Productivity

1. Presentation on Increase Productivity For Better Future Prepared by: Rajib Chandra Roy Asst. Manager (Production) Ramdi Feed Mill

2. Introduction : People are engaged in various field of economic activities like farms, factories, hospital, banks, school, offices etc. to earn a standard living by producing goods and services which is required by the community. In order to produce goods and services resources in the form of man, machine, material and money are required. And the more efficient use of resources is ensured, the more goods and services will be produced.

3. Production & Productivity : Productivity: • Production is the integrated effort of Land, Labour, Capital and Organization. • Productivity is the ratio between output and input. Productivity Social concept : • It is positive attitude of mind. • Productivity is being better today than yesterday and tomorrow will be better than today.

4. If, Productivity = Y Output = O Input = I According to Productivity Definition O Productivity is Y = ---- I

5. Distinction Between Production and Productivity Period=1 Production = 10,000 unit. Employment = 50 no Hours = 8 hour per day Days = 25 days 10,000 L(Y) = ----------- = 1unit 50x8x25 Period=1 Production = 12,000 unit. Employment = 60 no Hours = 8 hour per day Days = 25 days 12,000 L(Y) = ----------- = 1unit 60x8x25

6. Productivity (Production sector) Output (Higher quality) Productivity (Y) = ----------------------------- Cost x Time Productivity (Service sector) Service (Better service) Productivity (Y) = -------------------------------------- Cost x Time

7. Measurement of Output and Input Input measure: Labour : No of Persons, Man hours, Man days etc. Capital : Land, Building and structure, Equipment, Inventories etc. Materials : Cost of raw materials. Energy : Fuel, Power, Electricity, etc. Non Industrial Cost :Cost of printing and stationery, Postage, Telephone, Payment of water charges, Cost of advertisement, Banking, Insurance, Consultancy services, Accounting, Auditing and others.

8. Measurement of Output and Input Output Measure: (i) In Physical Unit; and (ii) In Value. (i) Physical Unit : Ton, Metre, Litre, Number etc. (ii) In Value : (a) Gross Value of Production = Value of Sales (+ or -) Change in stock (Closing balance – Opening balance). (b) Gross Value Added = Gross Value of Production – Industrial Cost. • Value Added at Current Price = Gross Value Added –Non Industrial Cost. (d) Net Value Added = Value Added at Current Price- Depreciation cost

9. Type of Productivity (1) Factor Productivity (2) Partial Productivity (3) Total Productivity (4) Total Factor Productivity Abbreviation : Productivity = Y Output = O Input = I Labour = L Material = M Capital = K Energy = E Non Industrial cost = N

10. Different type of Productivity with the help of figure Suppose a Company producing 100 units of Output (O) by using the following Inputs (I) Labour = L = 30 Material = M = 20 Capital = K = 30 Energy = E = 10 Non Industrial cost = N = 5

11. Factor Productivity: Factor Productivity: O 100 O 100 Y(L) = ---- = ----- = 3.33, Y(E) = ---- = ------ = 10.00. L 30 E 10 O 100 O 100 Y(M) = ---- = ----- = 5.00, Y(N) = ---- = ------ = 20.00. M 20 N 5 O 100 Y(K) = ---- = ----- = 3.33, K 30

12. Partial Productivity: Measurement of partial productivity refers to the measurement solutions which do not meet the requirements of total productivity measurement, yet, being practicable as indicators of total productivity. In practice, measurement in production means measures of partial productivity. Partial Productivity: O 100 100 Y(L+E) = ------- = --------- = ------- = 2.50 L+E 30+10 40 O 100 100 Y(M+N) = --------- = -------- = -------- = 4.00 M+N 20+5 25 O O100 Y(L+K+E) = ---------- = -------------- = ------ = 1.43 L+K+E 30+30+10 70

13. Total Productivity Total productivity is the most comprehensive productivity concept, since it is defined as the total output over the total input used to produce the output. Total Productivity O 100 100 Y (Total) = ------------------- = -------------------- = ------ = 1.05 L+M+K+E+N 30+20+30+10+5 95

