Hall MR12CD Wednesday 09h15 - Sello Mosai

PRESENTATION TO THE MANUFACTURING INDABA

Sello MosaiExecutive Manager: Productivity SA

e-mail: [email protected]

Productivity as a tool for Industrial development

• Introduction – Productivity

• Ways of improving Productivity

• Productivity and Profit

• Myths associated with Productivity

• Best Practice – Productivity Principles

• A holistic approach to productivity improvement within an Organisation

• Concluding remarks

Outline of Presentation

It is widely accepted that continuous productivity growth in entities is a significant determinant of sustained output growth and as a consequence can lead to employment creation, higher labour compensation, improvements in living standards and alleviation of poverty and inequality.

Productivity entails converting resources (inputs) into products and services (outputs) efficiently, effectively and with optimum utilisation of human capital, material, and physical resources for the benefit of business, society, the economy and the environment.

Productivity is a mindset that embraces the value of “doing what I do today better than I did yesterday, and even better tomorrow”.

Productivity centers around the output/input ratio, and other forms of measurement.

INTRODUCTION PRODUCTIVITY

WAYS OF IMPROVING PRODUCTIVITY

Wastagematerial, time, space, energy, money

Utilizationmachinery, equipment and people

Efficiencymachinery, equipment and people

OutputInput

Absenteeism/Presentismpeople

Labour Turn Overpeople

OutputInput

PRODUCTIVITY AND PROFIT

Productivity improvement always results in cost reduction

VA = labour cost + Interest + Taxation + Depreciation + profit

Reduced unit labour cost

Elimination of wastage in all its forms

Improved efficiency and utilisation

MYTH ABOUT PRODUCTIVITY

Productivity is not about…..Working harder

Cutting costs

Reducing employees

Employing specialists

BEST PRACTICEPRODUCTIVITY PRINCIPLES

Principle 1: Continuous Improvement – speeding up the production process:• Driving the programme from the Top

• Introduction of impact projects

• Change of attitude to productivity measures

• Networking and sharing with other improvement oriented companies

• Focusing in a consistent and structured manner on continuous improvement.


Principle 2: Strive for perfection – Cleaning and Organising:• Introduction of productivity tool-kits such as 5s (cleaning and organising).

• Benchmarking and striving for excellence

• Focusing in a consistent and structured manner on continuous improvement.


Principle 3: Providing Value to Customers – corrective measures:• Improving measures such as reducing total stock and lead times.

• Speeding up production process

• Reducing raw inventory materials throughout the value chain


Principle 4: Balance – Focus on People and Technology:• Reducing down-time that sometimes results from conflicts of interdependent

teams and/or departments.

• Bring about change in which teams and/or departments relate to each other and share responsibility

• Periodic meetings between team and/or departments assist to establish trust for a seamless working environment

• Preventative solutions are sought and reviewed periodically


Principle 5: Strengthening Internal Capability – Goal Alignment:• Need for strong technical skills, and competent leaders taking responsibility for

productivity on the shop-floor.

• All employees are informed and then become focused on company’s goals

• Cascading company goals into measurable targets at the departmental and then at team level

• Skilling and empowering employees to make shop-floor improvements, and

• Encourage innovations to make work simpler


Principle 6: Teamwork – Socratic Change Management:• Teamwork fosters a working environment where communication is clear, where

staff members are well informed and disciplined.

• If teamwork is part of the companies culture, it is possible to implement productivity improvements such as “hot seat” changeovers

• Staggering lunch tea and lunch times is also common where there is teamwork in order to improve productivity on the shop-floor


Principle 7: Sustainable Challenges:• Commitment of management to correct application of principles.

• Reporting of numbers, completing charts; and putting forward results for on-going measurement.

• Visual displays (‘dash-boards’) for identifying red-light activities.

• Influencing people’s attitudes and the way they think.

• You are in it for a long haul


Principle 8: Quality Assurance:• Measurement of defective products against sales for the month.

• A Quality Team to develop a set of reason codes that help with the analysis of customer complains

• Ability to identify at which point of production line defects occurred as well as department and/or teams where the defects arose

• A solution has to be presented as to how the quality problem will be avoided in the future.


Principle 9: Develop exceptional Leaders, Teams, and People:• Flat structure encourages true performance and direct communication.

• Open management style and cross-functional sharing allows for sharing of important information on a regular basis

• Mini-businesses form the bases of the structure of the company

• Team members have access to information upward and receive feed-back from more senior layers via mini-business meeting at the start of every shift.

• People like to know that they are being heard


Principle 10: Sharing Gains:• Possible scenario of an elaborate bonus system, i.e.,

• Annual attendance bonus

• A monthly bonus based on achieving daily production targets;

• And a monthly profit bonus that is based on 25% of PBIT.

• All employees at all levels partake in these schemes

• In spite of the difficulties of the schemes, the benefits have far outweighed these when it comes to motivating implementation of improvement programmes.

A HOLISTIC PRODUCTIVITY IMPROVEMENT APPROACH

• A thorough grasp of the strategic intent of all companies• Measure the key competitiveness drivers in all companies and establish factors causal to current performance levels

• Measure all processes/subsystems feeding into and departing from drivers and establish factors causal to current performance levels


• Design a company - specific productivity improvement plan in an inclusive manner

• Develop productivity competencies at varying levels and categories of employment

• Communicate details of the productivity improvement plan

• Plan, implement and evaluate productivity improvement campaign


• Review the productivity improvement plan and set new goals and targets

• Continuous review, planning, implementation, monitoring and evaluation.

All companies need to intensively focus on improving productivity and reducing inefficiencies which in turn can contribute to lowering high production costs and contribute to higher long-term output.

Productivity entails converting resources (inputs) into products and services (outputs) efficiently, effectively and with optimum utilisation of human capital and physical resources for the benefit of society, the economy and the environment.

Productivity is a mindset that embraces the value of “doing what I do today better than I did yesterday, and even better tomorrow”.

Productivity centers around the output/input ratio, and other forms of measurement.

Continuous improvements in productivity and related measures are necessary to assist all companies to be meaningful players in the economy.

CLOSING REMARKS

Questions & Discussion

Environment

Hall MR12CD Wednesday 09h15 - Sello Mosai