Hi Guys, These are some question I need to answer in my training class, can anyone help me with some suitable answers?

1. What do I mean by Productivity?
2. How do I measure the same with regard to the daily business deliverables?
3. What are the various parameters which contribute to the overall productivity?
4. As individuals and as a team are we able to quantify the various parameters which contribute to the overall productivity?

9th December 2009 From India

SANTOSH,
HERE IS SOME USEFUL MATERIAL.
REGARDS
LEO LINGHAM
1. What do I mean by Productivity?

Productivity is the amount of output created (in terms of goods produced or services rendered) per unit input used. For instance, labour productivity is typically measured as output per worker or output per labour-hour.
PRODUCTIVITY could also be explained by
PRODUCTIVITY = effectiveness / efficiency.
A simple way of looking at productivity in a business organization is to think of it in terms of the productivity as shown above.
Essentially, productivity is a ratio to measure how well an organization (or individual, industry, country) converts input resources (labor, materials, machines etc.) into goods and services.
This is usually expressed in ratios of inputs to outputs. That is (input) cost per (output) good / service. It is not on its own a measure of how efficient the conversion process is.
================================================== ======
Productivity Improvement
How productivity is improved
improvements can be realized by:
Achieving more output for the same input
Achieving the same output from less input
Achieving much more output for slightly more input
Getting slightly less output for much less input
There are six lines of attack to improve the productivity ratio of an organization, namely:
Improve basic process by research and development (long term)
Improve and provide new plant, equipment, and machinery (long term)
Simplify product and reduce variety (medium term)
Improve existing methods and procedures (short term)
Improve the planning of work and the use of manpower (short term)
Increase the overall effectiveness of employees (short term)
The focus should be the areas that most, if not all employees can contribute to, in a measurable way.
That is, if employees are properly motivated, coached, receive the right information at the right time, use simple productivity improvement tools and techniques and are rewarded in an appropriate way.
################################################## #################################
Productivity Guidelines
QUALITY
*Is there a better way?
*Will it benefit all?
*How do we maintain our standards?
*Are we the best we can be?
QUANTITY
*How can we speed things up?
*What are the obstacles?
*How can we do more?
*What’s next?
 
ECONOMY
*Can we utilize what we have?
*Is it practical?
*What are the tradeoffs?
*How can we limit risk?
 
ACCEPTABILITY
*What are people’s opinions?
*Is it disruptive?
*Will it gain acceptance?
*How can we get feedback?
################################################## ############
2. How do I measure the same with regard to the daily business deliverables?
All activities/ results can be measured.
Some deliverables can be measured ''daily''basis
-sales
-production
-distribution
-despatches
etc
Some deliverables can be measured ''periodic'' basis
like weekly or monthly
-inventory
-warehousing
-purchasing
etc
Some deliverables can be measured ''program'' basis
-marketing
-HR activities like recruitment / training etc.
-customer service
etc etc.
#########################################
3. What are the various parameters which contribute to the overall productivity?
4. As individuals and as a team are we able to quantify the various parameters which contribute to the overall productivity?
 
What VARIOUS DEPARTMENT Management activities and programs
can impact productivity
FIRST STEP,
YOU MUST ALIGN THE DEPARTMENT'S OBJECTIVES/STRATEGIES
TO THE COMPANY'S OBJECTIVES / STRATEGIES.
IF THE CORPORATE OBJECTIVE IS TO INCREASE
THE PRODUCTIVITY BY 7%, THEN EACH DEPARTMENT
DEVELOPS PROGRAMS/ KEY PERFORMANCE INDICATORS/
ACTION PLANS TO ACHIEVE THE SAME.
 