14. Total Factor Productivity Total factor productivity (TFP) is a measure of productivity calculated by dividing economy-wide total production by the weighted average of inputs i.e. labor and capital. It represents growth in real output which is in excess of the growth in inputs such as labor and capital. Total-factor productivity (TFP), also called multi-factor productivity, is usually measured as the ratio of aggregate output (e.g., GDP) to aggregate inputs. Total Factor Productivity O - M 100 - 20 100 Y = ----------- = ------------- = ------ = 1.67 L + K 30 + 30 60

15. Method of improvement of Productivity: OutputProductivity = ------------ Input There are five possible ways in which productivity can be improved: Output (1)Reduce cost = ------------------------------ Input • This is possible where output remains constant but input is reduced

16. Output(2) Manage growth = ------------------------------ Input This can occur where there is slight increase in input but at the same time a larger increase in output is achieved.

17. Output (3) Work Smarter = ------------------------------Input This is situation where input remains constant but there is an increase in output.

18. Output (4) Pare down = ---------------------Input A large reduction in input can result in increasing productivity if there is a only slight reduction in output.

19. Output (5) Work effectively = --------------------- Input This is a case where there is a reduction in input yet at the same time there is an increase in output.

20. We can apply some Method for Productivity Increase: • 5S System • Kaizen Paper • Lean Management Technic. • Waist Minimization.

21. 5S…. • Sort: sorting items in workplace. • Set in order: rearrange workplace. • Shine: clean everything around. • Standardize: maintain the 3S above to create habits. • Sustain: apply 5S everywhere. “5s such a technique by which a man or an enterprise can easily improves his work place to a productive culture. By applying the philosophy and the culture of 5s can easily be improved without involving extra cost or new techniques of production.”

22. SORT (SEIRI ) Objective: To reduce or eliminate workplace clutter thereby reducing requirements, stock levels, and reducing working capital, Thereby improve productivity. • Classify everything around you; • Separately store according to the classification; • Discard all obsolete and unwanted things; • Use the Red Tag technique; • Use the Yellow tag technique; and

23. SET IN ORDER/SYSTAMATISE (SEITON) Objectives: • Reduce search, pick up and transport time-productive use of time; • Reduce personnel stress- improve quality of work life; • Improve quality of products and services- prevent mix-up of items; and • Improve safety.

24. Main activities for doing Set in Order • Location Indication • Floor painting strategy • Proper transportation • File, registers and manuals • Proper arrangement of material • First in first out • Safety strategy • Visual control system

25. (1)Location Indication(i) Every building to be named A, B, C etc.(ii) Every room to be labeled.(iii) Every location or office should be able to be located without difficulty.(IV) Label strategy from the entrance. (2) Floor painting strategy(i) Working areas - Green(ii) Aisles - Orange(iii) Rest areas - Blue(iv) Warehouse - Gray(v) Door opening line - Red

26. (3) Proper transportation(i) Trolleys(ii) Pallets(iii) Cans(iv) Movable storage racks(v) Fork lift trucks (4) File, registers and SOP

27. (5) Proper arrangement of material

28. First in first out FIFO stands for “First in First Out” and is one of the most common methods to value inventory at the end of any accounting period and it makes the assumption that the first stock received will be the first that is sold.

29. A Safety Planning Committee that determines it is ready to begin strategic planning must perform four tasks before proceeding: • Identify specific issues that the planning process should address • Clarify roles (who does what in the process) • Create a Planning Committee • Identify the information that must be collected to help make sound decisions. (7) Safety strategy

30. VisualManagement Visual management is an absolutely essential tool within the world of Set in Order and can be seen as the link between the data and the people. 

