Productivity
The Profit Engine
“Productivity is being able to do things that
you were never able to do before.” ~ Franz Kafka
“Efficiency is doing better what is already
being done.” ~ Peter Drucker
What is productivity? How it is a profit engine? In our daily life a prudent human
being wants to enjoy maximum from his limited resources and that concept is
used for utilization of company resources for production purposes: that is what
the productivity is. It should be more so because we earn our livelihood from
our organization.
In simple
words it means to produce at the minimum cost per unit without compromising
quality. It is the total cost divide by total production in units that gives
us: cost per unit. Thus productivity is
ratio of input to output. If a factory is able to produce 12 units today
and yesterday it produced only 10 with the same expenditure of resources we can
say today productivity was higher by 20% than yesterday. It is elimination of
wastages, reducing overheads both fixed and variable to bare minimum, it is an
attitude of mind, it is attitude of improvement everyday and always & using
every minute for productive purposes.
Product and services that is the output and these days it is a fashion to call even the services as
product. Another name for the output being used is “Plan” like mobile plan,
interest plan for loans etc.; fundamentals remain the same that whatever is
produced is the output. It is easy to measure output for example cars produced,
coal mined, mobiles sold, mobile connection given, mobile towers erected,
policies sold, loans in Crores sanctioned and so on. Just count and tell.
Input is
cumbersome and complex. It embraces everything done within the boundary of a
production factory and factory itself to produce the end product. It includes land & building, plant and
machinery, capital & cash, office & staff quarters, management &
work force, wages & salaries, overheads-seen & unseen-fixed and
variables; marketing & purchases, loans & advances, debitors and
creditors, interest paid & received, satisfied labour force &
demotivated one, depreciation & maintenance: in fact every single penny
spent for the organization. It is very difficult to say what input is. It is
only the Profit & Loss account and the Balance Sheet that tells us where a
concern stands.
Since
calculation of input cost is a cumbersome process, for the purpose of
productivity calculation, man hour is taken as the unit because better records
exist for man-hours spent to produce and calculation is easy. So total units
produced divided by man-hours spent that gives us the units produced in one
hour: more the units produced per hour higher is the productivity per man hour.
Productivity is not just a figure; it is much more and requires a searching eye, positive
attitude, experimental suggestions and humane approach to each alteration,
examination, analysis of the highest order by the management and the men who
matter above all a willing work force that listens and implements suggestions.
These are the broad parameters to rewrite the existing work culture.
Most important factor to increase productivity
is the work-force. They use raw material, produce finished product, waste
inputs & overheads, save & use time, talk to the machines, on & off
machines, face problems unknown. They intermingle the skill & experience
with solid and raw inputs. Work force managed well can do wonders.
But how to
manage this ingredient of production: a tedious task- requires, right man for the right job, select men
who treat work as hobby, internally motivated, total quality people, devoted
dedicated, who feel pride in being part of the organization, satvic people, and
temper them with understanding, treating them equally good human beings in the
matters of love, affection, respect, regard, human value, praise them when needed,
ignore minor mistakes, be helpful to them in difficult days, recognize each
employee, when they come to you listen
with attention.
Office is another area which requires attention of the management to increase productivity- often neglected
as not directly concerned with production-this is a wrong notion. In fact this
is place where ideas solidify into plan and then action starts. Here people
assume themselves superior to technical staff a wrong notion so they are not
bothered about expense which sometimes are easily sanctioned being intimate
with the authority. The expenses which require scrutiny are: overtime,
honorarium, TA, Training, entertainment, local conveyance, staff requirement
particularly the multipurpose staff, stationery particularly the costly one. A
searching watch is needed.
Finance is an important area in the matters of
productivity which is generally over looked being
custodian of finances. Ancient wisdom is take care of pennies pounds would take
care of themselves. Excess liquidity is a killer in the long run which leads to
relaxed attitude to expenses. Control losses and expenses, profits &
stability would trickle.
Technology: Adopt
& adept advanced technology and its variants; they help to reduce cost and
put you ahead of others. Inertia is fatal in this area be quick and fast
otherwise you would be behind by two steps- one you have not adopted the new
and others have made the present technology obsolete and entered the next step.
Overheads beyond Office and Work-Force: This is another area of neglect like godowns of obsolete
items-these should be disposed of at regular intervals otherwise they consume
space, power, guards and would fetch less sale price.
Company’s own conveyance Keep you own fleet to the minimum. Hired fleet carries no
responsibility except payment of hire as and when required. That will reduce
fixed overheads like salaries, interest, pension, depreciation, insurance, ESI,
EPF etc. in addition mischievous flexible overheads.
Top heavy management is not conducive; then we will have more supervisors than the workers. Cadre
pyramid should take care of sentiments of work force. In Govt. in the name of
cadre review; top managerial staff is more so the slackness in delivery and
disposal.
Managerial Meetings should be kept to the minimum particularly they cost heavy in
terms of overheads to the concerns. Preference should always be for online
meetings and consultations they cost less time and energy and yield more
effective results.
Policy Makers & Executives Consultations between policy makers and the executives are a
regular feature of any operational units. It is, therefore, of paramount
importance that they are available to each other all times. In an organization
they should seat in adjacent rooms so that they can just walk in for
consultations. In many Govts, Ministers and Secretaries in Indian context sit
in the adjacent rooms to facilitate easy and quick sorting out of the issues.
Hence a much cheaper proposition both money and time wise than sitting far away
from each other.
Optimum Capacity: What is optimum capacity a debatable term? It is not the
maximum capacity. It is the capacity at which a plant, machine or a system
gives highest output without breakdowns and the lowest maintenance. Never use
the maximum capacity, it is like starching at seams, nobody known when it is
the last straw that breaks the camel’s back and clothes get torn. So study the
capacity of each thoroughly. This is applicable even to workforce and
management also.
Ease of Business Higher the ease of business in a country lessor time is need
for compliances whether of certificates or of payment of taxes and hence lesser
overheads and litigations. This is the reasons investors go to place with less
governmental intervention. Govt. must realize the benefits of ease of business:
easier it is lesser is corruption more is compliance.
Time Management is essence of life and of success in life. Unless we utilize
our time properly we cannot accomplish even very small and insignificant
targets in life. Time management is in fact attitude towards life. It cannot be
developed in a day or so. It is gift of God for some and others can develop it.
But those who do not acquire it lose many good things in life. Another name for
time management is self-imposed discipline. Fact of the matter is that if we do
not manage time, time will manage us. But how to ensure time management for
others: very difficult task for the organization. However if we start taking
steps work-force and others would realize that we have lot of respect for time.
That would save not only the overheads but many headaches for management and earn
money for the workers.
“Time is the scarcest
resource and unless it is managed nothing else can be managed”
~ Peter Drucker
Discipline & Decorum the two pillars of a systematic action contribute a lot to
productivity by speedy, complete and comprehensive implementation of managerial
orders.
For every disciplined
effort there is a multiple reward. Jim Rohn
Discipline and commitment
is pathway to reach goals and dreams. Dr Anil Kr Sinha
Productivity is a treasure, you have to dig
down and deep.
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