What is productivity?
Productivity is about the effective and efficient use of all resources. Resources include time, people, knowledge, information, finance, equipment, space, energy and materials.
To manage the resources of a business it is essential that you:
- understand exactly what needs to be done to meet customer demand
- establish a plan that clearly identifies the work to be carried out
- define and implement the methodologies that need to be used to complete all activities and tasks efficiently
- establish how long it will actually take to complete each activity and task
- determine what resources you need to meet the plan
- provide the necessary resources and initiate the plan
- constantly monitor what is actually happening against the plan
- identify variances and take the relevant actions to correct them or modify the plan
Productivity is often linked with “time and motion”. The evidence of time and motion studies was used to put pressure on workers to perform faster. Not surprisingly these studies had a bad press as far as workers were concerned. Similarly the image of “time and motion” doesn’t sit well with us as productivity specialists.
The real responsibility for productivity or performance improvement should be largely in the hands of those organising the work rather than the individual worker.
What is Kaizen?
Kaizen, Japanese for “improvement,” or “change for the better” refers to philosophy or practices that focus upon continuous improvement of processes in manufacturing, engineering, game development and business management. It has been applied in healthcare, psychotherapy, life-coaching, government, banking, and other industries.
When used in the business sense and applied to the workplace, kaizen refers to activities that continually improve all functions, and involves all employees from the CEO to the assembly line workers. It also applies to processes, such as purchasing and logistics, that cross organisational boundaries into the supply chain.
By improving standardised activities and processes, Kaizen aims to eliminate waste. Kaizen was first implemented in several Japanese businesses after World War II, influenced in part by American business and quality management teachers who visited the country. It has since spread throughout the world and is now being implemented in many other venues besides just business and productivity.
Kaizen is focused on making small improvements on a continuous basis. Kaizen involves every employee in making change—in most cases small, incremental changes. It focuses on identifying problems at their source, solving them at their source, and changing standards to ensure the problem stays solved. It’s not unusual for Kaizen to result in 25 to 30 suggestions per employee, per year, and to have over 90% of those implemented.
For example, Toyota is well-known as one of the leaders in using Kaizen. In 1999 at one U.S. plant, 7,000 Toyota employees submitted over 75,000 suggestions, of which 99% were implemented.
These continual small improvements add up to major benefits. They result in improved productivity, improved quality, better safety, faster delivery, lower costs, and greater customer satisfaction. On top of these benefits to the company, employees working in Kaizen-based companies generally find work to be easier and more enjoyable — resulting in higher employee morale and job satisfaction, and lower turn-over.
With every employee looking for ways to make improvements, you can expect results such as:
Kaizen reduces waste, in areas such as inventory, waiting times, transportation, worker motion, employee skills, over production, excess quality and in processes.
Kaizen improves, space utilisation, product quality, use of capital, communications, production capacity and employee retention.
Kaizen provides, immediate results. Instead of focusing on large, capital intensive improvements, Kaizen focuses on creative investments that continually solve large numbers of small problems. Large, capital projects and major changes will still be needed, and Kaizen will also improve the capital projects process, but the real power of Kaizen is in the ongoing process of continually making small improvements that improve processes and reduce waste.
10 steps to implement Kaizen in the organisation
1. Training: The key issue is to select a small group of individuals to be trained as mentors who will also be the key person to select the team members.
2. Project selection: We have written extensively about the need for projects to be aligned. A few of the articles are ‘Let Your Business Define Your Performance Improvement Program’ and ‘Business Process Management (BPM) = Robust Project Pipelines After the Low Hanging Fruit is Harvested’. But along with alignment, project selections should be cognisant of the impact the project will have on the specific area in which the project is to be conducted as well as any up or downstream effects.
3. Team selection: The team must start with subject matter experts from the targeted process area. But it should also be cross-functional and include process owners, finance and admin personnel, IT personnel and anyone who has pertinent knowledge of the project process. These people should be open minded, willing to challenge the status quo and influential in the organisation.
4. Value stream mapping: This is a hands-on technique utilising flow charting and icons to analyse information flow in graphical form. The team will identify and compile all the specific elements necessary to bring a service from inception to delivery. The purpose is to understand the relationship between process steps and identify those areas most in need of improvement.
5. Process mapping: The process map is more focused on one part of the overall process than the value stream map discussed above and provides more detail. When a team builds a process map it allows everyone to agree on the actual steps performed to produce the product or service. It’s a great tool for identifying non-value added process steps and reducing complexity. This begins the team’s root cause analysis.
