We choose productivity as the basis for success because it offers the greatest opportunity for a better work environment and a better, also lower, cost way of doing things. All but a very few organizations can benefit from improvements in their productivity.
As an example of the size of the opportunity available through productivity improvement, its cost reduction area dwarfs the size of the current rage, outsourcing. Outsourcing of certain functional areas can in fact be harmful to the reputation and effectiveness of the enterprise which does the outsourcing. This especially true of customer service applications.
That portion of the customer service function which deals with customer complaints is uniquely positioned to assist the organization to improve its ways of doing things. The complaints of the customer are often based upon poorly designed internal processing systems.
In the author’s experience as a full time consultant over a 10 year period, virtually every enterprise has the capability to obtain between 5 per cent and 25 percent cost reductions as a result of full implementation of productivity enhancement programs for existing systems.
There are two types of productivity improvement. The first is technology improvement. A very good example of technology improvement is word processing. Before word processing came into existence, the way a business letter was created was for the writer to write out the letter by hand, give it to someone to type, proof read, correct and return to the writer. The writer then proof read the letter again and then sent it out. With word processing, the writer prepares the letter on the word processor. After the word processor checks the spelling, the letter is proof read by the writer who thens prints out the letter and sends it out. Technology has made this task simpler and quicker.
Technology improvements most often appear as new products. Your systems have to be adjusted to incorporate the new product. Often this results in a hidden cost factor in adopting the new technology.
Large, well managed organizations, are very sensitive to the need to keep up to date with technical developments. They establish an information flow and communication system between the various business unit general managers and the technical disciplines. The technical disciplines have “subject matter experts” (SME) who are responsible insure that the general managers understand how the technical issues affect their business units. The impact could be to open areas for new product development. It could present competition. It could also offer opportunities to improve the production of existing products.
The communication between the general managers and the SME’s is proactive in both directions. This produces a cross transfer of concepts and ideas within the organization.
The second type of productivity improvement is a change in the way in which a function or process is performed which makes the function or task simpler or reduces the labor content of the task. An example of this type improvement would be to change a report layout of a warehouse pick ticket from item number sequence to physical location sequence. This change will require less travel activity to pick an order than the former sequance. In this instance we have made the task simpler and more organized to preform.
It is in the second example that we see the opportunities which are present in the vast majority of organizations. It is important to note that this kind of opportunity is within the control of the organization and as such can be used extensively as a management tool. These opportunities are often visible to the workers who are engaged in performing the various tasks.
Their observations can be converted to specific approaches which can improve the process.
The various skills and tools which we will be discussing here are all needed to obtain the data and present operational practices. Once that information is available, we use the same tools to develop and test the proposed new methods for the enterprise. It is because the tools and methods are missing from present curriculum that we include them in this discussion. The development of better productivity becomes more efficient when these tools are applied to this subject.
The missing elements are: work measurement theory and practice, budgeting, production theory and practice, and other skills which are mentioned as they are discussed.