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Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM , MNITAD Managing Partner/CEO bod-karon consulting

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Page 1: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Enhancing Organizational

ProductivityDelivered byRevd. ‘Kayode Oyebode

FCIPM , MNITADManaging Partner/CEObod-karon consulting

Page 2: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

1 - 2

Induction Ceremony- Institute of Professional Managers & Administrators of Nigeria – Friday 20th June 2014

Mainland Hotel Oyingbo

Page 3: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

PRODUCTIVITY• What is it?

• Why do we need it?

• How do we measure it?

• How do we improve it?

• How do we implement it ?

1 - 3

Page 4: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

SIMPLY PUT!!• Productivity is the amount of

results (output) an organization

gets for a given amount of inputs

such as labor and machinery.

Many organizations are trying to

improve productivity because of

the stiff competition industry

wide both local and overseas.

Page 5: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Definition of Organizations• An organization is a collection of

people working together in a

coordinated and structured fashion

to achieve one or more goals.

• The word is derived from the Greek

word organon, itself derived from

the word ergon meaning "organ" .

Page 6: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Organizations Role in Society • Organizations exist to allow

accomplishment of work that could

not be achieved by people alone.

• As long as the goals of an

organization are appropriate,

society will allow them to exist

and they can contribute to society.

Page 7: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Organizations and People • Organizations are strongly

influenced by the people that form

part of them.

• Organizations can take in part of the

personality of the people within

them and their attitudes,

perceptions and behaviors affect

how an organization will operate.

Page 8: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Organizations Require Management • Organizations use management to

accomplish the work that is required to achieve the goals.

The Nature of the Organizational Environment • The external environment is

everything outside an organization that might affect it.

• The internal environment consists of conditions and forces within the organization.

Page 9: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

The Internal Environment

• Board of Directors

• Employees

• Culture

Page 10: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Board of Directors• A board of directors is only required

of organizations that are incorporated; however, many other firms have them.

• The board of directors is elected by the stockholders and is charged with overseeing the general management of the firm to ensure that it is being run in a way that best serves the stockholders' interests.

Page 11: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Employees• When the organization's employees

hold the same values and goals as its management, everyone wins.

• However, when managers and employees work toward different goals everyone suffers.

• The composition of the organization's employees is changing, and managers must learn how to deal effectively with these changes.

Page 12: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Culture• The culture of an organization is the set of

values that helps its members understand

what the organization stands for, how it

does things, and what it considers

important.

• A strong organizational culture can shape

the firm's overall effectiveness and long-

term success and help employees to be

more productive.

Page 13: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

The Nature of Management

• Management is a set of activities

directed at an organization’s

resources with the aim of achieving

organizational goals in an efficient

and effective manner.

Page 14: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Management Activities

• Planning

• Decision Making

• Organizing

• Leading

• Controlling

Page 15: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Organizations Resources

• Human

• Financial

• Physical

• Information

Page 16: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Efficient and Effective

• Efficient means using resources

wisely and without unnecessary

waste.

• Effective means doing the right

things successfully.

Page 17: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

The Management Process (1)

• Planning: Setting an organization’s

goals and deciding how best to achieve

them.

• Decision Making: Selecting a course of

action from a set of alternatives.

• Organizing: Grouping activities and

resources in a logical fashion.

Page 18: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

The Management Process (2)• Leading: The set of processes used to

get people to work together to advance

the interests of the organization.

• Controlling: Monitoring the progress of

the organization as it works toward its

goal to ensure that it is effectively and

efficiently achieving them.

Page 19: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Resources of an Organization• Whether Public or Private;

The resources that are available to them are:

• Land & Buildings• Materials• Plant, Machines & Equipment• Energy• People• Money

19

Page 20: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Definition of Productivity

• Very simply,

•Productivity = Output Input

For any type of organization

Page 21: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

EXAMPLES OF OUTPUT

• Whether the organization is public or private the outputs are ;

• Accomplishment of a taskAccomplishment of a task• Length of an outputLength of an output• Distance travelledDistance travelled• Number of pieces producedNumber of pieces produced• Weight of productionWeight of production

Page 22: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Examples of Output• Volume of output• Value of output• No. of documents

processed• Time taken to

carry out a job• No of jobs

attended• No. of

customers served

Examples of Input• Labour force or man

hours, man days. Etc.

