Basic management Basic management gconcepts

gconcepts

References1 Daniel Kitaw Industrial Management and1. Daniel Kitaw, Industrial Management and

Engineering Economy.2. S.K. Sharma, etal., Industrial Engineering andg g

Operations Management.3. Abbass F. Alkhafaji, Competetitive Global

Management.

WHAT IS MANAGEMENT?WHAT IS MANAGEMENT?

• The verb manage comes from the Italianmaneggiare (to handle — especially a horse)gg p y

• Which in turn derives from the Latin manus(hand)(hand)

• The French word mesnagement (lateré t) i fl d th d l t iménagement) influenced the development in

meaning of the English word management inh h d h

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the 17th and 18th centuries3

M t i th t f tti thi d th h

WHAT IS MANAGEMENT?WHAT IS MANAGEMENT?

• Management is the art of getting things done through

people.p p

• The process of setting and achieving goals through the

execution of five basic management functions –

planning organizing staffing directing and controllingplanning, organizing, staffing, directing and controlling

– that utilize human, financial, and material resources

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in an efficient and effective manner.4

• What is this little lad doing?• Do you know where he is going?• Can you see where he is going?• Can you really see what the

consequences are going to be?consequences are going to be?• Have you got the big picture in

mind?• With anything that one does in

life you start with the end inmind You decide what you wantmind. You decide what you wantto achieve and then you decidehow you will work towardsachieving it. This is whatmanagement is.5/2/2012 5

manage the creative tension between current CONT’D CONT’D

manage the creative tension between current reality and Future reality

G tVisionReality

GreatnessNOW FUTURE

Courage

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S Th t Y d Y

CONT’D CONT’D

So That You and Your Followers Can Reach Our

Vision

Put Stepping Stones

Chart the Path

Put Stepping Stones in Place

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CONT’D CONT’D

• In general "management" identifies a special

group of people whose job is to direct thegroup of people whose job is to direct the

effort and activities of other people toward

common objectives.

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Th I d t i l R l ti b ht b t th

WHY MANAGEMENT? WHY MANAGEMENT?

• The Industrial Revolution brought about the

emergence of large-scale business and its need for

professional managers

M t b i t t th• Management became more important as the

developments and complexities of technology and

human relationships get more challenging to those who

perform managerial functions

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perform managerial functions

9

CONT’D CONT’D

Shorter life‐cycles for innovative technologies

•Water power•Textiles•Iron

•Steam•Rail•Steel

•Electricity•Chemicals•Internal‐combustionengine

•Petrochemicals•Electronics•Aviation

•Digital networks•Software•New media

engine

1st Wave 2nd Wave 3rd Wave 4th Wave 5th Wave

1785                                        1845                                  1900                        1950            1990  1999  2020                

Source: The Economist, February 20, 1999

60 yrs 55 yrs 50 yrs 40 yrs 30 yrs

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' l f l k

WHAT MANAGEMENTS STRIVES FOR?WHAT MANAGEMENTS STRIVES FOR?

• 'Management strives involving a group of people work

together in the most effective and efficient manner

to achieve stated goals in the best and most

economical way'economical way .

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FUNCTIONS OF MANAGEMENTFUNCTIONS OF MANAGEMENT

• The subject of management can beconsidered a process involving certainp gfunctions that a manager performs

1. Planning1. Planning2. Leading3 Organizing3. Organizing4. Staffing5 Controlling

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5. Controlling

CONT’D CONT’D

1. Planning

Pl i i l th d t i i f th f• Planning involves the predetermining of the course of

action to be taken in relation to the known event. It

also includes anticipating the possibilities of future

problems that might appearproblems that might appear

“Failing to plan means planning to fail”

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g p p g

CONT’D CONT’D

• It is a systematic activity which determines

when, how and who is going to perform a

specific job It is rightly saidspecific job. It is rightly said

“Well plan is half done”Well plan is half done

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CONT’D CONT’D

• The increased importance of planning in a

business enterprise results from variousbusiness enterprise results from various

changes in the environment like• changes in technology,• government policy,g p y,• overall economic activity,• in the nature of competition and

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in the nature of competition and• in social norms and attitudes.

