ICQI2002

Pakistans Seventh International Convention on Quality Improvement October 26-27, 2002 , at Marriott Hotel, Karachi

Productivity Audit of Pakistani Manufacturing Company

Author

Farzana Jabeen House 272-A, Street 30, F-10/1, Islamabad - Pakistan E-mail: [email protected]

Pakistans Seventh International Convention on Quality Improvement (ICQI2002)

PRODUCTIVITY AUDIT OF PAKISTANI MANUFACTURING COMPANY

by

Farzana Jabeen Islamabad - Pakistan 1.0 BACKGROUND

T P P

he manufacturing firm has been actively engaged in the manufacture of Engineered good since late 50s. The company has rapidly expanded its product range to serve various sectors of the company. The company also received ISO 9001 certification in 1996. But still Company is going through economical crunch for the last few years.

2.0 PRODUCTIVITY
roductivity is scientifically defined as P= output/input

However productivity is actually an attitude depending on the will of the management to motivate the workers to work both effectively and efficiently to give quality results.

3.0 IMPORTANCE OF PRODUCTIVITY IN THE COMPANY

roductivity is a concept well understood by the managers and workers of the Company. Recently the Company has redefined this concept in terms of value and volume. Top Management believes that productivity is nothing but motivation. They strongly believe in setting up of role models who would inspire people to work with their hearts along with their minds. In the wake of recent losses suffered by the company, top management is emphasizing on non-financial motivation techniques for the workers. The concept of productivity has been linked with quality to achieve organizational excellence. The management realizes that ISO certification is just a milestone in the path of TQM (Total Quality Management). The management and workers are aware that rework and non-conformance needs to be reduced to achieve higher productivity and deliver total customer satisfaction.

4.0 PRODUCTIVITY ENHANCEMENT TECHNIQUES APPLIED BY THE COMPANY 4.1.0 GENERAL

Techniques being applied by the Company are:

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a) Employee Based Productivity Improvement Techniques - 12 b) Task Based Productivity Improvement Techniques06 c) Technology Based Productivity Improvement Techniques - 05 d) Material Based Productivity Improvement Techniques 04 e) Product Based Productivity Improvement Techniques03

4.2.0 EMPLOYEE BASED PRODUCTIVITY IMPROVEMENT TECHNIQUES

Although there are 26 employee based productivity improvement techniques but the Company applies 12 of them. Though it is difficult to quantify the possible effect on productivity of these techniques, these may be the most important. Employee based techniques implemented by Company are of two kinds, financial and non-financial. 4.2.1 INDIVIDUAL INCENTIVES They use the piecework plan. Two features characterize this plan: Pay is directly proportional to number of units produced and minimum wage is guaranteed. The earnings generated by PWP is Epw = number of units produced * rupees per piece Where Epw is the earnings generated by PWP In the company if the worker works at 100% productivity he gets his basic pay. Anyone working above this gets his wage according to the above formula. A worker exceeding 120% will get 1.5 times more than that. The gross monthly wage including this plan is calculated using the criteria given in the table below by the accounts department. 4.2.2 GROUP INCENTIVES: There are several such plans. None of these are being applied in the Company. They give 7 fixed bonuses to the employees each year. They need to link productivity to group incentives. They do have an employee profit sharing fund. 4.2.3 FRINGE BENEFITS: The Company is providing its employees with many fringe benefits. These include Fair price shop, Canteen, Old age benefits, Social security, Medical facilities, Recreation, Subsidized education for children, Welfare fund, Group life insurance scheme, Death benevolent scheme, Burial expenses, Transport, Gur and oil, Loan facilities, Provident fund 4.2.4 WORKER PARTICIPATION The Company believes in the Japanese concept of continuous improvement by the co-operation of management and workers called KAIZEN. In the company, the workers in the shop floor are divided into 10 Kaizen teams. They are given two years to find solutions to problems in the shop floor. Competitions are held between the different teams, which increases motivation. The teams are also sent to institutions like LUMS to give presentations.

