Productivity Improvement Measures and Quality Management

Asst. Prof. Walter M. Robles, MIR Lecturer, Certificate in Industrial Relations Summer Program School of Labor and Industrial Relations University of the Philippines Diliman, Quezon City

Activity 1
Nine-dot Exercise

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Definition
What is productivity? above all, a state of mind that how you do things today can always be improved tomorrow

What is Quality? adherence to customer specification with customer satisfaction in mind

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Definition
Examples of Customer Satisfaction Money back guarantees (esp. in the US) Fur storage (Japan) Pizza Hut Delivery (Philippines) Meals on Wheels (UK)

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Before anything else...

ensure that the pie is whole before trying to enlarge it study applicability of planned programs evaluate costs v. benefits have S.M.A.R.T. objectives get everyone involved adopt the PDCA cycle
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Program 1:
Workers Participation in Corporate Governance

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Labor-Management Cooperation (LMC)

(the State) shall guarantee the rights of all workers to selforganization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace. Section 3, Article XIII, 1987 Constitution
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Labor-Management Cooperation (LMC)

(g) The Ministry shall help promote and gradually develop, with the agreement of labor organizations and employers, labormanagement cooperation programs at appropriate levels of the enterprise based on shared responsibility and mutual respect in order to ensure industrial peace and improvement in productivity, working conditions and the quality of working life. Article 277 Miscellaneous Provisions Philippine Labor Code

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Labor-Management Cooperation (LMC)

(the DOLE shall) promote the formation of Labor-Management Councils in organized and unorganized establishment and to promote other Labor-Management Cooperation schemes and, upon its own initiative or upon the request of both parties, may assist in the formulation and development of programs and projects on productivity, occupational safety and health, improvement of quality of work life, product quality improvement and other similar scheme. Rule XXI, Department Order No. 40-03

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LMC Objective
ENCOURAGE PRODUCTIVITY THROUGH THE PROMOTION OF INDUSTRIAL PEACE democratize policy and decision-making process promote voluntary dispute settlement models instill a sense of shared responsibility and mutual respect

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LMC: Old v. New

Old LMC: conflict resolution and industrial peace

New LMC: increasing profitability, quality and competitiveness to ensure the companys survival in a global economy

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LMC Principles
top management commitment and support democratically elected representatives continuous training for representatives clear objectives, by laws and/or constitution strict implementation of agreed plans
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LMC Pitfalls
irregular, unprepared, adversarial meetings difficulty in arriving at decisions poor dissemination of information mistrust non-implementation of agreed plans no commitment from top management
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LMC Recommendations
should be used to complement unions focus on training of LMC practitioners, with emphasis on communication, conflict resolution, creativity and innovation, problem solving and decision-making recognize the importance of workers participation in corporate governance as a and responsibility of both parties
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right

Program 2:
5S

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5S Essence
Japanese mnemonic used as a methodology for organizing and managing the workspace Essentially a place for everything and everything in its place Key impacts is upon workplace morale and efficiency

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5S Principles
1st: Seiri (Sort) organize, tidy up eliminate unnecessary items from workplace identify using red-tagging method allot a central storage area for these items

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5S Principles
2nd: Seiton (Set in Order) focus on efficient and effective storage methods strategies include painting floors, outlining work areas, having modular shelves and storage ask these guide questions: what do I need for my job? where should I find them? how much of this do I need?
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5S Principles
3rd: Seiso (Shine) systematizing cleanliness instilling this activity as part of daily work taking pride in a clean and clutter-free workspace

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5S Principles
4th: Seiketsu (Standardize) concentrate on standardizing best practices in the work area encourage employees participation in developing these standards consider your employees as the best source of ideas and the best medium to spread them
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5S Principles
5th: Shitsuke (Sustain) the most difficult stage to carry out employees are generally wary of change their tendency is to return to their old ways where they are comfortable define new ways and sources of comfort
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5S Benefits
increase employee morale and pride on their workplace make good impressions on customers encourage safety and security in the workplace improve efficiency and organization

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Program 3:
Quality Circles

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Quality Circles
participatory management technique based on Demings 85/15 observation enlistment of employees in solving problems related to their own jobs autonomous unit (ideally about 10 workers) led by a supervisor or senior employee placement of quality control early on in the production process
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Quality Circle Ideas

employees make better suggestions for improving work processes than management employees are motivated by their participation in making such improvements employees morale is directly proportional to increased productivity and reduction of costs

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Quality Circle Requisites

comfortable with participative management good, cooperative labor-management relations strong support of middle management sufficient resources for training, external help voluntary membership and regular meetings with clear objectives
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Program 4:
Kaizen

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Kaizen
literally means improvement never-ending efforts for improvement involving everyone in the organization continuous improvement program designed to develop processes and raise standards

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Kaizen and Management

Maintenance Component maintain current technological, managerial and operational standards establish policies, rules, directives and SOPs and ensure everyone follows them through a combination of disciplinary guidelines and human resource development measures
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Kaizen and Management

Improvement Component revise current standards and establish higher ones use innovation to introduce drastic improvements in the existing process use Kaizen to inject smaller improvements based on employees coordinated continuous efforts
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Kaizen Objective
PROCESS Improvement v. RESULT Improvement

