lmda introduction by prof. dr. ali sajjid, ti june 3, 2014 productivity engg & management by...
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LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Productivity Engg & Management
By Engr Dr. Ali SajidSpecial Presentation for
Pakistan Engineering Council
Leadership & Management Development Associates (LMDA)
28 Jan, [email protected]: 051-2211791(off)
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
LMDA A vision to make
Pakistani Industry
More Competitive
By Enhancing capacity of Engineers
www.Lmda.com.pk
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Shakwa a Zulmat Shab
"Don't curse the darkness -- light a
candle." Chinese proverb.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
“The will to win, the desire to succeed, the urge to reach your
full potentials are the keys to unlock the doors to the personal
excellence”
Confucius
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Commencement address by Sir Winston
Churchill at a graduation ceremony: "Never give up. Never give up. Never, never, never."
- this was his entire speech.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Good Mgmt
•Good management consists of showing
average people how to do the work of superior
people."
• (John D Rockerfeller, 1839-1937, US oil magnate and philanthropist.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Difficulty
•"Difficulty is not an obstacle, it is merely an
attribute".
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Stone Age
"The stone age didn't end
because they ran out of stones."
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
•Start viewing the probable as possible. You'll be surprised at
what you can accomplish.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
• All this will not be finished in the first one hundred days. Nor will it be finished in the first thousand
days, nor in the life of this administration, nor even perhaps in our lifetime on this planet. But
let us begin. - John F. Kennedy
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
• The best & most beautiful things in the world
cannot be seen or even touched.
• They must be felt
with the heart.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
•Self-actualized people are
independent of the good opinion of
others. - Wayne Dyer
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
• The greatest discovery of our generation is that a
human being can alter his life by altering his
attitudes.- William James
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
• Nature present us with an infinite variety of Attitudes - from gloomy mist to glorious
sunshine. Our own moods, whether gloomy or bright, radiate to those around us.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
We may affirm absolutely that nothing great in the
world has ever been accomplished without
passion.- George Hegel
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Two Parts of Empathy:
Skill (tip of iceberg)
& Attitude
(mass of the iceberg).
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
•
Eighty percent of success is related to ATTITUDE rather than competency.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Attitude
Your attitude determines
your altitude.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
•Pride is a personal commitment; it is an
attitude which separates excellence
from mediocrity.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
•Attitude is a little thing that makes a big
difference.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Action
•Logic will not change an emotion,
•but action will.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
The difference between a successful person and others
is not a
“Lack of Strength”, not a
“Lack of Knowledge”,
but rather in a
“Lack of Will”.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
The mold of a man's fortune is in his own hands.- Francis Bacon
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Passion
• We may affirm absolutely that nothing great in the
world has been accomplished without
passion.- Georg Wilhelm Friedrich Hegel
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Believe
• If you do not believe in yourself ...
chances are nobody else will.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
• You can have a positive attitude without talent and you can have
talent without a positive attitude, but things really start
happening when you have a positive attitude combined with
talent.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
To be conscious that you are ignorant is a great step to
knowledge.- Benjamin Disraeli
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Leaders Are …
in a Hurry
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Flexibility
Whatever is flexible ….will grow;
what ever is rigid & blocked
will dieLao Tzu
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Goodness
“Goodness is the
Only Investmentthat
Never Fails”
Henry David
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Proj Mgmt Good Practices
"I Praise Loudly.
Blame Softly." (Catherine The Great, 1729-1796.)
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Attitude in Projects
“Nothing can stop man with “Right Mental Attitude”
from achieving his goals: Nothing on earth can help man with
“Wrong Mental Attitude”- Thomas Jefferson
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Importance of Ethics in Org
In law, a man is guilty when he violates the
right of another. In Ethics, he is guilty,
if only he thinks of doing so
• Immanuel Kant
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Personal Integrity in OrgI look for three things in hiring People.
The first is Personal Integrity,Second is Intelligence
Third is a High Energy Level. But if you don’t have the first,
other two will kill you.Warren Buffett,
CEO Berkshire Hathaway
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Rethinking in Industry
The complacent companyis a dead company.