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4.2.5 JOB ROTATION: In the company, usually the turners of the machine are rotated. However it is not a formalized technique used by the company. 4.2.6 RECOGNITION AND PUNISHMENT: In the Company, they have a unique way of recognizing its employees. Every month the best turner of the month is selected according to the performance of the worker. He is given a financial award of Rs. 500 and his picture is placed prominently on the wall of the machine shop. At the end of the year best turner of the year is selected. He is given a reward of Rs.2, 000 and a certificate of excellence. There is no formal way of punishment but paid leave has been reduced to minimum levels to reduce absenteeism. 4.2.7 SKILL ENHANCEMENT: For blue-collar workers most of the training is done on the spot. Sometimes videos are also used to train the employees. However the production manager is in favor of more formalized classroom training. For managers there is on in-house training with special emphasis on quality training programmes. The management is sent to the principal company abroad to learn about new technologies and new management practices. Management is also sent to attend different seminars arranged by institutions. 4.2.8 WORKING CONDITIONS: Working conditions are important for better performance of the workers. There the working conditions are quite satisfactory. The walls have been recently white washed. One canteen is provided to all that work there. The bathrooms are very clean. The Director Technical gives special emphasis on this aspect. The shop floor is well maintained with huge dustbins provided for the scrap material. The noise level is relatively high and the workers do not use earplugs. Outside the employees are given a green, clean and healthy environment, which is pleasing and relaxing for the employees. 4.2.9 ZERO DEFECTS: Zero defect programmes attempt to improve quality by instilling the idea of doing it right the first time in the employees. Since ISO certification, the company has been working on this technique. Price of non-conformance and rework is recorded and in weekly meetings with the Quality Assurance Department reasons of these are discussed and suggestions are given to reduce mistakes. This has created a more quality conscious work force. 4.2.10 MANAGEMENT BY OBJECTIVES: Management by objectives (MBO) is a motivational technique in which the management and workers jointly set and achieve goals. The Company is a strong believer in this technique. Annual goals are set in the production department and published in form of a booklet to avoid ambiguity.
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Goals are also written in Urdu so that workers can read and easily understand the goals set and work accordingly (attached in appendix 9). The results of this technique have been very positive. Goals achieved are higher than goals set. For example the goal set in year 2000 was to reduce overtime by 25%. They actually managed to reduce it by 56%. 4.2.11 ROLE PERCEPTION AND QUALITY OF SUPERVISION: Supervisor of the production department in the company is an effective leader. He has managed to reduce unpunctuality by arranging the recitation of the Holy Quran at 7.00 a.m sharp for both white and blue collar workers. He believes in an open door policy and has a friendly relationship with his workers. Greater awareness in employees of organizational goals has been instilled because they define their goals according to company requirements. 4.2.12 COMMUNICATION: There is effective communication between workers and management. There is a strong concept of bottom-up communication. Literally the managers need to go down from their offices to the workers if there is any problem.

4.3.0 TASK BASED PRODUCTIVITY IMPROVEMENT TECHNIQUES:

The Company applies six task based productivity improvement techniques. 4.3.1 METHODS ENGINEERING/WORK SIMPLIFICATION: The time and motion study was carried out about 20 years ago and thus there has been no progress in the field of methods engineering. 4.3.2WORK MEASUREMENT: A time and motion study was carried out 20 years ago. At present, the stopwatch time study is usually done for recording the time taken to perform the various tasks. If the work is not completed in time, then the workers are asked as to what were the reasons for the delay at different stages of manufacturing process. 4.3.3 JOB EVALUATION: There is an evaluation committee, which comprises of Production Manager, Head Pumps Division, and Quality Manager. This committee evaluates the different jobs and they have adopted the ranking method for it. 4.3.4 JOB SAFETY DESIGN: They have a well-designed safety program, by which they provide safety shoes, goggles, and wooden racks to the employees to prevent them from electric shocks, helmets, safety gloves and masks. Gurr and oil is also provided to the employees to ensure better health and minimize the negative affects of gases within the factory.

