Productivity Control

The task of control is to assure accomplishment of objectives by detecting potential or actual deviation from plans early enough to permit effective corrective action. Productivity targets must be capable of being measured periodically.

Productivity managers must have plans and they have to take control actions to steer the managerial actions on day to day to basis to accomplish the plans. The plan can be prepared for an year and circulated. Its execution requires every day decisions made on the basis of the cumulative events till that day in the year. Managers have to know the events as they are happening and have to take decisions to increase or decrease relevant inputs into the processes to assure the planned outcomes.

Control can also be interpreted as statistical process control. In the statistical process control terminology, there is variation in the output of any process and a chart showing mean value of the output and three sigma (standard deviation of the output) limits are made. The actual output at various periods is posted in this chart and the patterns show whether the process is under control or not. For example, if there is deterioration in a machine used in the process, the output may go down. The chart will show that process is out of control, meaning, it is not any more the originally set up process. The process has to be investigated and the deterioration has to be corrected.

So actions to control processes are required. Assurance is the mechanism that ensures that outputs come from processes under control. Outputs are not produced from out of control processes. Process control action is identifying out of control processes and rectifying them.

Principles of Control

Related to the purpose of control

Principle of assurance of objective

The task of control is to assure accomplishment of objectives by detecting potential or actual deviation from plans early enough to permit effective corrective action. Productivity targets must be capable of being measured periodically.

Principle of efficiency of controls

The more control approaches and techniques detect and illuminate the causes of potential or actual deviations from plans with the minimum of costs or other unsought consequences, the more efficient these controls will be. Productivity controls have to be cost effective and should not cause dissatisfaction in operators.

Principle of control responsibility

The primary responsibility for the exercise of control rests in the manager charged with the execution of plans.

Principle of direct control

The higher the quality of managers and their subordinates, the less will be the need for indirect controls.

(The principle may termed as principle of reduced controls. A superior can spend less time in control activities if he has more higher quality managers and their subordinates in his department.)

Productivity education and training are important. Productivity managers themselves have to demonstrate productivity in certain select activities done by operators.

Principles related to Structure of control

Principle of reflection of plans

The more controls are designed to deal with and reflect the specific nature and structure of plans, the more effective they will serve the interests of the enterprises and its managers.

Principle of organizational suitability

The more controls are designed to reflect the place in the organization structure where responsibility for action lies, the more they will facilitate correction of deviation of events from plans.

Principle of individuality of controls

Controls have to be consistent with the position, operational responsibility, competence, and needs of the individuals who have to interpret the control measures and exercise control. 

Process of control

Principle of standards

Effective control requires objective, accurate, and suitable controls.

Principle of critical-point control

Effective control requires attention to those factors critical to appraising performance against an individual plan.

The exception Principle

The more a manager concentrates his control on exceptions, the more efficient will be the results of this control.

Principle of flexibility of controls

If controls are to remain effective despite failure or unforeseen changes in plans, flexibility is required in the design of controls.

Principle of action

Principle of Action

Control is justified only if indicated or experienced deviations from plans are corrected through appropriate planning, organizing, staffing and directing.

Measure only those which are monitored by the concerned and corrected. Don't make people fill forms for no purpose.

About Productivity in Books on Principles of Management

In the control part of the book, Koontz and O'Donnell discussed productivity.

Productivity is a major concern in 1990s and will be one of the major concerns in the future also. - Koontz & O'Donnell - Principles of Management.

Productivity implies measurement and thus is connected to control in which also measurement is important.

Industrial engineering is the profession with focus on efficiency and productivity in engineering products, activities, processes and production systems. IIE's describes itself as the global association of efficiency and productivity professionals.

Productivity of knowledge workers is yet to be operationalized for measurement and improvement.

Koontz and O'Donnell and Weirich covered Operation related productivity improvement techniques in this chapter.

Operations research
Time event networks
Value engineering
Work simplification
Quality circles

In some editions of the book on Management, Koontz, O'Donnell and Weirich said, in reality, the entire book of management is about productivity.

14th Edition

In 14th Edition, Chapter 20 is titled as  Productivity, Operations Management, and Total Quality Management.

The authors, say in a real sense, this whole book is about the improvement of productivity. How it will receive special attention in this chapter.

Undoubtedly, productivity is one of the major concerns of managers in the 21st century.

Productivity is the output-input ratio within a time period with due consideration for quality. Measurement of skill work is relatively easy, but it is more difficult for knowledge work.

