productivity leader

ISDN 1018-7227

40

of service delivery

over 40 years

OffIcIal publIcatION Of prODuctIvIty Savolume one • issue 1

www.workplacechallenge.co.za

Sango Madikizela Tel: 011 848 5305

Email: [email protected]

CEO’s desk

Ed’s note

Letters to the editor

News

•ProductivitySAappointsCEO

•ProspectsforSouthAfrica’sFuture

•PersistencepaysatProductivitySA’s AnnualAwards

•Productivecapacity-buildingforthe informalsectoroperatorsinAfrica

Achievingalignedcommitmentthrough employeebenefits

Achievingsuccessthroughdoingitright

Casestudies

•M-tEC

•ProfibreProducts

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Productivity SA CEO: BonganiCoka

Productivity SA Executive Manager:RebeccaPhalatse

Editor: MaupiMonyemangene

Email:[email protected]

Sub-editor:ChrisWhales

Contributing writers: ChaniqueFonto;DeleenWilson;

FrancesWright;MaupiMonyemangene;

MokgadiMahlakgane;PeetDorfling

Photography: ProductivitySAandPhotos.com,

adivisionofGettyImages

Productivity SA

Physical address:InternationalBusinessGateway,

Midrand,cnrNewRoadandSixthRoad

Tel:0118485300•Fax: 011 848 5555

Email:[email protected]

Website: www.productivitysa.co.za

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Postal address:POBox651793,Benmore2010

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Printing and reproduction: Colors

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ProductivitySA,Regno1975/00044/08

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cont

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1CONTENTS

2

volume one • issue 1 productivity leader

CEO’SDESK

In the second quarter of 2011, the gross domestic product (GDP) showed a decline of 1.3% compared with a 4.5% increase in the first quarter. South Africa’s quarter on quarter growth in Q3 was also 1.3%, mirroring the growth of Q2.

This could be attributed to a host of factors includingtheeurozonecrisis.Indeedthesedevelopmentsputpaidtoearlierprojections that theSouthAfricaneconomywouldgrow by 3.5% during 2011. These latest developmentsonceagainhighlightedtherealitythatthetaskofreducingunemploymentinSouthAfricaremainsanarduousone.

For Productivity SA, a drop in our GDP means wehavetodoubleifnottripleoureffortstogalvaniseSouthAfrican industry into an enhancedmode of productivity.For more than 40 years, Productivity SA has helpedthousands of companies to improve their productivityand competitiveness by building sound project-managementskills,developingworkingrelationshipswithother governmental agencies, progressing local labourpractices,andcreatingandinstillingarangeofeffective,tailoredprogrammes.

Some of our key programmes include ProductivityOrganisational Solutions (which helps individuals adoptthe right attitude, knowledge and skills to conduct dailyproductivity improvement); theWorkplaceChallenge (thedti’sbestoperatingpracticeandworld-classmanufacturingprogramme, which we operate for it); and Value ChainCompetitiveness whose primary objective is to conductthoroughresearchsoastoconstructivelycommentontheproductivityofpriorityeconomicsectors,andtocontributetowardsnationalpolicydirectionanddebates.

Theseprogrammes,togetherwithourengagingsupportservices, training, tools and research, are specificallydesigned to help companies develop jobs and createwealth, thereby leading to a better general standard oflivingacrossallincomegroups.

Earlier this year, the World Economic Forum (WEF)in Cape Town called on African governments to betterharnesstheregion’sresourcesthroughstrongerintegrationintointernationaltradeandfinance,toimproveeducationalsystems, to enhance entrepreneurial opportunities forwomen and to develop their tourism sectors in orderto become more competitive. Five key areas that werehighlightedincluded:• Regioninneedofbetterintegration• Improvededucationalsystems• Expandingwomen’sopportunitiesinentrepreneurship• Upgradingandharnessingtourism• Nationalcompetitivenesscouncils

CEO’s desk

BonganiCokaCEO:ProductivitySA

The recommendation for ‘National competitivenesscouncils inordertopromotethegrowthofthecontinent’coincided with a recommendation by Value ChainCompetitiveness in a study titled ’Establishing a Set ofSouthAfricaSpecificCompetitivenessIndicators’.

InorderforSouthAfricatoimproveitscompetivenessontheglobalstage,thereisaneedforthecountrytoestablishaNationalCompetitivenessCouncilsimilartoSouthKorea’sPresidentialCouncilonNationalCompetitiveness.

A National Competitiveness Council consisting ofrepresentativesfromgovernment,business,academiaandlabourwouldhelpimproveSouthAfrica‘scompetitivenessontheglobalstage.Itakethisopportunitytothankyouforyoursupportthroughouttheyearandwishyouwellduringthefestiveperiod.Thankyou.

3


ED’SNOTE

Ed’s note

[email protected]

Once again the year has come and gone. The year was not without its trials and tribulations, but it seems the tribulations have had more of a jubilant year when one glances at the days gone by from an economic growth and development perspective.

Theglobalwoes intermsoftheeurozoneseemtohaveputpaidtoanyhopesofaneconomicrevivalthatwouldhaveechoedthroughoutthecontinent.Bethatasitmay,thehumanspiritisknownforitsresilienceandwecontinuetostandtalldespitethecacophonyofchallenges.

In this issue of Productivity SALeader,weroundofftheyearbylookingattheNationalProductivityAwards.TheHonourableMinisterofLabour,MildredOliphant,capturedtheessenceofwhatthe National Productivity Awards areabout when she said, ‘The NationalProductivity Awards aim to act as asupportive tool that assists in spurringonproductivity.’

TogetmoreinsightsintotheNationalProductivityAwards,seepage8wherewe give an overview ofwho can entertheawardsandtheadjudicationcriteria.OurguestwriterFrancesWrightaddsavoicebyoutlininghowdoingthesimplethingsrightscanleadtosuccess.Inherarticleonpage14,Wright looksathowentrepreneurscontribute towards theeconomicgrowthofthecountryand,evenmorepertinently,towardsjobcreation.

While on the subject of economic growth, thegovernment, through the National Planning Commission,recently released theNationalDevelopmentPlanaimedatproviding a long-term vision and strategic plan for SouthAfrica. Together with the New Growth Path (NGP), theplans have succinctly outlined what is required to spurdevelopmentandgrowthinthecountry.

Onpage7wepublishexcerpts froma research reportreleased recently by the Development Bank of SouthernAfrica (DBSA) titled ‘Prospects for South Africa’s Future’,which ‘provides an independent perspective on SouthAfrica’s potential long-term development path, includingevidence-based projections and should contribute to thework of key national departments, the National PlanningCommissionandotherrole-players’.

Onpage12,guestwriterChaniqueFontolooksathowanenablingandhappyenvironmentwithin theworkplacecanleadtosatisfiedclientsandyieldhigherreturns.ProductivitySA continues to implement its workplace methodologies

and toolkits within various companies, and to provide asenseoftheresultsbroughtaboutbytheimplementationofProductivitySAprogrammes,welookatthecasestudiesasoutlinedonpage16.

The case studies outline how businesses implementedProductivity SA programmes within their companies.Productivity SA has a host of programmes, but the keyprogrammes implementedwithinworkplaces for enhancedproductivity are Turnaround Solutions and the Workplace

Challenge. Central to the workings ofTurnaround Solutions is the need tomitigatejobslossesbyactivelyprovidingtechnicalsupporttostrugglingenterpriseswith the aim of stabilising and nursingthembacktoprofitability.

Turnaround Solutions has over thepastdecadeandahalfhelpedsaveover200 000 jobs. This figure representsan average rateof at least 16000 jobssaved annually, including the 2010/11 financialyear.

The Workplace Challenge (WPC)aimstocatapultparticipatingcompaniestoworldcompetiveness.TheWPC isaprojectof theDepartmentofTradeandIndustry(dti)andisproject-managedby

ProductivitySA.Sinceitsinceptionin2002,theprogrammehasimpactedmostlyincompaniesinthemanufacturingandservices industriesofoureconomy.TheWPCprogrammeisaworld-classmanufacturing,orbestoperatingpractice,programme aimed at helpingmanufacturing companies inSouthAfricatobecomemorecompetitive.

Thisisachievedthroughvariousprocessesandtoolkitsthatinclude buildingworker participation, thereby empoweringtheworkers to upgrade their skills and perform better. Inthe year under review, theWPC nurtured 141 companiesontheir journeytoworldcompetitiveness.ProductivitySALeaderthanksthestaffattheWPC,notablyPeetDorfling,forsupplyingthepublicationwiththecasestudies.

Iampositiveyouwillfindtheline-upofarticlesengrossingandProductivitySALeader takes thisopportunity towishyouwellduringthefestivebreak.