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4.3.5 HUMAN FACTORS ENGINEERING: Unfortunately no importance has been given to this technique. However they are very clear about the importance of this technique. They admitted that this would be an interesting study to measure the productivity (partial and total) during the different seasons of the year. 4.3.6 PRODUCTION SCHEDULING: Production scheduling is the planning for timing and sequencing the work. It is a systematic and formal process for: Equipment assignment Labor assignment Materials assignment Customers assignment At this Company, this process is controlled through the COMET.

4.4.0 TECHNOLOGY BASED PRODUCTIVITY IMPROVEMENT TECHNIQUES:

4.4.1 COMPUTER-AIDED DESIGN (CAD): The Company from 1992 applied CAD system and almost 3000 drawings are on CAD system from the total of 12000.But even then the manual work is done and still other 9000 designs are to be converted to CAD system. 4.4.2 COMPUTER-AIDED MANUFACTURING: They have one CNC machine, which is working on the system from 1985. So it is obsolete now. 4.4.3 MAINTENANCE MANAGEMENT: The Company has its own maintenance department where they are applying this technique in two ways. Preventive Maintenance Management

The proper inspection of machines is carried out every day during the working hours. On Sundays when workers are not working, complete inspection of machinery is carried out. Breakdown Maintenance Management

The Company has its own maintenance department and if of a machine breaks down they have their own maintenance department where the entire necessary spare parts are available with it.

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4.4.4 COMMUNICATION: The internal and external communication is done through: Intranet

The whole organization is connected through the local area network (LAN) through which the managers are connected to each other through computers. Which makes the decision making easier and access to the information. Internet

4.4.5 COMPUTER GRAPHICS: CAD (computer-aided design) and CAM (computer aided manufacturing) are the two most commonly applications of computer graphics technology.

4.5.0 MATERIALS BASED PRODUCTIVITY IMPROVEMENT TECHNIQUES:

4.5.1 INVENTORY CONTROL: Inventory Control is concerned with two questions: When to order and how much to order. In the Company, it is done through Software where each unit is monitored. The company mostly uses ABC analysis for Inventory control. The ABC analysis is primarily intended for end items that are characterized by demand independent of other end items. This analysis is done on: Consumption Based Requirement Based

In consumption based analysis there are mostly Machine shop consumables, inventory consumables and spares. In this analysis the Company use EOQ model and do the trend analysis of last one year. Order for these items is automatically generated. Where as requirement based analysis is based on particular orders. In this analysis order is not generated automatically. COMET is used for this purpose. 4.5.2 MATERIALS REQUIREMENT PLANNING: In the Company, COMET is used for MRP (recently known as Enterprise Resource Planning), as it is an important module of it. In this software, information and description flow in the form of codes. This system supplements a very standardized product. The system is highly integrated starting from write-up to dispatch. 4.5.3 QUALITY CONTROL: Quality of design: All the goods at the Company are designed according to DIN (Dutch International Norms) Standards.

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Quality of conformance: Quality of conformance changes with every order. Customers requirement is transformed in to a document called QCP (Quality Control Plan). When the order is received, customer requirements of media, temperature, paint etc. are specified in the document. Quality of Performance: Quality of performance is governed by installation and operation of pump at site. There are DIN standards for testing and customer specific testing. There is a test bed facility available at the company campus where customers can witness the test. For certain goods the company do sampling and for others there is 100% testing.

4.5.4 MATERIAL HANDLING SYSTEM IMPROVEMENT: It is directly related to plant layout. Material flow time in the company is standard. The process time of materials is one day from store to machine shop. Kaizen team is working to reduce the issuance time to 50%.