CONT’D CONT’D

• There are different planning executed in

different level of an organization

• Strategic planning• Strategic planning

• Tactic planning

• Operational planning

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I l th l i

CONT’D CONT’D

• In general, the planning process may

systematically be composed of five elements:y y p

I. Setting Primary & Intermediate Goals

II. Search for Opportunities

III.Formulation of PlansIII.Formulation of Plans

IV. Target Setting

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V. Follow-up of Plans

CONT’D CONT’D

2. Leading

• For the same idea different organizations useFor the same idea, different organizations use

different terms such as

Directing, Executing, Supervising, Ordering and Guiding

• What ever terms are assigned to it, the idea of

directing is to put into effect the decisions, plans

and programs that have been worked out

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and programs that have been worked out.

LEADERSHIP STYLES LEADERSHIP STYLES

There are four types of leadership styles

Th di t t i l l d m i t i s hi hl iti l d• The dictatorial leader maintains a highly critical and

negative attitude in his relation with subordinates

and advocates the accomplishment of tasks through

fear of penaltiesf f p

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CONT’D CONT’D

• The benevolent - autocratic leader assumes a

paternalistic role which forces the workers to rely onp y

him for satisfaction.

Thi t f l d t b ti ll t d• This type of leader must be exceptionally strong and

wise individual, so that his personality generates

respect and allegiance. The subordinates develop

dependence on the leader to the extent that they have

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dependence on the leader to the extent that they have

very little chance of developing leadership qualities.

CONT’D CONT’D

• The democratic leader suggests better methods and

tries to improve the worker's attitude. Unlike thep

others, not only he depends on his capabilities but

encourages consultation with subordinates in planningencourages consultation with subordinates in planning,

decision making and organizing.

• With this type of leadership satisfaction is gained

through a feeling of group accomplishments.

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through a feeling of group accomplishments.

CONT’D CONT’D

• The fourth type of leadership style is a laissez -

faire type where the leader assumes the role of just

another member of the group and depends completely

on subordinates to establish their own goals and make

their own decisiontheir own decision.

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CONT’D CONT’D

3. Organizing

• Organizing may be defined as the structure• Organizing may be defined as the structureand process by which a group allocates its

tasks among its members, identifies

l ti hi d i t t it ti itirelationships and integrates its activities

toward common objectives

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j

CONT’D CONT’D

• The organizing function of management bringstogether human and physical resources in an orderlyg p y ymanner and arranges them in coordinated pattern toaccomplish planned objectives.p p j

• Each organizational resource (human, material,f ) f h h hfinance etc.) represent an investment from which themanagement system must get the return.

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S m f th b n fits :

CONT’D CONT’D

• Some of the benefits are:–Good communication between the management and

employeesemployees,–Sound basis to evaluate the performance of

individuals and groups,g p ,–Well defined areas of works for each employee,–Adequate and effective control, andq–Stimulation of independent, creative thinking and

initiative on the part of the employees.

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h l f h h

CONT’D CONT’D

• There are some principles of organization whichare guide lines for thought to operating managers

d hand researchers in an organization1. Unity of Command2. Exception Principle3. Span of Control4. Scalar Principle5. Departmentalization

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6. Decentralization

Th t th t i t t h i i

CONT’D CONT’D

• The steps that are important when organizingan enterprise

Reflecting Reflecting on plans

and objectives

Establishing major tasks

Evaluating results for organizing strategy

Dividing Allocating resources

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Dividing major tasks

into subtasks

resources and

directives for

subtasks

4 S ffi

CONT’D CONT’D

4. Staffing• Staffing deals with the workers and is worker-oriented

• This function includes the process of placing the rightperson in the right organizational positionp g g p

• The process of matching the people and the jobs isdone by careful preparation of specifications necessarydone by careful preparation of specifications necessaryfor positions and raising the performance of personnelby training and retraining of people to fit the needs of

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by training and retraining of people to fit the needs ofthe organizational position

CONT’D CONT’D

5. Controlling• Control is the process that measures currentp

activities, quantitatively if possible, and guidesit toward some predetermined goal, plan, policy,standard, norm, decision rule and criterion oryardstick.

• The essence of control lies in checking andcorrecting actions against desired results in the

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planning process

CONT’D CONT’D

• Controlling includes ensuring that employeesperform the work allocated to them in the wayslaid down and with no wastage or duplication oflaid down, and with no wastage or duplication oftime, effort or materials.