• Labour cost (Naira)• Area of land(in

hectares)• Kg. Of material or

material cost in Rs.• Volume of material

or fluid• Length of material• square area of space• Units of power• Time etc.

22

Page 23: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

IMPROVING PRODUCTIVITY

• Output = • Input • Methods of improving ProductivityMethods of improving Productivity• Increase output while input remains

same• Decrease input while output remains

same• Increase input resulting in a very large

increase in output• Decrease input by a very large amount

with a resultant small reduction in output

Page 24: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Types of Productivity measures

• Single Factor productivitySingle Factor productivity• Multi Factor ProductivityMulti Factor Productivity• Total Factor ProductivityTotal Factor Productivity

Page 25: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Other thoughts on Other thoughts on ProductivityProductivity

•“Productivity is an attitude of Productivity is an attitude of mind”mind”

• ““Productivity means doing Productivity means doing something better today than something better today than yesterday”yesterday”

• ““Productivity means Productivity means continuous improvement”continuous improvement”

Page 26: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

•“…The wealthy nations they are the productive nations…”

•“…Productivity makes you wealthy, it allows you to support high wages, it allows you to support high returns on capital…”

Michael Porter

Page 27: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

The need of the hour

Massive Investment !

Massive increases in productivity !

Page 28: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Basic Approaches to Productivity Improvement

• Investment in high output and modern plant & equipment and new technology

- capital intensive approach• Improving the efficiency and

effectiveness of existing resources

- better management approach

Page 29: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

The two aspects of Productivity

•The “soft” or qualitative aspects

- to create an environment - to create an environment conducive to productivity

•The technical or quantitative aspect

- to measure productivity- to measure productivity

Page 30: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

The ‘soft’ aspects of Productivity

• Productivity culture

• Team work

• Quality work

• “Delighting” customers

• Work ethic

• Caring for the work force

Page 31: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

The quantitative aspects The quantitative aspects of Productivityof Productivity

•By this is meant the concepts

behind productivity

measurement and their

application to performance

measurement at the economy

and company level

Page 32: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Productivity LevelsProductivity Levels

• National ProductivityNational Productivity

• Industry ProductivityIndustry Productivity

• Company ProductivityCompany Productivity

• Divisional ProductivityDivisional Productivity

• Branch ProductivityBranch Productivity

• Individual ProductivityIndividual Productivity

Page 33: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

National ProductivityNational Productivity= GDP

EMPLOYED WORK FORCE

This is a single factor productivity

measure and therefore wrong

inferences may be made by comparing

one country with another

Page 34: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Productivity of Nigeria

•How do we compare with others in Africa and World

•What inferences can we draw

Page 35: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Organization Productivity- Organization Productivity- how to measure ?how to measure ?

The best methodbest method is to use

Added Value( as output) per single factor of

output(Added value measures the

wealth creation)

Page 36: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Calculating Added Value• The subtraction method:(Wealth Generation Approach)Added Value = Total output less

Bought-in materials and services The Addition method(Wealth Distribution Approach)Added Value = Labour cost +

Depreciation + Taxes + Interest + Profit

Page 37: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Examples of added value

• Added Value per employee• Added Value per Naira of labour

cost• Added Value per Kg of material• Added Value per KWH of power• Added Value per litre of fuel

Page 38: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

PRODUCTIVITY IS PRODUCTIVITY IS ALSO...ALSO...

• EFFICIENCYEFFICIENCY (Doing things right) +• EFFECTIVENESSEFFECTIVENESS (Doing the right things) ““Do the right thing and do it right Do the right thing and do it right

now”now”

Page 39: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Misconceptions about Productivity

• People fear, hate, feel let down, complain about productivity, very often because they have misunderstood it.

