Productivity, Production Systems and Industrial Ownership

attachments and other devices. Total production times can be cut short
considerably by improving machine setting up methods, thereby reducing set-up
times. Proper maintenance will avoid sudden breakdown and add to the
producti vity.
(4) Land and Buildings: A suitable plant layout can accommodate
more machinery in the same space and thus raise productivity. Proper
orientation, construction and inside conditions of a building definitely affect
productivity.

2.6 IMPORTANCE OF PRODUCTIVITY

The importance of the concept of productivity can be viewed from the
following points :
(1) To Beat the Competition: It is an age of cut-throat competition.
There may be other commodities' which can serve as the substitutes of the
company's 'product' and can attract the consumers' purchasing power. The firm
whose productivity is higher can only beat the competition and can exist in the
market for long.
(2) Guide to Management: The productivity indices are very useful for
the management and can be used for different purposes. These indices can serve
as a valuable guide to the management for improving the performance of its
enterprise. The productivity measures can be used for the following purposes:
(i) Strategic: With the help of productivity indices, the efficiency of
different firms can be measured, analyzed and compared. The necessary
steps can be taken to improve the productivity of the firm taking.in view
the productivity of the other competitive firms.
(ii) Tactical: Different units or the sectors of the firm can also be
compared as regards to their productivity. The productivity of the less
productive units or sectors can be improved.
(iii Planning: A firm uses different inputs in producing the goods. A
comparison of relative benefits accruing from the use of different inputs
can be had and the most beneficial input can be used in production. It
helps the management to plan for the future.
(iv) Administration: Productivity indices indicate the progress of the firm
over a period of years. The productivity of different inputs, including
labour, can be measured individually. The individual productivity
indices help the management in bargaining with the labour leaders,
trade unions and the Government in case of labour disputes regarding
welfare activities.
(3) Indicator of Progress: In economically backward countries,
productivity movement is basic aspect of progress. It implies the development of
an attitude of mind and a constant urge to better, cheaper, quicker and safer
ways of doing ajob, manufacturing a product and providing a service. In an urge
to improve the productivity, new inventions take place. Thus, productivity is an
aspect of basic progress.

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(4) Maximum Utilization of Scarce Resources: In order to provide

the articles or commodities to the consumers at the lowest possible cost, the
productivity concept urges to utilize the available resources to the maximum for
the satisfaction of customers. The productivity processes and techniques are
designed to facilitate more efficient work involving less fatigue to workers by
improvements in the layout of the plant and work, better working environment
and simplification of works.
(5) Key to National Prosperity: The productivity, in fact, has become
the synonymous to progress. Higher productivity is an index of more production
with the same inputs at lower cost. It enables industry to offer goods to the
general public at cheaper rates and results in expansion of markets. The working
conditions and wages of workers will improve and industrialists too will get
larger profits. Thus, higher productivity is the key to national prosperity. The
secrets of Japan and Western countries' prosperity lie in increased productivity.
(6) Prosperity to Labour': The higher productivity is a boon to labour
also. It brings improved working conditions, better wages and salaries to
workers, better labour welfare activities etc. Thus, their standard of living is
improved.
(7) Other Uses:
(i) Higher productivity increases the profits and reserve funds of the
industry that can be used for expansion and modernization.
(ii) It increases the goodwill of the firm due to cheaper goods to the public,
well-off staff and more profits and better financial position.
(iii) It improves the competitive strength of the company in export markets
through reduction in cost of production and quality products.
In this way, increasing productivity is the only way to make the overall
progress of the country.

~2.7 TECHNIQUES OF INCREASING PRODUCTIVITY

The various techniques or ways by which productivity can be increased are:
(1) Product Development: Product development reduces work content
due to design defects and excess material removal. It also reduces ineffective
time.
(2) Specialization and Standardization: Specialization reduces idle
time through variety reduction. Standardization reduces idle time due to short
runs and due to increased batch sizes.
(3) Market, Consumer and Product Research: Market research is
done to find out the problems relating to sale of goods. Consumer research is the
process of analyzing information obtained from consumers of the products for
making those products more suitable for them. Product research is a research to
find out whether it fulfills its functional requirements.
Market, consumer and product research ensure correct quality standards.
Hence, more rejects, rework and waste of material can be avoided.

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(4) Value Analysis: This is systematic investigation of the product to

reduce cost and improve value. Value analysis reduces excess work content due
to design defects and excess material.
(5) Process Planning and Research: Process planning ensures
selection of correct machines. Thus it reduces work content due to usc of wrong
machines. Process research ensures correct operation and hence excess work
content due to inefficient process is reduced.
(6) Method Study: Method study is a technique to simplify the job and
develop more economical methods of doing it. By method study, layout may be
improved. The wasted movements caused due to bad layout can be eliminated.
(7) WorkMeasurement: Proper production planning can be worked out
only by knowing accurately the time required for completion ofjob. The standard
:ime for completion of a job is set by the use of work measurement.
(8) Operator Training: ,Through training or re-training of workers,
sound and uniform working methods can be ensured. Operator training reduces
work content due to bad working methods.
(9) Production Planning and Control: Proper planning and control
reduces idle time of men and machines. In other words, effective production
planning and control will reduce the ineffective time.
(0) Material Control: Irregular supply of materials may cause idle
: .me of men and machines. Material control ensures right type of material, at
:-:ght time, in right quantities and at competitive prices. It avoids locking up
-spital and reduces manufacturing cost.
(11) Plant Maintenance: Lack of proper maintenance results in
- reakdown of machines and plant. This in turn causes idleness of men and
-~!achines, reduces productivity and increases cost of manufacturing. Proper
.naintenance reduces idle time of men and machines due to breakdowns. Plant in
.ood condition reduces ineffective time.
(12) Improved Working Conditions: Bad working conditions force the
v orkers to take more rest. Heating, ventilation, lighting, colour, noise level,
~-:,rsonalcomfort, etc., will have their own effect on productivity. Good working
_mditions enable the workers to work efficiently to raise productivity.
(13) Safety: Unsafe conditions and unsafe acts cause accidents.
_:.2cidentsresults in loss of time. Safety measures will reduce ineffective time due
- :> accidents.

