of labor, materials, energy, and purchased services. Simple

changes to operating methods or processes often increase productivity, such as the

implementation of assembly lines. The biggest gains normally come from adopting new

technologies, which may require capital expenditures for new equipment, computers, or

software. Some ways to increase productivity:

1. Reducing rejections and rework

2. Reducing cycle time

3. Reducing setup time

4. Reducing wasted time by method study

5. Good training

6. Automation

8. What is learning curve? Explain.

Workers take more time in the beginning when the task or product is new. As they gain

experience their performance improves. The reduction in time taken is drastic in the

beginning, tapers off and finally the time taken is constant.

There are mathematical models to estimate the time taken such as :

Arithmetic analysis

Logarithmic analysis

Typical learning curve is as below


No. of components

Time taken


9. What is job design? Explain.

Job design specifies a job’s content, the employee skills and training needed to perform that

job and the degree of specialization appropriated for the job. Job design aims to organize

tasks, duties and responsibilities into a unit of work.

The objective may be:

To increase Productivity

To reduce costs.

job satisfaction

motivation

Poor job design may lead to

Lower productivity

High attrition rate

Absenteeism

Complaints

Sabotage



10. State the objectives of job design.

Objectives of Job design

Technical feasibility – Jobs (set of tasks) should be able to be performed by the person (s)

with y the equipments and systems available.

Economic feasibility – cost of performing the job should \be as low as possible

Behavioral feasibility- motivation and mental simulation are considered.

11. Briefly explain the techniques of job design.

Techniques of Job design

Work simplification- Big job is broken down into small parts and assigned to one employee.

Less trained or less skilled persons can do the job. This may also result

in highly repetitive jobs and less job satisfaction.

Job rotation - Persons are assigned different jobs at different times. It reduces boredom,

monotony and exposes employees to different aspects of the process.

Job enlargement - Adding similar tasks to a job. It is done to add variety and

autonomy and to make work more meaningful.

Job enrichment - tasks of planning, organizing and controlling are assigned along with

routine tasks. Objective is more involvement, motivation and

satisfaction.

12. What is ergonomics? Explain.

Ergonomics is concerned with designing of work situations with human characteristics in

mind.

Human and machine interfaces- some considerations are : location on tools ,

switches, parts for assembly , controls, levers, push buttons, Working height, sitting

height, left hand and right hand operations, heights at which readings are taken,

weights lifted, forces applied , direction of force .

Environmental factors – which affect morale, productivity, quality and long term

heath problems. Ambient temperature (26-38 degree C), Noise (< 90 dB), Lighting

( 100 ft-candles Machines), vibrations, air circulation, comfortable furniture.



13. How do you measure productivity in direct and indirect areas?

Productivity is a measure of the efficiency of production. Productivity is a ratio of production

output to the input required to produce it. The measure of productivity is defined as a total

output per one unit of a total input.

At the plant level, input statistics are commonly kept as monetary units, weights or volumes

of raw or semi-finished materials, kilowatt hours of power, and worker hours. It is therefore

tracked as sets of partial productivity, such as kilowatt-hours per ton or yield (weight of

output divided by weight of input), both of which are used in the chemical, refining, wood

pulp, and other process industries. Quality statistics such as defect rates are similarly tracked.

Summary reports are routinely issued to various departments and the department managers

are held accountable for managing inputs in their respective areas.

At the national level, productivity growth raises living standards because more real income

improves people's ability to purchase goods and services, enjoy leisure, improve housing and

education, and contribute to social and environmental programs. Productivity growth is

important to the firm because more real income means that the firm can meet its obligations

to customers, suppliers, workers, shareholders, and governments (taxes and regulation), and

still remain competitive or even improve its competitiveness in the marketplace.

Productivity is one of the main concerns of business management and engineering.

Practically all companies have established procedures for collecting, analyzing, and reporting

the data relevant to productivity. The accounting department typically has the overall

responsibility for collecting, organizing, and storing the data, which normally originates from

various departments.

14. Explain the sub-processes of a manufacturing company that affect productivity.

A manufacturing company can be divided into sub-processes and the following five are

identified as main processes, each with a logic, objectives, theory, and key figures of its own.

The main processes of a company are as follows:

Real process

Income distribution process

Production process



Monetary process

Market value process

Productivity is created in the real process and productivity gains are distributed in the income

distribution process; the real and income distribution processes constitute the production

process. The production process and its sub-processes, the real process and income

distribution process, occur simultaneously. Only the production process is identifiable and

measurable by traditional accounting practices. The real process and income distribution

process can be identified and measured. This is why they need to be analyzed separately in

order to understand the logic of production performance.

Real Process

Real process generates the production output from input, and it can be described by means of

the production function. It refers to a series of events in production in which production

inputs of different quality and quantity are combined into products of different quality and

quantity. Products can be physical goods, immaterial services, or combinations of both.

Income Distribution

Income distribution process refers to a series of events in which the unit prices of constant-

quality products and inputs change, causing an alteration in the income distribution among

those participating in the exchange. The magnitude of the change in income distribution is

directly proportionate to the change in prices of the outputs and inputs and to their quantities.

Productivity gains are distributed, for example, to customers as lower product sales prices,

which may lead to higher sales revenues, or to staff as higher wages, which gives them

additional income to spend.

Production Process

Production process consists of the real process and the income distribution process. A result

and a criterion of success for the owner is profitability. The profitability of production is the

share of the real process result that the owner has been able to keep to himself in the income

distribution process (profits earned). Factors describing the production process are the

components of profitability, which are revenues and expenses.



Monetary and Market Value Processes

Monetary process refers to events related to financing the business and the inputs of

production. Market value process refers to a series of events in which investors determine the

market value of the company in the investment markets.

15. How productivity is important to the industry?

Productivity is the main determinant of living standards – it quantifies how an economy uses

the resources it has available, by relating the quantity of inputs to output. As the adage goes,

productivity is not everything, but in the long run it is almost everything.

Higher productivity can lead to:

(1) Lower average costs: These cost savings might be passed onto consumers in lower prices,

encouraging higher demand, more output and an increase in employment.

(2) Improved competitiveness and trade performance: Productivity growth and lower unit

costs are key determinants of the competitiveness of British firms in global markets.

(3) Higher profits: Efficiency gains are a source of larger profits for companies which might

be re-invested to support the long term growth of the business.

(4) Higher wages: Businesses can afford higher wages when their workers are more efficient.

(5) Economic growth: If the British economy can raise the rate of growth of productivity then

the trend growth of national output can pick up.

At an industry level, productivity growth can be important to allow the

industry to compete with other sectors of the economy for resources

(labour, capital and raw materials) and maintain international

competitiveness.

It is important to note, however, that some sectors of the economy have

traditionally had low productivity growth but are vitally important to

aggregate productivity growth, for example, the health and education

sectors. The outcomes from these sectors become the inputs to all sectors

in the form of skilled, educated and healthy workers. This is also a



reminder that government policies which only focus on sectors exhibiting

productivity growth could be at the detriment of supporting productivity

growth as a whole.


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Pttqm Module 1