HERE ARE THE HRM activities/ programs that can impact organization productivity.
PROGRAMS / KEY PERFORMANCE INDICATORS/ACTION PLAN
 
FIRST STEP
review the company's
*VISION STATEMENT
*MISSION STATEMENT
*CORPORATE OBJECTIVES
*CORPORATE STRATEGY
*CORPORATE BUSINESS UNITS/ DEPARTMENTAL PLANS/STRATEGY.
FOR THE BUDGET PERIOD, WHICH IS USUALLY 12 MONTHS.
================================================== ======
SECOND STEP,
TAKE EACH DEPARTMENT ----ONE AT A TIME.
review, the
*DEPARTMENT OBJECTIVES
*DEPARTMENT STRATEGIES
* DEPARTMENTAL PLANS.
FOR THE BUDGET PERIOD, WHICH IS USUALLY 12 MONTHS.
=====================================
THIRD STEP
Set KPI FOR EACH DEPARTMENT

KRA and hence KPI is attributed to the person who
can have effect on the business results and is
self measured where applicable.
=============================================
AS AN EXAMPLE,
LET US NOW WORK ON HUMAN RESOURCE DEPARTMENT.
CORE KRAs of HR DEPARTMENT

-RECRUITMENT/ SELECTION
-WORKFORCE PLANNING/
-DIVERSITY MANAGEMENT
-PERFORMANCE MANAGEMENT

-REWARD MANAGEMENT
-WORKPLACE MANAGEMENT
-INDUSTRIAL RELATIONS
-SAFETY AND HEALTH WORKPLACE

-BUILDING CAPABILITIES AND ORGANIZATION LEARNING
-EFFECTIVE HR MANAGEMENT SYSTEMS , SUPPORT AND MONITORING
--------------------------------------------------------------------------
========================================
FOR THIS EXERCISE, WE HAVE TAKEN few areas
 
THE KRAs for HR [ weightage of importance %]

1.RECRUITMENT/ SELECTION [ 20%]
2.WORKFORCE PLANNING/ DIVERSITY [ 20%]
3.PERFORMANCE MANAGEMENT [ 25%]
4.REWARD MANAGEMENT [20%]
5.WORKPLACE MANAGEMENT AND RELATIONS [ 10%]
6.BUILDING CAPABILITIES AND ORGANIZATION LEARNING [ 5%]
TOTAL [ 100% ]
====================================
AGAIN AS AN EXAMPLE, IF THE
CORPORATE OBJECTIVE / STRATEGY, SAY IS
-improve the company competitive positioning and productivity
by 7%.
 
THEN THE
HR DEPARTMENT'S OBJECTIVE IS
-Achieve high productivity level in all activities [ say by 10%]
WHICH MEANS

KRA 1 -RECRUITMENT/ SELECTION
[KPI= fix the average time taken per employee 2 months MAXIMUM]
====================================
KRA 2 - WORKFORCE PLANNING/ DIVERSITY
ABSENTEEISM [ KPI =maintain absent rate at 5%]
TURNOVER [ KPI = control turnover rate at 7%]
=====================================
KRA 3- PERFORMANCE MANAGEMENT
PERFORMANCE APPRAISALS [KPI = all staff to be appraised at least once annually]
===================================
KRA 4 - REWARD MANAGEMENT
MARKET ORIENTED SALARY STRUCTURING [ KPI = total compensation to sales 12%]
============================================
KRA 5 - WORKPLACE MANAGEMENT AND RELATIONS
JOB EVALUATIONS [ KPI = 600 lower staff , below grade 4 to be evaluated]
===========================================
KRA 6 - BUILDING CAPABILITIES AND ORGANIZATION LEARNING
TRAINING [ KPI = average training hours per employee annually= 3 days or 24 hours]
============================================
THIS IS , ROUGHLY, HOW HR DEPARTMENTS
KRAs / KPAs / KPIs ARE SET , MONITORED AND
EVALUATED for THEIR CONTRIBUTION TO THE
PRODUCTIVITY.
============================================

KPI FOR THE VARIOUS KRAs should be
-quantity oriented
-quality oriented
-time oriented
-cost oriented
or a combination .
Quantity
Number of units produced/published/sent/received/processed/deadlines
Calls per hour/day/week
New products introduced
Grievances per 100 employees
Staff turnover
Customer complaints and compliments
Error rate or reworks
Returned goods
Sales increased
Profit increased
Increase in market share
 
Cost
Variance against budget
£’s spent
Profit
Waste
Overtime incurred
Speed
 
Time
Reduction in number of minutes/hours/days etc.
Deadlines and schedules met
Average call response time
Projects completed per week/month etc.
Number of minutes between customers
 
Qualitative
Accuracy
Customer satisfaction
Repeat business
Mistakes
Reworks/repairs
 
