I.

PRODUCTIVITY & QUALITY TOOLS

Productivity is a tool of measurement that determines the efficiency of the
organization in terms of the ratio of output produced with respect to inputs used.
Various factors like technology, plant layouts, equipment, and machinery affect
productivity. Hence, operations managers need to carry out a regular review of all
these factors to maintain as well as improve productivity.

Productivity can be either measured as total productivity or as partial productivity

where single variable or multiple variables are considered. Measuring productivity
in production organizations is relatively easy. But measuring productivity for
knowledge workers and in the service organizations is difficult. Maintaining time
sheets to determine the time spent on each task and the quantity of work done is
one of the ways of measuring productivity in the services industry. Quality is one of
the key issues, which defines an organization's competitive position in the market.

Quality is conformance to requirements. A well designed and properly produced

product without any error may not be perceived as a quality product by the
customers if it does not satisfy their requirements.

QUALITY CIRCLES
A quality circle is a participatory management technique that enlists the help of
employees in solving problems related to their own jobs. Circles are formed of
employees working together in an operation who meet at intervals to discuss
problems of quality and to devise solutions for improvements. Quality circles have
an autonomous character, are usually small, and are led by a supervisor or a senior
worker. Employees who participate in quality circles usually receive training in
formal problem-solving methods—such as brain-storming, pareto analysis, and
cause-and-effect diagrams—and are then encouraged to apply these methods
either to specific or general company problems. After completing an analysis, they
often present their findings to management and then handle implementation of
approved solutions. Pareto analysis, by the way, is named after the Italian
economist, Vilfredo Pareto, who observed that 20 percent of Italians received 80
percent of the income—thus the principle that most results are determined by a
few causes.

KAIZEN
Kaizen is a Japanese term meaning "change for the better" or "continuous
improvement." It is a Japanese business philosophy regarding the processes that
continuously improve operations and involve all employees. Kaizen sees
improvement in productivity as a gradual and methodical process.

The concept of kaizen encompasses a wide range of ideas. It involves making the
work environment more efficient and effective by creating a team atmosphere,
improving everyday procedures, ensuring employee satisfaction, and making a job
more fulfilling, less tiring, and safer.

SGA
SG&A is the acronym for selling, general and administrative. SG&A are the
operating expenses incurred to 1) promote, sell, and deliver a company's products
and services, and 2) manage the overall company.
SG&A will be reported on the income statement in the period in which the
expenses occur. Hence, SG&A expenses are said to be period costs as opposed to
being part of a product's cost. Since SG&A expenses are not a product cost, they
are not assigned to the cost of goods sold or to the goods that are in inventory.

Examples of SG&A
SG&A expenses include sales commissions, advertising, promotional materials,
compensation of the company's officers as well as the marketing, sales, finance
and office staffs, rent, utilities, supplies, computers, etc. provided they are outside
of the manufacturing operations.
 II. Value analysis and Value Engineering
Value Analysis
Value Analysis (VA) is concerned with existing products. It involves a current
product being analyzed and evaluated by a team, to reduce costs, improve product
function or both. Value Analysis exercises use a plan which step-by-step,
methodically evaluates the product in a range of areas. These include costs,
function, alternative components and design aspects such as ease of manufacture
and assembly.

A significant part of VA is a technique called Functional Analysis, where the product

is broken down and reviewed as a number of assemblies. Here, the function is
identified and defined for each product assembly. Costs are also assigned to each
one. This is assisted by designing and viewing products as assemblies (or modules).
As with VE, VA is a group activity that involves brainstorming improvements and
alternatives to improve the value of the product, particular to the customer.

Value Engineering
Value Engineering (VE) is concerned with new products. It is applied during product
development. The focus is on reducing costs, improving function or both, by way of
teamwork-based product evaluation and analysis. This takes place before any
capital is invested in tooling, plant or equipment.

This is very significant, because according to many reports, up to 80% of a

product’s costs (throughout the rest of its life-cycle), are locked in at the design
development stage. This is understandable when you consider the design of any
product determines many factors, such as tooling, plant and equipment, labor and
skills, training costs, materials, shipping, installation, maintenance, as well as
decommissioning and recycle costs.

Therefore, value engineering should be considered a crucial activity late on in the

product development process and is certainly a wise commercial investment, with
regard to the time it takes. It is strongly recommended you build value engineering
into your new product development process, to make it more robust and for sound
commercial reasons.
 III. Total Quality Management
What Is Total Quality Management (TQM)?

Total quality management (TQM) is the continual process of detecting and

reducing or eliminating errors in manufacturing, streamlining supply chain
management, improving the customer experience, and ensuring that employees
are up to speed with training. Total quality management aims to hold all parties
involved in the production process accountable for the overall quality of the final
product or service.

Total quality management (TQM) is a structured approach to overall organizational

management. The focus of the process is to improve the quality of an
organization's outputs, including goods and services, through continual
improvement of internal practices. The standards set as part of the TQM approach
can reflect both internal priorities and any industry standards currently in place.

Total quality management (TQM) is the continual process of detecting and

reducing or eliminating errors in manufacturing, streamlining supply chain
management, improving the customer experience, and ensuring that employees
are up to speed with training.

The focus of the process is to improve the quality of an organization's outputs,

including goods and services, through continual improvement of internal
practices.

Total quality management aims to hold all parties involved in the production
process accountable for the overall quality of the final product or service.

FIVE IMPORTANT FACTORS IN TOTAL QUALITY MANAGEMENT

1. Commitment and understanding from employees.

2. Quality improvement culture.

3. Continuous improvement in process

4. Focus on customer requirements

5. Effective control
 IV. STATISTICAL QUALITY CONTROL

Statistical quality control refers to the use of statistical methods in the

monitoring and maintaining of the quality of products and services. One
method, referred to as acceptance sampling, can be used when a
decision must be made to accept or reject a group of parts or items
based on the quality found in a sample. A second method, referred to as
statistical process control, uses graphical displays known as control
charts to determine whether a process should be continued or should
be adjusted to achieve the desired quality.
Statistical quality control refers to the use of statistical methods in the
monitoring and maintaining of the quality of products and services. One
method, referred to as acceptance sampling, can be used when a
decision must be made to accept or reject a group of parts or items
based on the quality found in a sample. A second method, referred to as
statistical process control, uses graphical displays known as control
charts to determine whether a process should be continued or should
be adjusted to achieve the desired quality.
Statistical quality control refers to the use of statistical methods in the
monitoring and maintaining of the quality of products and services. One
method, referred to as acceptance sampling, can be used when a
decision must be made to accept or reject a group of parts or items
based on the quality found in a sample. A second method, referred to as
statistical process control, uses graphical displays known as control
charts to determine whether a process should be continued or should
be adjusted to achieve the desired quality.