In a Recession, Productivity is still the Best Policy

by Rene T. Domingo

So you have downsized to cope with the recession. And you now think you have a lean and mean organization, with everybody productively working. Nothing could be farther from the truth unless you really know the meaning of productivity. Who is productive? Most confuse working hard with high productivity. In fact, to untrained eyes, any semblance of movement is misconstrued as value-adding work. Our idea of “working hard” is actually “moving hard” which has an acronym AIDS (As If Doing Something). All work is motion, but not all motion is work. So now what is “work”, if that’s what productivity is all about? The name of the profession determines its true function or work. For instance, salesmen must be “selling”, machine operators must be “operating” the machine, nurses should be “nursing”, surgeons must be doing “surgery”, bank tellers should be “tellering”, and managers should be “managing”. If they do something other than their true function, then we say they are doing unproductive work or wastes. Back to our examples, this time when our worker is not really “working”. We shall load them with the usual administrative and logistical tasks and some inefficiencies that distract them from real work, thereby pulling down their productivity.

A salesman is not selling when he is in the office, writing reports, attending meetings, or simply finding a place to park.

Like the salesman, the bill collector is someone you don’t want to see in the office. He should be in the field collecting bills.

A machine operator is not operating is he has to walk to search for and get his tools, to follow up material requests, and to call maintenance to have his equipment fixed. In fact, if he moves away from his equipment for any reason except for breaks, he is technically not working.

Like the machine operator, the aircraft mechanic must be inside the aircraft holding a tool to be considered working. The moment he leaves the aircraft to get tools, materials, or data from the computer, he abandons work. One survey revealed that mechanics spend only 47% of the time working on the aircraft. The rest of the time is spent or wasted getting tools and waiting for parts.

A nurse is not nursing if she is not beside the patient’s bed, answering patient’s call, or assisting a doctor. She is not nursing if she is filling out forms in the nurse station, walking great distances to get to pharmacy or the laboratory, grappling with an unreliable hospital IT system, or simply waiting in front of slow elevators. A major Asian hospital found out in a survey that 40% of patient’s call where requests to nurses to bring housekeeping items such as pillows and linen. To free up the nurses’ time and make them more productive, the hospital added these frequently requested items when preparing a room for admission.

A surgeon is not working if he is outside the operating room waiting for it to be cleaned or waiting for the patient to be prepped. A doctor is not working if he is not attending to a patient, not using his equipment (stethoscope, knife, etc.), or not writing a prescription or order. He is not working if he is walking to look for the nurse or medical records.

A bank teller is not working if she is not in her booth attending to a customer. While in a queue, we are often horrified to see her leave her booth and disappear into the backroom to do some chores. What time she returns is anybody’s guess. Also, even while inside the booth, if she stops serving the line to count money, do recordkeeping or reconciliation, then she stops “working” by our definition.

A manager is not managing is he is not planning, leading, organizing, and controlling (PLOC). If he is busy firefighting or attending endless meetings, he stops “managing”. Most Japanese companies have stricter definition of “managing”: a manager should be in the “gemba” or shop floor. If he is in any other place like his cozy office, then he is not managing. An even stricter definition is if he is not doing kaizen or continuous improvement, but simply solving day-to-day problems or doing PLOC to maintain status quo, then he is not working as a manager. A survey shows that a typical manager spends 60% of his time doing routine tasks, and 40% on firefighting – neither of which constitutes real managerial work. The ideal manager should spend at least 30% of his time doing kaizen.

It is usually not the intention of any employee to perform unproductive work. If he does, it is often due to management, bad process design, or some red-tape regulation. Somebody working hard would honestly think he is working productively 100% of the time for the sake of the company, even tough the reality is he may be producing mostly wastes. To appreciate this principle, let us classify activities using value stream analysis into three: value-added (VA) which we call “work”, non-value added (NVA) which we call “waste” due to inefficiencies, and business non-value added (BNVA) which technically are “necessary wastes”. BNVA’s are those that need to be done to comply with standards, regulation, laws, etc. NVA occurs if a machine operator has to walk and search for missing or misplaced tools. NVA’s are reduced or eliminated by better housekeeping, process redesign, and sometimes by training. But if he has to write down manually or electronically the details of the batch he just produced for the purpose of tracking and traceability requirements, he is performing a BNVA task. In both cases, note that he is not “working” i.e., not operating his machine. BNVA’s cannot be eliminated; the most we can do is reduce their cycle time through simplification. BNVA’s are part of the cost of doing business which customers do not see. Therefore to enhance work content (VA) and productivity, we must eliminate NVA’s and reduce processing times of BVNA’s. As a guide, consider VA’s as those activities that customers are willing to pay for and become part of product costs. Customers will not pay for nor care about all other activities – NVA’s or BNVA’s. Remember to constantly measure, measure, measure. What is not measured is not improved. Communicate to all their amount of value-adding work so they can start continuous improvement programs or projects. We cannot expect productive work to be 100% of total time, but from whatever baseline you start with, however low, make sure to increase it continuously. Then you are assured that your company’s productivity and chances of coping with the recession will constantly rise.

There are professions that you would rather see idle, and making them do too much of their value-adding professional work may be undesirable. Their measure of productivity is more like availability rather than physical work. Examples are firemen, police, and inspectors. While firemen may seem very productive by putting out fires most of their working time, we would rather see them idle or on stand-by most of the time by making the city’s fire prevention program succeed. Moreover, it is unwise to make idle fireman busy by giving them work away from their fire trucks like fund raising and street cleaning. You do not make them more productive by reducing their availability and readiness as firemen. Similarly, we don’t want to see policemen chasing criminals most of the time. We would rather see them do crime prevention activities that work. If quality control inspectors are too busy inspecting and discovering defects, then something is basically wrong with company’s quality system. The resulting high productivity of the inspectors in this case is not something to celebrate nor commend them for.

Rene T. Domingo is a professor and management consultant. Please send comments to rtd@aim.edu.

Source: www.rtdonline.com