QUALITY AND PRODUCTIVITY FOR GLOBAL COMPETITIVNESS

GLOBAL COMPETITIVENESS
Competitiveness is a comparative concept of the ability and performance of a firm, sub-sector or country to sell and supply goods and/or services in a given market Competitiveness at the global level is termed as GLOBAL COMPETITIVENSS. Global competitiveness is an important determinant for

the well-being of states in an international trade

environment.

THE QUALITY PRODUCTIVITY RELATIONSHIP

More Productivity Less Re-work

Improve Quality

Quality for Global competitive Advantage

Improve quality
Decrease prices Increase market

Decrease costs

Improve productivity

Global competitiveness

What is Quality?
Performance - Efficiency with which a product achieves its intended purpose Features - Attributes that supplement the products basic performance Reliability Perform consistently over the products useful life. Conformance - Adherence to quantifiable specifications

Durability - Tolerate stress or trauma without Failing

Serviceability - A product is serviceable if it can be repaired easily and cheaply Aesthetics Subjective characteristics such as taste, feel, sound, look.

Contd..
Tangibles Physical appearance of the facility, equipment, personnel

and functional equipment

Service Reliability - The ability of the service provider to perform the promised service

Responsiveness - The willingness of the provider to be helpful and

prompt in providing service Assurance - The knowledge and courtesy of the employees and their

ability to inspire trust and confidence

Empathy Caring Individualized attention from the service company

Differing Functional Perspectives on Quality

Engineering - Operations Research, Product Design Engineering, Concurrent Engineering, modeling techniques Supply Chain Operations Strategic Management Marketing Financial Human resource

Quality and Global Competitiveness

In a modern global marketplace, quality is the key to competitiveness

The costs of poor quality include the following

Waste Rejects Excessive overtime Pricing errors Billing errors, Excessive turnover Premium freight costs Handling complaints Expediting System costs planning

Retesting
Rework

delays Late paperwork Lack of follow-up Excess inventory Unused capacity

customer returns inspection, Recalls

Development cost of the failed product Field service costs,

Benefits of maintaining Quality

Quality has important benefits for trade, productivity, and technological progress The most common economic benefits of adopting Quality includes increased productive and innovative efficiency. Quality leads to economies of scale and allow suppliers to achieve lower costs per unit by producing large homogeneous batches of products. Quality allows firms to forge the types of long-term relationships that maximize knowledge transfer with global buyers and lead to sustainable development Quality facilitates STANDARDIZATION.

CONTRIBUTION BY GOVERNMENT IN ACHIEVING GLOBAL COMPETITIVENESS (NATIONAL QUALITY INFRASTRUCTURE) Testing laboratories and inspection bodies Certification bodies Calibration laboratories National standards bodies National accreditation bodies

National metrology institute

Productivity
Productivity is a measure of the efficiency of production.

Productivity is a ratio of production output to what is required to produce it (inputs). The

measure of productivity is defined as a total output per one unit of a total input.

At the national level, productivity growth raises living standards because more real income improves people's ability to purchase goods and services, enjoy leisure, improve housing and education and contribute to social and environmental programs.

Productivity growth is important to the firm because it means that the firm can meet its obligations to customers, suppliers, workers, shareholders, and governments (taxes and regulation), and still remain competitive or even improve its competitiveness in the global market place

Types of Productivity
Capital Productivity - It is the way in which capital (long-term assets like machines/buildings) are put to use for a certain level of labour and technical knowledge to make goods and services. Labour Productivity - The OECD defines it as "the ratio of a volume measure of output to a volume measure of input Volume measures of output are normally gross domestic product (GDP) or gross value added (GVA), expressed at constant prices i.e. adjusted for inflation The three most commonly used measures of input are: hours worked; workforce jobs; and number of people in employment. Multi-factor Productivity(total-factor) - The ratio of the real value of output to the combined input of labor and capital.

Importance of productivity
AT FIRM/INDUSTRY LEVEL :

The benefits of productivity growth can be distributed in a number of different ways:

To the workforce through better wages and conditions; To shareholders and superannuation funds through increased profits and dividend

distributions;
To customers through lower prices; To the environment through more stringent environmental protection; and

To governments through increases in tax payments (which can be used to fund social
and environmental programs)

Contd..

At National Level Productivity growth raises living standards because more real income improves people's ability to purchase goods and services Improve housing and education and contribute to social and environmental programs. Enhances country's ability to finance education, public health, environment and the arts Improvements in Nations balance of payments.

Factors affecting productivity

External Factors Government polices Political, social and economic conditions

The business climate

Availability of finance, Power, water, transport, communications and raw materials

Contd..
INTERNAL FACTORS
Hard Factors
Service or Product

Soft Factors
People

Plant and Equipment

Technology Materials and Energy

Organization and Systems

Work Methods Management

Methods of improving Productivity

By increasing outputs to with same inputs

By decreasing inputs but maintaining same output

By increasing outputs & decreasing inputs to change ratio favorably.

Barriers to productivity in INDIA

Family-controlled industry leading to earning easy money. Some Segments have monopolistic market, some are competitive one.

Erratic inflow of orders.

Lack of productivity/quality culture. Shortage of funds & codification are at low level. Automation is not encouraged.

Contd..
Low priority of marketing & commercial activities, poor after

service.
Complicated govt. policy, rules & regulations. Energy shortage. Poor working conditions (light, ventilations, safety, housekeeping). Non availability of some basic material & components (to be imported), unreliable suppliers.

Suggestions for Productivity Enhancement in INDIA

Government support for productivity through propagating Productivity

Consciousness in society.
Initiating long term policies for productivity growth Government can improve tax policy, develop better labour legislation, Provide better access to natural resources, improve social infrastructure, price policy but individual org cannot. Productivity improvement cells in all industrial units and govt. ministries. Productivity awards for the public & industrial sector.

 Varundeep Prateek Madaan