STEPS TO IMPROVE PRODUCTIVITY
M. L. Puri
In this case study of a large workshop, the author points out the deficiencies of the Indian workshop and suggests incentives to increase productivity. Finally, he draws up a framework for optimising foreign technical collaborations.
CASE STUDY - THE MECHANICAL DEPARTMENT OF A LARGE WORKSHOP
1.1 Compared to the standards in the industrially advanced countries, there is enormous scope for stepping up the productivity of workshops and other services in India. Our development commitments are progressively increasing and in order to meet them with limited resources, it is necessary to initiate action whereby the requisite machinery for exploiting the reserve of productivity may be perfected at the earliest.
1.2 As is well-known, the principal causes of low productivity are:
1.21 Insufficient vetting of design detail, standards and specifications from the standpoints of ‘producibility’ and maintenance, with adverse repercussions on the costs of production and repair.
1.22 Incorrect selection of machinery, plant and accessories resulting in lack of balance and bottle-necks which lock up capital in redundant machines/machine-features and hamper rationalized shop practice.
1.23 Poor maintenance of machinery and plant, causing loss of machine availability due to excessive breakdowns and impairing quality/output of work on account of deterioration in machine accuracy and adjustment.
1.24 Imperfect handling/tooling and inadequate employment of jigs and fixtures, which prevent the optimum utilization of manpower and machines.
1.25 Excessive waste of material in scrap through: faulty choice of material form and manufacturing methods, excessive rejections and obsolescence, and insufficient reclamation.
1.26 Losses incurred through stores bottle-necks created by imperfect co-ordination and control in procurement: emergency purchase at higher prices, dislocation of workshop schedules, loss of rolling stock availability and waste of time and effort in special chasing.
1.3 Compared to the West, we are extremely short of specialized technical personnel and codified know-how and data. Consequently, weaknesses are experienced in important functions such as planning, project preparation, standards and specifications, machinery and plant selection, procurement and production engineering. Under the pressure of expansion these functions are tending to become even more diluted. Efforts are being made to strengthen the position with the help of foreign specialists, but the number of specialists that can be made available is limited and they have the handicap of not knowing our background adequately. In the circumstances, there is no real alternative to training Indian specialists in the most up-to-date production methods adapted to out own environment and requirements. The set-up for training specialists could also undertake independent methods research and publish the processed material in the form of self-contained technical brochures. The specialists must not merely preach improved technology, but must demonstrate its effectiveness in improving productivity and living standards.
1.4 The production specialist set-up, when sufficiently mature, should endeavour to bring into existence ‘model’ work units, where productivity and corresponding remuneration would be well ahead of anything else in the department and even in the country. Such units appropriately located would create the most tangible impression on the average man and urge him towards constructive effort. This ‘model approach’ has important possibilities and, as such, its mother set-up should receive priority and support.
1.5 At present the climate for obtaining technical assistance from industrialized countries is favorable and we have considerable influence with foreign manufacturers on account of the large volume of our foreign purchase. We are also establishing closer contact with foreign counterparts though our policy of employing their inspection services for our contracts in the countries concerned. A useful purpose would be served by mobilizing these factors to strengthen the contemplated set-up. Negotiations with the international technical assistance bodies, contracting and collaboration schemes with private manufacturers should be processed with this bias.
1.6 In due course, this set-up would enable us to deal with outside specialist agencies at their own level, so that the channelisation of foreign assistance would progressively become more rational and effective. It would also enable us to formulate our requirements of foreign personnnel with greater precision and employ them for specific requirements rather than keep them as general consultants.
1.7 The same should also apply in utilizing opportunities of foreign training and experience for Indian personnel. As specialist requirements become more and more crystallized, selections should be made for specific assignments with due regard to the individual’s capacity to absorb and impart. The technical personnel sent out should be expected to record, in a practically usable form, the salient features of their experience, and on return they should be called upon to organize their sphere of activity and train the understudies and other key personnel they may require. Effective machinery should also be created to assess the original content and quality of their contribution, in order to keep up the requisite dynamics in the foreign training schemes.
2. INCENTIVES FOR HIGHER PRODUCTIVITY
2.1 Out of all factors, perhaps the most powerful influence on productivity is exerted by tradition; and even more by example that moulds the tradition. Accordingly, incentives for higher productivity should aim at “good tradition through good example.” The traditions that have contributed to the high productivity in industrialized countries are: dignity of manual labour, pride in workmanship and professional excellence, reward for constructive skill and resourcefulness, regard for training and instruction, respect for discipline and teamwork, concern for quality and competition, cost and methods consciousness, and, not the least, objective self-criticism. To foster these traditions, it is important that the elite in industrial hierarchy embody them to the maximum degree. The framework of industrial incentives should be designed from these basics considerations.
2.2 The modern industrial structure is complex, in which the direct worker, through be remains the central factor, is not the only factor. Unlike then self-employed craftman, he does not control his working environment, except to a limited degree within his allotted workplace. He is immobilized if there is a machine breakdown, non-availability of material or tools, inspection delay, etc. His output, when he is working, is also governed to no small extent by extraneous factors: choice of material form and tolerances, operation sequence and choice of machines for individual operations, tooling, state of machine accuracy and adjustment, etc. Even his own skill depends to a large extent upon the nature of training and instruction that he is given. In the circumstances, it is not sufficient to think in terms of incentives for the direct worker alone. For the maximum ‘volume’ effect, it is essential to include the indirect workers and members of the managerial, supervisory and specialist services in the incentive scheme. For the same reason it is necessary to have “joint consultation” in finding and applying the “better way”.
