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Improving Productivity in Manufacturing

***SCENARIO***

COMPANY EMAIL

FROM: George Washburn

SUBJECT: Annual Productivity Plan

The Plasit-brack product line is an important part of our business and with your qualifications, I am looking for some good things to happen with these products.

I am announcing the annual productivity plan and goal, which is for EMC to improve productivity this year by 5% overall. I am asking each manager to develop a productivity plan for their areas. This plan is to identify areas of productivity, the productivity measurements, and provide a plan for how the productivity will be accomplished.

I want you to consider using this multi-factor productivity measure: (Total Production of Plasti-bracks) / (Total Paid Labor Hours). Using the most recent data available, this Productivity Measure is 332.73 pcs produced per paid people hours, for Plasti-Brack. You can review the detailed data to see how I determined this measurement. A 5% increase translates to 349.37 pcs/pd ppl hr.

You can plan on a 3% to 5% increase in demand for the next year.

Here is the data that has been collected and analyzed for the Productivity Index for Plasti-Brack (click here.) Note that there is a lot of Non-Production time - I am sure we can eliminate some of this and convert it into productive use.

Given this overall productivity measure and the 5% goal, you should consider your next steps. First, do an assessment of the current situation. Then determine other subordinate productivity indices or factors that will be measured in your area of responsibility. What are the main issues and concerns about improving productivity this year? What are some of the possible processes that should be considered for process re-engineering or "lean" analysis? What improvements are you planning on making, and how will these make the 5% productivity goal?

Please do this analysis for your area. You should consult with the production managers as necessary. I want a report that provides an assessment of productivity measures and process improvement issues for the Plasti-brack product line and related production processes. Your report should include the following sections: Review of the Current Situation, Goals & Objectives, Action Plans, and Explanation/Justification.

Since you are new here at EMC, I am asking that your report also include another section that provides a review of the Plasti-brack processes including a process chart of one of the representative products. I think this will be helpful to you in getting an understanding of the processes.

I will be looking for your report in the next several weeks. Thank you. ~GW

PS - I know you are new to EMC and you may not be familiar with how we write reports. So I have attached a copy of a blank report template that I would like you to use: Report Template (click here.)

And I also have attached a copy of a report that was done a while back by Manny Jones. It is a report providing a plan to solve a big problem we were having in the Zinc Die Cast Machine Group. It is not about productivity, so you will need to taylor your report with appropriate content that I am looking for. Manny's Report (click here).

Assignment

Analyze the processes that are used to produce the Plasti-brack product line. Determine appropriate productivity measures and then develop a productivity & process improvement plan. Justify your plan. Write a report to the VP of Operations.

Assignment Expectations
•Use the information provided in the Background readings. It is not necessary to do any additional research.
•Review the information about the Excellent Manufacturing Company and become familiar with the products and processes
•Analyze the processes and determine productivity measures for the various processes.
•Determine a plan for improving productivity via process improvement and lean thinking.
•Justify your plan based on the concepts of process improvement.

Attachments

Solution Preview

TO: George Washburn
FROM:
SUBJECT: Annual Productivity Plan

REVIEW OF THE CURRENT SITUATION

This is a Productivity Plan for the Placit Brack product line.

The company considers the Placit Brack product line as crucial to the success of the company. The company has a productivity goal of improving productivity by 5% this year.

Here we will identify areas of productivity, the productivity measurements and also provide a detailed plan for achieving the goal

Using Total Production of Plastic Bracks/Total Paid Labor Hours as a productivity measure, the current value of the productivity measure is 332.73 pieces per paid people hours, for Placit Bracks.

The company is planning for a 3% to 5% increase in demand for the next year. If we consider a 5% increase, this translates to a productivity goal of 349.37 pieces per paid people hours for the product.

Data reveals that there is a lot of non production time that can be reduced or eliminated, in some of the cases.
There are four processes involved in the production of the Placit bracks. They are Blanking, Molding, Assembly and Packing.

Each division or process will now be analyzed, to determine the process improvements that can be implemented, in order to improve productivity.

The data reveals the following:
1. The highest non productive people hours to the productive people hours are in the packing department.

2. The lowest non productive people hours to the productive people hours are in the molding department.

3. The assembly department is the most people/labor intensive and machine intensive in absolute terms.

4. In terms of machine hours too we find that the highest non productive machine hours are in the packing department and the lowest is in the molding department.

5. Packing is the most labor intensive, with three times the machine hours, followed by the assembly process, with the same number of people to machine hours. The least people intensive is the molding department, which requires only one fourth of people hours as compared to the machine hours.

This report will continue with the other parts of the report.

GOALS AND OBJECTIVES

The goal is to increase productivity in terms of the product pieces produced per paid people hours. The company is planning for a 3% to 5% increase in demand for the next year. If we consider a 5% increase, this translates to a productivity goal of 349.37 pieces per paid people hours for the product.

There are 4 processes involved. An ...

Solution Summary

Improving productivity in manufacturing companies is a key to increased revenues and business success. Companies should not only focus on increasing their people productivity, but also look at techniques to improve production processes. Techniques like cell manufacturing, BPR, lean manufacturing and automation would contribute to an overall enhancement in productivity in manufacturing processes.

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