Recent years put a claim on the profitability of organizations. As the economic situation blocks a substantial increase in turnover and margin, is usually decided to drastically decrease cost. But how long can an organization continue to reduce costs without tampering quality demands? Health and municipal institutions are faced with government measures that require a critical assessment of their activities. They are challenged wit high quality objectives but have fewer resources to realize them.
First of all a clear and correct definition of efficiency and effectiveness is in place:
“Doing the right things, the first time right.” The right things are those which meet the objectives of the organization. The first time right is about eliminating all errors from the process. Making your process Lean.
2. Increase productivity and enhance efficiency
Increase effectiveness and improve efficiency. Those are the hot topics that dominate the agenda of many management meetings. Subjects which apparently clash with the objective to maintain and improve the quality of the organization at an acceptable level. Add the critical attitude of the customer and meeting the targets for quality seems an almost impossible task.
Still, there are real opportunities in the area of quality driving towards productivity and efficiency improvements. Unfortunately, although well intended, quite a few quality systems end up as straitjacket for the organization. As a result, procedures are disregarded and the effect of the system leaks away. Such effect indicate that the system does not meet the real requirement of the organization and are wrongly set up and implemented. Try to enforce the procedures in such condition fails and mostly leads to head on confrontation with the involved staff. A revisit of the system is required at such moments.
3. Reasons for not achieving productivity
Although many companies endorse the need for increase of productivity, in practice many attempts in this direction fail. What are the causes of today? Just reducing cost is only part of the story and isn’t the real solution. This method is finite and there are other means required. There are several reasons that prevent an organization to increase in productivity and still maintain the right quality level. Below a list of possible causes and the impact on the organization.
3.1 No clarity on the objectives of the organization
If the objectives of the organization are not SMART enough, they are not measurable. That sounds logic, but still many management teams fail to really get to the bottom of it. Mostly due to a lack of attention and the day to day work pressure, prevent management teams to succeed. As a result the demands on the resources are not clearly defined, which prevents a proper analysis of issues and thus an effective problem solution. If you want to know whether you are SMART enough, ask the staff that needs to execute the work. Do they understand and grasp your objective?
3.2 Not or insufficient measurement
Would an organization be able to evaluate the objectives, it is imperative to have an adequate set of instruments. These instruments must be designed so that deviations clearly identifies the different organizational areas. Only then is it possible to get the right measures to increase efficiency and productivity.
3.3. Insufficient understanding of the tools used and skills required.
If the understanding of resources and competences lack, the risk is eminent that the resources and skills will not efficiently be deployed. Nor is it possible to analyze the resources and competencies which lack in the organization. With the proper insight and the appropriate measures, productivity will increase.
3.4 Insufficient information
Information in an organization is necessary to take the right decisions. When clearly defined what information is necessary, can by use of appropriate resources, the process be optimized. This will optimize the speed of the process, which has a positive effect on productivity results.
3.5 Quality overkill.
In order to ensure the quality, it is necessary to install a proper quality system. However, instead of quality that helps to increase productivity, we see quite often that quality systems obstruct productivity improvements. Often processes are utterly described to meet all kinds of quality requirements, while also correct standards are available to ensure that companies perform better by improving quality. The quality system has become an end in itself rather than as a mean to improve organizational performance.
4. A tool for increasing productivity
When in the dictionary is searched for the term ‘quality’, it indicates: “some capacity in which something is suitable for a particular purpose or use”. To us, quality is not defined as a set of rules that an organization provide a disincentive. The essence of quality is to ensure that the objectives are achieved. An organization who wants to be the best they can be, should make sure that quality needs are leading when objectives are set. The specific demands on quality must be derived from these objectives. Measuring instruments must organize indications, enabling management to control and follow results. The outcome of the results should help the organization to optimize its processes.
4.2 Policy and strategy
When an organization wants to achieve an increase in productivity, it is necessary to the performance of the organization, to continuous evaluate and use the outcome of it as a lead for policy and strategy implementation.
To be able to initiate appropriate action is necessary to have clearly identified how the principles of policy and strategy are supported by the resources and competences. Indeed, the deployment of appropriate resources and use of skills largely determine productivity. In order to have resources work properly, it is necessary to understand the role of competencies and resources within the business. Only then is it possible to use the results to optimize the process.
4.3 Increase productivity
By applying a quality model, it is possible to establish a relationship between strategy, policy, resources and competence on one hand and employees, customers, suppliers and society on the other. To prevent the quality model turns into red tape and therefore the processes are not flexible, adaptable to changing circumstances, a method is required which is capable of rapidly responding to change. Only then is it possible to exploit the quality model for any organization. Because of the flexible response to changing circumstances, it is possible to respond effectively to opportunities and threats and increase productivity.