• There are several misconceptionsmisconceptions

about ProductivityProductivity

Page 40: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

MISCONCEPTION - IMISCONCEPTION - I

• Productivity = ProductionProductivity = Production

•Productivity is merely a more

“sophisticated” word for production

Page 41: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

MISCONCEPTION - IIMISCONCEPTION - II

Productivity means Productivity means

onlyonly Labour ProductivityLabour Productivity

Page 42: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

MISCONCEPTION - 3MISCONCEPTION - 3

• Productivity can be increased by getting people to work harder

• TRUE TO SOME EXTENTTRUE TO SOME EXTENT• But this is labour intensity

NOT real productivity. • Real productivity means working

more intelligently not harder

Page 43: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

MISCONCEPTION -4MISCONCEPTION -4

• Higher productivity causes retrenchment and large scale

loss of jobs

• This may happen in the short term but the long term benefits outweigh this disadvantage

Page 44: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Misconception -4(Contd.)

If there is low If there is low productivity then in the productivity then in the long term there will be long term there will be severe,severe,

large scale loss of large scale loss of jobs.jobs.

Page 45: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

MISCONCEPTION - 5MISCONCEPTION - 5

Productivity is relevant

only in manufacturing and

not relevant elsewhere

Page 46: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

MISCONCEPTION - 6MISCONCEPTION - 6

Productivity can beincreased by cutting

costs across the board

Page 47: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

MISCONCEPTION - 7MISCONCEPTION - 7

Productivity andProductivity and Quality are trade offs.Quality are trade offs. You cannot increase You cannot increase one without affecting the one without affecting the otherother

Page 48: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

MISCONCEPTION - 8MISCONCEPTION - 8

Productivity is directlyrelated to profits. In other words a profitable organization is always aproductive one

Page 49: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

MISCONCEPTION - 9MISCONCEPTION - 9

Productivity is relevant only in an open economy

Page 50: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

MISCONCEPTIONMISCONCEPTION - 10- 10

Productivity is only for

commercial enterprises

and not for the public sector

Page 51: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

MISCONCEPTION - 11MISCONCEPTION - 11

Productivity is for

organizations and not

for you and me

Page 52: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

SO DON’T BE MISLED BY THESE

MISCONCEPTIONS

Page 53: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Remember!!

•Productivity: The amount of

results (output) an organization

gets for a given amount of inputs.

•Productivity is calculated as a

comparison of outputs to inputs.

Page 54: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

• It is not an absolute number of

items produced.

Producing a higher number of

items will not necessarily result in

higher productivity, because if

both the inputs and outputs go up

or down at the same rate,

productivity will remain the same.

Page 55: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

•Productivity is the result of a complex combination of inputs and outputs. Productivity is a measure used to

evaluate the overall output of an organization.

It is a ratio which can be used to compare units of work. •Some may confuse productivity with being productive, or working to fill some type of quota or standard.

Page 56: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

•Productivity can refer to the amount of acceptable work employees do for each dollar they earn or

the number of acceptable products manufactured with a given amount of resources.

•Productivity is also used to compare the competitiveness of companies and countries.

Page 57: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

How do we improve Productivity

First point to remember

is the M I G cycle

Page 58: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

The M I G CYCLEThe M I G CYCLE

MEASURE

IMPROVE

GAIN SHARE

Page 59: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

The PROFIT GOAL

PROFIT = REVENUE - COSTS

Page 60: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Major StepsMajor Steps

Analyze the Revenues Analyze the Costs

And then Prioritize

Find the Vital Few Components of cost

Page 61: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

ANALYZE REVENUE ANALYZE REVENUE SOURCESSOURCES

Page 62: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

ANALYZE ANALYZE COSTSCOSTS

Page 63: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

CLOSELY LOOK AT

Labour costsMaterial costsEnergy costsFinance costsOverhead costs

Page 64: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Improving labour productivity

• Improving working conditions- lighting, ventilation, noise(music), temperature, work times

• Using appropriate and better tools• Ergonomics and better work station layout.• Improving factory, stores & office layout.• Improving the method/process - use 5Ws &

IH• Who is it about?, What happened? Where did it

take place? When did it take place? Why did it happen?

