Productivity Improvement in Industries

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Abstract

This literature review explores the possible methods available for productivity improvement in industries. Productivity is affected by various factors but the main ones include work measurement and waste materials. When good working conditions are availed to employees of an organization, their morale is boosted leading to increased productivity of the company as a unit. On the other hand, waste materials in an organization contribute greatly to reduced productivity. Therefore, if waste materials are eliminated in the production process, this can translate to improved productivity in an industry.

Introduction

Productivity is a very important factor in any industry especially when talking about profitability. Company’s profits do vary proportionately to the productivity level at any particular time. Productivity is the relationship that exists between the total outputs either goods or services and the total inputs of either physical goods or intangible services to the company’s customers (Ali, Yousof, Khan, and Masood 2212). Therefore, for a company to boost its profits, clearly set measurement systems of the productivity level need to be in place to monitor every step the company takes. This means that productivity improvement is capable of use as a unit of measurement of a company’s growth and profitability. Good methods of measuring productivity therefore, need establishment to ensure improvement in industries. Productivity encompasses many departments in any industry ranging from the quality of the finished products, cost of production, amount of capital, and cost of labor. There are also numerous ways of improving the productivity levels of an industry like quality improvement or measurement methods. However, this review limits its scope to measurement methods as a method of improving productivity in industries today since without measurement no improvements can be observed (Williams 9). This review will not only consider the normal methods of measuring productivity through amount of finished goods, but also consider the affairs of the workers and waste reduction. It is within the scope of this review to evaluate some of the traditional methods of gauging productivity coupled with attempts to demonstrate and support the hypothesis as stated above.

Background

Industrial engineering foundation lies squarely on taking measurements. This department is responsible for taking measurements to make recommendation on any possible changes to improve a company’s profitability. In his presentation, Rauglas observes that companies that use engineered work measurement as part of their management strategy are assured of 20-25% labor conversion and 20-25% increase in the rate of production (4). This observation implies that, in an organization fewer people do the same amount of work leading to reduced cost of labor. Moreover, throughput of the plant also increases. This paper reviews various ways in which productivity improvement is possible in industries today.

Traditional Methods

Various methods of productivity measurement have been in use until recently. Quality productivity measurements often depend on three pillars that are interdependent to each other viz. finished parts, worker’s safety, and employee attitude or morale (Morris 14). Most industries have used the number of finished products manufactured within their premises and actually later sold, as the major measurement of productivity implying that, the higher the number of finished parts produced and sold to consumers, the higher the productivity of the company and vice versa. As such, the other pillars of productivity measurement are either be neglected or counted as minor contributors to the overall productivity level. According to Morris, some companies go further to establish a condition that only finished parts meeting the Quality Specification Test Count in gauging productivity (14). It is such a pity that such companies have limited themselves to such a small scope of the many contributors to the productivity in an industry.

The article expounds that, while other methods of gauging productivity has emerged like the amount of waste produced by the industry, attention also need to be given to the employees. Morris highlights that, improved working conditions for the employees of a company will lead to improved productivity in any particular industry (14). He notes clearly that employee confidence and safety precautions availed to the workers directly link to the productivity of the company. Such safety precaution may include safety jackets, gloves, goggles, overalls, ear shields, and helmets. Depending on the environment that the workers are exposed to, they can either improve the productivity of the industry by working harder and whole-heartedly, or reduce productivity in a bid to protect themselves. This article further asserts that employee downtime results to reduced productivity hence reduced profits (Morris 14); an observation that supports the thesis as stated that productivity measures lead to improved performance of the company.

Working Condition

Employees form the most important part of an organization; actually, they resemble an engine in a car. Although customers are the final recipients of the goods and services produced by the organization, the employees form the fabric of the organization because they can easily decide to jeopardize the whole process. Byers, in an article explores “how far the employees have to walk from one station to another” (9), implying the pain they go through when serving an organization. The article observes that if the affairs of the employees come first, productivity improves almost immediately. Some of the issues concerning employees that need attention include allowances and benefits extended to them. Insurance, especially for those working under extremely risky environments serves to motivate the employees that the organization has their best interest at heart.

