PRODUCTIVITY PROBLEMS IN MANAGEMENT

Productivity refers to the ratio between the output from production

processes to its input.Productivity may be conceived of as a measure
of the technical or engineering efficiency of production. As such
quantitative measures of input, and sometimes output, are
emphasized.
Typical Productivity Calculations
Measures of size and resources may be combined in many different
ways. The three common approaches to defining productivity based
on the model of Figure 2 are referred to as physical, functional, and
economic productivity. Regardless of the approach selected,
adjustments may be needed for the factors of diseconomy of scale,
reuse, requirements churn, and quality at delivery.
a) Physical Productivity
This is a ratio of the amount of product to the resources consumed
(usually effort). Product may be measured in lines of code, classes,
screens, or any other unit of product. Typically, effort is measured in
terms of staff hours, days, or months. The physical size also may be
used to
estimate software performance factors (e.g., memory utilization as a
function of lines of code).
b) Functional Productivity
This is a ratio of the amount of the functionality delivered to the
resources consumed (usually effort). Functionality may be measured
in terms of use cases, requirements, features, or function points (as
appropriate to the nature of the software and the development
method).
Typically, effort is measured in terms of staff hours, days, or months.
Traditional measures of Function Points work best with information
processing systems. The effort involved in embedded and scientific
software is likely to be underestimated with these measures, although
several variations of Function Points have been developed that
attempt to deal with this issue.
c) Economic Productivity
This is a ratio of the value of the product produced to the cost of the
resources used to produce it. Economic productivity helps to evaluate
the economic efficiency of an organization.
Economic productivity usually is not used to predict project cost
because the outcome can be affected by many factors outside the
control of the project, such as sales volume, inflation, interest rates,
and substitutions in resources or materials, as well as all the other
factors that affect physical and functional measures of productivity.
However, understanding economic
productivity is essential to making good decisions about outsourcing
and subcontracting. The basic calculation of economic productivity is
as follows: Economic Productivity = Value/Cost
PROBLEMS IN MEASUREMENT OF PRODUCTIVITY OF
KNOWLEDGE WORKERS
Productivity implies measurement, which in turn, is an essential step
in the control process. Although there is a general agreement about
the need for improving productivity, there
is little consensus about the fundamental causes of the problem and
what to do about them.
The blame has been assigned to various factors. Some people place it
on the greater proportion of less skilled workers with respect to the
total labor force, but others disagree. There are those who see cutback
in research and the emphasis on immediate results as the main culprit.
Another reason given for the productivity dilemma is the growing
affluence of people, which makes them less ambitious. Still others
cite the breakdown in family structure, the workers’ attitudes, and
government policies and regulations. Another problem is that the
measurement of skills work is relatively easy, but it becomes more
difficult for knowledge work. The difference
between the two kinds is the relative use of knowledge and skills.
COST CONTROL
Cost control is the measure taken by management to assure that the
cost objectives set down in the planning stage are attained and to
assure that all segments of the organization function in a manner
consistent with its policies.
Steps involved in designing process of cost control system:
• Establishing norms: To exercise cost control it is essential to
establish norms, targets or parameters which may serve as yardsticks
to achieve the ultimate objective. These standards, norms or targets
may be set on the basis of research, study or past actual.
• Appraisal: The actual results are compared with the set norms to
ascertain the degree of utilization of men, machines and materials.
The deviations are analyzed so as to arrive at the causes which are
controllable and uncontrollable.
• Corrective measures: The variances are reviewed and remedial
measures or revision of targets, norms, standards etc., as required are
taken.
Advantages of cost control
• Better utilization of resources
• To prepare for meeting a future competitive position.
• Reasonable price for the customers
• Firm standing in domestic and export markets.
• Improved methods of production and use of latest manufacturing
techniques which have
the effect of rising productivity and minimizing cost.
• By a continuous search for improvement creates proper climate for
the increase
efficiency.
• Improves the image of company for long-term benefits.
• Improve the rate of return on investment.
