C3 Management and Productivity

MMV140003 INDUSTRIAL AND SYSTEM ENGINEERING| SEM 2 20182019
CHAPTER 3: Ts. Mohd Fairuz Bin Marian

MANAGEMENT AND PRODUCTIVITY
OBJECTIVE
§MANAGEMENT AND PRODUCTIVITY: (6 hours)
Basic concepts of management, Management factors: Planning,
Organizing, Leadership, Motivation and Control. Maslow’s
hierarchy of needs, Form of business organizations, long and short
term perspective for growth,
Diversification in the context of changing environment: Social,
economic, technological, etc.
Productivity: Definitions, Scope and measurement, Productivity
improvement methods for organizations, job evaluation and merit
rating.
© FAIRUZM@UTHM.EDU.MY | 2019 2
BASIC CONCEPT OF MANAGEMENT
§ Management means many things to many people.
§ It can be means commanding other. To many others, its simple as clerical work and
bureaucracy in administration procedures.
§ No universally accepted definition for management.
"Management is an art of knowing what is to be done and seeing that it is done in the
best possible manner." (planning and controlling)F.W. Taylor (father of scientific
management)
"Management is to forecast, to plan, to organize, to command, to coordinate and
control activities of others.“ Henri Fayol (father of modern management)
OPERATIONS MANAGEMENT (OM)
OPERATIONS MANAGEMENT is an area of management concerned
with designing and controlling the process of production and
redesigning business operations in the production of goods or services.
§It is concerned with managing an entire production system which is the
process that converts inputs (in the forms of raw materials, labor,
and energy) into outputs (in the form of goods and/or services).
§Operations produce products, manage quality and creates service. OM
covers sectors like banking systems, hospitals, airlines companies,
manufacturing factory, working with suppliers, customers, and using
technology.
THE HISTORY OF OM
§The Industrial Revolution (1760s to early 1800s) ushered in the foundations of division of
labor and interchangeable parts, keys to efficient production. Eli Whitney, inventor of the
cotton gin, also manufactured 10,000 muskets by using the concept of interchangeable parts.
§In 1883, Frederick Winslow Taylor used the stopwatch method to time tasks for complex jobs.
This became key for studying efficiency and productivity.
§In about 1912, Frank and Lillian Gilbreth laid the foundation for predetermined motion time
systems (PMTS), which predict the time it takes to complete tasks.
§] In 1913, Henry Ford’s first moving assembly line started rolling, cutting production time for a
car from 12 hours to less than three.
§In post-World War II Japan, Toyota developed just-in-time production (JIT), later called the
Toyota Production System. The company designed it to eliminate waste and increase
productivity and quality.
§In 1971, FedEx started overnight package deliveries. Nowadays, Amazon even offers same-
day delivery on orders.
MAJOR FACTOR / PROCESS
THE IMPORTANCE OF OM
We can also see the importance of operations management in these aspects of a
company’s success:
1. Customer service
2. Product or service quality
3. Correctly-functioning processes
4. Market competitiveness
5. Technological advances
6. Profitability
MASLOW THEORY OF NEEDS
§Maslow's hierarchy of needs is a motivational theory in psychology comprising a five-
tier model of human needs, often depicted as hierarchical levels within a pyramid.
§D-needs vs B-needs
BUSINESS ORGANIZATION
EXAMPLE OF BUSINESS PLAN
PRODUCTIVITY
Productivity is a relationship between the output (product/service) and input
(resources consumed in providing them) of a business system. The ratio of
aggregate output to the aggregate input is called productivity.
PRODUCTIVITY = OUTPUT/INPUT
For survival of any organization, this productivity ratio must be at least 1.
Productivity ≥ 1 : comfortable position (input fully utilized)
INTERRELATIONSHIPS
Interrelationships between Productivity and Other performance Areas
EFFECTIVENESS VS EFFICIENCY
§While EFFICIENCY refers to how well something is done, EFFECTIVENESS refers to
how useful something is.
EFFECTIVENESS VS EFFICIENCY
§Effectiveness is about doing or using the right things — things that yield positive
results. Efficiency is simply about doing things right — i.e., completing a task cheaper
or faster.
§Ideally, individuals and companies find ways to be effective and efficient, but it is
possible to be effective, but not efficient, or vice versa, or neither.
§ For example, if a company is not doing well it may decide to train its workforce to
use a new technology. The training may go well, with employees learning the new
technology in record time, but if overall productivity doesn't improve following the
implementation of this new technology, the company’s strategy was efficient but not
effective.
§https://www.youtube.com/watch?v=z1kb56vywQU
TYPES OF PRODUCTIVITY
Capital Energy
Material Labor
EQUATIONS
PRODUCTIVITY VARIABLES
Productivity Increases are dependent on:
Labor (10%)
Management (52%)
Capital (38%)
GIVE IT A TRY!
PRODUCTIVITY IMPROVEMENT
PRODUCTIVITY IMPROVEMENT TIPS
1. Review Existing Workflow
- People, process and equipment
2. Update Process and Technology
3. Commit to Scheduled Maintenance
4. Train and Educate Employees
5. Organize Workspace
6. Maintain Optimal Inventory
- Use dedicated software to track
- Create favored vendor
- Forecast and predict the impact of shortage and delays
PRODUCTIVITY VARIABLES
Productivity increases are dependent on three productivity
variables :
1. Labor, which contributes about 10% of the annual increase.
2. Capital, which contributes about 38% of the annual increase.
3. Management, which contributes about 52% of the annual increase.
§These three factors are critical to improved productivity. They
represent the broad areas in which managers can take action to
improve productivity.
PRODUCTIVITY : SERVICE VS PRODUCT
§ The service sector provides a special challenge to the accurate measurement
of productivity and productivity improvement. Productivity measurement is
particularly difficult in the service sector, where the end product can be hard to
define.
§The traditional analytical framework of economic theory is based primarily on
goods-producing activities.
§Productivity of the service sector has proven difficult to improve because
service-sector work is:
1. Typically labor intensive (e.g., counseling, teaching).
2. Frequently focused on unique individual attributes or desires (e.g., investment advice).
3. Often an intellectual task performed by professionals (e.g., medical diagnosis).
4. Often difficult to mechanize and automate (e.g., a haircut).
5. Often difficult to evaluate for quality (e.g., performance of a law firm).
LABOR SPECIALIZATION
• A job design strategy where labors are divided into a series and
specialized job operations.
• Four advantages of labor specialization [1]:
1) Development of skill and faster learning by the employee because of
repetition
2) Less loss of time because the employee would not be changing jobs or
tools
3) Development of specialized tools and the reduction of investment
because each employee has only a few tools needed for a particular
task
4) Paying exactly the wage needed for the particular skill required
JOB EXPANSION
Job Specialization: focused on a
specific task
Job Enlargement: add tasks requiring

similar skill to an existing job (horizontal
expansion)
Job Enrichment: add planning and

control of job (vertical expansion)
Job Rotation: when employee is

allowed to move from one specialized
job to another.
KAIZEN PHILOSOPHY

C3 Management and Productivity

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

C3 Management and Productivity

Uploaded by

Copyright:

Available Formats

MMV140003 INDUSTRIAL AND SYSTEM ENGINEERING| SEM 2 20182019

CHAPTER 3: Ts. Mohd Fairuz Bin Marian

For survival of any organization, this productivity ratio must be at least 1.

Productivity ≥ 1 : comfortable position (input fully utilized)

Interrelationships between Productivity and Other performance Areas

Job Enlargement: add tasks requiring

Job Enrichment: add planning and

Job Rotation: when employee is

You might also like