• How did it happen?• Improving the nutritional status of workers

Page 65: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Improving labour productivity

• Improving industrial housekeeping(5s) and safety

1. Seiri• Remove unnecessary items and dispose of

them properly• Make work easier by eliminating obstacles• Reduce chance of being disturbed with

unnecessary items• Prevent accumulation of unnecessary items• Evaluate necessary items with regard to

dept/cost/other factors.

Page 66: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Improving labour productivity

2. Seiton (straighten or streamline)•Arrange all necessary items in order so they can be easily picked for use•Prevent loss and waste of time•Make it easy to find and pick up necessary items•Ensure first-come-first-serve basis•Make work flow smooth and easy•Can also be translated as "set in order“•3. Seiso (shine)•Clean your workplace completely•Use cleaning as inspection•Prevent machinery and equipment deterioration•Keep workplace safe and easy to work•Can also be translated as "sweep"

Page 67: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Improving labour productivity

4. Seiketsu (standardize)•Maintain high standards of housekeeping and workplace organization at all times•Maintain cleanliness and orderliness•Maintain everything in order and according to its standard.5. Shitsuke (sustain)•To keep in working order•Also translates to "Self-Discipline" meaning to do without being told•Improving welfare facilities and worker motivation

Page 68: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Use the brains of the Use the brains of the workerworker• Quality Circles

• Staff Suggestion Schemes• Kaizen System of continuous

improvement(Seiri-sort, Seiton-Set-order, Seiso-

clean-up-Shine Seiketsu- standardize, Shitsuke-Sustain-Training & Discipline)

• Self Directed Work Teams• 3 Mu – Muda (Waste), Muri (Strain), Mura(Discrepancy)

Page 69: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Improving Capital Improving Capital ProductivityProductivity

• Implement TQM

• Reduce Working capital

• Reduce floor space

• Utilize machinery & equipment

better

etc..

Page 70: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Improving material Improving material productivityproductivity

•Cheaper material

•Alternative material

•Cheaper sources

•Better utilization

Page 71: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Improving energy productivity

• Improve power factor•Reduce wastage•Change processes where

required for improved performance

•Study working proceduresetc.

Page 72: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Productivity starts with you

•Think of productivity every minute

•Be organized • Implement “1 is best

campaign”»One hour meetings»One page memos»One copy documents»One minute telephone calls

Page 73: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Make Productivity a way of life

•Think Productivity

•Talk Productivity

•Demonstrate Productivity

•Be Productive at Home, on

the Road, and in Office

Page 74: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

REMEMBER!

ProductivityProductivity starts with starts with

You !You !

Page 75: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

-Essence of Productivity Improvement

WHAT IS IT ALL ABOUT !

Page 76: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Competitive level of productivity

NO ORGANIZATION CAN CONTINUE TO EXIST UNLESS IT MAINTAINS A COMPETITIVE LEVEL OF PRODUCTIVITY

ORGANIZATIONS WHICH DO NOT SUCCEED IN THIS ARE DOOMED TO FAIL THROUGH STAGNATION FOLLOWED BY BANKRUPTCY OR CLOSURE

Page 77: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

what is productivity what is productivity improvementimprovement?• Productivity

improvement is not just doing things better

• More importantly, it is doing right things better

• It’s a process of change

• To improve Productivity it is therefore necessary to manage change

Page 78: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Productivity as a measure of success • Productivity is the most

important long term resource

• Not only for the success of the organizations & individuals but also for national economic & social development

• It is also a measure of the efficiency of the Managers

Page 79: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Limits to Productivity•Management could also limit

productivity when it does not seem truly committed to improving it. One of the ways management

appears to be not committed to improving productivity is when they send mixed messages, such as withholding permission to improve methods of doing the work.

Page 80: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Other Limits

• Employee attitudes and skills can

also limit productivity.

Employees may be unable or

unwilling to meet standards.

• Government regulations and work

rules defined by union contracts

are other limits to productivity.

Page 81: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Basic Ways to improve productivity

•The two basic ways of improving productivity are to increase the amount of

output without a similar increase in inputs or costs, or

to decrease costs without decreasing the amount of output.