Success today requires “The Agility &
“Drive to Constantly Rethink, Reinvigorate,
React, & Reinvent”. Bill Gates, Chairman Microsoft
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023 36
•Never to suffer would never to have been blessed.
• Edgar Allan Poe (1809 - 1849)
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023 37
•Although the world is full of suffering, it is full also of the overcoming of it.
• Helen Keller (1880 - 1968)
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023 38
• To do right is wonderful. To Teach others to
“Do the Right” is even more wonderful –
& much easier.- Mark Twain
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023 39
“Self-pity is our Worst enemy & if we yield to it, we can never do anything wise in
this world”- Helen Keller
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023 40
“Setting An Example” is not the
“Main Means of Influencing” Others, it is
“the only means”.- Albert Einstein
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Education & Training in PM
"A person who graduated,
yesterday & stops studying today is uneducated
tomorrow."
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Competitiveness
• Ability to get customers to choose your product or service over competing alternatives on sustainable basis.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Competitiveness-
“Degree to which a country can, under free & fair market conditions, produce goods & services which meet the test of intl’ markets,
while simultaneously maintaining & expanding the real incomes of its people over the long-term“.
OECD
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Competitiveness
Competitiveness ---- continually sustained increases in productivity resulting in higher wages & living
standards --- characterized by increasing export market shares.
Competitiveness ---- demonstrated by "ability to meet, rest of free intl markets
while expanding real income."
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
High
standard of living
Trade
Productivity
(Quality should exist)
Investment in productive facilities
(Factors, R&D, technology)
Competitiveness Pyramid
Source: Based on US Council on Competitiveness, 1995.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Competitiveness depends on Productivity
"Standard of living is determined by the productivity of a nation's economy, which
is measured by the “Value of goods & services (products) produced per unit of
the nation's human, capital &
Natural resources".
Porter & Christensen, Harvard Business School
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
What is Productivity
Ratio of output to input by large number of professionals.
ILO Definition:
“Ratio between o/p of wealth produced & i/p resources used up in process of
production”.Comparative tool for mgrs, industrial engrs,
economists, & politicians.
Contd…
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Operation Management System
Outputs
Products, services, &
other (pollution)
Inputs
Raw materials, human resources,
capital (land, buildings,
equipment), technology information.
Feedback
Product/ Service
Design & Facilities
Transformation Process
Control Processes
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Indicators of Competitiveness
Productivity is efficiency with which goods & services are produced & provided.
Determined by previous “investments & by quality & performance of workforce, technological innovation, quality of plant & equipment, & effectiveness” with
which these factors of production are utilized.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Definition of Productivity
Successful Tech Org create surplus through productive operations.
Productivity, is output-input agreement on true meaning of due consideration for “Quality & Time”.Productivity = Outputs
Inputs(within time period, quality considered)
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Concepts of Productivity
Comparison b/w:
“Quantity of goods or services produced”
& “Quantity of Resources Employed”
in turning out these goods or services.
Stress is on productivity being
Concern of production function only.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
• Relationship b/w output generated by production or service system
& input provided to create this output.
Efficient use of resources –
Labor, capital, land, materials, energy, information –
In production of various goods & services.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Concepts of Productivity
“Ratio of o/p to inputs -expanded inputs to include technology besides labor, materials, machine
utilization.”
Siegel Considers Productivity as:
“Class conceivable measure depicting output per unit of associated input in sequence of compared period”.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Some Recent Attempt to Define Productivity
Mali - Rational departure to define productivity as:
“Productivity is measure of how well resources are brought together in organizations & utilized for accomplishing set of results.
Productivity is reaching higher level of performance with least expenditure of resources”.
Further Elaborates as.
“Productivity is combination of effectiveness & efficiency” & “ Effectiveness related to performance,
efficiency to resource utilization”.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Some Recent Attempt to Define Productivity
Concept of Productivity Must:
“Serve as a tool in the hands of mgt to take corrective steps for productivity improvement & also should provide ready reference & comparison of performance with performance objectives of org.”
Productivity Perceived as:
“Indicator of how well goals or performance objectives or mission have been achieved.”
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Concepts of Productivity
Faraday -Productivity as “Ratio of prescribed output to resources”.