The effects of employee’s behaviors and attitudes affect the organization slowly, meaning that the effects are not immediately visible in the productivity level but like cancerous cells, they grow to affect the whole organization over time. The research observed that if employers do not motivate their employees, they work mostly under supervision and not self-drive. Idleness becomes the order of the day in the firm, but if incentives and bonuses are extended to hard working individuals, productivity can be observed to improve. The article insists that each organization needs to create a system of dealing with employee issues whether good or bad. Improved working conditions means improved productivity by industries hence this article supports the hypothesis.

Rest

As mentioned earlier, measurements will never be divorced from industrial engineering. As such, the performance of the employees at their places of work goes a long way to determine the productivity levels in that organization. The worker’s alertness, mood, ability to make quick decision, and memory are only but a few indicators of productivity. However, due to life demands and stress, most of the employees appeared in foul moods, were subject to memory lapse, and showed lack of alertness. It was discovered that most workers slept for very few hours because of either extra jobs or overworking at their places of work. Such circumstances translated to poor work performances and reduced productivity in the end. These workers sometimes came to work late, escaped some of their responsibilities and always complained incase of any grievances.

The author of the article suggested taking short naps during the day to ease the pressure and stress of work. The short naps helped the mind to relax and refresh allowing the worker to be alert and attentive. Although exercise and nutrition received a lot of focus, it was established that sleep contributed greatly to productivity. Hence, emphasis should be given on workers’ rest to increase their productivity at their place of work. Though contrary to what most organizations believe that continuous work without rest increase productivity, this author argued that lack of rest led to reduced productivity due to stress and tiredness. Therefore, the author advocates for companies to arrange for their employees to take short naps during small breaks to help improve productivity.

Lean Manufacturing

The research further notes that other industries gauge their productivity on the amount of waste produced by their industry. On their part Rey, Ripley and Neal researched the method known as lean manufacturing and its application in the concrete industry (2). They labeled it as a systematic approach to improving productivity thus did a lot of work relevant to this study. Lean manufacturing is the method of productivity improvement that involves identifying and reducing waste materials that goes hand in hand with continuous improvement (Rey, Ripley, and Neal 3). This method was first developed by the Japanese car manufacturing company, Toyota, but later applied by different types of industries including engineering, administration, and construction.

The primary purpose of this particular method is to identify waste and reduce costs accumulated by the waste, translating to an efficient, smooth running, and competitive organization. The researchers outlined that the lean process began by establishing the value added to the product on its way to becoming a useful product. The value added in this case implies any works that contribute to changing of the raw material to the final product as required by the customer. Therefore, any processes that consume resources of any kind without adding value to the product receive classification as waste. This stage according to the research is the most important step in the lean process mainly because some of the wastes are very common thus not easily recognizable.

Types of Wastes

Wastes occur in everyday live and in businesses in any industry. Some of the types of waste may include motion, waiting, defects, transport, people, overproduction, inventory, and process. Motion waste is caused mainly by poor organization, misunderstanding, or poor tool design leading to walking when either looking for tools or counting something. Waiting cannot be classified any different from motion but it results to idle time created when waiting for tools not readily available due to poor schedule and disorganization. Defects may result to poor designs while poor layout and poor design of process flow causes transport wastes. Overproduction waste on its part refers to manufacture of products earlier or faster than actually required. The causes of such wastes include among others, inspection delays and poor schedules of workers.

An inventory waste occurs when excess output is obtained from a process implying that, it is more than the amount required in the next step caused by situations of miscommunication or poor scheduling. ‘People’ is the most wasted resource in any given industry; as a waste, people refer to the waste of failing to exploit the employees’ abilities. The causes of such wastes may include low expectations by the employees, poor conditions of working, or lack of good leadership and management teams. These are only examples of wastes possible in any organization but the list is not final. Waste may emerge in different ways depending on the type of industry in consideration. However, the research highlights a much-neglected area that gravely affects productivity in different firms.