4 LETTERS

DearEditor

Your previous issue released during what was termedProductivityMonthrananarticle‘Cansocialnetworkmediaincreaseproductivity?’Thearticleaskedhowsocialmediacanbeusedtocommunicateeffectivelywithstakeholdersespeciallywithintheyouthmarket.

Ithinktheissueofsocialmediaistwofoldandattimeswetendtooverratetheimpactsocialmediacanhavewithintheworkplace.Forstarterstheuseofsocialmediadependsonthenatureoftheworkplaceoneisoperatingin.

Socialmedia requires an individual to engage inwhatevercommunication gadget people are using to access themedia. If an individual operateswithin aworkplacewherethereislittleornospacetoengageinsocialmediasuchasoperations-intenseareaslikemanufacturing,thenifanythingsocialmediacanactuallyimpactnegativelyonproductivity.

I think social media can enhance productivity, however,theimpactthereofcanbeoverratedandifanything,socialmedia can simply be a supporting tool similar to whatcommunication does within the workplace. I would thinksocial media can increase productivity but only in areaswithin relateddepartments andwhenone looks at overallcompanyoperations,thatareacouldbeverysmall.

RegardsPulengMaseko,Midrand

DearMrMbathaandallNationalProductivity Awardsrole-players

Iwould like tocongratulateyouonyetanothersuccessfulNationalProductivityAwardsevent.Pleaseconveyawordofthankstoallthejudgesandrole-playerswhomakeaneventsuchastheNationalProductivitySAAwardspossible.

To be a finalist and awinner of this award is special andit trulymakesadifference tobe acknowledged for all thehardwork.ProductivitySAtrulymakesadifferenceasyouinvestandbelieveinpeople.Itisclearthatalltheorganisers,judgesandrole-playersworkhardtoproducetheseevents.Thankyouformakingadifferenceinpeople’slives.

TheProductivityAwardsaresuchamoralebooster.Youarethe bestmedicine for any person’s self esteem. This is a

Letters to the editor


Productivity tips

ProductivitySAwouldliketosharesometipsthatwillhelpincreaseproductivityinyourbusiness.

When you wake up each day, make a consciousdecisiontohaveapositiveattitudetowardseverythingthat comes yourway.Apositivemindset canmovemountains. The productive difference between amotivatedpersonandanunmotivatedpersoncanbeasmuchas60%!

1. Productivitycanneverbelefttochance!Planyour day.Makealistofgoalsthatneedtobeachieved eachday,andtickthemoffasyoucompletethem. Thiswillensureyouhaveamission,andthatyou remain focused on completing today’s goals. Don’tallowyourself tobeside-tracked intodoing lessimportantthingsfirst!

2. Once you have finished planning, make sure that you areprepared for everything.Go through yourlistandmakesureyouhaveallthetoolsyou needtocompleteyourgoalsfirsttime.Remember, productivityisaboutdoingmorewithless,souse onlywhatyouneed!

3. Delegation allows you to concentrate on your importantgoalsforthedayandnotwasteyourtime onlessimportanttasks.Multiplyyourproductivity bysharingyourgoalsandmissionwithyourteam orfamily!

4. Intheworkplace,donotwastescarceresources, donotwastewater,whenyourtapsleak,fixthem andwhenyouleavearoom,switchoffthelights, switchofftheairconditioning.

valueandcharacteristicthatisappreciated.Iamgratefultohavehadthiswonderfulexperiencein2010.Iamsurethatallthe2011finalistsandwinnersfeelthesame.

Keepupthegoodwork.

RegardsRahimaMoosaMotherandChildHospitalPublicSectorWinner(2010)MrsJCWWeyers

5


NEWS

Productivity SA appoints CEOBongani Coka is the new Productivity SA chief executive and is geared to ensure that South Africa leapfrogs into the ‘premier league’ of the world’s competitive nations through improved productivity.

Cokabelievesthekeytothegreatleapisanimprovementinthecountry’sinvestmentinresearchandtechnology.Heseesanimprovementinthequalityofthecountry’seducationsystem,furtherupgradestoroadandhealthinfrastructure,encouragement and development of entrepreneurs, anddealingwiththeskillsshortageasotherkeyingredientstotherealisationofthisobjective.

Hewasappointedaschiefexecutiveeffective1October2011. This man with a passion about the growth anddevelopment of the country is highly aware that a valuesystemandworkethicgearedtowardsthatisimportant.

‘Doingthelittlethingsrightandgettingthefundamentalsin line.Basicallyabeliever in the triedand testednormofhardandsmartworkyieldsresults,’hesaid.

Coka is an accomplished professional with across-the-board proficiency within a number of business sectorsranging from finance, operations, project management,design, execution and control of strategies, stakeholderrelationsandorganisationaltransformationtoleadershipandmentoring,amongothers.

ProductivitySAisastatutorybodyunderthestewardshipof theDepartmentofLabour.Theorganisationdischargesits responsibilities through longstanding programmesthat focus on research, providing information, training andfacilitation, advisory services, auditing and monitoringproductivityissues.

Amanwhooozespassionforwhathedoes,Cokasaidtheorganisation’sclientbasecomprisesprimarilybusinessandgovernment institutions.HealsosaidthatProductivitySAhasdoneextensiveworkwithinvarioussectors,notablythemanufacturingandagriculturalsectors.

The institutionhasthreeflagshipprogrammesandtheyoperateasfollows:• TurnaroundSolutions–assistscompaniesindistressand savesjobs;ProductivitySAcharges35%ofthetotalcost to the client while the Unemployment Insurance Fund (UIF)covers65%.• Workplace Challenge – assists companies to become world class by adopting world-class practices; ProductivitySAcharges25%whiletheremaining75%is absorbed by funding received from the Department of TradeandIndustry.• SMME Capacity Programme – funded out of the government grant received from the Department of Labour. The grant is also utilised by Productivity SA to fundtheproductivity-awarenessprogrammesandvarious productivity-relatedresearchandstatistics.

According to Coka, Productivity SA interventions areabout productivity improvement – which is a measure oftheefficiencyofproductionoraratioofwhatisproducedtowhatisrequiredtoproduceit–andthenumberofcompaniessuccessfully implementingProductivitySAprogrammes isindicativeofthesuccessthereof.

Theorganisationwasfoundedover40yearsagowithamandatetoimproveproductivityinallspheresofthenation’seconomicandcommunitylife.It isgovernedbyatripartitecouncil drawn from government, labour and business.Productivity SA has offices inMidrand, Durban and CapeTown,andasatelliteofficeinPortElizabeth.

Inadditiontoitsmandate,italsoplaysaroleinenhancingSouthAfrica’scommercialproductivityandglobalcompetitive-


6 NEWS

ness,thusboostingtheeconomyandcreatingjobs.Cokawasbornin1960inEkurhuleniandmatriculatedat

IllingeHighSchool inVosloorus.Hemadehisdebutinthejobmarketwhenhewas hired byPutco Ltd inBoksburg,whereheworkedasaninternalauditor.

HehasaccountingqualificationsincludinganHonoursde-greefromUnisa,andanAdvancedManagementAccountingandTaxDiploma fromthe formerRandAfrikaanseUniver-sity.HeiscurrentlystudyingtowardsobtaininganMBA.

Asaleader,hehaslonggraspedtheethosoftakingtheinitiativeandworkingasateamplayer.Cokaboastsstrongcharacter attributes in communication and interpersonaletiquette,beingateamplayerandanassertiveplannerwithhighattentiontodetail,goal-orientedwithstrongleadership.

CokapreviouslyworkedforTransnetbetween1994and2000invariouspositions,includingbeingfundingmanager,acting financial manager and finance manager. He hasalsoworked for Deloitte & Touche, a leading professionalservicesfirminaudit,tax,consultingandfinancialadvisoryservices,asatraineeaccountantbetween1989and1994.

Between 1987 and 1997, he was also a tutor atthe Johannesburg Learning Centre where he tutoredundergraduatestudentsforUnisa,accountingforattorneys,auditingandtaxation,andalsomentoredstudents.

Some of his successes during his stay at ProductivitySA include securing new key strategic partnershipswith organisations such as the Sheltered EmploymentFund, which provides opportunities to train workers withdisabilities; the Afrikaanse Handelsinstituut; the KwaZulu-Natal Department of Economic Development; the DurbanChamber;LabourCentreKwaZulu-Natal; theSouthAfricanChamber of Commerce and Industry; the Association forSkillsDevelopmentFacilitatorsinSAandtheDepartmentofScienceandTechnology.

BeforebecomingthechiefexecutiveofProductivitySA,Coka had previously been its chief financial officer since2000.He isnotnew to theposition, as in2008heactedas chief executive, was chairman of the Productivity SAPensionFund,andalsoservedintheorganisation’svariouscommitteesandroles.