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Program 5:
Hoshin Kanri

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Hoshin Kanri
Hoshin a policy, aim or plan Kanri management, control or administration Literally, Hoshin Kanri means management and control of the organizations direction Compatible with Demings PDCA cycle Also called Policy Deployment, Managing for Results, Goal Deployment, etc.
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Hoshin Kanri Purpose

analyze current problems and deploy strategies which respond to environmental conditions translate top management vision into consistent, coherent, intelligible and attainable policies and actions cascade the vision and engage managers and employees in definition of strategy and detailed action plan as it cascades
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Hoshin Kanri Requisites

top managements vision is clear managers and employees of all levels are aware of overall vision and targets and participate in the process accordingly employees involvement must ensure that proposed strategies of all business units correspond to the requirements

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Hoshin Kanri Steps

1. Measure the business system as a whole 2. Set core objectives of the business 3. Understand environmental variables 4. Define all processes in the system with activities, goals and metrics 5. Provide resources to perform activities to achieve business objectives
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Program 6:
Six Sigma

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Six Sigma Defined

Business improvement methodology originally developed by Motorola Systematically improves processes to by eliminating defects Important element of many TQM initiatives
Baluyot, Falcon, Quesada et Robles IR 202, Prof. V. Binghay

Six Sigma Objectives

Give high performance, reliability Add value to the end customer Reduce defect levels to 3.4 DPMO Control a process to the point of plus or minus six sigma (standard deviation)
Baluyot, Falcon, Quesada et Robles IR 202, Prof. V. Binghay

Six Sigma Methodologies

DMAIC for existing processes

Define the process improvement

goals that are consistent with customer demands and enterprise strategy
Baluyot, Falcon, Quesada et Robles IR 202, Prof. V. Binghay

Six Sigma Methodologies

DMAIC for existing processes

Measure the current process and

collect relevant data for future comparison

Baluyot, Falcon, Quesada et Robles

IR 202, Prof. V. Binghay

Six Sigma Methodologies

DMAIC for existing processes

Analyze to verify relationship and

causality factors, determine what the relationship is and attempt to ensure that all factors have been considered
Baluyot, Falcon, Quesada et Robles IR 202, Prof. V. Binghay

Six Sigma Methodologies

DMAIC for existing processes

Improve or optimize the process

based upon the analysis using the techniques like Design of Experiments
Baluyot, Falcon, Quesada et Robles IR 202, Prof. V. Binghay

Six Sigma Methodologies

DMAIC for existing processes

Control to ensure that any

variances are corrected before they result in defects.

Baluyot, Falcon, Quesada et Robles

IR 202, Prof. V. Binghay

Six Sigma Methodologies

DMADV for new processes

Define the goals of the design

activity that are consistent with customer demands and enterprise strategy
Baluyot, Falcon, Quesada et Robles IR 202, Prof. V. Binghay

Six Sigma Methodologies

DMADV for new processes

Measure and identify CTQs,

product capabilities, production process capability and risk assessment
Baluyot, Falcon, Quesada et Robles IR 202, Prof. V. Binghay

Six Sigma Methodologies

DMADV for new processes

Analyze to develop and design

alternatives, create high-level design and evaluate design capability to select the best design
Baluyot, Falcon, Quesada et Robles IR 202, Prof. V. Binghay

Six Sigma Methodologies

DMADV for new processes

Design details, optimize the

design, and plan for design verification

Baluyot, Falcon, Quesada et Robles

IR 202, Prof. V. Binghay

Six Sigma Methodologies

DMADV for new processes

Verify the design, set up pilot runs,

implement production process and handover to process owners

Baluyot, Falcon, Quesada et Robles

IR 202, Prof. V. Binghay

Statistics and Robustness

Data driven, systematic approach to product solving Focus on customer impact Can be started with rudimentary statistical tools Used mostly in engineering and manufacturing
Baluyot, Falcon, Quesada et Robles IR 202, Prof. V. Binghay

Program 7:
Job Design

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Job Enrichment
Attempts to redesign jobs which started in American in the 50s Aims to create greater opportunities for individual recognition and achievement Increase variety, responsibility and accountability

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Job Enlargement
Together with job rotation, it was tested as early as the 1950s to overcome boredom at work It promotes greater flexibility of workers Workers expect higher payment to compensate for learning other jobs Introduction of additions and changes in the production
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Job Design Principles

Remove some controls while retaining accountability Increase personal accountability for work assign each worker a complete unit of work grant additional authority and freedom to workers

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Job Design Principles

Make periodic reports available to workers Introduce new and more challenging tasks into the job Encourage the development of expertise by assignments to specialized tasks

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Program 8:
Re-engineering

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Re-engineering Defined
The concurrent redesign of processes, organizations, and their supporting information systems to achieve radical improvement in time, quality, cost and customers regard for the companys products and services.

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Re-engineering Phases
1st: Discover Identify the people who will play a role in the project and define their roles Identify those areas of business that should be reengineered and define the specific boundaries of the area selected

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Re-engineering Phases
2nd: Hunt and Gather Know the root causes of the current problems and the value-added tasks in the process Gain a basic understanding of how things work Examine the ways to understand the root causes of the current problems and analyze the business process to be reengineered and the information systems supporting the process
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Re-engineering Phases
3rd: Innovate and Build Rethink business processes in the light of modern advances in technology and management practices Provide established principles on new designs Devote to the methods and tools needed to implement the new design
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Re-engineering Phases
4th: Reorganize, Retain, Retool Allow for a transition and integration period Integrate a solution across all areas Consider Human Resources tools (skills mapping, training, staffing and structures)

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The End