Ramsay - Productivity as ratio of output to inputs based on concept of value addition.
Formal definition of productivity:
“Productivity is Optimization (or maximization of economic resources & generation of new resources through creative thinking, research & development, & by use of all possible improvement techniques & methods”.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Some Recent Attempt to Define Productivity
“Productivity is measure of how well resources are brought together in organizations & utilized for accomplishing set of results.
Productivity is reaching higher level of performance with least expenditure of resources”.
Further Elaborates as.
“Productivity is combination of effectiveness & efficiency” & “ Effectiveness related to performance,
efficiency to resource utilization”.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Some Recent Attempt to Define Productivity
Concept of Productivity Must:
“Serve as a tool in the hands of mgt to take corrective steps for productivity improvement & also should provide ready reference & comparison of performance with performance objectives of org.”
Productivity Perceived as:
“Indicator of how well goals or performance objectives or mission have been achieved.”
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Term ‘Productivity’ encompassed everything, which concerns an org.
Different meaning, definitions, interpretations & concepts emerged as experts working in various fields have looked at it from their own emphasis,
perceptions & reference point they have before them.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Difference b/w Production & Productivity
Production is concerned with Activity of Producing goods & or services.
Productivity is efficient utilization of resources (inputs) in producing goods or services (outputs).
Production is quantity of output produced.
Productivity is ratio of output produced in input (s) used.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
• Higher productivity means accomplishing more with same
amount of resources
or
Achieving higher output in terms of volume & quality for same input.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Evolution of Productivity Concept in Modern Era
Frederick Taylor: Father of Scientific Mgt
Mech Engr – invented high speed steel cutting tools
Got opportunity to know:
First Hand Problems & Attitude of Workers.
“Major Concern”
To increase efficiency in production,
to lower cost,
Raise profits through higher productivity,
possible increase in pay.
To be Contd.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
• “Concept of Economic Man”, - worker is motivated primarily by economic gain & o/p maximized only thru financial incentives.
• Differential Piece-Rate system, - workers receive higher rate of pay per piece produced after a fix number.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Taylor’s Message of Productivity
• Various pay plans based on output for “surplus”.Give People their best opportunity to be productive,
reward workers for individual productivity.Increase labor productivity not possible w/o:• a) Providing ample reward, • b) Adequate training,• C) or Managerial help.
Careful advance Planning by ManagerManagers to design work systems for
worker to do their best.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Fredrick Concluded:
“Low Productivity is matter of ignorance on part of “Labor & Mgt”.
Ignorance? “Fair day’s work” & “Fair day pay”
Not enough inc in surplus to get more compensation.
Productivity enhancement – answer to hi wages/profits.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Problem faced in LDC is problem not of underdevelopment but
rather of under mgt. Actually
productivity is most serious challenge confronting mgt.
Peter Drucker
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Contd…
Productivity can be improved:
1. By increasing outputs to with same inputs.
2. By decreasing inputs but maintaining same output
3. By increasing outputs & decreasing inputs to change ratio favorably.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Productivity-Manager’s Perspective
• Use accounting ratios in achieving objectives of general mgt, which is usually interested in productivity measures that enable it to easily assess the present profitability of the company.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Productivity-Engineer’s Perspective
• Seek measures of Physical assets & other resources, such as
• “Production per hr., • man hrs. per unit, • material requirements per unit, • machine utilization, • and space utilization”, but they may fail to relate these to overall
productivity.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Productivity-Behaviorist’s Perspective
• View productivity of people in organization, in terms of “time they spend at work vs. total time available”.
• A misleading measure.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Productivity-Accountant’s Perspective
• Costing & budgeting approach to productivity.
• When budget figures, rather than optimum achievable values, are used as standards,
• Could be a false impression of high productivity.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Productivity-Economist’s Perspective
• Partial measures, such as Labor productivity, Primary measures employed by economists.