Page 82: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Productivity Improvement Cost-cutting methods of improving

productivity include • improving methods or the way things get

done;• reducing overhead; •minimizing waste, • including idle time and physical

resources;• installing modern equipment; and •minimizing

– tardiness, – absenteeism, and – turnover.

Page 83: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Why the Fears for PI•Many employees are fearful

of productivity improvements because many organizations make them by laying off some employees and giving extra work to the

remaining employees.

Page 84: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Way Out!!•Supervisors can respond to

these fears by

keeping employees informed

about the organization’s plans,

emphasizing the benefits of

productivity, and

listening to employees.

Page 85: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Constraints on Productivity

• There are several constraints on productivity that limit the impact of a supervisor or even of higher management. Some of the most important

constraints on productivity are •management limitations, •employee attitudes and skills, •government regulations, and• union rules.

Page 86: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Management limitations

• For employees to contribute to improving productivity, they must believe that management is truly committed to this objective. All too often, employees believe

that management is more interested in the next quarter’s profits than in producing high-quality goods or services as efficiently as possible.

Page 87: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

• Supervisors should set a good

example by demonstrating through

actions and words that they are

interested in the department’s

productivity.

• Jobs that are done right the first time

and the effective use of resources

are general ways to develop

productive departments.

Page 88: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

• To assure jobs are done right the first

time, it’s necessary to have trained

employees who have adequate information

available to do the job.

Supervisors should be aware of what

resources are needed & how effectively they

are utilized.

They must communicate both up & down the

organization to assure adequate resources

are available.

Employees need to be informed about the use

and care of resources.

Page 89: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

•Upper management needs

information about resource

requirements and be assured

supervisors are using them in

a manner that will maximize

the organization’s goals.

Page 90: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Employee Attitudes and Skills• Improving Productivity

involves making changes. If you always do what you

always did, you’ll always get what you always got.

•Some changes may seem relatively small, such as adding one small task to a person’s job or changing the way a form is filled out

Page 91: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

•Employees will not be motivated to change if they have negative attitudes about productivity improvements. Part of the supervisor s job is to identify employee attitudes and, when necessary, to help employees take a more positive view.

Page 92: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

• Employees’ negative attitudes toward the best level of productivity are not always associated with improvement. When business is slow,

employees may “stretch” the work to fill the time.

If the loss of overtime seems likely employees may slow down or “forget” to do something on time to increase the probability that overtime will be available.

Page 93: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

•Employee skill level will also influence how effective productivity-building efforts will be. Working at a difference pace or

different method may require new skills.

When employees are either unwilling or unable to learn, this constraint is more difficult to overcome.

Page 94: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Government Regulations

• Businesses & other organizations.

• Laws determine the payment of overtime wages, the provisions that must be made

for disabled persons, limits on polluting the environment, minimum safety standards for goods

produced, the use of child labor, etc.

Page 95: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Union Rules

•Many union contracts specify rules for what tasks particular employees may do,

hours they may work, or other restrictions on how organization use employees.

Page 96: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

• Sometimes an organization’s managers see a way to improve productivity that violates one of these rules. Sometimes it is possible to

overcome such constraints, although that usually takes time. •It may be in the best interest of both the company and the union to negotiate a change in the work rules.

•However, this is not the job of the supervisor.

Page 97: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Measuring Productivity• Remember we said Productivity is

based upon the equation: Productivity = Outputs/Inputs

•which states that productivity is the amount of output produced with the inputs used.

• This formula can be used to evaluate or compare the productivity of individuals, departments or work units, organizations, and countries.

Page 98: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Ways to Improve Productivity

• Since the equation is expressed as a fraction, productivity can be increased by either increasing the top, or numerator of a fraction, or decreasing the bottom, or denominator of a fraction.

• To increase productivity, the supervisor needs to increase outputs, reduce inputs, or both.

Page 99: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

• Productivity can be improved by improving quality if the improved quality is the result of reducing the amount of rework or repair to the product or service. Improving productivity through

improved quality means that products and services must be right the first time without increasing the input part of the equation.

