Page 131 - DMGT206_PRODUCTION_AND_OPERATIONS_MANAGEMENT

Production and Operations Management

Notes of the work piece referred to earlier. When given a task, most people will, with only a small
amount of training, be taught how to make small improvements in their activities to improve
productivity. With billions of tasks performed each day in service and manufacturing firms
throughout the world, one can visualize the impact of these kinds of improvements on
productivity and costs.
Figure 6.1: The Productivity Tree

Figure above, illustrates the different components that go into the transformation process.
These components need to be looked at in greater detail to identify the potential for productivity
enhancements. They can lead to several approaches that can be used separately or in combination
to increase productivity.

The productivity tree is shown in three parts, the roots (inputs), the trunk (the conversion
process) and the fruit (the outputs). As will be recognized in the figure, long-term productivity
improvements can be achieved by the human factor through skills, systems, management and
positive and innovative attitudes. In this sense, productivity is an attitude of mind which is
intolerant of waste of every kind and in any form. It not only refers to work systems but also to
the development of right attitudes and a strong concern for efficiency. Waste can be eliminated
through:
1. Technology, Innovation and Automation: Technology, Innovation and automation brings
new ideas, methods, and /or equipment to the process of making a product. Technology
determines both the maximal physical quantity of output that can be reached as well as the
number and the quality of inputs required. This presents an opportunity to cut costs and to
do more value-added work. The technology that is adopted is an economic choice, taken
upon both economic and technological reasons. However, reversibility of the choice is
often low because of high switching costs.

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