2 Productivity 20120911 THIS INCLUDES .ppt

how industries can improve poeples lives

1. Productivity
Standard of living
Definition of productivity

2. 2
Standard of living
•The extent to which a person is able to provide the things that
are necessary for sustaining and enjoying life.
•Standard of living of a representative family differs greatly in
different parts of the world.
•What is considered a necessity in one part of the world could
be considered a luxury in the other.
•Basic necessities of a minimum decent standard of living:
Food, clothing, housing and hygiene. Also, security and
education also considered constituents.
•Greater the amount of goods and services produced in any
community, the higher its the average standard of living.
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3. 3
Standard of living
•There are two ways of increasing the amount of goods and
services produced:
- Increase the employment and investment in creating jobs. So
that more people are producing goods required for the society.
- Increase productivity. Same amount of labor produces more
goods.
We want:
•More and cheaper food by increase in agricultural productivity
•More and cheaper clothing and housing by increased industrial
productivity
•More hygiene, security and education by increasing overall
productivity.
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4. 4
Productivity
•Ratio between output and input.
•Arithmetic ratio of the amount produced to the amount of any
resources used in the production.
•The resources may be: land, material, plant, machines, tools,
labor. It could be combination of all!
•Over a period of time, one can say that productivity has
increased.
•How?
•Combination of improved technology, better planning, greater
skills etc.
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5. 5
Productivity
•Note that, increased production does not mean increased
productivity.
•Higher productivity means that more is produced with the
same expenditure of resources; that is, at the same cost in
terms of land, material, machine, time or labor.
•Alternatively, same amount is produced at less cost in terms of
land, labor, material etc; thereby releasing some of these
resources for the production of other things.
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6. 6
Productivity and standard of living
•If more is available at the same cost, or the same amount is
available at lesser cost the whole community benefits.
•As per the ILO, higher productivity provides ways for raising
the standard of living by:
1.Larger supplies of both consumer goods and capital goods at
lower cost and prices
2.Higher real earnings
3.Improvement in working conditions, e.g. by reduced working
hours
4.In general, strengthening of the economic foundations of
human well-being.
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7. 7
Productivity in industry
•Many factors affecting productivity of each organization; also,
they are dependent.
•Depending on the individual environments, decisions are to be
made.
•Industries where labor and capital costs are low compared to
the material costs, better use of material and plant gives the
greatest scope of cost reduction.
•In countries where capital and skilled labor are in shortage
compared to unskilled labor, one should look to increase the
output per machine or per skilled worker.
•Increasing the number of unskilled workers may be beneficial
if by doing so an expensive machine or skilled craftsmen are
enabled to increase production.
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8. 8
Government’s responsibility
•Government can create conditions favorable to raise
productivity. It can:
1.Have a balanced programs of economic development
2.Take steps necessary to maintain employment
3.Make opportunities for employment.
•Last step is specifically important for a developing country
like India.
•Government should make provisions for workers who are
going to loose jobs because of technology improvement –
training and education programs.
•Example: India’s First Five-Year Plan (1952).
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9. 9
Management’s responsibility
•The main responsibility for raising productivity in an
individual organization lies with the management.
•It can implement productivity programs.
•It can create a positive environment and obtain co-operation of
the employees.
•Trade unions should encourage its members to provide such
co-operation when the productivity program is beneficial to
workers, as well as the organization on the whole.
•We will look at management’s role in increasing productivity
of individual resource:
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10. 10
Productivity of material
At the design stage:
•Ensure least consumption of material,
•Purchase equipments and plants such that consumption of
material is economical.
At the operation stage:
•Use of correct process
•Right use of the process
•Operator training
•Proper handling and storage of products at all stages
•Proper packaging to reduce damage in transit
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11. 11
Productivity of land, machines and
manpower
•Effective utilization and maximum productivity is an
important source of cost reduction.
•Reduction in the original specification, before the land is
purchased saves capital outlay (as well as interest expenses)
•A savings in material which has to be imported saves import
duty and excise.
•Productivity of manpower and machines is typically measured
in terms of time (man-hours; machine-hours).
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12. 12
Factors tending to reduce productivity
Work content added due to the product for a manufacturing firm:
•The product or its components are designed such that it is
impossible to use most economical manufacturing processes.
•Excessive variety or lack of standardization.
•Incorrect quality standards.
•Excessive amount of material removal required.
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13. 13
Factors tending to reduce productivity
Work content added due to process
•Incorrect production process (and/or machine) used
•Process not operated properly
•Non-optimal layout with wasted movements.
•Working methods of operation causing wasted movements,
time and efforts.
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14. 14
Factors tending to reduce productivity
Ineffective time due to management
•Marketing policy which demands unnecessarily large number
of products.
•No standardization of components between as well as within
products.
•Failing to meet customer’s requirement from the beginning.
•No plan for flow of work.
•Improper supply of material, equipment.
•Improper maintenance of plant and machines.
•Insufficient safety measures.
•Improper working conditions resulting in interrupted work.
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15. 15
Factors tending to reduce productivity
Ineffective time within the control of worker
•Taking time off without good cause: by lateness, by idling at
work etc.
•Careless workmanship causing scrap or rework.
•Failing to observe safety standards.
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16. Management techniques to
reduce work content