SomeofProductivitySA’sclientsaretheJapanInterna-tionalCooperationAgency (JICA), theTshwaneUniversityofTechnology, Intersite, theDepartmentofEducation, theSheltered Employment Fund, Energy Seta, Vumo Waste,SowetoLED,TshwaneLED,theSouthAfricanWomenEn-trepreneurs’ Network (Sawen), Harmony Mine, MafikengMunicipality and theMpumalangaDepartmentofEnviron-ment,EconomicDevelopmentandTourism.

PastclientsincludeSpoornet,BMW,BankSeta,Kwikot,Valpré, Umzinyathi District Municipality, SANParks,Johannesburg Metro Police Department and the SmallEnterpriseDevelopmentAgency(Seda).

CokasaysProductivitySAshouldpatitselfonthebackbecauseduringtherecenteconomicdownturn,‘theorgan-

isation conducted studieson sectors thatwere sheddingthemostjobsandintervenedatcompanylevelandsavedover15000jobs’.

Working on a tight budget of around R100-million perfinancialcycle,Cokaseesthisbudgetincreasingovertime.

‘TotapintothemarketandunlockSouthAfrica’spotential,theorganisationwillrequireextensivefunds,’hesaid.

ProductivitySA’sbudgetcomprisesanestimated45%offundingderivedfromtheUnemploymentInsuranceFundtofundcompaniesthatare indistress;anestimated35%viathe government grant through theDepartment of Labour;10%fromtheDepartmentofTradeandIndustry;whiletheremaining10%isself-generatedfromvarioussourcessuchasconsultationwithintheidentifiedcompanies.

Productivity SA‘s current staff complement is 100 andover 70% of the staff members are productivity expertswithin theirfieldofoperation,suchas industrialengineersand trainers on productivity competencies. The corecompetenciesoftheorganisationareaugmentedbysupportstaff, including a marketing unit that specialises in thepromotionofproductivityawareness.

ProductivitySAaimstoexpand,buttheorganisationwillinitiallyexploretheutilisationoflabourcentresinprovinceswhereithasnooffices.

Since joining the organisation in 2000 as a financialmanager,Cokahasmanaged tohelpProductivitySApostunqualifiedauditsoveraperiodofmorethan10years.

Hedescribeshimselfasanaturallycalm,diligentpersonwho loveschildrenand ispassionateabout seeingpeoplegrowandbuildingstrongrelationships.


7NEWS

Prospects for South Africa’s FutureThe Development Bank of Southern Africa (DBSA) re-cently released a development report titled Prospects for South Africa’s Future. According to the DBSA, the report provides an independent perspective on South Africa’s potential long-term development path, includ-ing evidence-based projections, and should contribute to the work of key national departments, the National Planning Commission and other role-players.

Speaking at the launch, the editor of the report, MsSinazo Sibisi, said, ‘Partnerships and implementationcapacity are prerequisites to a successful South Africandevelopmentpath.’

AccordingtotheDBSA,thereportdrawsheavilyontheDBSA’s many decades of experience as a developmentfacilitatorandfinancier.Inlaunchingthereport,theDBSAsaiditwouldliketosharewithitsstakeholdersaspectsofthechallengeswithinitsscope,initsmandate,andalongits current and proposed development trajectory as aleadingregionaldevelopmentfinanceinstitution.

Thepurposeofthedetailedandcomprehensivereportistoprovideanindependent,DBSAperspectiveonSouthAfrica’s potential long-term development path. Thisreport does not seek to predict what will happen in thefuture. Rather, it sets out the key drivers thatwill affectwhetherandtowhatextentSouthAfricawillsucceed.Thechairperson of the DBSA board’s Development PlanningCommittee,AndrewBoraine,says, ‘The reporthighlightsthepriorityareasthatneedtobeaddressedifasustainableand inclusive development path is to be attained, andby suggesting possible areas of focus and associatedprogrammestosetSouthAfricaonanewtrajectory.’

This report, part of a series dating back to 2003, isone part of the DBSA’s contribution to South Africa’sdevelopment planning. Much of the work draws oncontributions to ongoing engagementswith key planningand implementation government departments and otherdevelopment role-players. TheDBSA’s analysis suggeststhat,onSouthAfrica‘scurrentpathandcapacity,manyofourcountry’sdevelopmentgoalsareunlikelytobemet.

These include those relating to employment,reindustrialisation,skillsdevelopmentandclimatechange.The characteristics and extent of GDP growth andemploymentcreationareunlikelytobesufficienttoaddresshighlevelsofpovertyandinequality,whiletheeffectivenessoftheSouthAfricanstateremainshamperedbysignificantcapacity gaps.Contestations about the slowpace of theSouth African transition to inclusive development haveincreased, amidst growing community frustrations overinadequateaccountabilityandlackofservicedelivery.Thuschanging this path will require a higher level of realism

regardingwhatSouthAfricacanachieveandwithinwhattimeframesandparameters.

At its core, the report argues that South Africa’sdevelopment successwill hinge on the partnerships andtheexecutioncapacity that arecreated to translateplansintoaction.Whiletherearerecentsignsofpositivechange,including in the difficult municipal and health sectorenvironments,muchmoreneedstobedone.

TheDBSA’sgroupexecutivefordevelopmentplanning,Ravi Naidoo, stressed the need for, ‘South AfricaIncorporatedtohaveaclearersetofactionablepriorities,partnershipsthatcanimplementthem,andaprofessionalpublicsectorthatcanensurethattheseprioritiesandthestate’sroutineworkareimplementedasrequired.Aswithdevelopmental states anywhere in theworld in the pastcentury,thisrequirescapableandstablepoliticalgovernancethatensuresthatprioritiesandskilledprofessionalsremaininplacelongenoughtoenableimplementation.’

Theeditorofthereportsummedupthereport’sshort-,medium-andlong-terminterventionsinthreecategories:• Actnow:to improvethequalityofeducation,enhance political governance, stabilise government admin- istrationsandconsolidateeconomicstewardship.• Acttogether:byincreasingpublic-public,public-private and public-community partnerships to maximise our collectivestrengthsanddriveintegratedsolutionstoour commonchallenges.• Actdifferently:by takingconsciousaction toput long- termnationalinterestsbeforeshort-termindividualgains and to let go of dysfunctional values systems and outdated paradigms, thus opening the way for South Africatochartanewcourse.

An overview of the report is available on www.dbsa.org

Above: Seen during the launch of the report are (left to right) the editor of the report, Ms Sinazo Sibisi, and DBSA’s group executive for development planning, Ravi Naidoo.

8 NEWS


Persistence pays at Productivity SA’s Annual AwardsIt was a glittering occasion on the Friday evening of 28 October, when Productivity SA celebrated its National Annual Awards at Gallagher Estate in Midrand. Productivity SA has for more than 40 years helped thousands of companies to improve their productivity and hence their competitiveness by imparting excellent project management skills and labour practices to the companies involved.

AnimportantaspectoftheworkofProductivitySAisthepreservation and creation of jobs. Through its TurnaroundSolutions programme, Productivity SA saved more than 16000jobsduringthe2010/11financialyear–inagriculture,manufacturing, the civil engineering and constructionsector,andtheclothingandtextileindustry.Inthisyear,130companiesparticipatedinthisprogramme.

ProductivitySA’sNationalAnnualAwardsfallattheendof ProductivityMonth, a campaign that seeks to promotethe importanceofproductivityand to inculcateasenseofcompetitivenessineverySouthAfrican.

Continuing shortfallInhiswelcomingaddress,AlwynNel,chairmanoftheboardof Productivity SA, quoted from recent research by AbsaCapital to highlight South Africa’s continuing shortfall inproductivityandcompetitiveness.

AbsaCapitalexpectstheSouthAfricaneconomytogrowby3.1%in2011.SouthAfrica’squarter-on-quartergrowthinQ3was1.3%,mirroringthegrowthofQ2,saidNel.

‘Despitetheeurozonecrisis,ahighlevelofuncertaintyintheglobaleconomyandableakmanufacturingsectorpicturelocally,SouthAfrica itself is far frombeing ina recession.Indeed, if the manufacturing figures hadn’t been so dire,thesecond-quarterGDPgrowthof1.3%wouldhavebeencloserto3%,’headded.

Unfortunately, the growth over this period hasn’ttranslated into jobs: South Africa’s formal non-agriculturalsectoronlymanagedtocreate7000jobsinQ2,comparedto38000createdinQl.