• That involves much more than simply instructing a• That involves much more than simply instructing agiven number of employees to perform work; theymust be supervised and managed so that theirmust be superv sed and managed so that the refforts achieve the desired results.

• This requires that they are motivated, checked,

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q y , ,guided, taught and encouraged.

CONT’D CONT’D

• There are seven principles of control.I. Strategic Point ControlII. FeedbackIII. Flexible ControlIV. Organizational Stability V. Self-ControlVI Di C lVI. Direct ControlVII. Human Factor

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CONT’D CONT’D

Staffing Planning Organizing Leading Controlling

Defining goals,

establishing

Determining what needs to be done,

Motivating, leading, and any other

Monitoring activities to ensure that

Lead to

Achieving the

Locating prospective

employees to gstrategy, and

developing plans to

coordinate

,how it will be

done, and who is to do

it

yactions

involved in dealing with

people

they are accomplished

as planned

organizations stated

purposes

p yfill the job created by

the organizing

activities process

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M

WHO ARE MANAGERS?WHO ARE MANAGERS?

◆ Manager

• Someone who coordinates and oversees the workSomeone who coordinates and oversees the work

of other people so that organizational goals can be

accomplished.

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CHARACTERISTICS OF A GOOD MANAGERCHARACTERISTICS OF A GOOD MANAGER

The Dual Aspects of any Manager's Job

• The modern 'world of industry' is very complex, and thisvery complexity has led to what is called “specialization”and to the "division of labor” by which different people

i li i f i d b i li ispecialize in performing − and become specialists in −different types of work.

• It follows, therefore, that the “technical” or "functional”,i.e. the specific work of different managers can and does

l

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vary enormously.

CONT’D CONT’D

• Nevertheless, all those different types of

managers, and all others, should have considerableg , ,

knowledge of the technical aspects of their jobs in

dditi t b i fi i t ‘ f l ’addition to being proficient ‘managers of people’.

• It is, in any case, not easy to train, supervise andy y p

control the work of others without knowing what

th sh ld b d i5/2/2012 35

they are or should be doing.

• Some estimates show that a managing director may spend between

CONT’D CONT’D Some estimates show that a managing director may spend between

80% and 90% of his working hours on managerial matters and only

10% 20% f hi i h h i l i i i10% to 20% of his time on the technical activities.

• Whilst senior managers may spend approximately 50% of their

work time on managerial activities and 50% on technical activities;

and

• Supervisors and foremen may spend some 70% to 75% of their

ti t h i l ti iti d l 25% t 30% f th i ti t

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time on technical activities and only 25% to 30% of their time at

work on the supervision of their subordinates

CONT’DCONT’D

♦ How The Manager’s Job Is Changing

• The Increasing Importance of Customers

– Customers: the reason that organizations exist

• Managing customer relationships is the responsibility of all managers and

employees.

• Consistent high quality customer service is essential for survival.

• Innovation• Innovation

– Doing things differently, exploring new territory, and taking risks

• Managers should encourage employees to be aware of and act on opportunities• Managers should encourage employees to be aware of and act on opportunities

for innovation.5/2/2012 37

CONT’DCONT’D

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S f th i t t lit t it f

PERSONAL QUALITIES NEEDEDPERSONAL QUALITIES NEEDED

• Some of the more important personality traits of a

successful manager are the following:

1. Ability to Think Clearly and Logically: A

manager needs to be able, as the result of training,

to approach each situation and problem positively

and objectively, without prejudgment or being

distracted by irrelevancies. This requires him to

think in a clear, orderly fashion and to marshal and

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arrange logically in his mind all the facts and

information available to him.

CONT’D CONT’D

2. The Abilities to Make Decisions and to ActDecisively: These follow on from theyforegoing, and also require a measure ofself-confidence; a belief in one's own ability; yto succeed in solving problems in the rightway, and in one's own ability to dealway, and in one s own ability to dealeffectively with different situations andsets of circumstances

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sets of circumstances.

1 Defining as accurately as possible the problem which

CONT’D CONT’D 1. Defining as accurately as possible the problem which

needs to be solved.2. Obtaining all relevant information about the problem. Obta n ng all relevant nformat on about the problem3. Breaking down the problem into parts − very often

the solution to one part is obvious and leads, logically,to the solving of other parts or the whole problem.

4. Comparing and judging the probability of success ofany possible different solutions to the same problemany possible different solutions to the same problem,and their possible consequences on other areas.

