Productivity objectives

1. To compare effectiveness and efficiency of Management

2. To youth life the resource profitably
3. To achieve continuous productivity improvement
4. To make all resources more productive
5. To find the opportunities for innovation in production process
6. To identify the most promising areas for productivity improvement

Productivity plan

"The productivity is never an accident. It is always the result of a commitment to excellence

intelligent planning and focused affort."

Hey productivity plan is consist of specific plan of action and that design to improve the
productivity that means a well structured plan in advance to what we produce how we produce
and how to improve the productivity. The organisational productivity plan typically address three
main elements

1. Operational planning
2. Tactical planning
3. Strategic planning
4. Individual productivity planning

Operational planning is defined have who what and when things need to be done it should
include the coordination of suppliers, vendors, material, and day-to-day work activities to
ensure workers have access to the resource necessary to do their job.

Tactical planning systematically organising and planning short term business activities in a
manner that is consistent with overall strategic goal.

Strategic planning is the process consists of the development and implementation of policies
and procedure design to attain day today as well as long term work activities with the overall
mission and vision of the organisation.

Individual productivity managers and suppliers main set productivity goal for individual workers
has a life providing training to help workers improve the communication, eliminate time waste
and manage their time wisely.

Productivity audit
Hey productivity audit determine management effectiveness and resource utilisation efficiency
and identify the most promising area for productivity improvement that means, the
measurement of source of input how to utilise for production.
Types of productivity audit

Material productivity audit. Labour productivity audit. Capital productivity audit.

Material productivity audit deal with examine and evaluate the productivity of material used.
There have Tu two aspects. One obtaining more of a given output than before at the same cost
of material consumed. Secondly obtaining a given output at a lower cost of material consumed
than before. Under the material productivity audit if evaluate how the material used in optimal
manner

Labour productivity audit is atom 2 exam in and evaluate the labour productivity in two aspects
one. Obtaining the highest output at the same labour cost. To. Obtaining the given output at
lower labour cost than before.

Capital productivity audit. Examine and evaluate the productivity of capital by analysing the
quantity produced and the amount of capital used in the course of production.
Advantages of productivity audit
It help to diagnose the operational weakness by a review of The organisations environment. 2.
The resources in business are utilising in a constructive Mannar, and profitable. 3. Measure the
obligation of Management and staff in production. 4. How to attain the organisational goal. 5. It
help to identify means for improving productivity.

Limitations of problem associated with productivity audit

The factorial input have got different unit Koriya district of measurements that means no clear
yardstick for measuring the productivity. Secondly difficult to measure the independence of input
items that is so many input are interdependent and independent show the measurement of the
integrated nature of work cannot be in common factor.
Third limb Mini input variable measure in different ways therefore the common productivity factor
cannot be identified in single step then finally productivity comparison is difficult. The variables a
b c can make product A.The combination of BAC variable can make product Y. And the variable
CBA can make product Z. Here the basic input are raw material a b c.
The combination different input can create different output. the different output can sold in
different price. So the revenue generated from each output may be different that is one of the
limitation of measuring the exact productivity and productivity audit.

Total Productivity Management (TPMgt)

lotal productivity management is concerned with identifying productivity problems a

taking steps to solve these problems so as to improve productivity continuously.Ahere are

many factors affecting productivity. All such factors must be managed in a way that producti
IS improved. TPMgt covers what productivity is, how it is measured, and what a company
do to increase it.

TPMgt may be described in the following way.

Total: Effectively use all company resOurces, to

Productivity.: Increase product power, and enhance customer satistaction, in the contex

Management: Clear business direction, an integrated, visible improvement plan, a consi

Set or improvement strategies, and an appropriate pertormance measurement system

Improvement using Total Productivity Management

The process of TPMgt's improvement involves the folloWing steps
Erst-understand the strategic, business customer and employees context within whi

improvement is to be made. Then apply the three-step sequence.

Now-Start with a realistic review of the current situation, including feedback, measur

analysis, critique, comparison and evaluation.

How- Define the steps involved in moving from the current situation to the desired

state- and then standardise to sustain the new levels.

Where-Develop a desired future state that embraces vision, purpose, goals and asp

Pareto Analysis

Pareto Analysis is a technique used for business decision making based on the 80
Pareto analysis is based on the idea that 80% ofa project's benefit can be achieved
20% of the work or conversely 80% of problems are traced to 20% 0f the causes

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8 MIN READ
Pareto Analysis
Choosing the Solution With the Most Impact
Imagine that you've just been promoted to head of department. You're brimming with ideas
about how to improve things, so where do you start?