1.SALES
Key Result Area = Sales
Objective = Sell x new product to customers
KPI = Number of units sold per new customer whilst maintaining
gross profit level of 25%
 
 
ANOTHER IMPORTANT ARE IN BUSINESS IS
SUPPLY CHAIN MANAGEMENT
 
2.DEMAND PLANNING
-demand planning for core products
-demand planning for parts/accessories
-demand planning for critical items
-developing product life cycle trends
-product life cycle forecast for new products
etc
 
KPI could be
-remove stock shortages[ by %]
-improve inventory levels.[ 98% max]
etc
==================================
3.PROCUREMANT
-
quicker stock replenishment
-continual stock replenishment
-reduction in lead time
etc
 
KPI could be
-improving stock availability [100%]
-reducing cost [ 5%]
-reduction working capital [ 7%]
etc
=======================================
4.SUPPLY
-better supply coordination
-more effective communication with supplier
-faster / timely communication
etc
 
KPI could be
-developing supplier profile [ all accounts]
-developing suppliers networking [ all accounts]
etc
===================================
5.RAW--INVENTORY
-quicker replenishment
-customer focused inventory building
-logistical lead time reduction
-demand based inventory
etc
 
KPI could be
-better material availability[100%]
-good/ usable inventory levels [ 98% satisfaction]
etc
=======================================
6.MANUFACTURING
-elimination of wastages in production
-improving throughput effiiciency
-process efficiency
etc
 
KPI could be
-reducing back orders[ nil %]
-improving targeted delivery date [ 98%]
etc
=================================
7.FINISHED --INVENTORY
-reduction in logical leadtime
-full stock availability
etc
 
KPI could be
-full total inventory[ 100%]
-full stock / range availability [ full range]
etc
=================================
8.ORDER SERVICE
-short--response time to query
-shortening order cycle time
etc
 
KPI could be
-making targeted delivery date [ 100%]
-providing order status [ at all times]
etc
==================================
9.DISTRIBUTION
-order fill rate
-ontime delivery
-backorder by age
-service/ parts availability
-targeted delivery date
-order completeness
-delivery reliability
etc
 
KPI could be
-improve order fill rate [ 98%]
-improve on-time delivery [ 98%]
-reduce shipment delays[ 0%]
etc
=============================
10.CUSTOMER SERVICE
-order status
-delivery reliabilitty
-documentation integrity
etc
 
KPI could be
-timely order status [ 100%]
-timely delivery status.[ 100%]
etc
================================================== =====
THE SUPPLY CHAIN MANAGEMENT KPIs
could include
-IMPROVING MATERIAL FLOWS
-REDUCE RAW MATERIAL INVENTORY LEVELS
-REDUCING PURCHASING COST
-REDUCE FREIGHT COST
-REDUCE OBSOLETE STOCK LEVELS
-IMPROVING WAREHOUSING OPERATIONS EFFICIENCY
-OPTIMISE STOCK LEVELS
-REDUCE LEAD TIME
-REDUCE TOTAL INVENTORY LEVELS
-REDUCE FINISHED STOCKS
-IMPROVE DEMAND FORECASTING
-IMPROVE MATERIAL RESOURCE PLANNING
================================================== ===
===================================
OTHER AREAS OF THE BUISNESS could be as follows
2.MANUFACTURING
- Unit volume level
- unit cost target
-production efficiency improvement
-productivity improvement
-quality improvement index
-capacity utilization
etc etc
====================================
MARKETING
-market share %
-new product launches success
-profit contribution by productlines

etc etc
=====================================
TRANSPORTATION
-%ACHIEVED AGAINST ORDERS
-PICKING / PACKING RATE
-FINISHED GOODS INVENTORY LEVEL
-STOCK TURNOVER
-====================================
FINANCE
-Cost of Capital USED
- Receivables leveL / against sales
-Bad-debt level
-Debt-equity ratio
=====================================
IN THIS WAY, EVERY DEPARTMENT
COULD BE ENABLED TO CONTRIBUTE
TO THE PRODUCTIVITY TARGET.
THIS CAN COME FROM
-INDIVIDUAL PERFORMANCE.
-GROUP PERFORMANCE.
-DEPARTMENT PERFORMANCE.
==============================
######################################

10th December 2009 From India, Mumbai
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