5 Selecting the most attractive solution − making the

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5. Selecting the most attractive solution making thedecision

CONT’D CONT’D

• The Ability to Use Initiative: from time to time a manager is

bound to come across problems or situations which are outside his

range of experience or outside the normal scope of his responsibly;

the latter can, perhaps, arise when a senior is away or is unavailable

for some reason. In such circumstances, particularly if action is

urgently needed, the manager must not simply leave the matter until

his senior is available or wait to be told what to do, but must initiate

- that is, lead the action without waiting to be prompted.

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CONT’D CONT’D

• Ability to Handle Conflict: A good manager is calm, able

to listen, is positively responsive to criticism and is ablep y p

to handle conflicts and differences in a constructive

manner In order to handle conflicts well a manager mustmanner. In order to handle conflicts well, a manager must

be confident, self-assertive, fair and dominant. He

should be highly tolerant of stress, as conflicts generally

lead to stress and tension. This would require a sound

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q

mind in a sound body.

CONT’D CONT’D

• Ability to Adapt Change and be Flexible: Any manager

must be able to adapt to changes and, if necessary, tomust be able to adapt to changes and, if necessary, to

cope with changed circumstances, and ensure that his

b di t l dsubordinates also do so.

• Adaptability to different situations and flexibility of

mind are also necessary in the routine, day-to-day

running of a section department or an entire enterprise

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running of a section, department or an entire enterprise.

CONT’D CONT’D

• Ability to Be Emotionally Stable: In dealing with different

problems and situations, some of which might be irritating, annoying,

worrying or heated − or include emotional displays (e.g. tearful

women, angry voices, etc.) by others − a manager must be

sufficiently mature to keep calm and collected. He must be able to

keep control over his own emotions and his temper whatever may the

provocation be, and be able to concentrate his attention on the

matter in hand, thinking clearly, logically, and avoiding hasty

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reactions.

CONT’D CONT’D

• Stamina and Concentration: mental fitness to work long and hard

without undue stress or strain.

• Besides mental alertness, a manager needs to be able to concentrate

his mind on the matter in hand even under the most tiring

circumstances and/or when he is under pressure; to focus or keep

one's mind intently fixed over a long period can be tiring,

particularly as there will be many different matters requiring

attention and concentration during a manager's working day.

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CONT’D CONT’D

• Drive and Determination: A manager needs the urge and

enthusiasm to stimulate action not only by himself butenthusiasm to stimulate action, not only by himself, but

by other people as well. He also needs the determination

to keep going whatever the difficulties, adapting his

actions and decisions to overcome problems encountered,p ,

and pressing on to a successful conclusion.

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CONT’D CONT’D

• Leadership: Leadership is the ability of a person to

exert a positive influence over the thoughts, behaviorp g

and actions of others, and then to direct their thoughts,

behavior and actions towards a common goal or objectivebehavior and actions towards a common goal or objective.

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Skills Needed at Different Management Levels

CONT’DCONT’DSkills Needed at Different Management Levels

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Th i h i f ff i i i l

ORGANIZATION STRUCTUREORGANIZATION STRUCTURE

• The stages in the setting up of an effective organizational

structure are

The activities which will be necessary to achieve the

objectives of the business must be established.

The various related activities should be grouped together into

departments; the most logical grouping is by 'function', that

is, by type of activity: production, marketing, finance, etc.

The activities of a particular department will be further

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p p

divided, and grouped together into sections;

An organization chart should be produced to depict

CONT’D CONT’D An organization chart should be produced to depict

the proposed organization

Based on estimates of the volume of work, which will

be performed by each section, the number of staffp y ,

required must be determined. Depending on the type

of work to be performed and on other factors theof work to be performed and on other factors, the

numbers of supervisors, junior and middle managers

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per section and department must be given thought

Th sp ci l kn l d r t l nts r quir d b d p rtm nt l

CONT’D CONT’D The special knowledge or talents required by departmental

and sectional managers must be laid down.

The equipment necessary for the proper functioning of each

section and department must be decided upon, and provision

made for its positioning when considering the layout of the

accommodation for each unitaccommodation for each unit.

To ensure effective coordination of all parts of the

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enterprise, effective procedures and systems of

communication must be devised and installed.