Ideally, you want to focus on fixing the problems that have the biggest impact. But how do you
decide which one to tackle first?

Pareto Analysis is a simple decision-making technique for assessing competing problems and
measuring the impact of fixing them. This allows you to focus on solutions that will provide the
most benefit.

In this article, we'll show you how to carry out a Pareto Analysis, and explain how to use your
findings to prioritize tasks that will deliver the greatest positive impact.

What Is Pareto Analysis?

Pareto Analysis uses the Pareto Principle – also known as the "80/20 Rule" – which was coined
by Italian economist, Vilfredo Pareto, in his 1896 book, "Cours d'économie politique."

The Pareto Principle states that 80 percent of a project's benefit comes from 20 percent of the
work. Or, conversely, that 80 percent of problems can be traced back to 20 percent of causes.
Pareto Analysis identifies the problem areas or tasks that will have the biggest payoff. The tool
has several benefits, including:

Identifying and prioritizing problems and tasks.

Helping people to organize their workloads more effectively.
Improving productivity.
Improving profitability.
Note:
The figures 80 and 20 aren't "set in stone," and should be taken as a guide. The Pareto
Principle illustrates the lack of symmetry that often occurs between the work you put in and the
results you achieve. For example, you might find that 13 percent of work could generate 87
percent of returns. Or that 70 percent of problems could be resolved by dealing with 30 percent
of underlying causes.

Pareto Analysis Steps

Now, we'll take a look at how to carry out a Pareto Analysis:

1. Identify and List Problems

Write out a list of all of the problems that you need to resolve. Where possible, gather feedback
from clients and team members. This could take the form of customer surveys, formal
complaints, or helpdesk logs, for example.

2. Identify the Root Cause of Each Problem

Next, get to the root cause of each problem. Techniques such as the 5 Whys , Cause and Effect
Analysis , and Root Cause Analysis are useful tools for this.

3. Score Problems
Now, score each problem that you've listed by importance. The scoring method that you use will
depend on the sort of problem that you're trying to resolve.

For example, if you want to improve profits, you could score problems by how much they cost.
Or, if you're trying to improve customer satisfaction, you might score them based on the number
of complaints that you've received about each.

4. Group Problems Together

Use the root cause analysis that you carried out in Step 3 to group problems together by
common cause. For example, if three of your problems are caused by lack of staff, you could
put these into the same group.

5. Add up Scores for Each Group

Now, add up the scores for each group that you've identified. The one with the top score should
be your highest priority, and the group with the lowest score your lowest priority.

6. Take Action
Finally, it's time to take action! Your highest scoring problem will likely have the biggest payoff
once fixed, so start brainstorming ideas on how to solve this one first.

You may find that your lowest-scoring problems aren't worth bothering about, particularly if they
are very costly to fix. Use your Pareto Analysis to save your energy and resources for what's
important!

Tip:
While this approach is great for identifying the most important root cause to deal with, it doesn't
take into account the cost of doing so. Where costs are significant, you'll need to use techniques
such as Cost/Benefit Analysis , and Net Present Value (NPV) and Internal Rate of Return (IRR)
to determine which changes you should implement.

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Pareto Analysis Example
Jack has taken over a failing computer service center, with a host of problems that need
resolving. His objective is to increase overall customer satisfaction.

He decides to carry out a Pareto Analysis to assess and prioritize the biggest issues facing the
center. He starts by listing these (see the Problem column in the table, below). He then
identifies the underlying causes behind each (see the Causes column). Finally, he scores each
item by the number of customer complaints that each has received (see the Score column).

Items Problem Cause Score

1 Phones aren't answered quickly enough. Too few customer service staff. 15
2 Staff seem distracted and under pressure. Too few customer service staff. 6
3 Engineers aren't well organized and often need to book second visits to bring extra
parts. Poor organization and preparation. 4
4 Engineers don't know what time they'll arrive. This means that customers may have to
be in all day for an engineer to visit. Poor organization and preparation. 2
5 Customer service staff don't always seem to know what they're doing. Lack of
training. 30
6 Customers are often booked in for an appointment with an engineer, only to discover
that the issue could have been solved on the phone. Lack of training. 21
Jack uses his analysis to group problems together by cause, then adds up the scores for each
group identified. He is now able to order the main causes affecting the center, starting with the
one that has attracted the highest number of customer complaints:

Lack of training (items 5 and 6) – 51 complaints.

Too few service center staff (items 1 and 2) – 21 complaints.
Poor organization and preparation (items 3 and 4) – 6 complaints.

