The Poona Divisional Productivity Council (PDPC) was established in 1959 as a local unit of the National Productivity Council (NPC). The character of PDPC is autonomous and non-profit making and it is governed with equal participation by the government, employers and employees. It’s mission is development, designation and application of knowledge and experience in the productivity, and the quality for promoting awareness with the objective for the improving resources, utilization, and standard of living for the national growth (Author’s Query). The objective of PDPC is to promote the latest techniques for improving productivity in a cost-effective way so as to assist industries to prosper in the changing global scenario, and ultimately enhance the economic development of the local regions. Now we have three different divisions, viz. productivity, quality, and environment divisions.

The industries to which we provide services are in various sectors like engineering, electronics, foods, pharmaceuticals etc. As you are aware, productivity is supposed to be traditionally a ratio of output by input. Output consists of goods and services, while input consists of various kinds of resources such as material, labour, capital, information etc. Productivity is supposed to be efficient and effective utilization of resources.

Due to globalisation and liberalization, which started in the year 1991, it has become imperative for the Indian industries to become cost competitive. To maintain the profitability of the organization it has become necessary to reduce the cost of the product.

External Factors

Now let us consider which factors affect productivity. There are certain external factors like economic climate, which includes government policies, changing prices of raw materials and energy sector goods, fluctuations in foreign currency and interest rates and how the economy is moving. Another factor, which is important, is the market, viz. what is the growth of the market, whether the product is lagging behind or there is substantial growth, how is the quality of imported products.

The third factor is change, which may encompass social change also. Since the last decade, there have been substantial changes in the lifestyles of people. Just a few years back, the means of communication normally used to be sending messages through posts and telegraphs. But due to the advent of the electronic revolution, nowadays, we are already sending most of the communication through the electronic media such as the Internet, e-mail etc. The relevance of the post office has diminished.

Internal Factors

Let’s discuss the internal factors affecting the productivity of an organization. The first factor is the organization. This involves what an organisation’s values are and how it is able to cope up with changes in the external environment.

The second factor concerns the employees and emphasizes the attitudes and beliefs of the employees and also how they are able to cope up with the external changes associated with the environment. The third factor involves motivational schemes, i.e., how the organization is tuned to provide proper motivational techniques so as to maintain the tempo of productivity. Another factor includes the information systems prevailing in the organization. It indicates how the information system is efficient and effective so that people in various departments are able to communicate and take effective decisions. Another factor is the technology employed by the organization. It shows whether the technology being used is relevant to the products, processes and methods, which are being used in the organization.

Kinds of Productivities

Let’s now talk briefly the various kinds of productivities. Total productivity consists of different sub productivities like labour productivity, capital productivity, material productivity etc. The other criteria for finding out productivity are quality and quantity i.e. maximization of the output. These become more relevant for mass manufacturing organizations such as domestic goods makers, electronic goods industry etc. Another criteria of quality is to provide value for money to the customer.

Timeliness is another criteria, which implies that the product or service an organization makes is supplied at the right time. This criteria is very important for industries making parts, sub assemblies, components etc., which are being supplied to the end use industries such as automobiles and domestic goods industries where nowadays manufacturers want a product just in time so that they are able to maintain the lowest inventory holding cost.

The third factor is yield, which is essentially maximum utilisation of input resources. This factor becomes very critical for process industries such as chemicals, foods and pharmaceuticals wherein yield is a very effective sign of total output. Another factor, which is important is, the utilization of key resources such as men and machines by the organisation. Other factors are absenteeism, number of accidents etc.

An organization has different departments such as marketing, materials, manufacturing, personnel and administration, finance etc. When we are talking about total productivity of an organisation, it becomes necessary for individual departments to improve their functional productivity.

Marketing Department

Now let’s deal briefly with what are the various departments, what are the key indicators for productivity and what are the tools being used to increase productivity. The most important department is Marketing as it interacts with customers/ clients, receives the orders, deals with customer complaints, receives payment for the goods being delivered, estimates the demand for the product and is involved in sales order planning. The various key indicators, which are used, are number of orders received, sales percentage, number of customer complaints settled in a particular time span and on time delivery.

Another factor is the market share of the product, region wise, state-wise, etc. i.e., how much market share the organization is having and the number of new customers it has got in a span of 3-6 months etc. Various tools, which are used, are demand forecasting, market research, various statistical analysis tools, classification of key customers, various electronic gadgets (computers, e-commerce, Internet) and customer satisfaction surveys. Nowadays it has become necessary to give the customer something more than what he wants. Communication and training are also very important tools. Training helps sales personnel to be able to communicate effectively with the customer and forward his requirements to the manufacturing department.