• Total Factor & total productivity measures proposed, but again definitions do not agree.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Misunderstanding about Productivity Myth # 1
Profitability is Measure of Productivity. Profit – Difference of some calculation of output value & some calculation of input costs. Function of several factors:-a) Status of demand & supply:b) Value of output:-
Value of output can rise because of hi market prices resulting from more aggressive marketing, improved quality of product, influence with buyers.
c) Input Costs:-
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
• Profit is not solely result of increased production efficiency. At expense of the LT objectives, it can be obtained by curtailing:
• (a) Training / HRD, (b) Maintenance, (c) Advertisement. (d) SHE (e) QWL (f) BMR
Company may raise profit by:
• (a) Production building monopoly power,
• (b) Bribing purchasing agents,
• (c) Hypnotizing consumers,
• (d) Undermining a union or getting public subsidy. /export rebate
• Conclusion : Profitability can not be equated with productivity.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Myth # 2
When you increase Quality,
You decrease Productivity as Cost of Input increases.
Quality & productivity go hand in hand
•Deming circle
•Quality is a specific dimension of productivity.
•A high productivity is not outcome of lowered specifications of products manufactured or services rendered.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Quality & Productivity Go Together
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Productivity & Managerial Performance Productivity is a summary measure of
the quantity & quality of work performance, with resource utilization
considered.
It can be measured at the individual,
group, or organization level.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
THE QUALITY PRODUCTIVITY RELATION SHIP
Contd…
LessRe-Work
MoreProductivity
Improve Quality
LessonRe-work
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Deming’s Chain Reaction Deming’s Chain Reaction
Improve Quality
COST DECREASEBECAUSE OF LESSREWORK, FEWERDELAYS, BETTER USE OF RESOURCES
PRODUCTIVITY IMPROVES
CAPTURE MOREBUSINESS WITH BETTER QUALITY AND LOWER PRICE
STAY IN BUSINESS
Less Production COSTJOBS, MORE PROFIT
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Quality is All Consuming Focus
Org which seeks to decrease costs, improve productivity, decrease prices, increase market share & increase return on investment - without first building quality into systems – is gambling its long-term survival for short-term advantage.
Improvequality
Provide jobs& more jobs
Increasemarket
Decreasecosts
Return on investment
Stay in business
Improve productivity
Decrease prices
Deming’s Chain Reaction
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Positive Relationship b/w Quality & Productivity
Reduced productivity is caused by quality defects, rework, & scrap.
“Improvement of quality transfers waste of man hours & of machine time into manufacture of good products &
better service”.
(Dr. Edward Deming)
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Positive Relationship Between Quality & Productivity
Reduced productivity is caused by “Quality Defects, Rework, & Scrap.
“Improvement of quality transfers waste of man hours & of machine time into
manufacture of good products & better service”.
(Dr. Edward Deming)
Contd…
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Certain “hidden” & “Non-productive Plant exists to rework & repair defects & returns, & if quality is improved, this hidden plant would be available for increased productivity. Any Quality Improvement that reduces defects - improvement in productivity. Same can be said, for services & for those firms in services businesses. Cost of quality improvement rarely exceeds savings from increased productivity.
(Feigenbaum)
Contd…
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Myth # 3
Productivity Can Be Judged by Output
•Output may be rising without increase in productivity e.g. input cost risen, disproportionately
•Increase in o/p compared with last year should also consider like price hike/inflation.
•Such an approach is result of being process oriented at the expense of paying attention to final results.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Myth # 4
Productivity is Applied only in Manufacturing &
Production alone.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Myth # 5
Cost cutting always improves productivity
When done in an indiscriminately make matters worse in long run
Cut on info Tech use, Ban on Training etc.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Myth # 6
Productivity is “Labour Efficiency or Labour Productivity
False assumption - single factor productivity analysis.•1976-82, UK Productivity in Agri Labor :•Rose to 60% due to breeding, fertilizers sprays, land & tech (yield/hectare also increased)•One Unit of Energy (fertilizer) grew less wheat in 83 than 1963. (Surprise) •More appropriate yardstick of efficiency is then yield produced for each monetary unit spent.•Productivity - much more than labour alone & take into account cost of energy, raw material & concern for unemployment / QWL.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Myth #7
Productivity improvement requires billions of Rs and millions of trained persons.