4.6.0 PRODUCT BASED PRODUCTIVITY IMPROVEMENT TECHNIQUES:

4.6.1 PRODUCT DIVERSIFICATION: The Company, in the beginning was producing few types of goods, but in 1964 they started producing variety of products. 4.6.2 VALUE ANALYSIS ENGINEERING: In the Company, basic engineering is done at Head Quarters Abroad. Whereas in Pakistan, only secondary engineering is done by the design engineers 4.6.3 ADVERTISING AND PROMOTIONS: In the Company, different methods are being applied to boost the sales and productivity. Billboards at Airports Technical Journals Yellow Pages

5.0 NON VALUE ADDED ACTIVTIES:

Any work done in an organization is of two types; value-adding work in which the work done adds to the value of the process or the product. Non-value added work is work done which does not add value and just wastes time, effort and money. Some non-value added work done in the Company has been identified and quantified Duplication Of Information Waiting Time Between Processes Double Checks Ineffective Layout Of Machine Shop Overtime Costs Comet Is Not Properly Implemented Unofficial Phone Calls
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Maintenance Department Is Not Properly Managed Checking Of Specification Of Parts By Vernier Caliper Using Comet But Information System Is Old Store Transaction Given To Contractors Manual Reporting System No Common Database Re-Issuance Of Drawings To The Machine Shop Long Tea And Lunch Breaks

6.0 WHITE AND BLUE COLLAR WASTE:

Waste is a result of unclear requirements, inefficient processes or errors. It is therefore costly and frustrating and can lead to big losses.

WASTE (Any excess, error, embellishment, whim, or fancy..anything a customer would prefer not to pay for) Hides problems Slows response Is costly De-motivates staff Annoys customers So Remove it constantly

6.1.0 WHITE COLLAR WASTE

6.1.1 COMPROMISING ATTITUDE: The managements attitude towards the disciplinary problems is not that much formal as it should be in such a big organization. 6.1.2 DELAYED DECISION MAKING: The decision made at the upper cadre of the organization seldom get transformed to the grass roots within the speed and time span chalked out in the operational plan.

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6.1.3 WORK DONE MANUALLY: Even though the offices are fully computerized still a lot of unnecessary paper work is done. Sometimes the information is duplicated, as it is both recorded on the system and manually resulting in a loss of time and effort. 6.1.4 COMPUTER ILLITERATE: The company chapter of Pakistan is comparatively less computer literate as compared to its parent and other western branches. 6.1.5 TIME WASTAGE BETWEEN ACTIVITIES: Managers in the office usually waste the time in between meetings and other activities. Take long lunch and tea breaks. 6.1.6 LACK OF PUNCTUALITY: It was observed that the managers in the company were usually late for work. Managers were up to two hours late.

6.2.0 BLUE COLLAR WASTE

6.2.1 OLD AGE EMPLOYEES: At the machine shop, most of the workers were old aged. They slow down the pace of work and hence hinder the productivity. 6.2.2 ABSENTEEISM: In the company, there is high rate of absenteeism, which results in waste. 6.2.3 OVER TIME: Since there is a practice in the Pakistani companies of paying an amount for any extra work done after the regular duty hours. Therefore the employees some times deliberately slow down the pace of the worktop gain that extra monetary benefit. 6.2.4 CAPACITY LOSS: In the company the capacity utilization is 80%. Absenteeism in the blue-collar workers is the main reason of capacity loss. In November 2000 twelve turners out of 30 were performing at an efficiency rate less than 100%.

5.2.5 Rework:
During the manufacturing process the different components of the product are checked for their measurement accuracy. A difference of micrometer can cause the component rejection. In such a case the component has to be manufactured again. This results in the wastage of time and other resources.
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7.0 PROCESS MAPPING

Process improvement starts from a mentality of accepting that every thing is a part of a process. It is the management tool initially developed and implemented by GE as part of their integrated Work Out best practices and Process Mapping strategy to improve significantly their bottom line business performance. Process mapping concept is used to describe in work flow diagrams and supporting text, every vital step in your business processes. Recognizing the importance of process mapping, the Company considered it analytical and communication tool intended to help and also improve their existing processes or to reengineer their processes. To develop Companys unique process management approach, the process improvement approach, the process improvement elements ___ followed by the company are: Businesses processes were defined Established the level of process mapping Selected processes to re-engineer Identified the role of management leadership The role of process owners The structure of executive management leadership 7.1 RULES FOR THE COMPANY TO USE PROCESS MAPPING PROPERLY TO REDUCE WASTE: As process Maps are used to figure out what a process is supposed to do. It is amazing how seldom any process managers can fill in all the blanks. Needless to say the Wastes side gets neglected the most. But in fact the most revealing result is that many times they don't have basic benchmarks or standards for a lot of steps in the process. So the company must set the benchmarks and fill in the blanks.