Page 100: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Cost-Control Strategies • Productivity improves when

the department or organization can do as much work at a lower cost or

when output rises without a cost increase.

• When starting a cost improvement approach to productivity, the supervisor must know what the costs are.

Page 101: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

•The most important source of such information is budget reports. Budget reports reveal

•what the highest costs are and

•where the variance indicates more money is spent than budgeted.

Page 102: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

•The efforts can be aimed at those areas where the biggest improvements are possible. In addition, the supervisor should

spend time with workers, observing how they use the department’s resources, including their time.

The process of gathering information about costs and identifying needed improvements is part of the supervisor’s control function.

Page 103: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

• Cost-control strategies include such things as increasing output, improving methods, reducing overhead, minimizing waste, regulating or leveling work flow, upgrading to modernize

equipment, and minimizing tardiness,

absenteeism, and turnover.

Page 104: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

• Before trying anything drastic, be sure to determine which of these strategies will and will not appeal to higher management. For example, leveling work load may

be inconsistent with upper management philosophy or it may violate union contract work rules.

Also, supervisors may only be able to suggest upgrading equipment to upper management. •They will probably not be able to

purchase new equipment without upper management approval.

Page 105: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

• Supervisors should not

focus on strategies that are

not under their control, but

instead should use those

that are available to them.

Page 106: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

• Another important resource to cost reduction are employee suggestions, whether or not there is a formal suggestion program. Employees have a close-up view of

how things are done. This enables them to see the

shortcomings of the way the organization does things.

They have personal experience with what works and what doesn’t.

Page 107: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

•Cost-cutting strategies include Increase output Improve methods Reduce overhead Minimize waste Regulate or level the work flow Install modern equipment Train and motivate employees Minimize tardiness,

absenteeism, and turnover

Page 108: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Increase Output•Be sure employees are

working up to their potential. Usually employees don’t go

around asking for more work. Supervisors need to be aware of

the work that needs to be done and see to it that employees are working up to speed.

Page 109: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

When employees are asked to do more they may become unhappy. •Setting goals for higher production rates should be made with targets that are reasonable and perhaps include employees in the decision-making process.

•The supervisor must also communicate the new goals carefully.

Page 110: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Improve Methods• A less stressful way to do more

with a given amount of resources is to improve methods. Major improvements result from

finding a better way to do the job. •Supervisors should constantly look for

ways to improve methods. •Employees see the problems of their

jobs and often have excellent ideas on how to improve them.

– Therefore, supervisors should keep lines of communication open and actively seek new ideas.

Page 111: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Reduce Overhead•Overhead includes such things

as rent, utilites, staff support, company cafeteria, janitorial services, and other indirect expenses

•expenses not directly related to producing goods and services.

Page 112: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

• Staff departments in particular can be guilty of contributing too much to the cost of overhead by generating unnecessary paperwork Supervisors and their employees

who produce or handle reports and forms should evaluate this paperwork to make sure it is needed.

Page 113: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Minimize Waste•Waste occurs in all kinds of

operations. For example. a factory may

create a lot of waste through poor manufacturing processes and poor material handling.

An office may make too many photocopies or needlessly long proposals, contributing more to landfills than to the company’s profits.

Page 114: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

•Another costly waste is downtime or idle time. For example, in a factory idle

time occurs while a machine is shut down for repairs or workers are waiting for parts.

In an office, idle time occurs when employees are waiting for instructions.

Page 115: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

•Another form of wasted time results from detour behavior, or tactics for postponing or avoiding work. Time is wasted when

supervisors and employees stop to talk or go get a cup of coffee at times other than when breaks are scheduled.

Page 116: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Regulate or Level the Work Flow

•An uneven flow of work can be costly. At low times, employees are

idle. When demand is up

employees have to work extra hours to keep up resulting in the need to pay overtime.

Page 117: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

•Steps a supervisor can take to regulate the work flow in his or her department: (1) Make sure that he or she is

doing an adequate job of planning for the work that is required.

(2)Work with your boss and peers in other departments or form teams of employees to examine and solve the problems with work flow.