The challenge of competitiveness‘However, South Africa undeniably continues to fall shortof its optimal productivity and competitiveness levels,’Nel continued. This is glaringly reflected in the recent

annual World Competitiveness Yearbook results. In its2011 report, South Africa has dropped eight places in itscompetitiveness ranking, from to 44 to 52. Published bySwitzerland’s InstituteofManagementDevelopment,withwhomProductivitySAistheinformationpartnerforSouthAfrica,theWorldCompetitivenessYearbookisdrawnfromthemacroeconomicevaluationofdomesticeconomies.

‘AreviewoftheSouthAfricaneconomyhighlightsthefactthatthatourbiggestchallengesremainqualityofeducation,healthstandardsandlabourrelations,’heexplained.

Nel continued to explain that attention was drawn toSouthAfrica’scomparative lackofcompetitivenessby thedeputypresidentofBusinessUnitySouthAfrica,ProfessorRaymondParsons,atlastyear’sNationalAwards.

‘SA isnotyetattractingenoughfixeddirect investmentfor growth purposes andwe should also recall that aboutfive years agoSouthAfricawas ranked 34th in theworldcompetitivenessassessment,’saidParsonsatthetime.

Productivity attracts FDINel added that in the previous year, South Africa sawits foreign direct investment fall by more than 70% to $1.6 billion, only one sixth of the peak amount recordedin 2008. The countrywas also just 10th in the ranking ofAfrica’stop10recipientsofFDIinflowsin2010,comparedwithfourthplacein2009.

Earlier this year, the World Economic Forum (WEF)in Cape Town called on African governments to betterharness the region’s resources throughstronger integrationinto international trade and finance, to improve educationalsystems,toenhanceentrepreneurialopportunitiesforwomenandtodeveloptheirtourismsectorsinordertobecomemorecompetitive.Fivekeyareasthatwerehighlightedincluded:• Regioninneedofbetterintegration• Improvededucationalsystems• Expandingwomen’sopportunitiesinentrepreneurship

9


NEWS

• Upgradingandharnessingtourism• Nationalcompetitivenesscouncils

‘Indeedweneedtoincreaseourcompetitivenessinordertoattainourgrowthtargetsassetout intheNewGrowthPath,’ emphasised Nel. He explained that the country, intermsofitsproductivity,was‘slidingandthereisaneedtoarrestthatslide.

‘Onewaywecanactivelyturnthesituationaroundincludestakingintoconsiderationkeyareasoutlinedbybodiessuchas the WEF, which also made the recommendation fornational competitiveness councils in order to promote thegrowthofthecontinent.’

Recently, Productivity SA became a fully fledgedDepartment of Labour entity, which has forged closerallegiancesandbetterworkingpartnershipsbetween thetwoorganisations.

ItwasthusfittingthattheHonourableMinisterofLabour,MildredOliphant,addressedtheawardsevening.

Improving living standardsSheemphasised thatproductivitywasnotonly thekey totheperformanceoffirmsandindustries,itwasfundamentaltothelivingstandardsofthegeneralcommunity. It isalsothe benchmark bywhich organisations canmeasure howefficienttheiruseofresourcesis.

‘Productivity is about being aware at all times that theright attitude determines the required altitude,’ said theMinister.Theawards,sheexplained,arebutatoolamongmany aimed at spurring on productivity. ‘All the finalistswerewinnersalreadybecausetogetthisfarmeantthattheyhavegonetheextramile.’

Andthenitwastimeforannouncingtheawardwinners.InthehotlycontestedCorporateSector,tophonourswenttoAdcockIngramCriticalCare,SouthAfrica’slargestsupplierof hospital and critical-care products, blood systems andaccessoriesaswellasproductsusedforrenaldialysisandtransplantmedication.

InthePublicSector,LimpopoDepartmentofRoadsandTransportburnedupthetarmactoemergeastheclearwinner.

The Emerging Sector of South Africa’s industry is theall-important incubator of the country’s larger successfulbusinesses. In this sector, Limpopo Lumber took thecovetedaward.

Inclosingtheawardceremony,theCEOofProductivitySA,BonganiCoka,explainedthattheresilientnatureofthecompanies that were represented on the eveningwere ahighlight inaweekthathadarguablytestedtheresolveofcountrytothelimit.

‘Awardsbytheirverynatureoftenmaskthehardworkrequired to meet and even surpass set targets,’ said Coka. ‘However, despite the logjams and bottleneckspresentedbytheworkplace,youstillmanagetoproducearesultthat isworthyofacknowledgementbyyourpeers,’hesaidinconclusion.

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NEWS

Productive capacity-building for the informal sector operators in AfricaBy MOkGADI MAhlAkGANE

The informal economy contributes immensely to the economic growth of most developing countries and its importance is underscored by the fact that it is where the bulk of

the population, including most of the poor, mainly women, works. In Africa, urban informal employment was estimated to absorb about 60% of the urban labour force and generate more than 93% of all new jobs in the regions in the 1990s. The size of the informal economy, which has witnessed phenomenal growth in the past three decades, as a share of the GDP in Africa is estimated at about 41%.

The majority of workers in the informal economy ofAfrica suffer from multiple vicious cycles of povertyand vulnerability which perpetuate their low skills, lowproductivity, high unemployment, low product quality,and low-income working lives. Improving the skills andproductivity of the informal economy workers will resultin higher incomes and subsequently improved workingconditionsandlivingstandards.

Employmentintheinformalsector,inparticularfortheyouth and women, is now an important feature on thelandscape of Africa, accounting for a significant share ofGDPand influencing thewell-beingofagrowingnumberof households. The character of the informal sector onthe continent has changed if ever so slightly as growingnumbersofthosewhonowenterthisemploymentdosowith higher levels of education than those before them.Thenewentrantsalsobringentrepreneurialaspirationsthatlookatthisemploymentasapreferreddestinationfortheirfutureratherthanmerelyastaginggroundfortheongoingsearchforwageemploymentinthemodernsector.

SuchdevelopmentshaveledtheAfricanUniontoadopt

theProductivityAgendaforAfrica(2010-16)whichisaimedat productivity capacity development in the public sector,SMEsandthemicroenterprisesoftheinformaleconomy.

A workshop was conducted at the AU headquartersin Addis Ababa from 29 September till 1 October 2011.The objective of the ‘train the trainer’ workshop was toimpart knowledge, skills, competencies and the rightattitudetoparticipantsintheunderstandingofproductivityconcept and the ability to apply some basic productivityimprovementtoolsandtechniquesforimprovingbusinessperformance. The workshop was in line with both theProductivity Agenda’s Strategic Plan as well as with theAUProgrammeonUpgradingtheInformalEconomyanditsSocialProtectionPlanfortheInformalEconomyandRuralWorkers(SPIREWORK).

TworepresentativesfromeightAUmemberstatesofthefiveAUregionsparticipatedintheworkshopieIvoryCoast,Senegal, Namibia, Tanzania, Rwanda, Cameroon, TunisiaandEthiopia.TheworkshopwasconductedbyproductivityexpertsfromPAPAmembercountries:MsLalaneJansevanRensburgfromProductivitySA,SouthAfrica,DrBalaUsmanfrom Nigeria as well asMr FranklinMuchiri, InternationalLabourOrganisation(ILO)seniorspecialist.

Attheendoftheworkshop,theparticipantsdevelopedtheirnationalactionplansasthemainoutputofthetrainingsession which will be monitored by the AU. The actionplanswere aligned to the Productivity Agenda for Africawiththefollowingobjectives:1. IncreasetheproductivityandcompetitivenessofAfrican smallandinformalenterprises2. Facilitate the improvement of productivity culture amongsmallandinformalenterprises3. Promotetheuseofproductivityapproaches,techniques, toolsandprocessesbyallstakeholders4.Mobiliseallrelevantstakeholdersatanationallevel

The informal economy is recognised by the African


11NEWS

Productive capacity-building for the informal sector operators in AfricaUnion as essential for its member states to achieve theMedium Development Goals, and reverse the persistenttrend of unemployment, underemployment and poverty.African micro small, and medium enterprises (MSMEs)accountformorethan70%ofenterprisesintheeconomyandcreatemorethan90%offormalandinformaljobs.

Butthecurrentproductivityrealityinthecontinentwillnotimprovesignificantlywithoutacomprehensiveagenda,asthechallengesaremanyanddaunting.

AccordingtotheILO,thelargestgapofproductivity isencountered inAfrica (ILO2007)with a value added perworker12timesless inSub-SaharanAfricathanthatofaworker inthe industrialisedworldandfourtimes lower inNorthAfrica.That is largelydue to the fact that inAfricaaround80%ofworkersare in the informaleconomy, theruraleconomy(RE)andSMEs,whiletheycontributeabout60%ofGDP, and thesesectors arestill dampedbyverylow productivity scores. The productivity challenge forAfrica is based on the fact that the largemajority of the

workers intheinformaleconomystilldonotearnenoughtoliftthemselvesandtheirfamiliesabovetheUS$2adaypovertyline.