17. 17
Nature of management
•Management is the organization and control of human activity
directed towards specific ends.
•Management techniques are systematic procedures of
investigation, planning and control which can be applied to
management problems.
•Systematic approach to the solution of the problems proceeds
step by step from known to the unknown, always on the basis
of ascertained facts.
•Since management deals with human beings, it can never be
completely scientific, and must partly be regarded as an art.
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18. 18
Reduce work content due to the
product
•Coupling of product design and process design phases (design
products such that most economical processes can be used).
•Pilot project/ prototyping to avoid mistakes at a advanced
stage (very common in chemical companies).
•Standardization of components.
•Setting correct quality standards
Stricter standards lead to increased manufacturing time,
lenient standards lead to greater variability.
•Knowing the customer – Management should conduct market
research and consumer surveys to know the customer better.
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19. 19
Reduce work content due to the
method
•Process planning – Identification of correct machines for the
process. In chemical industry, this is specified by the R&D
division or the license seller.
•Process research – Identification of best manufacturing
technique.
•Proper maintenance.
•Method study – Combine with process planning to give most
suitable tools for the operative. Includes factory layout,
working methods of the operative.
•Operator training – Improve working methods of the
operative.
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20. 20
Reduce ineffective time due to the
management
•Strategic decisions – Which markets to enter can affect
ineffective time to a great extent.
•Production planning – It is planning of proper programs of
work so that plant and workers are kept supplied without
having to wait.
•Proper programs should be applied only on the basis of sound
standards of performance.
•Work measurement – Setting up those standards.
•Material control – Workers and machines should not be idle
because of non-availability of material and tools.
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21. 21
Reduce ineffective time within control
of the worker
•Training.
•Make worker want to reduce ineffective time. (Create
conditions to make the worker get on with his work.
Hawthorne effect)
•Effective personnel policy and management’s attitude towards
the worker.
•Good relationship between management and worker.
•A sound wage structure, including incentive schemes
(typically based on time standards derived from work
measurement).
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22. 22
Work study
•Technique used in the examination of human work in all
contexts, and which lead systematically to the investigation of
all the factors which affect the efficiency and economy of the
situation being reviewed, in order to effect improvement.
•Two branches – method study and work measurement.
•Widely known as “time and motion study.”
•Rapid developments after World War II.
•Huge capital investment in process R&D may increase
productivity. However, it is expensive and time consuming.
•Work study focuses on human workers and can increase
productivity at a lower cost.
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23. 23
Work study
•Since line managers are typically busy with the day-to-day
activities, they can only look at work study during their free
time. They should not be entrusted with the work study
responsibilities.
•Workers also ruled out because they usually lack the
knowledge of the big picture.
•Therefore, responsibility should be given to someone who can
work full-time on work study, without direct management
duties.
•Someone in the staff and not a line position.
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24. ProductivityProductivity
PRODUCTIVITY IS , ABOVE ALL A STATE OF THE MIND.
IT IS AN ATTITUDE THAT SEEKS THE CONTINUOUS IMPROVEMENT OF
WHAT EXISTS.
IT IS A CONVICTION THAT ONE CAN DO BETTER TODAY THAN
YESTERDAY, AND THAT TOMMORROW WILL BE BETTER THAN
TODAY.
FURTHER MORE, IT REQUIRES CONSTANT EFFORTS TO ADAPT
ECONOMIC ACTIVITIES TO EVER-CHANGING CONDITIONS, AND THE
APPLICATION OF NEW THEORIES AND METHODS.
IT IS A FIRM BELIEF IN THE PROGRESS OF HUMANITY
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25. Productivity
Productivity:
“production per unit of effort”
effectiveness of productive effort.
Work organization:
quantitative techniques to
optimize productivity
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26. THE CURRENT
PRODUCTIVITY FOCUS
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27. Productivity
Efficiency = Output / Unit Input
Efficiency is “doing the thing right”
Effectiveness is “doing the right thing”
Productivity is an efficiency measure usually quoted as:
•Productivity = Output / Worker hours
•Machine productivity= output / machine hours
or = output / capital invested
•Energy productivity = output / kilowatt-hours
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28. Service ProductivityService Productivity
1. Typically labor intensive.
2. Frequently individually processed.
3. Often an intellectual task performed by
professionals.
4. Often difficult to mechanize.
5. Often difficult to evaluate for quality
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29. Productivity Growth 1971- 1992
29
Whole Economy Manufacturing
%

