Lean Manufacturing: Productivity

Traditionally, we have looked to the worker for productivity increases. We have focused on working harder, and on work methods in order to improve the individual worker's productivity. The focus point of productivity, however, has shifted from the worker to the entire company. Issues such as ROI, ROA, Working Capital turns and Inventory Ratio begin to put the focus of productivity on a company wide basis instead of an individual worker basis. We must increase our productivity to survive and remain competitive. Our competition is still doing better than we are in many segments of the world economy. We must focus on raising the DNP through productivity increases in order to create more wealth. This in turn will increase the standard of living and hopefully begin doing a better job of fulfilling the American Dream. And finally, we must be prepared to deal with a declining work force in an economy that is shifting to service. This means less workers available for manufacturing. Therefore productivity in manufacturing must increase.

Productivity is defined as output divided by input. The units of measure can be hours, dollars, tons, rejects, or profits; it doesn't matter. As long as you can measure the output and the input, it can be compared. Within this context, we will explore the six Ms of manufacturing—Manpower, Methods, Material, Machines, Money, and Management. These are the major resources that make up the activities of a manufacturing firm and it is in these areas that we must focus our attention to become more productive.

Manpower is still a valid area to look at for productivity increases, but we must enable our people to work smarter and better as opposed to simply working harder. As management and supervi­sion, we must begin to focus on receiving a fair day's work for a fair day's pay from our people. Focus should be placed on the comparison between time and attendance time and the direct labor that is being reported against jobs. We can no longer be satisfied with indirect labor charges that exceed 10-15%. It is equally important that we focus on earned standard, given that the standards are accurate and fair.

People need to work in a satisfying environment and it is management's task to eliminate what have been referred to as the dissatisfiers. In 1967, Fredrick Hertzberg identified what he determined to be the dissatisfiers for workers in a manufacturing environment. Dissatisfiers include poor levels of pay, poor work instruction, a dangerous work environment, and no possibility of advancement. As long as these dissatisfying issues exist, people will not be able to direct their attention to their work and consequently productivity will suffer. On the other hand, we must also acknowledge that simply eliminating these issues will not motivate an individual. Once we get the dissatisfiers resolved, we can begin motivating people through the use of need-satisfiers such as promotability, socialness, recognition, and job satisfac­tion.

Managers must commit themselves to spending the time necessary to train employees, particularly the new employee. There is a very formal five step training program that has been outlined, and while it is somewhat laborious, it certainly makes sense when you consider the investment that is made in a new employee. The first

step of this training program is a formal orientation to the company, what the company does, who the company's customers are and what products are produced. The next step would be on the job exposure. This will expose the worker to the work site, the geographical layout of the facility and where the different services are throughout the facility that this individual may need. This is simply a familiarization with the physical aspects of the job. The third step would involve a formal training program. This would typically be held in a classroom, where training would take place emphasizing the job skills necessary for the work. This would be an ideal time to talk about tool use, how to reduce scrap and re-work, as well as what to do when they do occur. The fourth step would be a detailed exposure to the product lines, not only the components that make them up, but also the end items. It is also pertinent for management to spend some time instructing people where these end items are used in customer's product, so that we can identify with the end user.

Only after these four formal steps have taken place, would we put a person into the work environment with a formal on the job training program. We would want to assign them to a partner who not only has good work habits, but who also could be used as a role model. It is important also to make sure that this employee is put into a group of peers that will help to encourage the development of skills either through example, or through peer pressure. Without this type of training program, we are not getting a good return for our investment when that employee goes into the work force.

To be Continued

Lean Six Sigma Training   Thinking Out of the Box   
Balanced Scorecards  Strategic Tactical Planning  
Supply Chain Inventory Management  Total Quality Management Principles
Lean Manufacturing Implementation  Lean Manufacturing Principles