Againstthebackdropoftheabovesituation,thestrategyoftheAUProductivityAgenda(2009-15)aimsto‘promoteproductivity in key sectors of the economy, in particularthe informal economy, SMMEs, public/parastatal sector,industryandcommunities’.Oneoftheenvisagedactivitiesisto‘establishand/orenhancethecapacityofsupportingorganisations to SMMES in providing productivitycounselling/consultationservices.’

This is the rationale of the Productive CapacityBuilding Training Programme. The pursuit of upgradingand improving Africa’s informal economy (IE) is crucialand critical to Africa’s development and progress and itsintegration intotheglobaleconomy.Therefore, itrequiresbuildingthecapacityoftheIEunits/operators,intheformof ‘trainthetrainers’,sothattheyarefullyequippedwithskillsandknowledgetoidentifythesector’sproblemsandbeabletodevelopandimplementproductivityandqualityimprovementactivitiesinthesector.

(AdoptedfromtheConceptNoteoftheAUProductivityAgendaforAfrica)

Above and right: Delegates at the AU workshop held in Addis Ababa, Ethiopia.


12 FEATURES

Achieving aligned commitment through employee benefits

By ChANIQuE FONTO

‘happy staff, happy clients’ – the truth of this saying is often underestimated. When employees are well looked after and work in a secure environment knowing that

their retirement is taken care of and medical risks are contained, they can focus on the work at hand and servicing customers well.

The alternative is also true.When employees are nottaken care of, they are distracted by financial and otherpersonal issues and will move to other companies insearchofbetterworkingconditions.Whenthereisahighstaffturnover,thecostofrecruitingandtrainingnewstaff

seriouslyaffectsthenetprofitofthecompany.Thecompanyalsorunstheriskoflosingclientswhenitsprimarycontactfrom a service provider is no longer available. Researchshowsthat there isacorrelationbetweenhighemployeeturnoverandlowcustomerretention.Securingnewclientsismuchmorecostlythanservicingexistingclients.

Urban, Van Vuuren and Barreira (2008) found thatbusiness knowledge and work experience are positivelyassociatedwithentrepreneurialsuccess.Theaccumulationofknowledgeablehumanresourcesandsocialcapitalhasahighimpactonbusinesssuccess.Whenemployeesleaveor fall ill, knowledge and intellectual property will leavewiththem.Cassar(2006)agreesthatinvestmentinhumanresources leads to entrepreneurial success. According toForin,LubatkinandSchulze(2003),itisimportanttohavethecorrecthumancapital,suchasteammemberswiththecorrecteducation,experience,knowledgeandskills.Theyidentifiedhumancapitalasacriticalresourceforbusinesssuccess.SonnentagandFrese(2002)alsostatedthattheimportance of human capital is increasing as informationis becoming freely available and knowledge-intensiveactivities increase in most industries. It is thereforeclear that it is in thebest interestof thebusinessand itssustainabilitytomaximiseemployeeretention.

Inthecurrentmarket,withbudgetsbeingcutdramatically,


13FEATURES

it is important for employers to find innovative and cost-effectiveways to improveemployeemorale. It is also thedutyoftheemployertostayabreastoftrendsinthemarketand take advantage of new opportunities. Gap cover, forinstance,canbeprovidedtoemployeesatanaveragecostofaboutR94permonth.Theeffectonthepeaceofmindoftheemployeewillbedramatic.Knowingthatall in-hospitalbillswill be settled, nomatter howmuch themedical aidpays,cancontributehugelytowardsemployeeloyalty.

In linewiththeNationalHealth InsurancePolicyPaperof 2011, it is an objective to make quality healthcareavailable to all South Africans. According to the PolicyPaper, contribution ratespermedical schemebeneficiaryhave doubled over a seven-year period, which has notbeenproportionatewithincreasedaccesstoservices.Thisdisparityleadstolimitedaccesstoneededhealth-servicecoverage. The new design of themedicalschemebenefitoptionshaspaymentgapswithearlyexhaustionof benefits as a result. This posesa real concern and detractor for anemployeewhohastoprovideforhisorherfamily.

AccordingtotheNHI,‘out-of-pock-etpaymentsaccountforasignificantpart of total health expenditure andthis could be in the form of co-pay-ments, or direct payment to privateproviders, particularly by those whoarenotcoveredbymedicalschemes’.Even for those who are covered bymedicalschemes,theextentofco-paymentsconfirmsthatthe current system does not provide full cover. However,forthosewhoarenotonmedicalaid,thiscouldhavecata-strophiceffects.Whenemployeescannotaffordtopayoutofpocketforunplannedmedicalevents,paymentgapswilleitherresultinuntreatedconditions,increasingabsenteeismatthecompany,orfinancialhardshipsresultinginalackoffocus,productivityandteamcohesiveness.

Themosteffectivemannerofkeepingateamcohesiveandmotivated is through looking after their needswhile

clearly communicating company vi-sion,goalsandobjectivestoapointwhere there isgeneralbuy-in.Beal,Cohen,BurkeandMcLendon(2003:989)ask thequestion:howtocapi-taliseonteamcohesivenessinorderto positively affect business suc-cess? They conclude that the wayto achieve team cohesiveness is towork group applications and ben-efits throughout the organisation.Themake-up of every team shouldbe alignedwith, andwork towards,achieving organisational goals. It isimportanttoidentifythefactorsand

processesthatgiverisetoincreasedperformance.Naquin andTynan (2003: 332) agree that realising the

business’ objectives can only be achieved through be-comingapreferredemployer.Byintegratingtheskillsandcharacteristicsofeachteammember,performancecanbeimproved. In essence, it is a situationwhere the sumofthe teammembersshouldbebetter thaneach individualmemberoftheteam.

Inthecurrentmarket,withbudgetsbeingcut

dramatically,itisimportantforemployerstofindinnovativeandcost-

effectivewaystoimproveemployeemorale.


14 FEATURES

Achieving success through doing it rightBy FrANCES WrIGhT

In a recent study conducted with re-gards to business success, it became clear that South Africans are highly enterprising and can find innovative ways of making a living. What has

also become clear, however, is that only about 3% of entrepreneurs become employers, thus affording employment to somebody else. Most entrepreneurs remain lifestyle entrepreneurs, creating work and an income for themselves, but not interested in or able to grow the business. These entrepreneurs have to be commended.

They earn an honest living, they are not dependenton anybody else and they provide a valuable service orproduct to themarket. The problem comes inwhen theentrepreneurcannotworkany longer.Novaluehasbeencreated. There is no separate legal entity that can carryonregardlessoftheinvolvementoftheleadentrepreneurand,therefore,noretirementplanorlegacyleftforthenextgeneration.Throughtheresearch,ithasbecomeclearthatsomeentrepreneurswanttogrowtheirbusinesses,butareeitherriskaverseordonothavethenecessaryskills.Itisthereforenecessarytocommendthoseentrepreneurswho

dogrowtheirbusinesses,eventuallyprovidingemploymenttohundredsofpeoplewhileturningovermillionsofrandsandcreatingwealthforallstakeholders.Throughintensiveliterary research, it became evident that most scholarsmeasure business success according to net profit andgrowthinturnoverandemployees.Anotherfactorisclientsatisfaction. But how is this achieved? Through doingthingsright.Theproblemistofindoutwhattherightthingtodois.


15

Beingagoodstrategistandhavingfinancialtrainingandleadershipqualitiesthatshowedatayoungage

allcontributetotheabilitytonavigateandgrowa

companyindifficulttimes.

FEATURES

Rob Clarke, groupmanaging director of Puregas (Pty)Ltd,contends that thesuccessof thecompany isdue toanarrowfocusandchoosingaproductthatisindemand.Puregas was started in 1971 and is todayan award-winning company, recognisedas Southern Africa’s leading supplier ofpurified and blended gaseous hydrocarbonpropellant,foam-blowingproductsandhigh-qualityspecialitygasesandgasequipment,providingemployment to approximately40employees.Tohavegrownthecompanyby11%duringarecessionisnomeanfeat.

Being a good strategist and havingfinancial training and leadership qualitiesthatshowedatayoungageallcontributetotheabilitytonavigateandgrowacompanyin difficult times, but themain ingredientsto business success are a cohesive team, retaining staffandsuppliers,anabsolutefocusonserviceandsafety,andhavinggoodmentorshipandsupport.