Page 118: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

(3) If the work flow must remain uneven, the supervisor may find it best to use temporary employees during peak periods. •This approach can work if the temporary employees have enough training in the needed skills.

Page 119: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Install modern equipment

•Work may be slowed because employees are using worn or outdated equipment. If that is the case, the supervisor may find it worthwhile to replace it with modern equipment.

Page 120: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

• A supervisor needs to determine whether the expense of buying new equipment, or recommending its purchase, is worthwhile. One way to do this is to figure out

how much money per year the new equipment will save. •Consider such things as lower repair

costs, less down time, and more goods produced.

•Then compute the number of years it will take before the savings will offset the cost of buying the equipment.

– This is known as the payback period.

Page 121: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Train & motivate employees

•For employees to work efficiently, they need a good understanding of how to do their jobs. Training alone does not lead

to superior performance; employees also must be

motivated to do good work.

Page 122: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Minimize tardiness, absenteeism, and

turnover• Lack of motivation often is the

problem underlying time lost to tardiness and absenteeism.

• Low morale is another reason. • Employees who do not find

their jobs rewarding personally are more likely to find excuses not to show up.

Page 123: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

• The extra costs are paid for someone who is not working. Even if wages are not paid, the

organization still must pay the employees’ benefits.

Other employees may not be able to work efficiently when other employees are not there. •Obviously, this means that customers may not be served adequately in a timely manner.

•The cost of disappointing a customer is unknown and unmeasurable.

Page 124: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

• The rate at which employees leave an organization is known as turnover. Any turnover adds costs because the

organization must spend a lot of money to recruit and train new employees. •Of course, the costs go up when the rate of turnover goes up.

•The company also absorbs other costs such as lower productivity of employees while they are gaining knowledge and skills associated with the job.

•The risk of failing to meet organizational objectives is also increased.

Page 125: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Overhead•Expenses not directly related

to producing goods and services; examples are rent, utilizes, and

staff support.•Overhead expenses will be

incurred whether or not the company is producing goods or services.

Page 126: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

• When productivity is low, overhead expenses may be an excessive burden. E.g. , under a standard level of

production, each item of product or each incident of service is priced to contribute to the profit of the organization.

When productivity is low, the overhead is spread over fewer goods and services, resulting in a higher percentage of overhead (input) being absorbed by each.

Page 127: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Down Time or Idle Time• Time during which employees or

machines are not producing goods or services. Down time of machinery, both

scheduled and unscheduled, is likely to be recorded. • Idle time for employees is often

unknown. – During employee idle time a special

effort may be made to look busy and stay out of the way of observing management.

Page 128: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Detour Behavior

•Tactics for postponing or avoiding work.

Page 129: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Payback Period

•The length of time it will take for a benefit generated by an investment (such as cost savings from machinery) to offset the cost of the investment.

Page 130: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Although a supervisor may have limited control over these costs, he or she should be mindful of waste and attempt to reduce these costs.

Page 131: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

Employee Fears about Productivity Improvement

• A highly productive organization is in an ideal position to thrive and grow. Thus, employees can benefit from

productivity improvements. Even so, many employees react

with fear when managers start talking about improving productivity.

Page 132: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

• Increases in productivity are often coupled with less overtime, layoffs, more work because less idle

time, and change in work methods.

Page 133: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

•When layoffs occur, the people who are left behind often have to struggle to keep up with the work that still has to be done.

•Supervisors must respond to these fears.

Page 134: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

• If a supervisor does not understand the types of changes to be made and the reasons for the changes, the supervisor should discuss the

matter with his or her boss as soon as possible.

• After obtaining a clear view of the organization’s plans and goals, the supervisor should present this

information to the employees.

Page 135: Enhancing Organizational Productivity Delivered by Revd. ‘Kayode Oyebode FCIPM, MNITAD Managing Partner/CEO bod-karon consulting

•Emphasize the benefits and avoid dwelling on the negatives.

•Answer employee questions and seek to get information for them.

•While information alone will not make employees enthusiastic, uninformed employees will almost certainly suffer from low morale.

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