p
e
r

y
e
a
r
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
United States
West Germany
Japan
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30. Whirlpool
•Productivity improved Costs were pared Wages increased
30
Parts per man hour
95
100
105
110
115
1989 1990 1991
Cost per unit of a spin pinion
$1.50
$1.75
$2.00
$2.25
1989 1990 1991
Average w orker's annual cash compensation
24000
25000
26000
27000
1989 1990 1991
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31. Multi-Factor Productivity:
which facility has the best productivity
31
Multi-Factor ProductivityStator Pty Ltd Rotor Pty Ltd
Workers 500 100
Labour costs $20,000/yr/worker $20,000/yr/worker
Equipment $1m $5m
Output 1500 1200
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32. Multi-Factor ProductivityMulti-Factor Productivity
32
Stator Pty Ltd Rotor Pty Ltd
Normal (labour) productivity= 1500 / 500
= 3 machines / worker
= 1200 / 100
= 12 machines / worker
Capital productivity = 1500 / $1m
= 15 machines / $100k
= 1200 / $5m
= 2.4 machines / $100k
Labour/capital multi-factor
productivity
= 1500 / (500x(20k) + 1000k)
= 136 machines / $1m
= 1200 / (100x(2k) + 5000k)
= 171 machines / $1m
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33. Productivity Summary
•When analysing productivity the measures
must be appropriate
•These measures must be quantitative so
that changes can be monitored
•Quality should not be traded for
productivity
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34. 34
Work study: A tool for management
•Means of raising productivity (and efficiency) of the factory
by reorganization of work.
•Typically involves low or no capital expenditure.
•Systematic process – Covers all aspects of raising
productivity.
•Very accurate in setting standards of performance.
•Savings from work study start at once and continues as long as
the improved operations are performed.
•Applied everywhere: not only in manufacturing shops, offices,
shops, stores, laboratories; and service industries like
restaurants, etc.
•One of the most penetrating tools of investigation available to
management.
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35. 35
Work study: Beyond systematic
•Should be applied continuously, and throughout the
organization.
•Basis of successful work study: complete intolerance of waste
in any form – whether of material, time, effort or human
ability.
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36. 36
Techniques of work study
•Method study – Systematic recording and critical examination
of existing and proposed ways of doing work, as a means of
developing and applying easier and more effective methods
and reducing costs.
•Work measurement – The application of techniques designed
to establish the time for a qualified worker to carry out a
specified job at a defined level of performance.
•Method study is associated with the reduction of the work
content of a job or operation, while work measurement is
mostly concerned with the investigation and reduction of any
ineffective time associated with it.
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37. 37
Basic procedure of work study
1.Select the job or process to be studied.
2.Record from the direct observations everything that happens.
3.Examine the recorded facts critically and challenge
everything that is done.
4.Develop most economic method taking in to considerations
all circumstances.
5.Measure the quantity of work involved in the method selected
and calculate a standard time for doing it.
6.Define the new method and time to standardize.
7.Institutionalize the new method and time as practice.
8.Maintain the new standards by control procedures.
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38. Method study

