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One solution in tough economic times is to "do more with less."
That's what productivity improvement is all about. They used to
call it "more bang for the buck." And with fewer bucks to go
around, managers are looking to productivity improvement to
help them cope.
A QUESTION
Would you rather have twenty employees producing 1,000
"widgets" a day or ten workers producing seven hundred and
fifty? The answer is pretty clear. While the twenty employees
are making 50 units each, the ten employees output, at 75, is
50% greater! This can mean the difference between loss and
profitability; between survival and failure.
THE FORMULA
The productivity formula is a simple one: P=O/I. Productivity =
Output divided by Input. The more input required to produce
something, the lower the productivity. Conversely, more output
realized from the same or lower input results in greater
productivity.
MEASUREMENT
The first key to productivity is measurement. The manager must
know what the employees are doing. What are they supposed to be
producing? Admittedly, this can be more difficult than it
seems. Employees produce something. Is it reports, customer
contacts, completed service calls, product sales, etc.?
Frequently it is several outcomes/deliverables. Determine the
basic outputs for each employee. This will require some
analysis and thought, as what the employee is currently
producing may not be what they should be producing.
STANDARDS
The second key is establishing "standards." Once we know what
the employee should be producing, how much of it should they be
producing, and in what time-frame? Establishing standards is
essential and will enable some measure of control and
evaluation.
BENCHMARKING
Can you compare what your employees are doing with what other
employees are doing in similar companies within your industry?
If so, your task is easier. You will be able to make
comparisons. This factor alone will provide some objectivity to
the process. Sometimes these reports cover only a few types of
jobs, and do not take into account all of the unique factors of
your particular environment. In any event, adjustments will be
required. However, you will have meaningful starting point for
this part of your analysis, and industry comparisons provide
useful leverage in dealing with employees.
EVALUATION
The data which you have secured thus far must be analyzed.
Tweaking the criteria, measurements, standards, data collection
procedures and reporting will be necessary. If the outcome is
not what you expect or need, and it cannot be adequately
explained by system deficiencies or measurement difficulties,
then you must take action. For example, if your workers are 15%
below the industry average, why? If they're twenty percent
above, why? If they're "right on," why? Your analysis should
include what you may be doing "right," as well as areas that
cry for improvement.
IMPROVEMENT TARGETS
When your monitoring system is in place, and you're satisfied
that you're measuring the right things, measuring them
accurately, and you have an ongoing capability to do this-it's
time to consider improvement targets. The concept of
"continuous improvement" is based on the premise that "nothing
is perfect," and there is always room for improvement. You will
need to establish moderate, realistic, attainable targets.
Remember the S.M.A.R.T. goal-setting criteria. Goals need to
be: Specific, Measureable, Attainable, Realistic, and
Timely.
CONSISTENCY
You're not done yet. Successful organizations not only
implement the above steps, they consistently apply these
principles, techniques, procedures, analyses, and processes
aimed at creating a more productive enterprise.
DON'T FORGET QUALITY
Yes, productivity is important, but not at the cost of
sacrificing quality. Shortcuts can be taken, processes
streamlined, more "widgets" produced, but quality standards
must be maintained.
A reputation for low quality will quickly negate any cost
efficiencies realized through productivity gains.
WHY IS THIS IMPORTANT?
Productivity improvement may be more important at this time
than at any point in recent history. Current economic
conditions necessitate cost reduction to maintain
profitability. However, many companies are using a "meat axe"
approach to the problem. They are cutting the payrolls by
laying off employees. Sure this reduces costs, but without a
more methodical approach, any long-lasting gains may prove
elusive.
Tough times call for tough measures, but productivity
management is simply a good business practice that is more
important now than ever.
Ben Carlsen
17 Nov. 2008
Source: http://EzineArticles.com/?expert=Ben_Carlsen
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