‘Ofcourseourfocusonqualitythroughoutthecompanyisamajorcontributingfactor,’saysClarke. ‘Oursuppliersare chosen according to their qual-ity standards and maintaining ourISO 9001 certification brings abouta carefully worked-out quality pro-gramme, forming a circle of excel-lencethat isdocumented inavaluepolicy. An employee of the monthis chosen according to excellenceinconduct.’Afurthercomponentofthebusiness’success is itsmarket-ing activity, a good brand, regularcontactwithcustomersandknowingthe market will contribute towardssuccessfulgrowthinabusiness.

‘Ultimately,itishavingapurpose,discipline and surrounding yourself with the correct skillsthatwillbringaboutbusinesssuccess.Thatincludesbuildinga good team, each having a defined role, a good rewardand recognitionsystem,andcontinuouslydoingemployeedevelopmentandskillstraining,’continuesClarke.

All these ingredients of business success willcontribute towards growing a business, but only if theoriginal idea is viable. The Gem report of 2006 showsthatof the97%ofentrepreneurs thatdonotgrowtheirbusinesses,only17%makeagoodliving.Sowhydo80%ofbusinesses thatopenup failcompletelyandcease toexist?ItseemsasifentrepreneursinSouthAfricafailtodothenecessaryresearchtoascertainwhethertheideaisactuallyanopportunity.Therearethreefiltersthroughwhich a business idea should be put before capital andoften lifesavingsare invested inthe idea.Thefirstfilteristoascertainwhethertheideaisoperationallypossible.

Frances Wright is the MD of Trinitas Consulting, a supplier specialising in creating profitability through the integration of communications, marketing and operations. An entrepreneur herself, Frances has had 16 years of experience in the communications industry and, with a BSc in Industrial Technology and Management (Honours) and an MBA, she specialises in the operational health of companies, assisting them to create sustainability. She is currently doing her PhD on the effect of processes on business success. For more information, contact Frances on 011 262 2814, email her on [email protected] or go to the Trinitas website at www.trinitas.co.za.

Can it be done? Secondly, is there a market? In otherwords, is there a portion of the population that actuallyneedstheproductorservice?

Sometimestheneedcanbecreated,aswas the case with the cellphone. Twentyyears ago, nobody ‘needed’ a cellphone.But to change human behaviour is capitalintensive and requires a big marketingbudget.Oncetheneed isestablished, it isimportanttofindouttheparametersoftheneed and develop the product and serviceexactly according to such a need. Offer atotalsolutiontoaneed.

Thethirdfilteristodeterminewhetheritis financially possible to deliver the serviceor product at a market-related price whilestillmakingaprofit.Whenstartingout in a

market where there are existing suppliers, it is importanttounderstandthefinancial requirementsandtodeterminewhetherbiggercompetitorsandtheresultanteconomiesofscalewillcreateascenariowhereasmallersupplierwillbetooexpensive.This is a recipe for failure,unlessaunique

differentiatorcanbefoundtocompelcustomerstobuyatahigherrate.

Whenconsideringallthesefactors,entrepreneurshipisnotforthefaint-hearted, but when everything fallsinto place and the business grows,it ishugely rewarding,financially aswell as through self-actualisation.The feeling of providing themarketwith a much-needed product suchas propellants and speciality gases(which laymen do not even knowthey are using, but without whichlifewouldnotbethesame)ishugelysatisfying.When,intheprocess,an

entrepreneurcanalsoprovidepeoplewithemploymentinahappy,friendlyenvironment,anentrepreneurhastofeelasifhisorherlifeonearthhascounted.Everybodywantstoleavealegacy.

Above: Group managing director of Puregas (Pty) Ltd, Rob Clarke.

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CASESTUDIES

Workplace Challenge case studyM-TECissituatedinVereenigingandemploys526people.The company manufactured South Africa’s first strandedcopperwireasfarbackas1924andproducedthecountry’sfirstaluminiumrodin1955.Todayitisoneofthecountry’sundisputedleadersinthemanufactureandsupplyofpowercables, aluminium overhead conductor, bare copper wireandopticalfibrecable.

ThereputationofM-TECproductsisbuiltonanabsoluteinsistence on high quality and the company attained ISO9002accreditationin2003.

M-TEC is proud to have been awarded 4 Stars on theNOSA5StarCMB150SafetyandHealthSystem.M-TEC’sproduct list includes Aluminium Fibre Optic Cables andOpticalFibreGroundWire(OPGW).

OPGWM-TEC’s OPGW series is an entirely new form oftelecommunication linewhichcombinesagroundwire forshieldingoverheadpowertransmission linestogetherwithoptical fibres for transmission of communication signals.The product is designed to resist strong winds, lightningand short circuit current. The OPGW has been designed

to meet both the electrical and mechanical equivalent ofconventionallygroundwire.

M-TEC joins Workplace Challenge Programme M-TECjoinedtheWorkplaceChallengeProgramme(WPC)in2009.The20KeysprogrammemanagedbyOrganisationDevelopmentInternational(ODI)wasimplemented.(The20KeysprogrammesuppliedbyODIforWPCclientsconsistsof20modulesthatcanbeselectedonaneedsbasis.)

By taking a comprehensive look at their needs,M-TECdeterminedeightareastobeaddressedbytheWPC.TheyselectedeightsuitableKeysfromthe20Keysprogramme.

Step 1 – Creation of Mini-business Units (MBUs)Tolaunchthe20Keys/WorkplaceChallengeProgramme,ODIconductedMiniBusinessUnit(MBU)workshopswiththefirst-linepersonnelandtopmanagement.Thisresultedintheidentificationandestablishmentof28MBUs.Thefirstchallengefacingmanagementwastogetallof theshop-floor level people involved in themini-business. In somedivisionsthelackofparticipationseemedtobeasaresultofa lackofcommitment fromthefirst-linemanagement.


17CASESTUDIES

Theproblempersistedthroughoutthedurationofthetwo-yearprogramme.

Step 2 – Implementing Key 11 (Quality Control)Quality has always been core to M-TEC’s vision and mission.However,theISO9001:2000BusinessManage-mentSystemneededtobesustainedandthusM-TECalsoselectedKey11.

WhenthecompanyauditedtheirperformanceonNCRs(Non-ConformanceReports)theyrealisedthatinthemonthof June theyhad44 customer returns. Therefore thefirsttechnicalfocuspointoftheWorkplaceChallengeProgrammewas to implementKey 11 by training divisionalmanagers,supervisors,operatorsandplantlevelcommitteemembersintheprinciplesofquality,coupledtotheNCRpolicy.

Overthetwoyearcourseofthe20Keysprogramme,theNCRsdeclinedsteadily.

Step 3 – Implementing Key 16 (Production Scheduling)On-time-deliveryandqualitygohandinhandwithcustomersatisfactionandto implementasystemthatwouldensureon-time delivery performance for customer satisfaction,M-TECselectedKey16aswellandalsoheldaproductionschedulingworkshopwithProductionPlanners.

The company utilised the services of industrialengineering students to conduct time studies and to setappropriatetimestandardsforkeymachinesandoperations.On-timedeliveryimprovedsteadily.

Step 4 – Implementing Key 1 (Cleaning and Organising)Someareasonthecompanypremiseswereverydirtyanddisorganised–hencetheneedtoselectKey1.

Key 1Key 1 was launched in phases – first in the operationsand engineering divisions. M-TEC conducted Yellow andRed taggingexerciseswith theseMBU teams, identifyingunwanted and unsafe objects. These divisions continuedwith the tagging and removing of unwanted objects foralmostfourmonths.Theneachworkareawasorganisedandcleanedaccordingtotheprinciplesofvisiblemanagement.

Next,Key1was launched in thesupport functionwitheachMBUteamarrangingadateforcleaningandorganisingintheiroffices.Participationwashighandunwanteditemsremovedoveraperiodofonemonth.Everybodyorganisedtheir offices and filing systems according to 5S principles– ‘creating space for everything and putting everything initsplace.’Thereafter,anin-houseinspectionwasconductedandascheduleforregularreviewingagreedupon.

Step 5 – Implementing Key 2 (Goal Alignment and Measurement)During the 2009 recession, management wanted everyemployee to understand that the companywas in trouble

and needed all to contribute to its rescue. Managementwantedeveryemployeetobeabletomeasurethemselves,toparticipate ina cultureofmeasurementandeveryone’sgoalstobealignedtothecompany’sgoals.TheysawinKey2asolutiontotheneedforGoalAlignment.ThecompanystartedwithGoalAlignmentbytrainingallthePLCmembersontheprioritykeysselectedsotheycouldserveaschangeagentswithintheorganisation.

The most important aspect of Goal Alignment was toagree on performancemeasures and put up performancecharts inMBUareas.MiniBusinessmeasuresandtargetsdiffered according to the nature of work per division andsections. The frequencyofmeasurementwasestablishedasdaily,weeklyormonthly,basedonthecomplexityofthemeasure.Theoverallcompanygoalswereclassifiedintofivecategoriesfollowingthe20Keysdiscipline.