39. 39
Objectives
•Improvement of processes and procedures.
•Improvements of factory, shop and workplace layout and of
design of plant and equipment.
•Economy of human efforts and the reduction of unnecessary
fatigue.
•Improvement in the use of materials, machines and manpower.
•The development of a better physical working environment.
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40. 40
Selecting the work to be studied
•Economic considerations
Bottlenecks
Movements of material over long distances
Operations involving repetitive work
•Technical considerations
Relatively straight forward
Based on the technical knowledge of the process
•Human considerations
Most difficult to foretell – because of mental and emotional
nature.
Select an unpopular job for method study.
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41. 41
Important considerations
1.Product and operation
2.Person who proposed investigation
3.Reason for proposal
4.Particulars of the job
5.Equipment
6.Layout
7.Product
8.Savings and/or increase in productivity expected.
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42. 42
Method study charts and diagrams
•Charts indicating process
sequence
- Outline process chart
- Flow process chart – Man,
Material and Equipment
type
- Two-handed process chart
•Charts using a time scale
- Multiple activity chart
- Simo chart
- PMTS chart
• Diagrams indicating movement
- Flow diagram - Chronocyclegraph
- Sting diagram - Travel chart
- Cyclograph
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43. 43
Method study charts and diagrams
•Outline process chart: Is a process chart giving an overall-
picture by recording in sequence only the main operations and
inspections.
•Flow process chart: A chart setting out the sequence of flow of
a product or a procedure b recording all events under review
using the appropriate chart symbols.
Man-type – Records what the worker does
Material-type – Records what happens to materials.
Equipment-type – Records how the equipment is used.
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44. 44
Why charts?
•It gives a complete picture of what is being done and helps to
understand the facts and its relationship to one another.
•Details on the chart must be obtained from direct
observation. Should not be from memory.
•Neatness and accuracy important.
•Increased value if following is included:
1.Product, equipment details (code#, drawing#)
2.Job or process being carried out
3.Location and time (date) of the study
4.Observer’s name
5.Chart reference number
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45. 45
Examine critically
•Means by which each activity is subjected to a systematic and
progressive series of questions.
•Grouping of activities: Five sets of activities can be grouped in
two categories
•Those in which something actually happens to the work-piece
(it is moved, worked upon or examined)
•Those in which it is not being touched (in storage or in delay)
•Objective is to maximize proportion of “do” activities.
•All other activities, however necessary, are considered “non-
productive.”
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46. 46
Primary questions
•The PURPOSE for which
•The PLACE at which
•The SEQUENCE in which
•The PERSON by whom
•The MEANS by which
……………………… .…………the activities are undertaken.
With a view to ELIMINATING, COMBINING,
REARRANGING, or SIMPLIFYING those activities.
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47. 47
Primary questions
PURPOSE
What?
Why?
ELIMINATE unnecessary
part of the job
PLACE Where?
COMBINE wherever possible
or REARRANGE the
sequence for better result
SEQUENCE When?
PERSON Who?
MEANS How? SIMPLIFY the operation
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48. 48
The secondary questions
PURPOSE
What else might be done?
What should be done?
PLACE
Where else might be done?
Where should be done?
SEQUENCE
When else might be done?
When should be done?
PERSON
Who else might be done?
Who should be done?
MEANS
How else might be done?
How should be done?
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49. Facility layout

50. 50
Facility layout: Method study
considerations
•Important considerations: Easiest flow of material, at the
lowest cost and with minimum handling.
•Essentially a work study problem.
•More recently, because of cost minimization aspects,
Operations personnel solves the layout problem.
•Work study methods: Flow diagram and process flow chart.
•Flow diagram – 3D diagram and/or model, 2D cardboard
models and 3D wood/plastic models.
•Ensure that diagrams/models are to the scale.
•Err on the safe side.
•CAD models more common now.
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51. 51
Facility layout: Method study
considerations
•Start with the flow diagram/model.
•Map all the material movements on the flow diagram/model.
•Measure distances of travel (computer output, thread method,
drawing lines on the diagram etc.)
•Analyze the current practice using a flow chart.
•Go through the usual rounds of primary and secondary
questions.
•Develop the improved method.
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52. Material handling

53. 53
Material handling
•Typically material handing may take up to 85% of the total
process time.
•Only important method study principle: Motion Economy!
•Material handling adds to the cost of manufacture but adds
nothing to the value of the product.
•Therefore, ideally there should be no material handling.
•Typical material handling problem solved in the same way as
all method study problem – start with asking questions.
•Most important question: WHY is this handling done?
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54. 54
Material handling: Process
•Traditional way of solving any method study problems
•Use of outline and process flow charts and flow diagrams to
ensure a correct workplace layout.
•AIM: Minimization of movement in any plane – horizontal or
vertical.
•Specially critical when one is buying material handling
equipment for the workplace.
•Change in workplace layout affects not only the quantity but
also the type of material handling equipment necessary.
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55. 55
Material handling: Important aspects
•Always try to keep material at the height at which they are to
be worked upon.
•Never keep material on floor.
•Always keep distances over which material is handled as short
as possible.
•Let gravity work for you.
•Always handle in bulk over distances.
•Always have sufficient boxes, platforms or container available
at the workplace.
•Keep gangways clear.
•Don’t reduce the supplementary human labor if it means
increase in the load for direct operators.
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56. Movement of workers

