HANDBOOK ON PRODUCTIVITY

1 IHANDBOOK ON PRODUCTIVITYA sian PRODUCTIVITY OrganizationiHANDBOOK ON PRODUCTIVITYA sian PRODUCTIVITY OrganizationiiHandbook on ProductivityAntonio D. Kalaw, Jr., Philippines, served as the volume published in Japanby Asian PRODUCTIVITY OrganizationLeaf Square Hongo Building 2F1-24-1 Hongo, Bunkyo-kuTokyo 113-0033, views expressed in this publication do not necessarily reflect the official views of the Asian PRODUCTIVITY Organization (APO) or any APO member. All rights reserved. None of the contents of this publication may be used, reproduced, stored, or transferred in any form or by any means for commercial purposes without prior written permission from the APO. 2015 Asian PRODUCTIVITY Organization ISBN 978-92-833-2458-4 (paperback) eISBN 978-92-833-2459-1 (PDF) by Word by Design Creacomm Printed by Hirakawa Kogyosha Co.

2 , Ltd., JapaniiiContentsAcknowledgementvIntroduc tion 1 Definition of PRODUCTIVITY 1 Impact of PRODUCTIVITY 2 PRODUCTIVITY Initiatives 4 Cross-cutting PRODUCTIVITY Initiatives8 Product-related PRODUCTIVITY Initiatives11 Process-related PRODUCTIVITY Initiatives14 People-related PRODUCTIVITY Initiatives16 Policy-related PRODUCTIVITY Initiatives18ivivvAcknowledgementThe APO is grateful to President of the Development Academy of the Philippines Antonio D. Kalaw, Jr., who was responsible for devel-oping, writing, and producing the HANDBOOK on PRODUCTIVITY ac-companying this volume. He was assisted by Carlos A. Sayco, Jr. APO Liaison Officer for the Philippines and Vice President of DAP, Julie V. Andayon, DAP Project Coordinator, and Arlene Donaire, DAP Consultant on PRODUCTIVITY Projects.

3 Vi1 INTRODUCTION PRODUCTIVITY is key to maintaining competitiveness, at both the organization and country levels, and in ensuring sustainable socio-economic development. The various PRODUCTIVITY -enhancing tools, techniques, methods, and practices that have been developed and adopted over the years in the production and consumption of goods and services are essential to the dynamism of economies. The target users and readers of this HANDBOOK are those just start-ing to understand the field of PRODUCTIVITY . It is intended to provide an orientation and basic glossary on some fundamental concepts, principles, tools, and methodologies of PRODUCTIVITY . It can serve as a primer for readers and stakeholders in the PRODUCTIVITY the application of PRODUCTIVITY -enhancing concepts, tools, techniques, methods, and practices, there are many different terminologies and ac-ronyms in use.

4 This HANDBOOK is designed to give users a first glimpse into what is otherwise an elaborate field, discipline, or movement that influ-ences production, consumption, and economic development of many countries. DEFINITION OF PRODUCTIVITYThe concept of PRODUCTIVITY has evolved over the years to repre-sent more than an efficiency ratio. From cost and quality issues, its scope has expanded to embrace social concerns - such as job creation, job security, poverty alleviation, resource conservation, social responsibility - to business excellence, governance , and en-vironmental protection (referred to as Green PRODUCTIVITY or GP by the APO). Today, other PRODUCTIVITY concepts that have evolved include social PRODUCTIVITY and knowledge PRODUCTIVITY .

5 There are several ways of understanding PRODUCTIVITY , but there are at least two essential definitions often used and espoused by the is the relationship between the quantity of output (goods and services produced) and the quantity of input ( , re-sources such as labor, materials, machinery, and energy) that are used in production. PRODUCTIVITY = Output/InputProductivity is concerned with how efficiently goods and services are produced and the value created by the production process. If a product is made at the lowest cost with high quality and can be sold competitively in the market at a price higher than its cost of production, then its PRODUCTIVITY level is considered high. The objec-tive of PRODUCTIVITY is to maximize output and minimize input.