Step 6 – Applying Key 9 (Maintaining Machines and Equipment)Anotherofthecompany’sneedswastoimplementasystemofpreventivemaintenanceinsteadofreactivemaintenance,to improve the level of maintenance of machines andequipment.Key9wasselected.

TheKey9ActionPlanincluded:1. Identifyingmodelmachinesperdivision2. Identifyingwhatoperatorsshouldcheckonamachine3. Developingchecksheetsforallmodelmachinesand trainingoperatorstousechecksheets)

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CASESTUDIES

Step 7 – Applying Key 10 (Workplace Discipline)ManagementneededtoinstillWorkplaceDisciplineamongemployeessothatthecompanycoulddeliverontimeandconformtoallpolicies.ThecompanyselectedKey10.TheKey10ActionPlanfocusedon:• Selecting the most important Workplace Discipline criteria• Humanresourcesstartedholdingmonthlymeetingswith thefirst-linemanagementtodiscussworkplacediscipline issues.TheKey10checksheetwasusedasanagenda forthemeetingstobeabletokeepfocus• An external training programmewas scheduled for the supervisors to broaden their knowledge and skills. The interimresultoftheapplicationofKey10wasareduction inthenumberofgrievancesanddisciplinecases.

Step 8 – Applying Key 15 (Skill Versatility and Cross Training)M-TEC realised that in order to improve the company’sperformance on quality, they needed to coordinate theeducationofemployeesbetter.ThereforetheyalsoselectedKey15toaddressthecompany’seducationneeds.

M-TECappliedthe20KeysandWorkplaceChallengeSkillsMatrix practice on the SAQA (South African QualificationAuthority)UnitStandardsassessmentframework.

Assuch thecompanyassessesoperators’skills levelsagainst Unit Standards for recognition purposes and

completes the company’s annual Workplace Skills Planfor MERSETA on the basis of scientifically determinedIndividual Development Plans (IDPs). The skills level ofindividualemployeesisthusrecognisedagainstanationallyaccepted Skills/Qualifications Framework and so theemployee’s skills assessment influences his/her job andsalarylevelintheorganisation.

The assessment is also recognised by other employers,enablingtheemployeetotransfertheirskillswhentheymovetoanotheremployer.Thecompany isbusyapplyingtheas-sessmentprocessonitscurrentworkforceof450operators.

Step 9 – Key 3 and Key 6 (Small Group Activities and Kaizen of Operations)A part of the company’s recessionary problems wereincreasingcosts.Managementrequiredemployeestohelpthinkofwaystoreducecostsbyeliminatingwaste.

TheyselectedKey3andKey6 toharness thecreativeabilitiesofM-TECemployeestowardseliminatingwaste.Toestablishthecompany’sSmallGroup/capability,M-TECgotafewSmallGroupActivities/KaizenTeamsgoing,focusingonproblemssuchastheFibreFailureRate.

TheKaizenTeamset thegoal tominimise the totalFibreFailures by 50%. Applying a few useful Small Group/Kaizentechniques,theymanagedtoreduceFibreFailuresby55%.

Anecdotal evidence of the impact of the Continuous Improvement ProgrammeThembiMathenjwa, organisational development specialistatM-TEC,highlightedtheimpactoftheWPCprogramme:• The networking and site visits facilitated by the WPC provides M-TEC as a company with the opportunity to learn from other companies that have had experience withcertainelementsofthe20Keysprogramme.• The plant level committee has helped to solve many operationalproblems,suchasabsenteeism.

Joseph Gorewang, assessor in the Aluminium Depart-ment, said:• The newUnit Standards-based assessment framework givesthecompanytheabilitytoauditskillslevels.• It also enables the company to reward employees accordingtotheirqualifications/skillslevel.

Impact of Workplace Challenge ProgrammeThe most recent external audit based on the 20 Keysproducedaverageratings.TheratingsoutlinedthefactthatdespitesuccessfullyimplementingeightKeysandimprovingonitsperformancesignificantlyoveratwoyearperiod,thecompany continues to face challenges in implementingsome aspects of the programme.However, in addressingthesituation,themanagementteamrecentlyreplanneditsOrganisationDevelopmentStrategyandworkisongoingtomaintainworld-classstandardatthecompany.

20 CASESTUDIES


21


CASESTUDIES

Profibre ProductsIntroductionProfibre’s vision is to grow an innovative, world-classcompany,manufacturingpredominantlycontinuousOriginalEquipment (OE) products, to a local and internationaldiversified customer base, using technologically advancedsystemsandprocesses.

Profibrewasestablishedin1990asaclosecorporationwith an initial focus on diverse industrial products. Thecompany developed a competence to produce unique,customised solutions for customers in diverse industrialspheres, from mining and construction through to portservicesandpetrochemicalplants.

In the late1990s,Profibrestartedwith itsfirstsmall-scale OE supplies to Bell Equipment in Richards Bay,South Africa. The business grew as Bell Equipmentgrewandwitheachchange inmodel theproduct rangeexpanded, from bonnets to heat shielding, fan shroudsandspecialpurposecovers.

AsthedemandforOEsupplygrew,Profibrestrategicallyfocusedthebusinessonthisvolumemarketsegment.ThecompanyexpandeditsOEfocusbysecuringtheMANbusand coach contract in 2001, Putco buses in 2006, TatabusesandEcho4x4trailersin2007.

Supply to Original Equipment Manufacturers (OEMs)requiresstrong,controlledprocessesinlinewithademandforquality,reliable,on-timedeliveryperformanceandcost-efficiency,so in2005Profibreembarkedonaprocessofintroducingleanmanagementprinciplesintoitsproductionsysteminordertoentrenchthephilosophyofcontinuousimprovementwithinitsoperations.

Turnkey solutionsDue to the fact that Profibre has its own design, toolmanufacturing, sourcingandmanufacturing facilities, it isabletoprovidecustomerswithacompleteturnkeysolutionfromproductdesignthroughtothemanufactureandsupplyofproductionpartsorassemblies.

Theorganisationcurrentlyoperatesoutofa10000m2

facilityinHalifaxRoad,Pinetown,ofwhich8000m2isunderroof.Thecompanycurrentlyemploys239employees.

InTrODUCTIOn OF ThE WOrKPlACE ChAllEnGE PrOGrAMME (WPC)Why was the WPC introduced?The need for the company to sustain the culture ofcontinuous improvementstarted in2005,andgettingthecompanyuptoastandardofworld-classperformancewasone of the main reasons for Profibre Products adoptingthe Workplace Challenge Programme in February 2010.Profibre wanted to become successful in its market against any competition regardless of size, country of originorresources.

Themanagingdirector,GarryCoady,realisedthatworld-class manufacturing is not a milestone, destination orcertificateprogramme,butratheranongoing,never-endingjourneytowardstotaloperationalexcellence.

Thecompanywantstomatchorexceedanycompetitor

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CASESTUDIES

on quality, lead time, flexibility, cost, customer serviceandinnovation.

HavinghadsomeexposuretotheWorkplaceChallengeProgrammeatanothercompany,GarrysawintheWorkplaceChallenge Toolkit Programme a means of rolling out theprinciplesofcontinuousimprovementandleanmanagementto every employee. The lean system, as facilitated bythe Workplace Challenge Programme, engenders thecompany’scorevaluesofcustomersatisfaction,beingthebest, providing innovative solutions, providing stakeholdervalue,integrityandrespect.

In line with the managing director’s long-term vision,the Workplace Challenge Programme was introduced to

ProfibreProducts,afterCoadyhadmotivatedeverymanagerto complete a NQF Level 3 Learnership in Management.Coady regarded leadership support as the foundation fora sustainable culture of continuous improvement/leanmanufacturingsuchastheWorkplaceChallengeProgramme.

hOW WAS ThE WPC InTrODUCED?Step 1 – Finding an Internal Facilitator/Project ManagerHaving ensured everymanager’s buy-in and grasp of thebig picture, the first stepwas to assign the responsibilityfor facilitating and coordinating the Workplace ChallengeProgramme. The company’s quality manager, AkashHariparsad,waschosenforhisenthusiasmanddeterminationtofollowthroughontheWPCinitiatives.

Step 2 – Setting up Mini Business AreasThemanagement team establishedMini Business Areas/Value Stream teams called Green Areas where teamscouldmeetdailytodiscusstheirperformanceandaddressoperational problems. Through the Green Areas, theWorkplaceChallengeProgrammegavethecompany’sleanmanufacturing system a channel for communicating clearperformanceexpectationsanddoingfollow-up.Thecoreofthesystemisvisibleleadership.

