Project on

Productivity Improvement in
Direct Blanked indexes

Submitted By:
Manpreet Singh
 Productivity
Productivity is an index that measures output
(goods and services) relative to the input (capital,
labor, materials, energy, and other resources) used
to produce them.

It is usually expressed as the ratio of output to

input:

Output
Productivity = ---------------
Input
 Ways to Increase
Productivity
Increase output by using the same or a lesser amount
of (input) resource.
Reduce amount of (input) resource used while keeping
output constant or increasing it.
Use more resource as long as output increases at a
greater rate.
Decrease output as long as resource use decreases at
a greater rate.
Production is concerned with the activity of producing
goods and services.
Productivity is concerned with the efficiency and
effectiveness with which these goods and services are
produced.
Variables Affecting Labor
Productivity
Physical work environment
Technology, equipment, materials, lighting, layout

Product quality
Defects, scrap, rework

Employee job performance

Employee ability, motivation
 Modifying Jobs to Provide
Broader Range of Needs
Satisfaction
Cross training workers perform multiple jobs
Job enlargement is a horizontal expansion of job
tasks; that is, the worker is assigned more tasks at the
same general skill level.
In a manufacturing setting, job enlargement might mean
having a worker do several tasks at a work station rather
than only one or two.
In a bank, it might mean training a person to write car loans,
and installment loans rather than only one of these.
Job Enrichment involves vertical expansion of a
jobs responsibilities and skills.
It may mean that a production worker is involved in the
design of the product or production process is responsible for
his own quality testing, handles customer complaints, or
deals directly with suppliers.
Team production -- organizing workers into teams;
assigning management responsibility to teams
METHODS ANALYSIS AND IMPROVEMENT
Specifying the tasks and responsibilities of a job is only
the first step in the job design process.
The next step is to determine how to perform the tasks,
that is, determine the best work methods.
Best work methods are
the most efficient physical movements of the worker,
the best sequence in which to perform movements or
tasks, and
the best way to coordinate the workers actions with
those of machines and other workers.
This information must be conveyed to the workers through
training and appropriate supervision and feedback.
 METHODS ANALYSIS
A logical approach to deciding what tasks should be done
and how they should be done is called methods analysis.

Methods analysis utilizes

structured data collection,
visual aids and charts, and
logical procedures to help understand and improve work
methods.

Methods analysis relies on obtaining good observational

and experimental data.

Methods analysis focuses primarily on the activities of

individual workers or groups of related workers.
 Labor Standards
A labor standard is the number of worker-minutes
required to complete an element, operation, or
product under ordinary operating conditions.
Labor standards are used in:
Cost estimation
Pricing of products and services
Incentive pay systems
Capacity planning
Production scheduling

A labor standard can be determined using one or

more of the following approaches:
Time study
Work sampling
Predetermined time standards
 Time Study
Job is performed by a single worker in a fixed location
Job involves repetitive short cycles
Job is expected to continue unchanged for a long
period
Job produces large quantities of output
Resulting time standard must be very accurate
Analysts use stopwatches to time the operation being
performed by workers
These observed times are then converted into labor
standards
The labor standards are expressed in minutes per unit
of output for the operation
Determining Labor Standards
from Time Studies

Performance Allowance
Rating Fraction

Observed Normal Standard

Time Time Time
Example: Time Study Approach
In a time study of a manufacturing operation,
the average time observed to complete a
product was 8.6 minutes. The performance
rating applied to the observed worker was 0.95
and the allowance during an 8-hour shift was
12.5% or 60 minutes.

Compute the labor standard.

 Example: Time Study
Approach

Observed time = 8.6 minutes

Performance rating = 0.95
Allowance fraction = 0.125
Normal time = Observed time x Performance
rating
= 8.6 x 0.95
= 8.17 minutes
Standard Time = Normal time / (1 - Allowance)
= 8.17 / (1 - 0.125)
= 8.17 / (0.875)
= 9.337 minutes
 Work Sampling
The work of one or more employees is
randomly sampled at periodic intervals

The results of these studies are used to:

Set allowances used in labor standards

Set labor standards
 Work Sampling
Job performed by a single worker in a fixed
location
Job involves repetitive short cycles
Job expected to be changed periodically as
customer orders change
Job produces relatively small quantities of output
Resulting time standard used for accounting
cost standard, pricing analysis, and production
planning
 Example: Work
Sampling
A work sampling study was performed on an
electronic assembly operation at OK
Instruments. The study covered an 8-hour shift
with a single worker. The results of the study
were:

Activity % of Workers Time

Assemble Units 80
Allowances 20

If the worker received a performance rating of

1.20 on the Assemble Units activity and 400
units were assembled during the study, what is
the labor standard for this operation?
 Example: Work Sampling
1) Compute the average time per assemble:
Total Minutes of Assembly Work
Number of Units Assembled
= 0.80(480)/400 = 0.960 minutes per unit
2) Compute the normal time per unit:
= (Average Time per Unit) (Performance Rating)
= 0.960 (1.20) = 1.152 minutes per unit
3) Compute the labor standard:
= Normal Time / (1 Allowance Fraction)
= 1.152 / (1 - 0.20) = 1.44 minutes per unit