Process maps don't show dynamic information. For that the company also needs to take measurements over time. A process waste chart is interesting because it reveals 3 different kinds of waste. Design waste is inherent in the process and the engineers and designers need to be involved to reduce it. Variance waste is created when processes run normally; to reduce it the process operators need to be responsible. Defect waste is created by all kinds of things including poor maintenance, bad materials, etc., and often requires cross-function problem solving. Simply measuring the wastes daily often has great results in getting them reduced.
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Once the company knows when and where wastes happen it can start figuring out why. Many people are still unfamiliar with the classic fish-bone diagram of cause analysis yet it is tremendously powerful. Each time a branch is identified as a waste causes to draw more sub-branches off of it for each deeper"cause.

Once the company knows what the problem is, how to approach it? The key is to start "up the pipe" to prevent problems as early as possible. There is a terrible tendency for managers to think of treatment of wastes when they should be thinking of prevention. Once an option has been selected the company needs to compare its value to the current process. The most important thing to start with is this:

If you don't know how much you are spending to create waste, you can't tell how much you will save by preventing it!

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So the first thing to do is find out what the current process REALLY costs.

8.0 STUDY OF THE MACHINE SHOP

STUDY OF THE MACHINE SHOP: Our study is more focused towards the Machine shop of the Company. To measure the productivity of Machine shop: Performance indicators of machine shop are defined and calculated Then goals are set to enhance productivity of machine shop and how to achieve them.

PERFORMANCE INDICATORS: 1. 2. 3. 4. 5. 6. 7. 8. Capacity utilization. Productivity per turner (min) Lead time of Lots (avg.) days Average turner/machinist efficiency Rejection %age bad work (weight wise). Rejection lots (Bad work) Local. %age of rejection lots (bad work) local. a) Percentage of defective components (export) b) Finally rejected components against 8 a) 9. Go straight %age of lots 10. Delivery within sales delivery period. CALCULATIONS: After defining the performance indicators of machine shop, figures of target and achieved are compared. Sr.no 01 02 03 04 05 06 07 08 a) b) 09 10 Criteria Capacity utilization Productivity per turner (min) Lead time of lots (avg.) days Average turner/machinist efficiency Rejection %age bad work (weight wise). Rejection lots (Bad work) Local. %age of rejection lots (bad work) local. Percentage of defective components (export) Finally rejected components against 8 a) Go straight %age of lots Delivery within sales delivery period 1999 78% 10125 12 108% .55 6 2.1% 4.3% 0% Target 80% 10600 10 110% .5 5 1.75% 3.5% 95% 90% Dec 2000 87% 10399 14 105% .45 10 4.2% 3% 0% 96% 89% Year to date 82% 10265 14 101% .46 9 3.76% 3.98% 0% 96% 88%

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GOALS TO ENHANCE PRODUCTIVITY OF MACHINE SHOP

Enhance productivity of CNC Machine by 10% Reduce inventory (tools) by 5% Reduce Tools Consumption by 10% Reduce Overtime by 25% (as compared to 1st half 2000) REJECTION /PONC CONTROL Reduce rejection (Bad work) by 5% Maintain Go-Straight %age of Lot above 95% Reduce NCs by 25% Reduce QPRs by 25% ACTIVITIES TO ACHIEVE THESE GOALS: 1) Enhance productivity of CNC Machine by 10%

Sr.#
1 2

Activity
Provide lifting hoist crane at CNC Removed the Pitter Bar work from the CNC area

3 4 5 6 7 8

Study the existing CNC Program Maintain the back up of the finalized programs. Training of Turners Setting &Provision of tools/fixtures in advance for the next lot Develop new fixtures /clamps Optimize the machine lay-out and ensure better environment

