Productivity SA Presentation by SAFLEC

SAFLEC/EFLC & PRODUCTIVITY SA WEBINAR - Productivity Awareness & Lean Principles

THE LEGISLATIVE MANDATE OF PRODUCTIVITY SA • Productivity SA is a schedule 3A Public Entity of the Department of Employment and Labour with the mandate to promote employment growth and productivity thereby contributing to South Africa’s socioeconomic development and competitiveness VISION To lead and inspire a productive and competitive South Africa MISSION

To improve productivity by diagnosing, advising, implementing, monitoring and evaluating solutions aimed at improving South Africa’s sustainable growth, development and employment through increase competitiveness

STRATEGIC FOCUS OF PRODUCTIVITY SA Enterprise Competitiveness and Sustainability provides support to SMMEs in both the formal and informal economy by focusing on productivity and operational efficiency Prevent job losses. Business Turnaround and Recovery, focus specifically on initiatives aimed at preventing job losses at enterprises in decline Providing productivity and competitiveness related value-added information and statistics, best practices and systems through research activities and databases Promoting a productivity culture and mind-set as well as driving accountability for productivity performance across sectors (national, sector and enterprise level) and segments of society.

PRODUCTIVITY SA ENTERPRISE SUPPORT PROGRAMMES Continuous Improvement Services (CIS)

* Emerging Enterprises

Business Turnaround & Recovery (BT&R)

Sustainable Enterprises

Distressed Enterprises

* Businesses to be assisted should meet the following criteria:

• • • •

Operational (Proof of transactions such as invoices & orders) Regulatory compliance Financials Operating premises

OUR FOCUS AREAS: 1. ENTERPRISE COMPETITIVENESS & SUSTAINABILIY EMERGING SECTOR – SMALL AND MICRO ENTERPRISES • Training programmes and solutions, including Business Performance Improvement (BPI), Early Warning Systems (EWS) and Productivity Champion Training. • Promoting a productivity culture and mind-set as well as driving accountability for productivity performance across sectors. STABLE BUSINESSES : SMALL, MEDIUM, LARGE/CORP ENTERPRISES KAIZEN AND WORKPLACE TRANSFORMATION (4MTHS TO 12MTHS) • Focusses on creating a culture of Continuous improvement within enterprises • Develops and improves workplace collaboration between management and workers • Implement strategies for best practice: Leadership that fosters teamwork, participation, continuous learning, innovation and flexibility by involving those on the shop floor in the improvement of company performance; Simultaneous effort to improve quality, speed, cost, safety and morale. • Facilitates network/sharing through Clustering of enterprises. COMPETITIVENESS ENHANCEMENT PROGRAMME (6MTHS TO 12MTHS) • Implementation of Productivity and Competitiveness enhancement initiatives, focusing on operational efficiency within exporting or potential export clients. • Focus on productivity and innovation, Value Chain Efficiency and Export Market Access through Clustering of enterprises. • Aims to increase South Africa’s enterprises competitiveness, to assist enterprises to meet the challenge of entry in the global market and become more productive and 5 competitive.

OUR FOCUS AREAS 2. PREVENTION OF JOB LOSSES BUSINESS TURNAROUND AND RECOVERY • Implementing turn-around strategies and plans to restructure and improve the business’s efficiencies and productivity to be sustainable, competitive and create conditions conducive for job retention and creation. • Sustain existing jobs as a proactive solution by identifying inefficiencies and solutions to ensure improved organisational efficiencies and job retention • Establish and capacitate Future Forums (Enterprise-Based Productivity Forums) and training their members to establish early warning systems (EWS) and to manage enterprise problems proactively.

