productivity and quality management third lecture
TRANSCRIPT
Productivity and Quality Management
Third Lecture
Summary of Last Lecture
• The Role of Productivity– role of Productivity in increasing national welfare– the main source of economic growth
• Productivity Concept– accomplishing more with the same amount of
resources or achieving higher output in terms of volume and quantity for the same input
Summary of Last Lecture
• Misconceptions about Productivity– productivity is not only labour efficiency– it is possible to judge performance simply by
output– confusion between productivity and profitability
• Importance of Productivity• Low Productivity Trap Model
This Lecture
• History of Background of Productivity • Productivity Models• Productivity Measurement Models• Productivity Improvement
HISTORY AND BACKGROUND OF PRODUCTIVITY MANAGEMENT
Learning Objectives
• Describe some important historical figures in operations management
• Explain productivity• Define operations management• Identify OM decisions• Distinguish goods & services• Describe organization functions
Frederick W. Taylor
• Born 1856; died 1915• Known as ‘father of scientific
management’• In 1881, as chief engineer for
Midvale Steel, studied how tasks were done
– Began first time & motion studies• Created efficiency
principles© 1995 Corel Corp.
Frank & Lillian Gilbreth
• Frank (1868-1924); Lillian (1878-1972)
• Husband-and-wife engineering team
• Further developed work measurement methods
• Applied efficiency methods to their home & 12 children!
© 1995 Corel Corp.
Henry Ford
• Born 1863; died 1947• In 1903, created Ford
Motor Company• In 1911, first used
moving assembly line to make Model T
– Unfinished product moved by conveyor past work station
• Paid workers very well for 1911 ($5/day!)
‘Make them all alike!’
© 1995 Corel Corp.
W. Edwards Deming
• Born 1900; died 1993• Engineer & physicist• Credited with teaching
Japan quality control methods in post-WW2
• Used statistics to analyze process
• His methods involve workers in decisions
Feedback
Input(Land, labor,capital, mgt.)
ProcessOutput
(Goods,services)
Feedback
Input(Land, labor,capital, mgt.)
ProcessOutput
(Goods,services)
Economic System
Productivity
• Measure of process improvement• Represents output relative to input
• Productivity increases improve standard of living
• Since 1889, U.S. productivity has increased at 2.5% annual rate
ProductivityProductivityUnits producedUnits produced
Input usedInput used
Productivity Variables
• Labor– Education, diet, &
sanitation• Capital
– Equipment – Building
• Management– Technology– Knowledge 0.5
0.4
1.6
0.0
0.5
1.0
1.5
2.0
2.5%
Capital
Labor
Mgmt
Thinking Challenge
Employment (Emp) in services (Svc) is greater than in manufacturing (Mfg). Yet, the contribution of services to the gross domestic product (GDP) is proportionally less. Why is service productivity lower?
76.4 64.1
16.2 25.0
020406080
100120
Emp GDP
Svc Mfg Con Agr
%
Alone Group Class
Organization Functions
• Marketing– Gets customers
• Production/Operations– Creates product
• Finance/Accounting– Obtains funds– Tracks money
© 1995 Corel Corp.
PRODUCTIVITY MODELS
What is productivity ?
• Productivity is a measure of the efficiency of production.
• Productivity is a ratio of what is produced to what is required to produce it.
• Productivity is the determinant of the efficiency of an enterprise to convert its variable resources into useful finished goods and services.– Productivity = output/input.
Partial productivity
• Easiest to measure, there can be more than one input factor but the output is one factor.
• It uses a single major input which plays an important role to determine the productivity ratio
Total Productivity
• It is a systematic & quantitative approach .• It was developed by “David .J. Sumanth”.• It is customer oriented one integrating
technical and human resources situation during the conversion process.
Reasons to improve Productivity
• Increase in income & profitability.• Lowering running costs & operational costs.• It important to improve productivity at all
levels by an organization to be more competitive.
• An organization is in problem when if its human resource is not productive.
Methods to improve productivity
• Ineffective time in work content front.• Product and process front.• Labour front.• Building trust to improve productivity.• Incentives and bonus front.• Use of electronics waste reduction front.• Six sigma
Productivity Model
Inputs Transformation Process Outputs
Efficiency Effectiveness
Material Resources
Human Resources
Technology
Systems
Quality
Quantity
Customer Relationships
Figure 1.3
Productivity Model
Inputs
Efficiency
Material Resources
Human Resources
Technology
Figure 5.4
Technology
Human ResourcesFinance
Materials Procurement
Systems
Transformation Process
Productivity Model
Figure 5.5
Operations
Effectiveness
Quality
Quantity
Customer Relationships
Outputs
Productivity Model
Figure 5.6
Marketing
Functional Systems
Figure 4.4
Materials Procurement
Technology
Finance
Human Resources
Operations Marketing
Service Transactions Guest/Client
Production
Delivery
Maintenance
Repairs
Production Systems
Figure 5.2
Productivity Model
Inputs Transformation Process Outputs
Efficiency Effectiveness
Material Resources
Human Resources
Technology
Systems
Quality
Quantity
Customer Relationships
Figure 5.7
Reduce Increase
Maintain Increase
Reduce Maintain
PRODUCTIVITY MANAGEMENT MEASUREMENT MODELS
Introduction
Benefits (contd.)
Ways of Calculating Productivity
Ways of Calculating Productivity
Ways of Calculating Productivity
Ways of Calculating Productivity
Ways of Calculating Productivity
Ways of Calculating Productivity
Ways of Calculating Productivity
Ways of Calculating Productivity
Ways of Calculating Productivity
Ways of Calculating Productivity
Ways to Improve Productivity
Ways to Improve Productivity
Summary
• History of Background of Productivity • Productivity Models• Productivity Measurement Models• Productivity Improvement
THANK YOU