57. 57
Effects of shop layout on worker
movement
There are many activities in which workers move at irregular
intervals between a number of points in the working area, with
or without material. This happens when,
•Bulk material is fed to or removed from a continuous process.
•An operator is looking after two or more machines.
•Laborers are delivering material to or removing work from a
series of machines.
•In stores and shops when variety of materials are being
removed from or put away into racks or bins.
•In restaurants and canteens kitchens during preparation of
meal.
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58. 58
String diagram
A scale plan or model on which a thread is used to trace and
measure the path of workers, material or equipment during a
specified sequence of events.
•A special form of flow diagram, in which a thread is used to
measure distance.
•Necessary that the string diagram be drawn correctly to scale,
whereas regular flow diagram can be drawn only
approximately to scale.
•Start using the string diagram by recording all the relevant
facts from direct observation.
•Like flow diagram, it will most often be used to supplement a
flow process chart.
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59. 59
String diagram
•Thus, string diagram and flow chart can give clearest possible
picture of what is actually being done.
•Flow process chart will be examined critically in order to
make sure that all unnecessary activities are eliminated before
a new method is proposed and tested using string diagram.
•String diagram can be used to plot movements of material to
know how far the materials travel.
•Most commonly, the string diagram is used for plotting the
movements of workers.
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60. 60
String diagram: Process
•A scale plan of working area similar to that required for a flow
diagram must be made; as stated earlier, with higher accuracy.
•Machines, benches, stores etc. should be drawn to scale,
together with doorways, pillars, partitions.
•Completed plan should be attached to a softwood board and
pins driven into it firmly at every stopping point, the heads
being allowed to stand well clear of the surface.
•Pins should also be driven in at all the turning points on the
route.
•A measured length of thread is then taken and tied around the
pin at the starting point of the movements.
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61. 61
String diagram: Process
•It is then led around the pins at the other points of call in the
order noted on the study sheet until all the movements have
been dealt with.
•The result is to give a picture of the paths of movement of the
operators, those which are most frequently traversed being
covered with the greatest number of strings.
•By measuring the length of the thread, the distance traveled by
the worker can be calculated.
•Of two or more workers are studied over the same working
area, different colored threads may be used to distinguish
them.
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62. 62
String diagram: Analysis
•Examination of diagram and development of new layout done
in a similar fashion as with a flow diagram.
•Pins and templates are moved around until an arrangement is
found by which the same operation can be performed with a
minimum movement between them.
•This can be checked by leading the thread around the pins in
their new positions, keeping the same sequence.
•The length of the thread for the new layout is measured and
compared with the length of thread for original layout.
•Difference in length of threads represent the reduction in
distance traveled as a result of improved layout.
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63. 63
Travel chart
•String diagrams take a rather long time to construct. And when
a great many movements along complex paths are involved,
the diagram looks like ugly mess of criss-crossing lines.
•When the movement patterns are complex, the travel chart is
quicker and more manageable recording technique.
•It is a tabular record for presenting quantitative data about
movements of workers, materials or equipment between any
number of places over any given period of time.
•It is represented as a square matrix: columns indicating origin
of movement and rows the destination. Or vice versa.
•Data could be travel time taken, distance traveled etc.
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64. 64
Travel chart
•The person conducting the study doesn’t have to trace the
actual path from origin to destination.
•Just the start and end of the travel is recorded as corresponding
columns and row.
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65. 65
Man type process flow chart
•A flow process chart which records what the worker does.
•Frequently used in the study of jobs which are not highly
repetitive and standardized.
•Service and maintenance work, laboratory procedure and
supervisory and executive work can be recorded on this type
of chart.
•Since the chart follows one individual or a group performing
the same activities in sequence, the standard forms are used.
•Essential to attach a sketch showing the path of movement of
the worker while carrying out the operation charted.
•Written in active voice (e.g. worker “drills hole”) as against
passive voice of other flow charts (e.g. “hole drilled”).
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66. 66
Multiple activity chart
•A chart on which the activities of more than one subject
(worker, machine, equipment) are each recorded on a common
time scale to show their interrelationship.
•By using separate vertical columns, or bars to represent the
activities of different operators or machines against a common
time scale the chart shows the periods of idleness on the part
of any subjects, during the process.
•This makes it possible to rearrange these activities so that such
ineffective time is reduced.
•Extremely useful in organizing teams of operatives on mass-
production work, also on maintenance work when scheduling
expensive plant.
March 6, 2025