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Productivity Trying to improve productivity is like trying to pull out a tree stump with a chain that always breaks. When you look at productivity, you have to look at the whole picture. One of the problems that exist in business today is that we are crazy about improving productivity. However, those responsible for it are usually managing a very specific area. If they spend time and effort in improving productivity in their specific area, they are likely to make improvements that will have no effect on the overall productivity. This is kind of like making one the links that didn’t break stronger. While it is easy for us to understand the allegory of the tree stump, it never fails to surprise me how often people responsible for managing production have difficulty in applying that same logic to a multi-operation, multi-machine, multi-person production process. If the chain must have a weak link in spite of it’s inherent consistency, then how can we imagine something as complex as a high-speed production line not having a single weak link? The confusion lies in the fact that people misperceive any malfunction that occurs as a constraint and therefore believe that the constraint moves. This phenomenon is what leads people to question the validity of constraint theory. Malfunctions will always occur on all operations at various times with varying frequency and duration. However, over time there can only be one constraint. The limit to what can be produced is governed by the capacity of the resource, which, over time, limits the overall output. This leads us to pick a direction. We can make a choice to either identify the constraint or we can decide to choose were we want the constraint to be. If one operation is the constraint, then by default all other operations must have excess capacity. To improve the productivity of those operations would, by logic, not afford any increase in overall productivity. What feels right is not always effective. Excess capacity is not a bad thing. It is the natural result of one thing being the constraint. In fact, in most cases, to reduce the amount of excess capacity that exists in the non-constrained operations reduces the amount of output a system can achieve. What is the measure? I propose that, in all areas except the constraint, efficiency is an inappropriate measure for performance. I also propose that there are measurements that are very simple, easy to assess, and provide effective performance evaluation that achieves the goal of increasing thruput. Productivity must always be a global measure. To measure productivity on a specific element may not affect the overall productivity objective. If fact, there are cases where a productivity gain in a specific area will adversely effect the overall objective. The measure of productivity must be established so as in advance so as to direct the activity needed to move towards the goal. This means that the measure of productivity must be valid. If it is not valid, then all subsequent activity is flawed. What are valid measures of Productivity?
If something is true, by logic, it can not be false. Conversely, if something is false, it can not be true. Therefore, if a measure of productivity is to be valid it can not be proven to be invalid. If it is proven to be invalid, then it can no longer be considered a valid measure. It is my belief that each of these measures are invalid measures of productivity. Therefore, they should not be used. The reason for my belief is that in each case there is evidence that if you make business decisions based on them you will not achieve your desired result. This begs the next question. What is the desired result? What is the goal? What are valid elements, that can be measured, if achieved, would attain the goal. The measures must also pass the test of relevance. That is, if an element is valid, but its measure would give no direction to those who are required to execute activity towards the goal, then it is not a relevant measure. |