Good management results in improvement of productivity.

Tools and Techniques for Improving Productivity

Value Engineering

Specific Steps:

1. Divide the product into parts.
2. Identify the costs for each part.
3. Identify the relative value of each part with respect to the  lowest cost design alternative for a similar function.
4. Find a new approach for those items that appear to have a high cost and low value.

Work Simplification

This is a process of obtaining the participation of workers in simplifying their work. Training sessions are conducted to teach concepts and principles of techniques such as time and motion studies, work flow analyses, and the layout analysis methods.

Just-in-Time Inventory System

In this inventory system, safety stocks are drastically reduced. , Set up cost or ordering cost is also drastically reduced giving low batch quantities for production and ordering. There is emphasis on zero defects, and any defective part found during the subsequent operation is immediately sent back to the earliest state for repair and the reasons for the defect occurrence is investigated and corrected. For the system to work, dependable relations with suppliers are required and also well planned transport arrangement that collect parts frequently in a day from many suppliers in small quantities is required. Japanese companies have made successful implementation of JIT systems and rest of the world is now redesigning its systems to implement JIT system and improve productivity.

Lean Manufacturing

A study by MIT team on American, Japanese and European car manufacturers showed that Japanese were more productive as they use fewer workers, a shorter development time, lower inventories, few suppliers, less production space, and less investment to produce more models. Their delivery times are also small. MIT team named the Japanese systems as Lean Systems and popularised Lean manufacturing.

Lean manufacturing is creative application of industrial engineering by the Japanese IEs and managers and is now a popular productivity improvement methodology all over the world.

Managing Productivity

From Management, 11th Edition, Stephen P.. Robbins, and Mary Coulter

Improving productivity is an important and major goal in virtually every organization. For countries, 

high productivity can lead to economic growth and development. Employees can receive higher wages and company profits can increase without causing inflation. For individual organizations, increased productivity gives them a reduction in cost  and thus the ability to offer more competitive prices.

Over the past decade, U.S. businesses have made dramatic improvements to increase

their efficiency. 

Examples 

The Latex Foam International’s state-of-the-art digital facility in Shelton, Connecticut, boosted capacity by 50 percent in a smaller space but with a 30 percent efficiency gain.

Service companies and departments  are also  pursuing productivity gains. 

Pella Corporation’s purchasing office improved productivity by reducing purchase order entry times anywhere from 50 percent to 86 percent, decreasing voucher processing by 27 percent, and eliminating 14 financial systems. Its information technology department slashed e-mail traffic in half and implemented work design improvements for heavy PC users such as call center users. The human resources department cut the time to process benefit enrollment by 156.5 days. And the finance department now takes 2 days instead of 6 to do its end-of-month closeout.

For global companies also improving productivity is an important objective and route to increase competitiveness. 

McDonald’s Corporation drastically reduced the time it takes to cook its french fries—65 seconds as compared to the 210 seconds it once took, saving time and other resources.

The Canadian Imperial Bank of Commerce, based in Toronto, automated its purchasing function, saving several million dollars annually.

Skoda, the Czech car company,  a subsidiary of Germany’s Volkswagen AG, improved its productivity through an intensive restructuring of its manufacturing process.

Productivity is a composite of people and operations variables. To improve productivity, managers must focus on both. 

The late W. Edwards Deming, a renowned quality expert, believed that managers, not workers, were the primary source of increased productivity. Some of his suggestions for managers included planning for the long-term future, never being complacent about product quality, understanding whether problems were confined to particular parts of the production process or stemmed from the overall process itself, training workers for the job they’re being asked to perform, raising the quality of line

supervisors, requiring workers to do quality work, and so forth.

High productivity can’t come solely from good “people management.” The truly effective organization will maximize productivity by successfully integrating people into the overall operations system. 

At Simplex Nails Manufacturing in Americus, Georgia, employees were involved as an integral part of the company’s much-needed turnaround effort.  Some production workers were made part of  a plant-wide cleanup and organization effort, which freed up floor space. The company’s sales force was retrained and were involved in developing ways to sell what customers wanted rather than what was in inventory. The results were dramatic. Inventory planning was changed on the basis of more accurate and reliable information, and was reduced by more than 50 percent.  The plant now has  20 percent more floor space, orders became more consistent, and employee morale improved. The company recognized the important interplay between people and the operations system.

Design for Productivity - Productivity Engineering - Product Industrial Engineering

Design for Productivity - A Productivity Engineering Task
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