TYPES OF ORGANIZATIONAL STRUCTURETYPES OF ORGANIZATIONAL STRUCTURE

• There are four different types of organizations,

namelynamely

I. line,

II. functional,

III line and staff andIII.line and staff, and

IV. matrix organization.

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CONT’D CONT’D

I. Line organization

• Sometimes called 'military organization' becauseSometimes called military organization , because

it is how the armed forces are organized.

• There is a clear 'line' of responsibility and

authority right through the managementauthority right through the management

structure from the board to the lowest level of

d l5/2/2012 54

supervision, and below.

• The 'chain of command‘ is direct and so decisions can

CONT’D CONT’D • The chain of command is direct and so decisions can

usually be made quickly and implemented rapidly, because

f th di t f th t l th di ti f thof the directness of the control, the coordination of the

activities of all those employed in a department is

simplified.

• The position (and status) of all the different peoplep p p

working in a department can be easily seen, and so the

extent of their responsibilities authority and duties can

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extent of their responsibilities, authority and duties can,

be clearly defined and understood.

CONT’D CONT’D

5/2/2012 56

CONT’D CONT’D

II. Functional Manager

• It is the function (the type of activity) which• It is the function (the type of activity), which

determines the areas of authority and responsibility.

• An expert or specialist is placed in charge of each

function, and will have direct control of that functionf , f f

wherever it is undertaken within the enterprise.

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• As the functional specialists are not involved in the day to day running

CONT’D CONT’D • As the functional specialists are not involved in the day-to-day running

of the enterprise (which is the domain of the line managers) they are

free to the concentrate on their particular functions that producefree to the concentrate on their particular functions that produce

many benefits for the enterprise.

• However, this form of organization makes control difficult as there are, g

no clear lines of authority and it is similarly difficult to establish

responsibility when things do not go right.

• Furthermore, staff as well as supervisors and junior managers become

confused at being subject to the authority of more than one superior.

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CONT’D CONT’D

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CONT’D CONT’D

III.Line and staff organization

• In such a structure, the line managers control thegprimary functions, such as marketing andproduction, which are directly concerned withproduct on, wh ch are d rectly concerned w thachieving the objectives of the business; whilst thestaff managers are generally involved withstaff managers are generally involved withsecondary functions which assist the smooth andefficient running of the primary functions

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efficient running of the primary functions.

CONT’D CONT’D

MANAGING DIRECTOR DIRECTOR

WORKSMANAGER

SALESMANAGER

ACCOUNTS MANAGER

PERSONNELMANAGER

L L L S

SECTION MANAGERS

SUPERVISORS &

SECTION MANAGERS SUPERVISORS & 

SALESMEN

SECTION MANAGERS

SUPERVISORS &

LL L

SUPERVISORS & OPERATORS

SALESMEN SUPERVISORS &CLERKS

EMPLOYMENT OFFICER 

TRAININGOFFICER 

S S

L – Line relationship: S – staff relationshipResponsibility and authority shown by

5/2/2012 61

SUPERVISORS & CLERKS 

SUPERVISORS & CLERKS 

Responsibility and authority shown byStaff. Advisory relationship shown by ‐‐‐‐‐‐‐‐‐‐

CONT’D CONT’D

IV. Matrix organization(Project Organization)

• These are temporary organizational structures formed for

specific projects for a specific period of time and are

dismantled, once the required goal is achieved.

• A typical example for this kind of organizational structure can

be the goal to design and build a new power plant station.

• The specialists are selected primarily on the basis of task-related skills and expertise rather than decision making

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p g

experience or planning ability.

Th f l h

CONT’D CONT’D

• These structures are very useful when:

– The project is clearly defined in terms of objectives to

be achieved and the target date for completion of the

project.p j

– The project must be separate and unique and not be a

part of daily work routine of the organizationpart of daily work routine of the organization.

– The project must be temporary in nature and not

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extended into other related projects.

h k d f f l

CONT’D CONT’D

• This kind of organization occurs frequently in:

– Construction ( e.g. building a bridge)( g g g )

– Aerospace engineering ( i.e. designing and launching

th t llit )weather satellite)

– Marketing( e.g. advertising company for new product)

– Installation of an electronic data processing system,

etc

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etc.