Materials Department

Another important department is Materials. Majority of the materials constitute about 60 to 70% of the total production cost. The various functions of the materials department are, controlling production cost, dealing with the purchase functions through suppliers, receipts, stores, issue of materials and requirement planning. The various indicators are stock of raw materials, number of months consumption, percentage of sales, value of non moving stocks – this becomes very important for most of the organisations because non moving stock goes on adding overheads for a period of years, and then one has to go through the total stock, otherwise it becomes a blocked inventory. , or ….. Then lead time for processing …. Items, ordering processing percentage of total materials cost and also various kind of productivity of materials person such as number of orders processed by particular purchase officer etc. (Author’s Query)

Various tools, which are used are ABC analysis, economic order quantity, reorder levels, stores layout (whether sufficient time is devoted towards effective stores layout so that total material handling, as well as upkeep and storage of the product is optimum), material codification, classification system, use of electronic gadgets, vendor development system, vendor rating, value analysis studies, O&M studies etc.

Manufacturing Department

The Manufacturing Department comes next. It involves product design, development, supplying material as per customer requirements, upkeep, quality control and inspection. The key indicators are rejects, yield, equipment and on-time delivery, rework percentages, in-process inventory as a percentage of sales i.e. how much in-process inventory is being kept at different stages of manufacturing.

The traditional investing tools, which are used are work study, plant layout, material handling, product standardizing simplification so that we are able to have the product with many number of operations (Author’s Query), research and development programmes and house-keeping. Nowadays this has become very important. Most of the organizations are going in for ISO 9000 and spic and span departments where everything is available at the right place and at the right time. Total productive maintenance is a new concept, wherein the concerned departmental workers are supposed to maintain their equipments as much as possible.

Personnel and Administration

Another important department is Personnel and Administration. Various concerns, which are dealt with, are recruitments, salary administration, settlement of industrial disputes, retirement of employees, maintaining personal data for various categories of employees, upkeep of plant and office, equipment, and buildings and transport clearance with government and local authorities. The indicators, which are used, are what is the output layout per person or per employee, turnover rate, how the personnel department is able to retain the people in the organization, manpower loss due to accidents, absenteeism, labour problems, sales percentage, overtime control, number of industrial disputes settled etc. The tools, which are used, are manpower plans, psychological tests, aptitude tests, training and communication, computers, O & M studies. Organisation method studies are done to know the effectiveness of the departments and also to improve their methods and procedures and introduce various kinds of traditional tools like job rotation, reverse systems, financial incentives etc.

Accounts and Finance Department

The Accounts or the Finance Department essentially deals with product investment, receipt of cash based on the products, which are delivered to the customers and various other areas like controlling the expenses, making departmental budgets, product costing, dealing with the banks for loans, cash credit limits and control on sundry debtors and creditors, dealing with financial clients and planning product access etc. The key indicators are net profit margin, depth equity ratios, book value of shares, labour costing, percentage of sales, material costing, energy consumption norms, inventory to turnover ratio and capacity utilization of plant and equipment.

The various tools, which are used, are Management By Objectives (MBO), which is done individually or department-wise. Objectives are set and they are achieved by carrying out the traditional return on investments study, department-wise budgeting, standard costing (for each product the standard cost is given by the industrial department), allocating overheads on a standard basis, O & M studies, cost variance reports, computer aided data processes, control of sundry debtors, training, communication etc.

Case Studies

Having understood about how productivity helps us in the reduction of cost, now I’ll give an example of a particular industry like forging, and a component like front wheel half, you must all be aware of what is front wheel half, if I am not wrong, it is the cage of the front wheel half, actually what is going to be the change in increasing the output productivity particularly has been least in that area. It is particularly the whole process, but I have given what material was used particularly, and subsequently what new process require new material as such (Author’s Query). Basically it is what is called as round cornersque material (RCS), and these are round bars as such. There is a two-bend defrost between the old and the new process. A change in the material does not result in any change in the cost. The old cost, which was 26.8 rupees per kg remained same 26.8, sorry it is the weight of the component was 26.8 it has remained the same 26.8 only. But the forging cycle is minutes per piece, originally it required 1 minute per piece because of the RCS material itself, to remove the shove corners, make the material as per the forging quality, then to give more number of broke, it took 1 minute for making 1 forging as compared to now, any other material required from 0.55 minutes (Author’s Query).

Because the same production unit is being used in both cases, labour cost which is a main effect, originally it was 62.5 rupees, because of the cycle time was more, now in the 2nd case it is coming down to 43.4. Now this clearly shows the saving is rupees 19.61 per piece. I am seeing the total volume was 60,000 pieces per year. Total saving per year was 11.8 lakhs rupees. That we consider as substantial saving. So this is being shown or demonstrated here. (Author’s Query)

Now I will take one more example of increasing productivity in the forging industry. Now this is a cross section of a particular component has been explained here. old method. If we see the spinderhousing, particularly this is a component, almost all automobile vehicles has such.This is a change in the manufacturing process as such. If you see the originally, the forging was upto this particular configuration.Whereas in this new case, we have increased the forging depth as such and because of that the subsequent changes, what is going to happen that we will be illustrating in the next copy. So now here is wha the change involved in this (Author’s Query). So the material, which was earlier 100 mm in diameter has reduced to 90 mm. Due to the change in the material saving was achieved, material cut weight, which was earlier 37.71 kg has been reduced to 33.51. Because of the material weight saving, we could achieve a saving of rupees 71.40 paisa per piece. Then the machining was also reduced because in this SKF some dig piercing was involved. This saved 15 rupees per piece.