(4) Personnel Policy: This refers to the complete policy of the

--:',anagement towards employees, in matters like method of remuneration,
..elfare services, relations with trade unions, social security, etc. A sound
::ersonnel policy will create a good relationship between management and
-rnplcyees and reduce ineffective time due to absence, idleness, lateness,
_arelessness, etc.
(15) Incentives: Workmen, in general, will not produce on their own
.ipto their capacity. The workers' interest in increased production can be
=::mulated only by rewards that satisfy them. Incentive wage system (the
.rnount earned is dependent on the production) arouses interest in an employee
') produce more.

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2.8 PROCEDURE FOR INCREASING PRODUCTIVITY

(1) Improving the Existing Method of Plant Operation: The use of
systematic procedure is recommended to improve the productivity. Method study
and work measurement may be used to improve the existing method to select a
process, machines, tools, etc.
The first step is to gather all information about the process and present it in
a form suitable for study. Information gathered may include all operations,
facilities, transportation facilities used, distances moved, all inspections,
inspection time, storage facilities and time spent in storage, all drawing and
design specifications etc. This information may be presented in the form of flow
process chart.
The usual technique is the critical examination which consists of asking
questions on every activity shown on the flow process chart and then finding out
the best possible answer. The answers to these questions may result in the
elimination or combination of some of the elements of operation; improvement
in the plant layout; rearranging the operations in an efficient way, proper
selection of machines and tools; reduction of scrap and improvement in quality of
the products manufactured.
(2) Purpose of Operation : Before accepting any operation as absolutely
necessary, the analyst should determine the purpose of the operation. Possibly,it
may be found that some operations are unnecessary.
(3) Design of Part : The product designs are not permanent. They can be
changed, and improvement is possible. To improve the design, the production
engineer should keep in mind the following points that may be helpful in
reducing the cost of design under study:
(i) Reduce number of parts, thus simplifying the design.
(ii) Reduce the number of operations and length of travel in the
manufacturing by joining parts better and making the machining and
assembly easier.
(iii) Utilize a better and economical material.
(iv) Rely on accuracy for key operations.
(v) Install efficient system of quality control.
(vi) Standardize the materials, processes, tools used and the sequence of
operations, etc.
(4) Tolerance and Specifications: Functional designers have a
tendency to specify closer tolerance than necessary while developing the
products. Enforcing tolerances that are too tight or rigid tends to increase cost of
production. On the other hand, if the tolerances are too liberal, the value of the
product decreases. It is difficult to achieve interchangeability of manufacture.
Therefore, instead of having tight tolerances which are loosely enforced, it is
necessary to design realistic tolerances and create controls needed to enforce
them strictly. The designers may consult the production engineers and cost
analysis group for setting realistic tolerances. The design should be optimum
based on type of customers in the market.

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(5) Effective Utilization of Materials: There are many industries in

which the cost of material is a big percentage of the cost of the finished product.
Many industries have to import a very large proportion of their basic raw
materials and pay for them in scarce foreign currencies. Under either of these
conditions higher productivity can be achieved through proper use of materials
and reduction of scrap.
The material to be used is actually specified by the designer but the
production engineer should try to find out alternative economical materials
which will not affect the proper functioning of the product.
(6) Process of Manufacture: There are many manufacturing processes.
Moreover, a part or component can be manufactured by two or more processes.
The process selected must be an economical balance of material, manpower,
product design, tooling and equipment, plant space and other factors influencing
cost and practicability. The break even analysis may be used for selection of the
economical process for a given volume of production. In order to reduce the cost
considerably, proper speeds and feeds should be used. The grinding of cutting
tool should be proper to enhance the rate of production and reduce the number of
regrindings. Cutting tools should be properly mounted and right lubricant
should be used. Proper maintenance will ensure that plant and machinery is
operating properly and will prolong its life, so reducing capital expenditure.
(7) Set-up and tools: The economic advantage of lower labour costs is
the controlling factor in the determination of the tooling. Other considerations
such as improved interchangeability, increased accuracy, reduction of labour
trouble, increased rate of production are dominant reasons for use of jigs and
fixtures.
Set-up times depends on tooling considerations since, it determines the
set-up time and tear-down time. When the ratio of set-up time to production
run-time is high, then the methods engineer should develop possibilities for
set-up and tool improvements.
(8) Working Conditions: Working conditions means the condition of
the plant where the actual work is carried out. Working conditions should be
good, safe and comfortable. Experiments have proved that plants providing good
working conditions have more productivity. Ideal. working conditions will
improve the safety record, reduce absenteeism and tiredness, raise employee
morale, help to motivate the workers to improve their efficiency and hence,
enhance the productivity. Some common conditions for improving working
conditions are :
CD Proper lighting in the working areas.
(ii) Control of temperature so that it is neither too cold nor too hot.
(iii) Provision of adequate ventilation.
(iv) Controlling excessive noise levels.
(v) Proper cleanliness and good house keeping.
(vi) Arrangement of disposal of dusts, fumes and gases produced during i
operations.
(vii) Provision of necessary protective equipment.

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