CONT’D CONT’D

G eneral M anager

L abor R esearch F inance Personnel T echnical L abor R esearch Personnel S erv ices

P roject A M anager

P ro ject B M anager

P ro ject C M anager

5/2/2012 65

• In matrix organization it is possible for the

CONT’D CONT’D • In matrix organization, it is possible for the

individual employee to have two managers. However,

proponents of matrix organization believe that it

provides an agency with the flexibility to work onp g y f y

critical projects.

• Matrix organization also brings together the

specialized talent that is often necessary to

5/2/2012 66

p y

complete a project

Other advantages of matrix organization:CONT’D CONT’D

g g

– Decision making is decentralized to a level where information

is processed properly and relevant knowledge is applied.

– Extensive communication networks help to process largep p g

amount of information.

– With decisions delegated to appropriate levels, higher

management levels are not over loaded with operational

5/2/2012 67decisions.

CONT’D CONT’D

– Resource utilization is efficient, because key

resources are shared across several importantresources are shared across several important

programs or products at the same time.

– Employee learns the collaborative skills needed to

function in an environment characterized byf m y

frequent meeting and more informal interactions.

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PRODUCTIVITY PRODUCTIVITY

5/2/2012 69

THE BASICS OF PRODUCTIVITY THE BASICS OF PRODUCTIVITY

• In most businesses, competition for the availablemarket, forces the management of each enterprise to

k i i d h h h fseek competitive advantage through the use of:– product improvements

l sts– lower costs– lower selling prices for the same or better quality and– better service to customersbetter service to customers

• Productivity is defined as the ratio of value of outputto the value of inputto the value of input

5/2/2012 70

CONT’D CONT’D

inputofvalueoutput of value =ty Productiviinput ofvalue

5/2/2012 71

CONT’D CONT’D

• An increase in production does not necessarily by

itself indicate an increase in productivity.

• If the input of resources goes up in direct

proportion to the increase in output the productivityproportion to the increase in output the productivity

remains the same

5/2/2012 72

CONT’D CONT’D

• If input increases by a greater percentage than

output, higher products will be achieved at theoutput, higher products will be achieved at the

expense of reduction in productivity

• In short higher productivity means to producemore with the same expenditure or with amore with the same expenditure, or with a

minimum increase in expense, or the same amount

is produced at less cost in terms of resources.5/2/2012 73

CONT’D CONT’D

• The outputs may be products or services and theinputs or resources may be land, materials, plantp y , , pmachineries, tools and a series of man.

♦ Land Productivity: Better seed, fertilizer andbetter method of cultivation may increase thebetter method of cultivation may increase theyield from two quintals to three quintals. Hencel d d ti it h i d b 50 tland productivity has increased by 50 percent.

5/2/2012 74

CONT’D CONT’D

♦ Material Productivity: If a skillful worker is ableto produce 300 formworks from 400 pieces ofto produce 300 formworks from 400 pieces of2m 1m sheet metal, while an unskillful workercan only produce 250 out of the same material,then with the skilful worker the material wasthen with the skilful worker the material wasused with 20 percent greater productivity

5/2/2012 75

CONT’D CONT’D

♦ Machine Productivity: If a machine tool has

been producing 100 pieces per a working daybeen producing 100 pieces per a working day,

and through the use of improved cutting tool

and/or proper maintenance procedure its

tp t i th s m p i d is i s d t 120output in the same period is increased to 120

pieces, the productivity of that machine hasp p y

been increased by 20 percent.5/2/2012 76

CONT’D CONT’D

♦ Productivity of Man: If a shoe maker has

b d i 30 i f l hbeen producing 30 pieces of leather parts per

hour, and if improved methods of work enable, f p f

him to produce 40 pieces per hour the

productivity of that man has increased by 33.3

percentpercent

5/2/2012 77

CONT’D CONT’D

• To sum up, a low level of productivity implies a low

growth of economygrowth of economy.