Figure 1. Pareto Analysis of Computer Services Center

Pareto Analysis Example
As you can see from figure 1, above, the business will benefit most from giving staff more
training, so Jack should tackle this first. He could also look to increase the number of staff in the
call center. However, it's possible that this won't be necessary – the provision of further training
may help to reduce customer complaints and increase staff productivity.

Jack's Pareto Analysis has enabled him to quickly identify the areas of the business that face
the biggest challenges, so he can focus his efforts where they are needed most and prioritize
issues that will provide the biggest payoff to the business. This will likely save him a great deal
of time and money that he might otherwise have spent trying to fix a range of different issues,
some of which may have provided very little benefit.

Key Points
Pareto Analysis is a simple decision-making technique that can help you to assess and prioritize
different problems or tasks by comparing the benefit that solving each one will provide.

It's based on the Pareto Principle (also known as the 80/20 Rule) – the idea that 80 percent of
problems may be the result of as little as 20 percent of causes.

To use Pareto Analysis, you first need to identify and list the problems that you face, and their
root causes. Then, score each problem according to its impact (the scoring system that you use
will depend on the types of problems that you are attempting to fix).

Group the problems together by cause and add up scores for each group. This will allow you to
identify the problems that will have the biggest benefits if resolved.

Finally, use your findings to prioritize your workload, so that your efforts can be directed toward
issues that are the most impactful, and away from problems that are less impactful.

Steps in Pareto Analysis

the major steps involved in pareto analysis are as follows

1 Identify the problem or problems
2 List or identify the cause of the issues or problems noting that there could be multiple causes

3.Score the problems by assigning a number to each one based on the level of impact on the
company. The higher the score, the greater the impact.
4.Organize the problems into groups such as customer service or system issue.

S. Develop and implement an action plan to solve the problems by focusing on the higher
scored problems first

Usefulness of Pareto Analysis.

1 The usefulness of Pareto Analysis may be understood from the following.

Today, Pareto Analysis is employed by business managers in all industries to determined

which issues cause the most problems within their departments,organization etc.,
A good approach typically involves conductinga statistical technque.,
effect analysis, to produce a list of potential problems and the out come of these problems.
Following the information provided from the cause and effect analysis, the 80/20 analysis
can be applied.

2. By allocating resources to the issues with higher scores, companies can solve problems more
efficiently by targeting those having a higher impact on the business.
3. It has more utility in quality control. It helps to detect the major causes for defect in the
product.
4 It is useful in knowing which products are more profitable so that the firm can increase the
production of such product.

Steps in Pareto Analysis

the major steps involved in pareto analysis are as follows

1 Identify the problem or problems
2 List or identify the cause of the issues or problems noting that there could be multiple causes

3.Score the problems by assigning a number to each one based on the level of impact on the
company. The higher the score, the greater the impact.
4.Organize the problems into groups such as customer service or system issue.

S. Develop and implement an action plan to solve the problems by focusing on the higher
scored problems first

Usefulness of Pareto Analysis.

1 The usefulness of Pareto Analysis may be understood from the following.

Today, Pareto Analysis is employed by business managers in all industries to determined

which issues cause the most problems within their departments,organization etc.,
A good approach typically involves conductinga statistical technque.,
effect analysis, to produce a list of potential problems and the out come of these problems.
Following the information provided from the cause and effect analysis, the 80/20 analysis
can be applied.

2. By allocating resources to the issues with higher scores, companies can solve problems more
efficiently by targeting those having a higher impact on the business.
3. It has more utility in quality control. It helps to detect the major causes for defect in the
product.
4 It is useful in knowing which products are more profitable so that the firm can increase the
production of such product.

Steps in Pareto Analysis

the major steps involved in pareto analysis are as follows

1 Identify the problem or problems
2 List or identify the cause of the issues or problems noting that there could be multiple causes

3.Score the problems by assigning a number to each one based on the level of impact on the
company. The higher the score, the greater the impact.
4.Organize the problems into groups such as customer service or system issue.

S. Develop and implement an action plan to solve the problems by focusing on the higher
scored problems first

Usefulness of Pareto Analysis.

1 The usefulness of Pareto Analysis may be understood from the following.

Today, Pareto Analysis is employed by business managers in all industries to determined

which issues cause the most problems within their departments,organization etc.,
A good approach typically involves conductinga statistical technque.,
effect analysis, to produce a list of potential problems and the out come of these problems.
Following the information provided from the cause and effect analysis, the 80/20 analysis
can be applied.