•Common sense•Short courses/formal train.•Top level commitment•Principles of TQM
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
• “Greatest opportunity for increasing productivity is surely to be found in knowledge worker itself, & especially in mgt”.
• Peter F. Drucker
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Financial & social benefits of productivity
improvement strategy should be greater than implementation cost, in
long run.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Definition of Effectiveness & Efficiency
Productivity implies effectiveness & efficiency individual & organizational
performance.
Effectiveness-Achievement of Objective.
Efficiency: Achievement of ends
“with least amount of resources”.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
•Efficiency is concerned with
means
•Effectiveness with ends.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Efficiency is ratio of actual output attained to standard output
expected. Example
Output of machine is 120 units per hours while standard rate is 180
pieces per hour, machine's efficiency is 120/180 = 0.6667 or
66.67 percent.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Efficiency
• Extent of useful output compared to input.
• Least amount of resources must be used to achieve useful output.
• Wastage reduction.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
• Efficiency -relationship between inputs & outputs and its comparison . If you get more output for a given input, you have increased efficiency.
• Managers deal with input resources that are scarce money people, equipment they are concerned with the efficient use of these sources.
• Mgmt- concerned with minimizing resource costs. (Efficiency).
• Mgt concerned with getting activities completed- (effectiveness).
• When managers achieve their org goals- effective.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Balancing Effectiveness & Efficiency
Effectiveness entails promptly
achieving stated objectives.
Efficiency enters picture when
resources required to achieve an objective
are weighed against what was actually accomplished.
Mgrs are responsible for balancing
effectiveness & efficiency.
Too much emphasis in either
direction leads to mismgt.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Efficiency & Effectiveness
Mgt, is concerned with minimizing resource costs w/o chances of failure.
Efficiency is “doing things right”.Mgt is also concerned with getting activities completed, so it seeks effectiveness.Effectiveness is:
“Doing right things”
So efficiency is concerned with means & effectiveness with ends.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
• It is easier to be effective if one ignores efficiency. Some Production org-
reasonably effective
but
extremely inefficient.
• They get their jobs done, but at a very high cost.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Mgt in Engg Org must be concerned, then not only with
Getting activities completed (effectiveness),
but also with doing so as
Efficiently as possible.
Can organizations be efficient & yet not effective?
Yes,
By doing wrong thing well !
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Management Seeks Efficiency & Effectiveness
Ends:Effectiveness
Means:Efficiency
GoalsHigh
attainmentLow
Waste
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Effectiveness/EfficiencyPeter Drucker
• Effectiveness– Doing the right thing
• Efficiency– Doing things right
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Productivity Index =
Output Obtained Input expended
= Effectiveness Efficiency
Productivity Index= f (Effectiveness)F (Efficiency)
Performance achieved
Resource consumed
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
• Efficiency & effectiveness are interrelated.
• It is easier to be effective if one ignores efficiency.
• Federal Govt. in Islamabad are reasonably effective -extremely inefficient jobs done but at a very high cost.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Major Issues of Productivity in Pakistan
• Inability to understand the basic concept of productivity.
• Inability to measure & manage productivity of white collar employees- main reason for PS inefficiencies.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Major Issues of Productivity in Pakistan
• Considering productivity enhancing initiative as an additional overhead.
• Across the board Rewards / benefits disregarding - equivalent in productivity.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Major Issues of Productivity in Pakistan
• Diffused and unclear authority under institutional setup & inefficiency in complex organizations, cause delays and time lags.
• Low labor productivity in Pakistan is causing –”competitive imbalance”.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Major Issues of Productivity in Pakistan
• Manufacturing -we are losing competitiveness, due to higher costs of
production as customers turn to low cost product.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Productivity in Pakistan:Issues & Lessons
• Financial & social benefits of Productivity Improvement Strategy are far
greater than implementation cost in the long run.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Increasing Productivity can break Vicious Circle of Poverty, Low Productivity & Unemployment
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Low Productivity Trap in Pakistan
Conditionalities of donors.
Low productivity growth (compared with input prices esp. labor and energy).
Rising prices (domestic and export goods).
Rising per unit (labor and energy) costs.Sluggish sales (in domestic
and foreign markets). Unintended inventory in warehouses.