2.3 In promoting productivity two aspects deserve special attention: tempo and methods.
2.31 At present, in our workshops with daily-rated labor, the tempo would be about two-thirds the optimum: the average effective hours put in by a worker are approximately 5 out of 8, and this figure could go up to a maximum of, say, 7 ½. Thus by increasing the tempo of work alone, there is scope for productivity to rise up to 50%.
2.32 By rationalizing production methods with the aid of work study and latest technological advances, it is considered that the output per hour could be increased up to, say, double its present value. Thus by a combination of the ‘tempo’ and methods’ components, a target of 200% increase on the present level of productivity could be pursued (100+50 x2-100=200).
2.4 For the best results, incentives schemes should be introduced in easy stages after the necessary groundwork for each stage is completed. Straight piecework for direct labor should be preferably reserved for the last stage of an incentive scheme, after the slack in tempo has been taken up and development of methods sufficiently advanced. An earlier introduction of piecework would tend to freeze productivity at a relativity low level, because, notwithstanding the usual safeguards in an incentive scheme, it is difficult to revise the timings once set and repeated revisions are also not desirable from the standpoint of morale. As such, it is advisable to cover the transition period on a flexible basis, employing both group individual incentives as the circumstances may require.
2.5 During the period of transition, action should also be taken to perfect the machinery for direct piecework payment. The following steps would be necessary:
2.51 Establish Joint consultation and provide against redundancy.
2.52 Rationalize quality standards and provide adequate inspection.
2.53 Rationalize cost structure and provide for appropriate accounting of spoilage
2.54 Systematize/mechanise office procedure, particularly in production control, payment and costing.
2.55 Ensure timely availability of correct material, avoiding substitutes.
2.56 Correct drawbacks in machine maintenance and small tool provision/reconditioning.
2.57 Rationalize handling and machinery and plant selection.
2.58 Build up a dependable cadre of production specialists and demonstrators.
2.59 Build up dependable production data with the aid of work-study.
2.60 Establish training facilities for individuals to overcome their particular drawbacks.
2.6 Removal of the drawbacks enumerated in paragraph (1.2) and building up of the factors listed in paragraph (2.5) constitute the basic task of development, calling for contribution of a ‘capital’ nature. Accordingly, the effectiveness of such contribution, as reflected through improvement in functional quality of products and services, reduction in production/service costs and progressive increase in individual earnings, should form the yardstick of performance and the basis for remunerations.
2.7 Apart from direct payment by results (where practicable), there is a whole range of individual and group incentives that can be employed with effect: improvement in working conditions and amenities, social recognition, specialization facilities, premiums for constructive suggestions, patent and copyright benefits, lump sum awards, accelerated increments, out-of turn/class promotions, etc. Assessment of merit would be facilitated with decentralization of authority coupled with definite responsibility. Further, for the best results, development assignments and, as indicated in paragraph (1.7), deputations for foreign experience should be held out as prizes in recognition of outstanding performance. They should be dispensed through active selection from the broadest possible base, so that there may develop a positive attitude to earn such assignments and deputations, rather than expect them as a matter of course on the basis of class and seniority.
3. CONSIDERATIONS IN FOREIGN TECHNICAL COLLABORATION
3.1 The important fields where there is scope for foreign technical collaboration are:3.11 Recasting the structure of our workshop costs and statistics, so as to make the unit costs representative, and comparable with outside industry; and to evolve performance indicator which would be sufficiently comprehensive and precise to pin-point the sources of strength and weakness.
3.12 Security and revision of our design detail, standards and specification from the standpoints of rationalised manufacture and maintenance.
3.13 Creation of a set-up for “methods development” and research in production-engineering/repair-practice.
3.14 Development of machinery for digestion and publication of basic data and practice know-how.
3.15 Establishment of machinery for training and testing of technicians.
3.16 Development of machinery for joint consultation and incentives.
3.17 Development of model working units, calculated to demonstrate the feasibility in India of low costs of production side with high remuneration, the same as is now case in the industrialized countries.
3.18 Planning and lay-out of new factories and remodeling of existing ones.
3.2 The aforesaid fields are fundamental and weakness therein can result in bottle-necks in the later stage of development. Moreover, large sums of money are expended on development projects and there is also the question of dispensing available resources and fixing priorities. Accordingly, it is desirable to obtain the services of the best available parties for technical collaboration, with due regard to the staff that they would employ on our work and the facilities with which that staff would be backed. The direct charges for technical collaboration, though important, constitute only a small fraction of the expenditure involved; and it would not be prudent to give this factor excessive weightage in making collaboration arrangements.
3.3 Under the present market condition the volume of our foreign purchase gives us a material bargaining advantage compared to other countries in our position. This can be utilized in obtaining technical collaboration on favorable terms from component parties. However, this is practicable only if there is effective machinery to co-ordinate the requirements of technical collaboration with foreign purchase. This co-ordinated approach has a further advantage in that the consultant-cum-supplier in working on our contracts develops production know-how and data that can be directly employed in India. In the circumstances, perfection of the aforesaid machinery for co-ordination should receive priority. Similarly, in order to elicit the most attractive terms for collaboration, trade enquiries to the manufacturers considered component for technical collaboration should be as large as possible.
3.4 As far as practicable, the arrangements for technical collaboration should be specific in respect of the transfer of know-how: drawings, material schedules, production data including timings, machinery and plant specifications, manuals and other technical documentation for internal use, training courses and printed matter supported the same, etc. The same should also apply with regard to the collaborating party’s responsibility in establishing any production. The ultimate yardstick for assessing the productivity of an enterprise is the unit cost of production as related to the average earnings. Bonuses payable to the foreign consultants should be linked to this yardstick. Similarly other incentives could be provided to encourage maximum turn-out of well qualified specialists and well-ordered codification of data and practice know-how – two critical factors in our development.