31. SHINE (SEISO) Scientific manner of cleaning Objective To improve health of machinery and human beings by a process of cleaning. • Develop a cleaning culture. • Prepare a cleaning responsibility map. • Prepare a cleaning responsibility schedule. • What to clean • When to clean • In which order to clean • Who is responsible • How to clean • What tools to use • What materials to use

33. STANDARDIZE (SEIKETSU) • Standardize all three steps • Standardization of Sort ((Seiri) • Standardization of Set in Order (Seiton) • Standardization of Shine (Seiso)

34. Standardization of Sort (Seiri) • Fix rule for Separation • Things we use frequently : Keep at the workplace. • Things we use infrequently : Store in the work place. • Things we use on & off : Store somewhere far away. • Things we don’t use but want to have on hand just in case : Keep as contingency items in a separate tore /record room. • Things we don’t use : Discard.

35. Standardization of Set in Order (Seiton)

36. Standardization of Shine (Seiso)

37. SUSTAIN (SHITSUKE) Chairman 5s Committee Member Secretary Member Member Member

38. Kaizen Paper: Kaizen is an activity to improve productivity by recognizing the existing situation and solving the problems of the organization continuously and gradually utilizing existing management resources (man, machine, material, money and information ). Kaizenis the Sino-Japanese word for "improvement". In business, kaizen refers to activities that continuously improve all functions and involve all employees from the CEO to the assembly line workers. for

39. KAIZEN MEANS…… • Making small improvement with little cost • Making small improvements all the time- always thinking of doing something better today than yesterday. • Focusing on “negative situations” • Accepting that nothing is good enough that there is room for improvement- encourages “breakthrough thinking”. • Allowing everyone to make improvements.

40. Innovation KAIZEN PHILOSOPY: Innovation Decline Innovation Innovation Decline • Never be satisfied with the current status. • Constant dissatisfaction seeks continuous improvement. • Always look for improvement • Never think you are good or the best. • Look for negative factors. Innovation without Kaizen KAIZEN For….: • Work become better; • Work become easier; • Work become faster; and • Work become cheaper. Innovation Kaizen Innovation with Kaizen

41. Primary question(5W&1H) for Kaizen activities for simplification of work Eliminate unnecessary part of the job. • Purpose : What is actually done ? Why is all the activity necessary at all ? • Place : Where is it being done ? Why is it done at that Particular place ? • Sequence : When is it done ? Why is it done at that particular time ? • Person : Who is doing it ? Why is it done by that particular person ? • Means : How is it being done ? Why is being done in that particular way ? Combine Wherever possible Or Rearrange The sequence of operations for more Effective result. Simplify The operation.

42. Kaizen means Change for Better. It is Small change for Improvement this is Japanizes Thinking. and Innovation is American Idea It is Big Change for Improvement. Kaizen vs Innovation in terms Focus Kaizen Innovation Effect Long-term but un-dramatic Short-term but dramatic Place Small steps Big steps Timeframe Continental and incremental Intermittent Change Gradual and constant Abrupt and volatile Approach Group efforts Individual ideas and efforts Involvement Everybody Selected few Mode Maintenance and Improvement Scrap and build Know-how Conventional Know-how Technological breakthrough Requirement Little investment Large investment Orientation People Technological

43. Purpose : What is actually done ? Why is all the activity necessary at all ? • Place : Where is it being done ? Why is it done at that Particular place ? • Sequence : When is it done ? Why is it done at that particular time ? • Person : Who is doing it ? Why is it done by that particular person ? • Means : How is it being done ? Why is being done in that particular way ? Eliminate unnecessary part of the job. Primary question(5W&1H) for Kaizen activities for simplification of work Combine Wherever possible Or Rearrange The sequence of operations for more Effective result. Simplify The operation.

44. Success Factors For Kaizen • Top management Commitment. • Autonomy for middle management. • Structured scheme with clear targets. • Evaluation criteria and rewards. • Training. • Promotion & Sustenance. • Feedback and monitoring.

45. Practical Application of Kaizen The following is the key points for practical application of KAIZEN • Selection of a Model (or pilot) area (or line). • Formation of a project team. • Determination of the existing situation. • Determination of the KAIZEN direction. • Start of trial project. • Expansion and up grading step by step.