Lower utilization of domestic plant capacity.
Lagging capital formation (insufficient capital-labor ratio).
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Low Productivity in Pakistan
• This vicious cycle of poverty & unemployment can be broken by increased productivity.
• Increased productivity results in:– Optimal use of resources.– Better balance between different stakeholders
of society.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Productivity Improvement in Pakistani Environment
• Productivity improvement will cause direct increase in standard of living.
• Pakistani GNP can grow without adding more input factors when productivity is improved.
• Productivity improvement will trigger economic growth.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Lessons for Pakistani Industry
• Caterpillar has achieved 27% greater sales, through investments in productivity enhancement of its workforce & technology.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Difference B/W Production & Productivity Production is concerned with the activity of producing goods and or services. Productivity is efficient utilization of resources (inputs) in producing goods or services (output)Production is the quantity of output produced; productivity is the ratio of the output produced to the input (s) used. Efficiency is the ratio of actual output attained to standard output expected. ExampleOutput of a machine is 120 units per hours while the standard rate is 180 pieces per hour, the machine's efficiency is 120/180 = 0.6667 or 66.67 percent Effectiveness is the degree of accomplishment of objectives. How well a set of result is accomplished reflects effectiveness, whereas how well the resources are utilized to accomplish the results refers to the efficiency. Productivity is a combination of both effectiveness and efficiency, since effectiveness is related to performance while efficiency is related to resource utilization.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Efficient & effective use of resources – labour, capital, land, materials, energy, time, information, etc. in production of goods & services that meet users, needs & requirements.
“Productivity is combination of effectiveness & efficiency” while “Effectiveness is related to
performance & efficiency to resource utilization”.
Rising & improving quality of working life do tend to go hand in hand.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
How can Orgs Improve Their Productivity
Productivity is composite of people & operations variables.
To improve productivity, mgt needs to focus on both.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Productivity does not just happen by “trying harder”. It must be planned.
But how do you plan for productivity, & what factors are involved?
Frank. E. Cotton, Jr.Mississippi State University
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Task of mgt is to evaluate those factors with have bearing on
productivity & take appropriate measures to use effectively.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Increase Productivity Is Key To Global Competitiveness
Japan’s prosperity in 1980s -due to growth in manufacturing productivity.
Between 1979-86Japan’s productivity increased - 5.5%
U.S productivity gained only 2.8% annually. US firms responded over in 1990s -dramatic improvements.
Caterpillar investments in productivity (workforce & its tech) resulted in: Higher customer satisfaction. Increasing market share 27% greater sales With 29% fewer employees.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Critical Barriers/Problems Affecting Productivity Improvement
Application on South Asia• Family-controlled industry leading to earning easy
money.• Some Segments have monopolistic market, some hi
competitive one.• Erratic inflow of orders.• Lack of productivity/quality culture.• Shortage of funds & codification are at low level.• Automation is not encouraged.
Contd…
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Critical Barriers/Problems Affecting Productivity Improvement
Application on South Asia Contd…• Low priority of marketing & commercial activities,
poor after service.
• Complicated govt. policy, rules & regulations.
• Inadequate communication facilities, particularly road transport.
• Energy shortage.
• Poor working conditions (light, ventilations, safety, housekeeping).
• Non availability of some basic material & components (to be imported), unreliable suppliers.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Causes of Productivity Decline in Org
Inability to measure, evaluate, & manage productivity of white collar employees. This causes shocking waste of resources.
Rewards & benefits given without requiring equivalent in productivity & accountability. This causes spiraling inflation.
Diffused authority & inefficiency in complex org, thereby, causing delays & time lags.
Org expansion that lowers productivity growth. results in soaring costs.
Low motivation among rising number of affluent workers with new attitudes.
Late deliveries caused by schedules that have been disrupted by scarce materials.
Contd…
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Causes of Productivity Decline in Projects
Unresolved human conflicts & difficulties in teamwork, resulting in firm’s ineffectiveness.
Increased legislative intrusions or antiquated laws, resulting in constrained mgt options & prerogatives.
Specialization in work processes resulting in monotony & boredom.
Rapid technological changes & high costs, resulting in decline in new opportunities & innovations.
