Sello Mosai at Sustainability Conference 2015, NCPC

1. PRESENTATION TO THE
MANUFACTURING INDABA
Sello Mosai
Executive Manager: Productivity SA
e-mail: sello@productivitysa.co.za
Productivity as a tool for
Industrial development

2. • Introduction – Productivity
• Ways of improving Productivity
• Productivity and Profit
• Myths associated with Productivity
• Best Practice – Productivity Principles
• A holistic approach to productivity improvement within an
Organisation
• Concluding remarks
Outline of Presentation

3.  It is widely accepted that continuous productivity growth in entities is a
significant determinant of sustained output growth and as a consequence
can lead to employment creation, higher labour compensation,
improvements in living standards and alleviation of poverty and inequality.
 Productivity entails converting resources (inputs) into products and services
(outputs) efficiently, effectively and with optimum utilisation of human capital,
material, and physical resources for the benefit of business, society, the
economy and the environment.
 Productivity is a mindset that embraces the value of “doing what I do today
better than I did yesterday, and even better tomorrow”.
 Productivity centers around the output/input ratio, and other forms of
measurement.
INTRODUCTION PRODUCTIVITY

4. WAYS OF IMPROVING PRODUCTIVITY

5. Wastage
material, time, space, energy, money
Utilization
machinery, equipment and people
Efficiency
machinery, equipment and people
Output
Input

6. Absenteeism/
Presentism
people
Labour Turn Over
people
Output
Input

7. PRODUCTIVITY AND PROFIT
 Productivity improvement always results in cost reduction
 VA = labour cost + Interest + Taxation + Depreciation + profit
 Reduced unit labour cost
 Elimination of wastage in all its forms
 Improved efficiency and utilisation

8. MYTH ABOUT PRODUCTIVITY
Productivity is not about…..
Working harder
Cutting costs
Reducing employees
Employing specialists

9. BEST PRACTICE
PRODUCTIVITY PRINCIPLES
Principle 1: Continuous Improvement – speeding up the production process:
• Driving the programme from the Top
• Introduction of impact projects
• Change of attitude to productivity measures
• Networking and sharing with other improvement oriented companies
• Focusing in a consistent and structured manner on continuous improvement.

10. BEST PRACTICE
PRODUCTIVITY PRINCIPLES
Principle 2: Strive for perfection – Cleaning and Organising:
• Introduction of productivity tool-kits such as 5s (cleaning and organising).
• Benchmarking and striving for excellence
• Focusing in a consistent and structured manner on continuous improvement.

11. BEST PRACTICE
PRODUCTIVITY PRINCIPLES
Principle 3: Providing Value to Customers – corrective measures:
• Improving measures such as reducing total stock and lead times.
• Speeding up production process
• Reducing raw inventory materials throughout the value chain

12. BEST PRACTICE
PRODUCTIVITY PRINCIPLES
Principle 4: Balance – Focus on People and Technology:
• Reducing down-time that sometimes results from conflicts of interdependent
teams and/or departments.
• Bring about change in which teams and/or departments relate to each other and
share responsibility
• Periodic meetings between team and/or departments assist to establish trust for a
seamless working environment
• Preventative solutions are sought and reviewed periodically

13. BEST PRACTICE
PRODUCTIVITY PRINCIPLES
Principle 5: Strengthening Internal Capability – Goal Alignment:
• Need for strong technical skills, and competent leaders taking responsibility for
productivity on the shop-floor.
• All employees are informed and then become focused on company’s goals
• Cascading company goals into measurable targets at the departmental and then
at team level
• Skilling and empowering employees to make shop-floor improvements, and
• Encourage innovations to make work simpler

14. BEST PRACTICE
PRODUCTIVITY PRINCIPLES
Principle 6: Teamwork – Socratic Change Management:
• Teamwork fosters a working environment where communication is clear, where
staff members are well informed and disciplined.
• If teamwork is part of the companies culture, it is possible to implement
productivity improvements such as “hot seat” changeovers
• Staggering lunch tea and lunch times is also common where there is teamwork in
order to improve productivity on the shop-floor

15. BEST PRACTICE
PRODUCTIVITY PRINCIPLES
Principle 7: Sustainable Challenges:
• Commitment of management to correct application of principles.
• Reporting of numbers, completing charts; and putting forward results for on-going
measurement.
• Visual displays (‘dash-boards’) for identifying red-light activities.
• Influencing people’s attitudes and the way they think.
• You are in it for a long haul

16. BEST PRACTICE
PRODUCTIVITY PRINCIPLES
Principle 8: Quality Assurance:
• Measurement of defective products against sales for the month.
• A Quality Team to develop a set of reason codes that help with the analysis of
customer complains
• Ability to identify at which point of production line defects occurred as well as
department and/or teams where the defects arose
• A solution has to be presented as to how the quality problem will be avoided in
the future.

17. BEST PRACTICE
PRODUCTIVITY PRINCIPLES
Principle 9: Develop exceptional Leaders, Teams, and People:
• Flat structure encourages true performance and direct communication.
• Open management style and cross-functional sharing allows for sharing of
important information on a regular basis
• Mini-businesses form the bases of the structure of the company
• Team members have access to information upward and receive feed-back from
more senior layers via mini-business meeting at the start of every shift.
• People like to know that they are being heard

18. BEST PRACTICE
PRODUCTIVITY PRINCIPLES
Principle 10: Sharing Gains:
• Possible scenario of an elaborate bonus system, i.e.,
• Annual attendance bonus
• A monthly bonus based on achieving daily production targets;
• And a monthly profit bonus that is based on 25% of PBIT.
• All employees at all levels partake in these schemes
• In spite of the difficulties of the schemes, the benefits have far outweighed these
when it comes to motivating implementation of improvement programmes.

19. A HOLISTIC PRODUCTIVITY IMPROVEMENT
APPROACH
• A thorough grasp of the strategic intent of
all companies
• Measure the key competitiveness drivers in
all companies and establish factors causal
to current performance levels
• Measure all processes/subsystems feeding into
and departing from drivers and establish factors
causal to current performance levels

20. A HOLISTIC PRODUCTIVITY IMPROVEMENT
APPROACH
• Design a company - specific productivity
improvement plan in an inclusive manner
• Develop productivity competencies at
varying levels and categories of employment
• Communicate details of the productivity
improvement plan
• Plan, implement and evaluate productivity
improvement campaign

21. A HOLISTIC PRODUCTIVITY IMPROVEMENT
APPROACH
• Review the productivity improvement plan
and set new goals and targets
• Continuous review, planning,
implementation, monitoring and
evaluation.

22.  All companies need to intensively focus on improving productivity and
reducing inefficiencies which in turn can contribute to lowering high
production costs and contribute to higher long-term output.
 Productivity entails converting resources (inputs) into products and services
(outputs) efficiently, effectively and with optimum utilisation of human capital
and physical resources for the benefit of society, the economy and the
environment.
 Productivity is a mindset that embraces the value of “doing what I do today
better than I did yesterday, and even better tomorrow”.
 Productivity centers around the output/input ratio, and other forms of
measurement.
 Continuous improvements in productivity and related measures are
necessary to assist all companies to be meaningful players in the economy.
CLOSING REMARKS

23. Questions & Discussion