The list of wastes and their causes indicates that, productivity of any firm can be improved through elimination or reduction of wastes. Rey, Ripley, and Neal state that, the lean manufacturing method has designed tools and methods efficiently to reduce any wastes found within the workflow translating to improved productivity (5). They came up with different strategies that some of them required implementation dependent on others. These tools involved establishing an interdepartmental team to identify the wastes across the whole production process. The method outlined that, the work place organization was paramount to reduced wastes. Visual controls by painting or having signs on the wall as well as the plant layout form part of the lean manufacturing process tools. The other tool involved is balancing of flow in the manufacturing process. This meant establishment of standard tasks, process cycle, and scheduling the workers appropriately. Consequently, walking, waiting, and repetitive material handling reduced, hence, waste reduction. For all the methods and tools mentioned to be effective, the process requires teamwork participation and this way, people would feel appreciated and incase of training and mentorship, employers would be easy to learn and follow. The lean process explained above supports the hypothesis as stated because waste reduction will result to reduced costs hence improved productivity in industries.

Measurement

In his article, Badiru outlined the importance of productivity measurement as a method of improving the productivity level (24). He categorically stated that, it is impossible for industrial engineers to succeed in their call to facilitate integration and coordination of top-notch technologies without understanding measurement of time, motion, and performance. He observed that to adapt to the ever-changing technology, all the stakeholders have to come together and participate collectively in improvement projects. The author associated work measurement with industrial engineering and insisted on it remaining an important competency test.

Achievement of organizational profitability goals required measurement of various effects in a company. Some of these variables include worker’s performance, resources consumption, and productivity levels hence measurement seemed indispensable. Badiru highlights various situations that may occur in an organization and necessitate measurement of their impact to productivity levels (24). Anything that happens in an organization no matter how small or insignificant it may appear, always affects the productivity level. Consequently, measurement is a serious method of improving the productivity of an organization. This article appropriately supports the hypothesis that measuring productivity leads to improvement in industries.

Conclusion

Every organization’s goal is to boost the annual profits at any given time among others goals. An organization making losses but achieving other goals like community development or technological advancement cannot be said to attain its objectives. Productivity contributes significantly to the profitability of any organization thus productivity measurement and consequent courses of action translate to improved profitability in an organization. When the different methods of productivity measurement were applied and necessary course of action taken from the results, productivity improved significantly. However, productivity measurement is not exploited and other methods of measurements require further studies. Technological developments in the world today depict an ever-changing world hence more studies are required to improve productivity considering the new production methods.

Works Cited

Ali, Syed, Yousof, Jamil, Khan, Memmona, and Masood, Syed. “Evaluation of performance in manufacturing organization through productivity and quality.” African Journal of Business Management 5.6 (2011): 2211-2219.

Badiru, Adedeji. “Long live work measurement.” Industrial Engineer Norcross 50.6 (2008): 20-27.

Byers, Robin. “Improving Productivity and Profits.” National Underwriter (Life and Health insurance) 88.35 (2008): 9-10.

Morris, Ray. “Productivity: Small Changes Can Lead to Large Gains.” Occupational Health and Safety 80.4 (2008): 14-15.

Rauglas, Dirk. “A forgotten Key to Success: Taking Lean to the Next Level: Work Measurement.” MTM Association, 2010. Web.

Rey, Bill, Ripley, Paul, and Neal, Doug. “Lean Manufacturing- A systematic approach to improving Productivity in the Precast Construction Industry.” PCI journal 16.4 (2006): 1-10.

Williams, Nathan. “Performance Measurement Systems for Converting Operations with Varying Performance Capabilities. IIE Annual Conference Proceedings, 2008. Web.

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