Business TurnaroundTurnaround

Acquisition

Close-out

Internal process not governed by legislation Driven by Change/ Business Development Consultant Co. I.d problem areas Co. develop turnaround strategy Co. Implement turnaround strategy

Strategy/ Plan implementa tion

Business Turnaround and Recovery

In-depth Assessment

Enterprise-Based Productivity Forums Establishment & Capacitation

Productivity & Competitiveness Where do you begin? 7

PRODUCTIVITY VS PRODUCTION Productivity is the measures how efficiently production inputs, such as labour, equipment, material and capital are being used to produce a given level of output. • An increase in production does not by itself indicate an increase in productivity • If the input of resources is directly proportional to the increase in output, then productivity remains the same • If the input of resources goes up by a greater percentage than output, higher production will be achieved at the expense of a reduction in productivity • Higher productivity means that more is produced with the same expenditure of resources • Alternatively, that the same amount is produced at less cost in terms of materials, machine time or labour 8

Productivity

Process

A Business Operations Performance Measure

‘How many’ resources does the process ‘consume’ when delivering OUTPUTS?

COST

‘How quickly’ does the process deliver OUTPUTS?

SPEED (TIME)

‘How well’ does the process deliver OUTPUTS?

QUALITY

Improve process performance – Improve productivity

Productivity Improvement Where do you start?

Improve Cycle Time

Improve Quality

Reduce Waste

Eight Dimensions Reduce Cost

Speed Increase Yield

Do not exclude support services functions from productivity improvement! 10

Productivity Improvement What to focus on?

Productivity Improvement Waste Identification (8 Wastes)

Waste Identification (8 Wastes)

Productivity Improvement Suggestions for Consideration •

Create awareness amongst staff of ‘productivity’ and its impact on ‘profitability’ and the ‘sustainability’ of the business. o Emphasize waste identification and drive to eliminate

•

Develop and empower your first line managers to be ‘Productivity Champions’

The abovementioned creates a framework and platform for developing business specific productivity improvement initiatives

LEAN MANUFACTURING AND PRODUCTIVITY Lean manufacturing is a production process based on an ideology of maximising productivity while simultaneously minimising waste. • Production trimmed of all waste • Reducing or eliminating stock or work in progress • Removing extra / wasted space • Reducing defects and mistakes • Focus on core production activities • Cutting out activities that don’t add value

What is Lean? • The core idea is to maximize customer value while minimizing waste • Simply lean means creating more value for customers with fewer resources • Lean focus is on total elimination of waste from operation

Lean Thinking • Waste exist in any process • Waste not only burden the people of the process but also the customer • The key to lean is the total elimination of the 8 deadliest waste

Focus of the 3M’S

3M Illustrated

FIVE (5) Principles of Lean thinking

Five (5) Principles of Lean thinking

Lean Management Techniques

PRODUCTIVITY IMPROVEMENT PLAN Plan: 1. Clarify the problem / opportunity 2. Breakdown the problem / opportunity 3. Analyse the Root Cause 4. Set Targets - quantifiable 5. Develop Action Plan

PLAN

ACT

IMPLEMENTATION

DO 6. Execute Action Plan Check 7. Evaluate outcomes – use set KPI’s

CHECK

Act 8. Remedial and corrective actions

4. PERFORMANCE MONITORING Adopt and implement process measures that will speak to the focus areas the organisation is aiming to improve. The closet to real-time the frequency of measurement is, the better. Some areas of measurement that are key to competitiveness are: Increase Productivity

• TIME related process measures • COST related process measures

Reduction in Waste

• QUALITY related process measures

PERFOMANCE MONITORING Improvement in Resource Utilisation

Improvement in Efficiency/ Delivery Improvement in Quality

SET / SHARE THE COMPANY OPERATIONAL STRATEGY

Company Vision & Mission

Company Overall Measures

Team Goals

SET / SHARE THE COMPANY OPERATIONAL STRATEGY

Directors / Management

• Develops the strategic intent of the business • Develops the Vision & Mission • Develops the Business Plan • Plans the Cash Flow

Supervisors / Shop Stewards

Shop Floor

• Create & live the Vision & Mision • Delivers the Business Plan • Produce the Goods • Satisfy the Market • Creates a safety environment

“The only thing harder than changing is paying the price for failing to change” Norman Austin, past chairman of the Lockhead Martin Corporation

THANK YOU