2. By allocating resources to the issues with higher scores, companies can solve problems more
efficiently by targeting those having a higher impact on the business.
3. It has more utility in quality control. It helps to detect the major causes for defect in the
product.
4 It is useful in knowing which products are more profitable so that the firm can increase the
production of such product.

Steps in Pareto Analysis

the major steps involved in pareto analysis are as follows

1 Identify the problem or problems
2 List or identify the cause of the issues or problems noting that there could be multiple causes

3.Score the problems by assigning a number to each one based on the level of impact on the
company. The higher the score, the greater the impact.
4.Organize the problems into groups such as customer service or system issue.

S. Develop and implement an action plan to solve the problems by focusing on the higher
scored problems first

Usefulness of Pareto Analysis.

1 The usefulness of Pareto Analysis may be understood from the following.

Today, Pareto Analysis is employed by business managers in all industries to determined

which issues cause the most problems within their departments,organization etc.,
A good approach typically involves conductinga statistical technque.,
effect analysis, to produce a list of potential problems and the out come of these problems.
Following the information provided from the cause and effect analysis, the 80/20 analysis
can be applied.

2. By allocating resources to the issues with higher scores, companies can solve problems more
efficiently by targeting those having a higher impact on the business.
3. It has more utility in quality control. It helps to detect the major causes for defect in the
product.
4 It is useful in knowing which products are more profitable so that the firm can increase the
production of such product.

Steps in Pareto Analysis

the major steps involved in pareto analysis are as follows

1 Identify the problem or problems
2 List or identify the cause of the issues or problems noting that there could be multiple causes

3.Score the problems by assigning a number to each one based on the level of impact on the
company. The higher the score, the greater the impact.
4.Organize the problems into groups such as customer service or system issue.
S. Develop and implement an action plan to solve the problems by focusing on the higher
scored problems first

Usefulness of Pareto Analysis.

1 The usefulness of Pareto Analysis may be understood from the following.

Today, Pareto Analysis is employed by business managers in all industries to determined

which issues cause the most problems within their departments,organization etc.,
A good approach typically involves conductinga statistical technque.,
effect analysis, to produce a list of potential problems and the out come of these problems.
Following the information provided from the cause and effect analysis, the 80/20 analysis
can be applied.

2. By allocating resources to the issues with higher scores, companies can solve problems more
efficiently by targeting those having a higher impact on the business.
3. It has more utility in quality control. It helps to detect the major causes for defect in the
product.
4 It is useful in knowing which products are more profitable so that the firm can increase the
production of such product.

5.It is also useful in measuring the performance of sales force.

6. It can be used in dealing with customer complains.

7.Pareto Analysis is a simple technique for prioritizing possible changes by identifying the
problems that will be resolved by making these changes. by using this approachthe
can prioritize the individual changes that will most improve the Situation.

9. This tool can also be used with other situations such ds.

a) When firms have a lot of data and you want to analyze it.
D when firms want to identify the main cause for most of the problems.
C)when communicating data with stakeholders.
d) When firms want to prioritize tasks.
e) When firms want to see the relative importance of data.

10. Pareto analysis can be very helpful in resolving contlicts, particulary it a project involves
many moving parts or crosses over many different units or work functions.

The following are a few benefits of Pareto analysis:

One. Drawing of a pareto chart is easy.

2.This diagram helps segregate the problems and their causes.

3.It helps focus on solving the few causes which are generating the maximum amount of
problems.
4.It shows the problems to focus and get the most significant improvement.
5.This chart helps visualize problems quickly. So this is an excellent visual communication
tool as well.

Limitations of Pareto Analysis.

1. The Pareto principle is a rule of thumb which is not a universal law and cannot be applied in
all cases.
2. It does not help to find the root cause of the problem, so firms will need another tool such as
root cause analysis to use it effectively.
3. If there are many problems firms may need more sub-pareto chart to segregation with
sometime maybe cumbarasam.
4. Though a pareto chart show the frequency of a problem it can you show the the separately.

5. The Pareto analysis rocuses On past data which might not be significant to current or future
scenario.

Applications ot Pareto Analysis

A pareto analysis is able to do the analysis of the bulk of data. It can be applied

1.For the analysis of the revenue growth of the organisation with respect to the time period.
2. To choose To any specific data and work on it, in a broad set of data available.
3. To explain to other people the set of data firms have.
4. For tne analysis of population growth in a city or country or all over the Wond every year.
5.To check the global problems and focus on resolving the major one.
6.To check the major complaints coming from the public and resolve them resolve them on
priority.

5.