• A low growth of economy meant, low income leading

to low standard of leaving and a low level of savings,

resulting in low level of investment and lowresulting in low level of investment and low

productivity

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Global

Higher productivity

Higher competitiveness

International

multinationalHigher Quality

Export

5/2/2012 79

Standard of living Standard of living

Economic Growth

Productivity Growth Employment +r u y Gr w Emp ym nGrowth

TFP Growth Capital Intensity G th

+Growth

5/2/2012 80

• Productivity is affected by many external and internal

PRODUCTIVITY IMPROVEMENTPRODUCTIVITY IMPROVEMENT• Productivity is affected by many external and internal

factors. Some of the external factors, influencing

productivity to mention are: the national and international policiesp

infrastructure supports

cultural practicescultural practices

the availability of technology and natural resources

i ti l p li i s organizational policies

Climate, incentives and information5/2/2012 81

CONT’D CONT’D

• Examples of internal factors that are identified

to as hindering the rise of productivity are:to as hindering the rise of productivity are:

unsuitable personnel policies leading to a low level of

satisfaction and involvement;

poor maintenance system and low level of maintenancepoor maintenance system and low level of maintenance

awareness;

improper selection and training of personnel;5/2/2012 82

CONT’D CONT’D

inappropriate choice of design, tools, material and equipment;, q p ; undefined standardization and quality policies; inadequate plant layout and materials handling inadequate plant layout and materials handling

systems; poor planning controlling and communication poor planning, controlling and communication

systems;uns fe nd unhe lth rkin envir nment unsafe and unhealthy working environment

5/2/2012 83

PRODUCTIVITY IMPROVEMENT STRATEGIES PRODUCTIVITY IMPROVEMENT STRATEGIES

A. Short term StrategyTh fi t t t i i i i ti l l i• The first strategy is improving organizational planning

and control, to implement planned maintenance of

machinery and effective production system in plants

would show an increase in machine productivity andwould show an increase in machine productivity and

reduction in maintenance cost.

5/2/2012 84

The second action is increasing manpower efficiency and

CONT’D CONT’D

• The second action is increasing manpower efficiency and

effectiveness at all levels. Effectiveness and efficiency

are the main tools of productivity.

♦ Efficiencyff y “Doing things right”

– Getting the most output for the least inputs

♦ Effectiveness “Doing the right things”g g g

– Attaining organizational goals5/2/2012 85

CONT’DCONT’D

Resource Goal

Efficiency (Means) Effectiveness (End)

Resource

Usage

Goal

Attainment

Low Waste High Attainment

Management Strives for: L R s W st (Hi h Effi i )Low Resource Waste (High Efficiency)

High Goal Attainment (High Effectiveness)

5/2/2012 86

CONT’D CONT’D

• To be able to increase manpower efficiency and

effectiveness at all levels of an organizationeffectiveness at all levels of an organization

what is required is motivation, training and

education. This method has proved itself

s ssf l i J psuccessful in Japan.

5/2/2012 87

CONT’D CONT’D

• The third short term line of attack is improvingoperation methods. The techniques of methodp qstudy involve breaking a process into detailedcomponentscomponents.

– The study may result in elimination of anactivity, combination of several activities,change of sequence of activities, shorteningg q gduration of activities etc.

5/2/2012 88

CONT’D CONT’D

• As Frederik Taylor said "Most of us can dothree or four times as much as we ordinarily dothr or four t m s as much as w or nar y owithout lengthening working hours or evendriving ourselves to exhaustion by the day'sdriving ourselves to exhaustion by the day send".

• In fact, to achieve this, effectiveimplementation of method engineering isimplementation of method engineering isrequired.

5/2/2012 89

CONT’D CONT’D

B. Medium Term Strategy

• At this stage the firm may require capital to simplify• At this stage the firm may require capital to simplify

and improve the products, and reduce variety.

• The analysis consists of common sense questions to

come up with effective solutions like substitution ofcome up with effective solutions like substitution of

alternative materials, elimination of parts where

special designs have been specified, redesign, etc.5/2/2012 90

CONT’D CONT’D

C. Long Term Strategy

• Properly selected new machineries wellProperly selected new machineries, well

organized departments and proper layout will

undoubtedly contribute to an increase in

productivityproductivity.

• Furthermore, research and development is the

backbone for productivity increment.5/2/2012 91

Productivity improvement techniques5/2/2012 92

FUNCTIONS OF AN INDUSTRIAL ENTERPRISEFUNCTIONS OF AN INDUSTRIAL ENTERPRISE

• Manufacturing functions– Receiving, Warehousing, Transportation, Production,

ShippingShipping

• Engineering Functions– Product design Process design Plant engineering CostProduct design, Process design, Plant engineering, Cost

estimation

• Control Functions– Production control, Quality control, Cost control,

• Support Functions– Purchasing, Sales, Maintenance, Personnel

5/2/2012 93