A standard element of the Workplace ChallengeProgramme is to introduce a system for managinginnovationsandforemployeestoparticipateinimprovementactivities–althoughProfibreasyethasnotformallylaunchedasystemformanaginginnovation,eachMiniBusinessUnit/Value Stream measures the number of innovations/ideassuggestedbyteammemberspermonth.Andasthesayinggoes,aproblem is themotherof invention,soeachValueStreamalsomeasures thenumberofdefectsproduced invariousproductionprocesses.Applyingthe80/20orParetoPrinciple, if a certain type of defect comes up too often,theMiniBusiness’teammembersdoaFishboneExercise,where theproblemwould be analysedbymeansof a bigmobilewhiteboardwithafishbonedrawnonit.Theproblemorsymptomswouldbedescribedclearlyinthesquareinthepositionofthe‘fish’shead’.

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CASESTUDIES

Thentheteamwouldbefacilitatedtobrainstormaroundanumberof‘fishbones’,eachrepresentingpossiblecausesofthe problem, iemanagement,man,method,measurement,machineormaterials beingpossible causesof theproblem.Whentheteamfindsthemostlikelycauseoftheproblem,theyfollowthenextprocessofasking‘Why?’atleastfivetimes,untiltheygettothecoreproblem.Oncethecoreproblemisclear,the team would then brainstorm possible solutions, which oftenresultinaninnovativeideabeingimplemented.

Step 3 – Implementing the Goal Alignment ToolkitTheexternalWorkplaceChallengeFacilitator trainedeveryMini Business team leader and managers in the basicsof Goal Alignment. Goal Alignment as a concept entailsan exercise whereby the company’s overall goals, visionand mission are cascaded down to every Mini BusinessArea while making sure that every Mini Business Area’scontribution to theValueStreamof thewholebusiness isalignedtotheoverallgoalsofthebusiness.

Themanagementteamfacilitatedthisprocessbydraw-ingupaGoalAlignmentActionPlanintheformofaGanttChartwhichaddressedactionssuchasCommunicationofCompanyVisionandMission,FormulationofPerformanceMeasuresforeachManagerandeachMiniBusinessArea,EstablishmentofaPlant-LevelCom-mittee(akindofinternalorganisationdevelopment body to oversee theimplementation of the WorkplaceChallenge Programme), Selection ofMini Business Names, IdentificationofInternalWorkplaceChallengeAudi-tors,andPlanningaMeansofGivingRecognition for Achievements withregardstothewholeprogramme.

These Action Plans were postedatallof theMiniBusinessAreas forall Value Stream employees to see,and teams formulated their ownvisionandvaluestatements,ensuringawarenessandalignmentofindividualversusorganisationalgoals,visionandvalues.

Impact of Goal Alignment and the implementation of the Mini Business structurePerformance on Profibre’s most important goal, namelyquality, is seemingly starting to improve – earlier in 2011,customer returns seemed to be on the increase (but thatisbecauseeverythingisnowmeasuredasaresultoffine-tuningProfibre’smeasurementsystem)whereas,sinceApril2011,thenumberofcustomerreturnsisbeginningtodeclinetobelowProfibre’stargetline.

Step 4 – Implementing the Cleaning and Organising ToolkitTheCleaningandOrganisingToolkitwastackledinthesame

World-classmanufacturingisnotamilestone,

destinationorcertificateprogramme,butrather

anongoing,never-endingjourneytowardstotaloperationalexcellence.

wayasGoalAlignment.Again,AkashandthemanagementteamfirstsatdowntodrawupanActionPlanforthismoduletobeabletocoordinateallefforts.

And although the company does not have any tangibleresulttoreportinregardtoCleaningandOrganisingyet,thevisualimpactisalreadyclear.

Innovations on the Cleaning and Organising ProcessUsually one of the elements ofCleaning andOrganising is to applythepracticeofRedTagging.AllMiniBusiness teams put in a concertedeffort to do a thorough ‘stock take’ofredundant/unuseditemsofequip-ment or materials (Red Tagged).ThenalltheseRedTaggeditemsaremoved to an area where they canbeviewedbyotherteamsandreas-signedtowheretheymightbeusedmoreproductively.

Akashwentonestepfurtherbycreatinganelectronic‘logsheet’whereallofProfibre’sRedTagitemswereloggedforelectronicinternaladvertising,andasaresulttherelocationprocess could be better coordinated and finalised muchmorequicklythanotherwise!

ConclusionAlthough Profibre might have had a slow start with theimplementationoftheWorkplaceChallengeProgramme,duetorelocation,ithasestablishedasustainabledisciplineofGoalAlignment, and Cleaning and Organising. It is also reapingmany benefits from an informal approach to harnessinginnovations fromtheshopfloor. Itseemsclear thatonce itstartstoimplementtheTeamworkToolkit, itsupwardspiraltowardsworld-classperformancewillbeconsolidated!

24


HUMOUR

Getting productive in the North PoleStreamlining was appropriate in view of the reality that the North Pole no longer dominates the season’s gift distribution business. home shopping channels and mail-order catalogues have diminished Santa’s market share, and he could not sit idly by and permit further erosion of the profit picture.

The reindeer downsizing was made possible throughthepurchaseofalatemodelJapanesesledfortheCEO’sannualtrip.ImprovedproductivityfromDasherandDancer,who summered at the Harvard Business School, is an-ticipatedandshouldtakeuptheslackwithnodiscernible lossofservice.

IampleasedtoinformyouandyoursthatRudolph’srolewillnotbedisturbed.Traditionstillcountsforsomethingatthe North Pole. As a further restructuring, today’s globalchallenges require the North Pole to continue to look forbetter, more competitive steps. Effective immediately,the following economymeasures are to take place in the‘TwelveDaysofChristmas’subsidiary:• The partridgewill be retained, but the pear tree never turned out to be the cash crop forecasted. It will be replacedbyaplastichangingplant,providingconsiderable savingsinmaintenance.• The two turtle doves represent a redundancy that is simply not cost-effective. In addition, their romance during working hours could not be condoned. The positionsarethereforeeliminated.• The three French hens will remain intact. After all, everyonelovestheFrench.• The four calling birds were replaced by an automated voicemailsystem,withacallwaitingoption.Ananalysis is underway to determine who the birds have been calling,howoftenandhowlongtheytalked.• The five golden rings have been put on hold by the boardofdirectors.Maintainingaportfoliobasedonone commodity could have negative implications for institutionalinvestors.Diversificationintootherprecious metals aswell as amix of T-Bills and high-technology stocksappearstobeinorder.• Thesixgeesea-layingconstitutealuxurywhichcanno longer be afforded. It has long been felt that the production rate of one egg per goose per day is an example of the decline in productivity, therefore three geesewillbeletgo• The seven swans a-swimming is obviously a number chosen in better times. Their function is primarily decorative.Mechanicalswansareonorder.Thecurrent swanswillbe retrained to learnsomenewstrokesand thereforeenhancetheiroutplacement.

• As you know, the eight maids a-milking concept has beenunderheavyscrutinybytheEEOC.Amale/female balance in the workforce is being sought. The more militant maids consider this a dead-end job with no upwardmobility.Automationoftheprocessmaypermit themaidstotrya-mending,a-mentoringora-mulching.• Nineladiesdancinghasalwaysbeenanoddnumber.This function will be phased out as these individuals grow olderandcannolongerdothesteps.• Ten lords a-leaping is overkill. The high cost of lords plustheexpenseofinternationalairtravelpromptedthe compensationcommitteetosuggestreplacingthisgroup with10out-of-workcongressmen.While leapingability maybesomewhatsacrificed,thesavingsaresignificant asweexpectanoversupplyofunemployedcongressmen thisyear.• Eleven pipers piping and 12 drummers drumming isasimplecaseofanout-of-datebandgettingtoobig. A substitutionwith a string quartet, a cutback on new music,andnouniforms,willproducesavingswhichwill droprighttothebottomline.

Overallwecanexpectasubstantialreductioninassortedpeople, fowl, animals and related expenses. Thoughincomplete, studies indicate thatstretchingdeliveriesover12daysisinefficient.IfwecandropshipbyUPSinoneday,servicelevelswillbeimproved.

RegardingthelawsuitfiledbytheBarAssociationseekingexpansion to include the legal profession (‘13 lawyersa-suing’),adecisionispending.

Deeper cutsmaybenecessary in the future to remaincompetitive. Should that happen, the board will requestmanagementtoscrutiniseourSnowWhiteDivisiontoseeifsevendwarfssleeping,sneezing,grumping,etcareinlinewithouroverallprojections.

the team at productivity Sa leader

would like to wish you a safe

festive season and blessed 2012.

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