PURCHASE CONTROL
Purchase control is an element of material control. Material
procurement is known as the purchase function. The functional
responsibility of purchasing is that of the purchase manager
or the purchaser. Purchasing is an important function of materials
management because in purchase of materials, a substantial portion of
the company's finance is committed which affects cash flow position
of the company. Success of a business is to a large extent influenced
by the efficiency of its purchase organization. The advantages derived
from a good and adequate system of the purchase control are as
follows:
a) Continuous availability of materials: It ensures the continuous
flow of materials. So production work may not be held up for want of
materials. A manufacturer can complete schedule of production in
time.
b) Purchasing of right quantity: Purchase of right quantity of
materials avoids locking up of working capital. It minimizes risk of
surplus and obsolete stores. It means there should not be possibility of
overstocking and understocking.
c) Purchasing of right quality: Purchase of materials of proper
quality and specification avoids waste of materials and loss in
production. Effective purchase control prevents wastes and losses of
materials right from the purchase till their consumptions. It enables
the management to reduce cost of production.
d) Economy in purchasing: The purchasing of materials is a highly
specialized function. By purchasing materials at reasonable prices, the
efficient purchaser is able to make a valuable contribution to the
success of a business.
e) Works as information centre: It serves as a function centre on the
materials knowledge relating to prices, sources of supply,
specifications, mode of delivery, etc. By providing continuous
information to the management it is possible to prepare planning for
production.
f) Development of business relationship: Purchasing of materials
from the best market and from reliable suppliers develops business
relationships. The result is that there may be smooth supply of
materials in time and so it avoid disputes and financial losses.
g) Finding of alternative source of supply: If a particular supplier
fails to supply the materials in time, it is possible to develop alternate
sources of supply. the effect of this is that the production work is not
disturbed.
h) Fixing responsibilities: Effective purchase control fix the
responsibilities of operating units and individuals connected with the
purchase, storage and handling of materials.
In short, the basic objective of the effective purchase control is to
ensure continuity of supply of requisite quantity of material, to avoid
held up of production and loss in production and at the same time
reduces the ultimate cost of the finished products.
MAINTENANCE CONTROL
Maintenance department has to excercise effective cost control, to
carry out the maintenance functions in a pre-specified budget, which
is possible only through the following measures:
First line supervisors must be apprised of the cost information of the
various materials so that the objective of the management can be met
without extra expenditure on maintenance functions
A monthly review of the budget provisions and expenditures actually
incurred in respect of each center/shop will provide guidlines to the
departmental head to exercise better cost control.
The total expenditure to be incurred can be uniformly spread over the
year for better budgetary control. however, the same may not be true
in all cases particularly where overhauling of equipment has to be
carried out due to unforseen breakdowns. some budgetary provisions
must be set aside, to meet out unforeseen exigencies.
The controllable elements of cost such as manpower cost and material
cost can be discussed with the concerned personnel, which may help
in reducing the total cost of maintenance.
Emphasis should be given to reduce the overhead expenditures, as
other expenditures cannot be compromised.
It is observed through studies that the manpower cost is normally
fixed, but the same way increase due to overtime cost. however, the
material cost, which is the prime factor in maintenance cost, can be
reduced by timely inspections designed, to detect failures. If the
inspection is carried out as per schedule, the total failure of parts may
be avoided, which otherwise would increase the maintenance cost. the
proper handling of the equipment by the operators also reduces the
frequency of repair and material requirements. Operators, who
check their equipment regularly and use it within the operating limits,
can help avoid many unwanted repairs. In the same way a good record
of equipment failures/ maintenance would indicate the nature of
failures, which can then be corrected even permanently.
QUALITY CONTROL
Quality control refers to the technical process that gathers, examines,
analyze & report the progress of the project & conformance with the
performance requirements
The steps involved in quality control process are
1) Determine what parameter is to be controlled.
2) Establish its criticality and whether you need to control before,
during or after results are produced.
3) Establish a specification for the parameter to be controlled which
provides limits of acceptability and units of measure.
4) Produce plans for control which specify the means by which the
characteristics will be achieved and variation detected and removed.
5) Organize resources to implement the plans for quality control.
6) Install a sensor at an appropriate point in the process to sense
variance from specification.
7) Collect and transmit data to a place for analysis.
8) Verify the results and diagnose the cause of variance.
9) Propose remedies and decide on the action needed to restore the
status quo.
10) Take the agreed action and check that the variance has been
corrected.
Advantages and disadvantages
Ø Advantages include better products and services ultimately
establishing a good reputation for a company and higher revenue from
having more satisfied customers.
Ø Disadvantages include needing more man power/operations to
maintain quality control and adding more time to the initial process.