6. Developing baseline data: You must develop Primary Metrics to improve a process. In fact, it is the development of that Primary Metric that often leads to and is an indication of improvement.
7. Creating spaghetti charts: This is a visual diagram depicting the information, personnel, and document movement in a process, department or entire service organisation. It is a great first step to eliminating waste in motion and conveyance.
8. Conducting time study analysis: This tool is used to collect and verify cycle time data relative to an operation or process. This provides for careful study of each aspect of the process and continues to contribute to root cause analysis.
9. Developing continuous improvement: This is where the team records the changes to be implemented resulting from the analysis of collected data and brainstorming. The purpose is to identify improvements and their implementation.
10. Implementing appropriate changes: It seems all that is left is to implement the improvement. But along with implementation, the team should develop Control Plans so 30 to 60 days after implementation one can assess the impact of the process changes.
What is 5S?
5S is the name of a workplace organisation method that uses a list of five Japanese words: seiri, seiton, seiso, seiketsu, and shitsuke. Transliterated or translated into English, they all start with the letter “S”.
The list describes how to organise a work space for efficiency and effectiveness by identifying and storing the items used, maintaining the area and items, and sustaining the new order. The decision-making process usually comes from a dialogue about standardisation, which builds understanding among employees of how they should do the work.
The five steps of 5S are:
5S Seiri (sort, clearing, classify) to remove all of the clutter from the work place
5S Seiton (straighten, simplify, set in order, configure) to organise all tools, materials and equipment in an efficient and ergonomic manner.
5S Seiso (sweep, shine, scrub, clean and check) to clean up the entire area removing all dirt.
5S Seiketsu (standardise, stabilise, conformity) to ensure standard ways of working for the first three stages.
5S Shitsuke (sustain, self discipline, custom and practice) to ensure that 5S principles are part of the culture of the business.
Benefits of 5S
The benefits of 5S for lean are significant, it is suggested that efficiency gains of the order of 10% to 30% can be achieved, and certainly within my experience of handling many 5S program implementations these levels of success have always been achieved, even in companies that already claim to have implemented 5S.
The reasons for these gains in efficiency are many fold and stem from a number of benefits driven by the implementation of 5S.
Due to the removal of all but the necessary items in a work area during the first stage of 5S you remove many instances of the waste of waiting and motion as items are easier to find and you do not have to get around unnecessary clutter.
The second stage of 5S results in ensuring that items (components, equipment, tools, machines, people) are located in the most ergonomic and thus efficient (and safer) positions. This eliminates many of the seven wastes of manufacturing. The operators do not have to search for things as the use of shadow boards and clear visual identification ensure that things are immediately to hand and obvious. These items are located as close to where they are needed and at the correct most ergonomic height and orientation to minimise handling.
The third stage of 5S ensures that the work place remains clear of clutter and that any signs of malfunction become more obvious leading to actions being taken to prevent more serious breakdowns and other delays.
The fourth and most important step is that of standardisation, wherein you ensure that there are standard ways of working. This ensures that everyone uses the most efficient work method and that there are clear standards. This prevents delays, defects and other wasteful occurrences.
The right tools in the right place, the correct methods and standards, and a motivated workforce means that you will have a far more efficient and less wasteful working environment. The visual management aspects ensure that anyone can see if there are problems such as things missing, in the wrong location and so on.
The fifth stage, sustain, ensures that this continues on an ongoing basis and that it remains everyone’s responsibility; this ensures that there is no slippage and that you continue to challenge what you do and make improvements through the constant involvement of your staff.
In addition to these benefits, you will have a visually more pleasing environment that will serve as a significant marketing tool from which to be able to sell your company.
(The writer is the Managing Director & CEO, McQuire Rens & Jones (Pvt) Ltd. He has held Regional Responsibilities of two Multinational Companies of which one, Smithkline Beecham International, was a Fortune 500 company before merging to become GSK. He carries out consultancy assignments and management training in Dubai, India, Maldives, Singapore, Malaysia, Indonesia and Bangladesh. Nalin has been consultant to assignments in the CEB, Airport & Aviation Services and setting up the PUCSL. He is a much sought-after business consultant and corporate management trainer in Sri Lanka. He has won special commendation from the UN Headquarters in New York for his record speed in re-profiling and re-structuring the UNDP. He has lead consultancy assignments for the World Bank and the ADB. Nalin is an executive coach to top teams of several multinational and blue chip companies. He is a Director on the Board of Entrust Securities Plc.)