6 PRODUCTIVITY = Efficiency + EffectivenessThe other element of the PRODUCTIVITY equation is effectiveness. This relates to the attainment of the desired goals or outcomes set by the producer of a product or service. If the customers are highly satisfied in using the product or service, this could mean higher rev-enues and repeat orders for the product or service. It could also mean higher return on investments for investors and even a better image or reputation for the company or organization. IMPACT OF PRODUCTIVITYP roductivity is an integrated concept, a combination of principles from various disciplines such as science, engineering, economics, finance, and psychology. PRODUCTIVITY improvements or enhancements are generally achieved through collaborative efforts that target specific issues affecting an organization.

7 In short, achieving improved PRODUCTIVITY involves a managed and systematic process; it does not happen by coincidence or accident. Improvements may be planned once at the end of a staged process, incrementally from step-wise initiatives, or in spurts through breakthroughs or innovations. 3 The PRODUCTIVITY Management Framework in Figure 1 is a good way of illustrating the cycle of managing PRODUCTIVITY in an organization. Figure 1. PRODUCTIVITY Management FrameworkThe framework starts with CHECK, assessing the organization s present condition or PRODUCTIVITY level. After checking or assessing, the next step is ACTION. At this stage, the organization looks for countermeasures to remedy the problem or improve the present condition.

8 The next step is PLAN, wherein the organization will determine what PRODUCTIVITY improvement program or project it will implement. The final step is DO, when an organization starts to implement the planned PRODUCTIVITY initiative or intervention. If the implemented program results in an increase in PRODUCTIVITY level, the management may opt to share the gains of improvement through PRODUCTIVITY gainsharing. After implementing any PRODUCTIVITY improvement activity or intervention, the organization will again CHECK on the status of improvement. The cycle continues. CHECKACTIONPLANDOP roductivityMeasurementImprovement/Counte rmeasureProductivityImprovementProductiv ityImprovement PlanProductivityImprovementTechniquesLab or-ManagementCooperationProductivityGain sharingProductivityManagement Cycle4 PRODUCTIVITY INITIATIVESIn this HANDBOOK , the PRODUCTIVITY - improving or enhancing initia-tives, which can be in the form of a basic principle, tool, technique, method, practice, guideline, model, or approach that had been espoused by the APO in the past years, are presented in a simplified framework to allow users a quick grasp of how they are used and how they fit into the larger picture of an organization s PRODUCTIVITY goals.

9 They may be grouped into the following four Ps, which repre-sent areas of concern in any organization that is aspiring to achieve PRODUCTIVITY improvements - people, product, policy, and People-focused: When a PRODUCTIVITY -enhancing initiative aims to directly raise the efficiency and effectiveness of a Product-focused: When a PRODUCTIVITY -enhancing initiative aims to improve the quality and responsiveness of a product to consumer Process-focused: When a PRODUCTIVITY -enhancing initiative aims to make the planning, design, production, and delivery of goods and services more efficient and Policy-focused: When a PRODUCTIVITY -enhancing initiative aims to improve the overall environment for production and/or consumption of goods and many cases, the PRODUCTIVITY initiatives can be designed and im-plemented with multiple goals, and are, therefore, cross-cutting in their applicability and impact.

10 Figure 2 shows the PRODUCTIVITY im-provement framework adopted in this HANDBOOK . 5 Figure 2. PRODUCTIVITY Improvement FrameworkTable 1 summarizes the 31 common PRODUCTIVITY -enhancing initia-tives that are included in this HANDBOOK , first, classified according to their impact areas, and second, arranged alphabetically for easier reference. The initiatives with four stars indicate that they are cross- cutting in their applicability in an entry points for PRODUCTIVITY - improving initiativesEconomy-level benefits of PRODUCTIVITY improvementsPeopleProductProcessPolicySu stainable DevelopmentEconomic GrowthCompetitiveness6 Product Process People Policy Cross-cutting 1.