As far as the manufacturing process is concerned partially pierce and deep drilling was involved. In the improved case, it was fully pierced and only shallow drilling was required. The saving was Rs. 59. The operation cost in the total process, if you see in the new improved method, one extra piercing was to be carried out, which was costing additionally, it can be seen as a minus saving, that is 44 rupees and 25 paisa, and if you see the overall cost structure you could save 101 rupees 15 paise per piece as such. And the total quantity was 60 thousand

that is why we could achieve 60.7 lakhs per year saving. These are the 2 basic concept of increasing output, particularly, that is why the cost was being reduced in the forging tempo industry as such (Author’s Query).

Let’s consider another case study in a steel melt shop, which makes various kinds of special steels of cold-headed quality, ball-bearings, carbon steel etc. There used to be substantial load on the steel melt shop for increasing the production of liquid steel. The process being followed is, initially the scrap was welded, transferred to the scrap free heater, preheated, and poured in the UHP (ultra high power furnace), melted at a certain temperature of around 1440 or so and transferred to a ladle on level transfer car. This ladle on the transfer car is taken for further operations at various stations which are called as LF vd or vod that is ladle furnace vod that is vacum oxy decarobonisation (Author’s Query).

After various operations the ready ladle is transferred to bloomcasting and casting continues on the blooms of the bloomcluster (Author’s Query). So this is essentially a manufacturing process. Various equipments which are used are; 50 tonne capacity UHP furnace, two major cranes of 75 tonnes, one is SMS, where UHP is located, and second is in highway where the bloomcluster is located, another is the 100 tonne capacity ladle car which is on a platform, then the scrap preheater, and bloomcluster. Before we started the studies, we used to make around 11 heats per day, and heat size used to be 37 tonnes. The monthly liquid metal production considering 26 working days used to come to around 12,155 tonnes. The ladle size, which was used, was 2100 mm in diameter.

The major constraint was, a certain ladle height had to be maintained in the ladle furnace, as well as the clearances when the metal was poured from the UHP to the ladle. So a group consisting of senior managers of materials and production was constituted. They went through various work-study tools to understand the existing methods and arrive at the capacity assessment of the individual work stations. After this study it was feasible to increase the ladle size from 2100 mm to 2300 mm. The cranes capacity was upgraded from 75 tonnes to 100 tonnes in the SMS and Halfbay. As the crane capacity increased, the existing structure was strengthened to take the additional load. Our capital expenses involved a total investment of about 1.5 crores and used to give a payback paid less than 4 months (Author’s Query). We were able to achieve a heat size of 52.5 tonnes, that is an increase of about 5 tonnes per heat size, 5.5 tons (Author’s Query). The number of heats per day went upto 13 tonnes, the monthly liquid metal production worked out to be 14,365 tonnes, which gave a total production increase of about 18 tonnes 18 percent (Author’s Query).

There is another case study of the grinding mill sector in the abrasive industry. The manufacturing process consists of weighing the grains from silos, then mixing them with the bond (Author’s Query) in the mixing machines, then pressing the green mix on the presses and firing or baking on the green mills either in a kiln or oven. Firing is essentially carried out for lucrified (Author’s Query) mixing and baking is done for rezonide mixing. Then dressing up the fired or baked wheel, inspection, packing and dispatch are the remaining steps involved in the manufacturing process.

we had done various kind of productive tools that we used, like work study, carving out what is the existing method and making a …method for that , determining the standards for new methods, than wherein we also carried out certain low cost automations that is providing …….stations. Then improved motivational schemes which were there on the workstations that is the earlier schemes of 9 rupees per day basis to about 12 rupees. Then improved material handling at the workstations like doing proper material handling in terms of providing conveyence etc, and improved the desk correction system at the shopfloor (Author’s Query).

By using all the above techniques we were able to increase the productivity of different departments. I am giving only some key indicators, there used to be a 150 kg bond blender for mixing. Earlier we used to make about 3.6 batches per day which increased to 5.4, that is a 50 percent increase in the productivity. Similarly if I had 60 kg bond blender from 7 to 10.5 batches which is 50 percent. On press shop 100 ton press numbers 6 from 720 pieces to 900 pieces about 25 percent and 300 ton press from 450 to 800 of about 80 percent and on ER 230 that is ….from 233 to 465 are 100 percent, increasing productivity. Similarly, in dressing department, double spending grinders, from 100 to 190 pieces, per shift which will amount to 90 percent, Side dressing machines from 92 to 174 pieces about 90 percent and also from …..machines from 15 to 26 pieces about 74 percent. So by using this various work study techniques, we are able to substantially impose a productivity in abrasive industry from somewhere of about 25-100 percent, by using these productive techniques.