Increasing demand of leisure time causing disruption of time commitments.
Practitioner’s inability to keep pace with latest information & knowledge.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Critical Barriers to Productivity Improvement in any Project
• Too many hierarchical levels.
• Poor utilization of old factory & machinery.
• Skilled worker shortage. Overloaded engineering & design groups.
• Lack of time for development work.
• Trade unions adversity to productivity.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Critical Barriers to Productivity Improvement
• Inadequate human resource development.
• Poor industrial relations.
• High absenteeism.
• Inefficient materials-handling facilities.
• Rigid & authoritarian management style.
• Excessive diversification.
• Poor documentation of technical problems.
• High social orientation.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
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LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Productivity Thru Time and Motion Study
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Time and Motion Study: Defined
• A method created to determine the ‘correct time’ it takes to complete a certain task
• A method to establish ‘the one best way to perform a task’
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Time and Motion Study: Purposes
• To end ‘goofing off’ and to establish what constituted a fair days work
• To make sure that the job being evaluated does not include any unnecessary motion by the
worker
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Functions of Time Studies
• Establish work standards: e.g. recommended times in which tasks should be completed by qualified, trained operators, without excessive fatigue,
• Set expectations which are fair to both employee and company.
• Identify sources of error, difficulty, sub-optimality,
• Improve an existing process, tool, or work environment,
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Functions of Work Standards
• Establish reasonable productivity targets for experienced workers,
• Provide productivity goals for training purposes,
• Eliminate waste,
• Make processes more consistent,
• Reduce product variability, improve quality.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Time and Motion Study: History
• Frederick W. Taylor and his followers developed and refined the Time Study
• Frank B. Gilbreth and his wife Lillian developed and refined the Motion Study
• Historically the two studies are discussed individually, today they generally are discussed as one
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Time and Motion Study
Historically: T&M Studies were used in the manufacturing industry to evolve pay scales with the thought that money was the only motivation for work
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Time and Motion Study
• Today:– T&M Studies can be effective for
performance evaluations– T&M Studies can be used for planning
purposes in order to predict the level of output that may be achieved
– T&M Studies can be used to uncover problems and create solutions
– T&M Studies can be used for time cost analysis
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Time and Motion Study: Objective
The objective of the Time and Motion Study is to determine a ‘normal’ or average time for a job, by
using observers to record exactly how much time is being devoted to each task.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
SCOPE ENHANCEMENT
• In 60s measurement alone
found of little use
• Method Improvement made
an integral part of TMS
• Now called Work Study
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
• Work Measurement Divided into Two parts
– Method Study
– Work Measurement
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
METHOD STUDY
Systematic Recording & Critical Systematic Recording & Critical
Examination of Examination of
existing and proposed processes as a existing and proposed processes as a
means of means of
applying easier and effective methodsapplying easier and effective methods
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
OBJECTS OF METHOD STUDY
Improvement of Processes and Procedures
Improvement of Shop-floor layout
Economy in human effort and reduction in
fatigue
Improvement in use of machines, material and
manpower
Development of better physical environment
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
There are two major categories of productivity
External (Not controllable)
Internal (Controllable)
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
External Factors Affecting Enterprise Productivity
External factors include government polices and institutional mechanisms: political, social and economic conditions; the business climate; the availability of finance, power water, transport, communications and raw materials. They affect individual enterprise productivity, but the org’s concerned cannot actively control them.
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Internal Factors require different institutions, people, techniques & methods.
External Factors – during planning phase.
First step towards improving productivity in Services is to identify problem areas.
External Factors are internal to govts, regional institutions, associations & pressure groups.
Contd…
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Model of Internal Productivity Factors
Internal Productivity
Factors
Soft Factors Hard Factors
Service or Product
Plant and Equipment
Technology
Materials and Energy
People
Organization and Systems
Work Methods
Management
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
Productivity Simple Rule# 1
Productivity is composite of people & operations variables.
To improve productivity, mgt needs to focus on both.
How can Organizations Improve Their Productivity?
LMDA Introduction by Prof. Dr. Ali Sajjid, TIApril 10, 2023
•THANKS