Quality and Productivity-final

8/2/2019 Quality and Productivity-final

http://slidepdf.com/reader/full/quality-and-productivity-final 1/21

QUALITY AND PRODUCTIVITY

FOR

GLOBAL COMPETITIVNESS



GLOBAL COMPETITIVENESS

• Competitiveness is a comparative concept of the ability

and performance of a firm, sub-sector or country to sell

and supply goods and/or services in a given market

• Competitiveness at the global level is termed as GLOBAL

COMPETITIVENSS.

•Global competitiveness is an important determinant forthe well-being of states in an international trade

environment.



THE QUALITY PRODUCTIVITY

RELATIONSHIP

Improve

Quality

Less Re-work

MoreProductivity



Quality for Global competitive

Advantage

Improve quality

Decrease

costs

Improve

productivity

Decrease

prices

Increase

market

Global

competitiveness



What is Quality?

Performance - Efficiency with which a product achieves its intended purpose

Features - Attributes that supplement the product’s basic performance

Reliability – Perform consistently over the product’s useful life.

Conformance - Adherence to quantifiable specifications

Durability - Tolerate stress or trauma without Failing

Serviceability - A product is serviceable if it can be repaired easily and

cheaply

Aesthetics – Subjective characteristics such as taste, feel, sound, look.



Contd..

• Tangibles – Physical appearance of the facility, equipment, personnel

and functional equipment

• Service Reliability - The ability of the service provider to perform the

promised service

• Responsiveness - The willingness of the provider to be helpful and

prompt in providing service

• Assurance - The knowledge and courtesy of the employees and their

ability to inspire trust and confidence

• Empathy – Caring Individualized attention from the service company



Differing Functional Perspectives on

Quality

• Engineering - Operations Research, Product

Design Engineering, Concurrent Engineering,

modeling techniques

•Supply Chain

• Operations

• Strategic Management

•

Marketing• Financial

• Human resource



Quality and Global Competitiveness

• In a modern global marketplace, quality is the key to competitiveness

• The costs of poor quality include the following

• Waste

• Rejects

• Retesting

• Rework

• customer returns

• inspection,

• Recalls

• Excessive overtime

• Pricing errors

• Billing errors,

• Excessive turnover

• Premium freight costs

• Development cost of the failed product

• Field service costs,

• Handling complaints

• Expediting

• System costs planning

delays

• Late paperwork

• Lack of follow-up

• Excess inventory

• Unused capacity



Benefits of maintaining Quality

• Quality has important benefits for trade, productivity, and technological progress

• The most common economic benefits of adopting Quality includes increased

productive and innovative efficiency.

• Quality leads to economies of scale and allow suppliers to achieve lower costs

per unit by producing large homogeneous batches of products.

• Quality allows firms to forge the types of long-term relationships that maximize

knowledge transfer with global buyers and lead to sustainable development

• Quality facilitates STANDARDIZATION.



CONTRIBUTION BY GOVERNMENT IN ACHIEVING GLOBAL

COMPETITIVENESS

(NATIONAL QUALITY INFRASTRUCTURE)

Testing laboratories and inspection bodies

Certification bodies

Calibration laboratories

National standards bodies

National accreditation bodies

National metrology institute



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.

• 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 it 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 global

market place



Types of Productivity

• Capital Productivity - It is the way in which capital (long-term assets like machines/buildings) are put to

use for a certain level of labour and technical knowledge to make goods and services.

• Labour Productivity - The OECD defines it as "the ratio of a volume measure of output to a volume

measure of input“

•

Volume measures of output are normally gross domestic product (GDP) or gross value added (GVA),

expressed at constant prices i.e. adjusted for inflation

– The three most commonly used measures of input are:

• hours worked;

•

workforce jobs; and

• number of people in employment.

• Multi-factor Productivity(total-factor) - The ratio of the real value of output to the combined input of

labor and capital.



Importance of productivity

AT FIRM/INDUSTRY LEVEL :

The benefits of productivity growth can be distributed in a number of different ways:

To the workforce through better wages and conditions;

To shareholders and superannuation funds through increased profits and dividend

distributions;

To customers through lower prices;

To the environment through more stringent environmental protection; and

To governments through increases in tax payments (which can be used to fund social

and environmental programs)



Contd..

At National Level• Productivity growth raises living standards

because more real income improves people's

ability to purchase goods and services

• Improve housing and education and contribute to

social and environmental programs.

• Enhances country's ability to finance education,

public health, environment and the arts

• Improvements in Nation’s balance of payments.



Factors affecting productivity

External Factors

• Government polices

•Political, social and economic conditions

• The business climate

• Availability of finance,

• Power, water, transport, communications and raw

materials



Contd..

• INTERNAL FACTORS

• Hard Factors

– Service or Product

– Plant and Equipment

– Technology

– Materials and Energy

• Soft Factors

– People

– Organization and Systems

– Work Methods

– Management



Methods of improving Productivity

By increasingoutputs to with

same inputs

By decreasing

inputs but

maintaining same

output

By increasing

outputs &

decreasing inputs

to change ratio

favorably.



Barriers to productivity in INDIA

• Family-controlled industry leading to earning easy money.

• Some Segments have monopolistic market, some are

competitive one.• Erratic inflow of orders.

• Lack of productivity/quality culture.

• Shortage of funds & codification are at low level.

• Automation is not encouraged.



Contd..

• Low priority of marketing & commercial activities, poor after

service.

• Complicated govt. policy, rules & regulations.

• Energy shortage.

• Poor working conditions (light, ventilations, safety,

housekeeping).

• Non availability of some basic material & components (to be

imported), unreliable suppliers.



Suggestions for Productivity

Enhancement in INDIA

• Government support for productivity through propagating Productivity

Consciousness in society.

• Initiating long term policies for productivity growth

• Government can improve tax policy, develop better labour legislation,

• Provide better access to natural resources, improve social infrastructure,

price policy – but individual org cannot.

• Productivity improvement cells in all industrial units and govt. ministries.

• Productivity awards for the public & industrial sector.



• Varundeep

• Prateek Madaan

Documents

Quality and Productivity-final