Welcome back guys, in the last lecture we completed marketing mix and this time we are going to study Productivity. However, before we study productivity, its factors and types, we should ask ourselves about what production is. It is the provision of a good or a service to satisfy a consumer need. A matchbox for example is produced from what was previously a tree . The process of transformation starts when the tree trunk is cut and processed and phosphoric powder is added to the ends of small sticks. This is the process of production of match box.
Now productivity is the output measured against the inputs used to create it. Productivity of factory or plant can be calculated by dividing the output by the number of employees involved in making that much output.
This means that the more efficient the employees are the more productive becomes the business. Efficient workers do the same job in a less time and produce more products per unit time which means that the products produced become greater and the no. of employees remain the same.
So not surprisingly most firms pursue the objective of achieving higher productivity gains. So that they can make more money and make as little labour costs as possible in the process.
There are three types of production methods
- Job Production
- Batch Production
- Flow Production
This type of production is where products are made specifically to order, for example, in a diner where customers come throughout the day breakfasts and oher meals are examples of job production. This is because they are made on order and not in bulk to be provided to customers on request. Other examples are, expensive products like luxury cars e.g Ferrari, BMW.
Its advantages are that the product meets the exact demands of the customer, and the workers have more varied jobs which leads to job motivation and enrichment. However, this type of production does incur expensive labour costs.
This type of production involves the production of goods in blocks or batches. This means, that unlike job production where only the ordered product was produced, products in batch production are made in groups without any respect to the no. of orders.
It is a flexible way of working and workers can produce goods in advance rather than making them every time the order is placed. However, there is a loss if the products already produced are not bought.
This method of producing good involves the continuous production of goods that are kept “flowing” along a production line. This production line takes the products through all their phases of production.
Labour costs are comparatively lower with this type of method and goods are produced more efficiently. However, consumers get bored by doing the same job if they are psted on the same phase of production line.
These three production methods are used depending on the type of product and its market.
Lean Production Methods
These production methods as the word lean suggests are there to decrease the production costs and make the process as lean and efficient as possible. Most of these techniques have originated on Japanese factory workfloors are as follows:
- KAIZEN: In Japanese this word means “continuous improvement” and its focus is on the elimination of waste. The suggestions t do this come not from specialists but they come from the workers themselves who know the problems better than anyone. This technique usually includes the repositioning of machines, to make them as tight as possible and to reduce time and energy. Stocks are also cleared for avoiding hindrance and inefficient use of space.
- KANBAN: This involves the minimal use of raw materials in a given period. Basically on every phase, two bins are placed and both are filled with raw materials for that phase. When one is empty, it is taken over with its kanban card to the raw material section where it is again filled and taken back to production. This is effective in reducing hold-ups and accumulation of extra raw materials.
- Cell-Production: This involves the division of production line into separated, independent cells each of which makes an identifiable part of the process. This makes employees work harder to transport the products themselves, making them more efficient in the process.
Quality Control And Quality Assurance
Another thing businesses take care of is Quality control and management. It is very important for the brand image of the business and if consumers find out that quality is not good then sales will start dropping drastically.
Therefore the businesses use certain mechanisms to ensure that quality is maintained.
This involves taking samples from the batches that are produced, at regular intervals. This makes sure that no good produced is of substandard quality. Quality control department does this job and if any substandard good is found then the whole batch has to be removed.
This is a different approach that does not include checking but rather takes preventive measures. This method means to set quality standards and to go by them. Everything including the design, packaging of the product is carefully don by efficient and careful workers to reduce any chance of error.
Total Quality Management
This is the continuous improvement of quality by focusing on every aspect of a certain phase of a product. This was again started by the Japanese and its aim is to exterminate errors. Quality circles are also established and workers suggest on the best thing to fo to improve quality.
So these were the methods for making productivity lean and the types of productivity, I hope you found this lecture useful. Till next time.
Q:1 What is productivity?
Ans. It is the ratio between the number of goods produced and the no. of employees that are involved in making those products. In other words it is the number of goods produced per employee.
Q:2 Why do we need lean production methods?
Ans. Lean production methods are techniques that allow a business to cut down on its production costs and make its productivity higher.
Without these techniques firms would not be able to fully utilize their potential and HR potential will not be fully utilized. This will lead to otherwise unnecessary labour costs and reduce the profit a business could make. Hence these techniques are important for the maximum profit of the business.