Improving Productivity Ripples Throughout the Organization

Last week, I wrote about how improving productivity can reduce the need for hiring new people (Increase Productivity to Reduce the Need for Hiring).

So we devised a new way of strapping and stacking the conduit to avoid the problem, and that eliminated the recovery process because we had almost no imperfect pieces. By reducing the potential for a reject, we were able to eliminate the reason to have a recovery process.

Basically, we improved our productivity:

• We moved the two recovery specialists into different jobs that were otherwise open. That meant we didn’t have to hire anyone.
• We stopped spending money and machine power to recover unrecoverable conduit.

But improving productivity goes far beyond just improving the output on the floor or streamlining the manufacturing process. Its effects can be felt throughout the entire organization.

For example, a 15% improvement in productivity overall could improve our total output. It also created greater associate satisfaction, because people weren’t having to fix other people’s problems. After all, no one wants to “wipe anyone else’s behind” or clean up someone else’s mess. Rather than fixing a problem someone else created, each person could focus on their own work without grumbling about the person behind them.

Doing it right the first time means we could service 15% more customers in the same amount of time. We could take on more clients. We could reduce our costs.We could improve our profits. And we could keep our headcount to a manageable level.

Not only did this reduce our hiring and onboarding efforts (more on that in a future post), it was an improvement on all the business processes.

For example, we had two workers straightening the bent products, but we also had a forklift and forklift driver moving everything around. After all, these were 20-foot pipes, so they couldn’t just be lifted by hand. The forklift driver would move the rejected pipes instead of moving other loads of good product onto the next step in the process or get loaded into the trucks.

If the forklift driver has an extra 15% workload, that means they have to work longer. That could back everything up, which means the production process could come to a stop because the hopper or pallet was full. Things would get backed up and stacked up, and were more prone to getting damaged through accidents and carelessness.

Having an ultra-busy forklift driver meant we needed another forklift driver, which meant getting another machine plus all the requisite fueling and repair costs. By finding these efficiencies, their effects ripped throughout the floor.

Improving productivity saves paperwork

Believe it or not, our on-the-floor improvements also translated into improved productivity in the back office as well.

For one thing, it saved us a lot of paperwork on the rejected final products — pipes, fittings, junction boxes, elbows, etc. — which meant we weren’t reordering more raw materials or building and shipping replacements to unhappy customers. That reduced our staff’s workload for placing orders, creating shipping documents, and processing warranty claims. It also reduced our other costs such as waste haulage.

Improving productivity is more than just making more product with fewer people in less time. It has a ripple effect that can be felt throughout the entire office, but you have to measure everything in order to find those results.

Start measuring your productivity and output in all your departments so you can establish a baseline and then implement your different changes. Check your measurements and see what has resulted from your different efforts. Follow the results down the line and into the back office. Translate everything into dollars spent, dollars wasted, dollars saved, and so on. Then you’ll know what value your changes are actually bringing to your company.

I’ve been a manufacturing executive, as well as a sales and marketing professional, for a few decades. Now I help companies turn around their own business. If you would like more information, please visit my website and connect with me on Twitter, Facebook, or LinkedIn.

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