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2) Reduce inventory (tools) by 5% and reduce tools consumption by 10% Sr.# 1 Activity Identification of obsolete Machinery spares & Tools/Aging of inventory Tools Proposal for disposal of obsolete Spares/tools lying in inventory Control tools Consumption through developing awareness at grass root level. Monitor Consumption on weekly basis Control new intending/purchasing

2 3 4 5

3) Reduce Overtime by 25% Sr.# Activity 1 Better Planning (through COMET)& capacity planning 2 Fix targets for O/time on monthly basis/weekly basis 3 4 5 Monitoring Overtime Daily basis Utilize other available resources as alternate against the requirement Control Absentees

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4) Reduce rejection (Bad work) by 5%, maintain Go-Straight %age of Lot above 95%, reduce NCs by 25% and reduce QPRs by 25%. Sr. # 1 2 3 4 Activity Strengthen Process control /self inspection Maintain Go-Straight %age above 95% Reduce NCs by 25% through prompt and effective corrective actions/measures Reduce QPRs by 25% through prompt effective corrective actions/ measures

9.0 PRODUCTIVTY AUDIT:

ISO 9001: The Company was given the ISO 9001 certification in 1996.Though they are following the stipulated 20 clauses and documenting most activities; the same have not yet been fully implemented. The main reason for this may be attributed to the managements inaction and lack of resolve to implement standardization. Documentation also means extra expenditure. A single form of PONC requires Rs.500/- to fill only. Although documentation has helped the company to improve the quality of its products and reduce re-work but non-conformance can still be seen. In the year 2000 alone the cost of non-conformance, customer complaints and Quality Performance reports (in Appendix 8) was Total = Rs. 1, 228, 200 If the cost is reduced by 25% by strengthening process control and self inspection Savings would be = Rs. 307, 050. DISPARITY IN TECHNOLOGY: If a comparison is made between the work methods and technology being used at the Parent Company and here, a large disparity is observed. Only one CNC Machine is available here. Most of the machines being run are at least 20 years old and no proposal has been floated for their replacement. In view of this stark contrast the quality of certain products could be suffering.

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If another CNC machine is bought Cost of machine = Rs. 1, 000, 000 If 4 workers are reduced due to new CNC machine Then average savings will be on labor cost Wage per year x 4 Wage per year = 160 x 365 = Rs. 58, 400 For 4 workers 58, 400 x 4 = Rs. 233, 600 So savings per year will be Rs. 233, 600 Keeping other factors constant the pay back period will be around 5 years. RESEARCH AND DEVELOPMENT: There are absolutely no research facilities available to the Company personnel and design staff. Maybe it would bring out more innovations defined by the Pakistani environment if such a facility is created. RELIANCE ON GOVERNMENT ORDERS: The Company almost entirely relies on the government sector for the sale of its products. Lack of political stability has aggravated the situation and the company is facing a crisis. Little effort has been made to penetrate the private sector. This particular sector promises great business but it has remained untapped for so long the private customers are now turning to other pump manufacturers for the fulfillment of their needs. In 1999 orders per day amounted to 10. Now they have been reduced to 4 orders per day. WAGES REDUCED: Over the past few months the company slashed the salaries of its upper cadre staff by 3-5% in the face of the huge losses the company has had to suffer recently. There are absolutely no backlogs and fresh orders are eagerly awaited to cover the fixed costs. This reduction has generally resulted in a feeling of chaos amongst the workers and demoralized them. Such a drastic action has no precedence in the history of the company . MANAGEMENT PRACTICES: The various departments of the company are not well connected to each other. Although the use of e-mail is widely emphasized upon but such a practice has yet to become a norm and people still rely on other forms of communication like faxes, telephone and post incurring costs that can be saved. Also the attitude of the management is very relaxed. They do not display very motivating behavior especially at the middle level. The upper management is more innovative and the M.D is bringing in new changes. Another problem is that the upper management is usually bought in from other companies creating a feeling of resentment in the middle management. EMPLOYEE TURNOVER: Owing to the grave crisis the company finds itself embroiled in these days, a number of its engineers that formed its most talented pool have quit the company. The reason apparently seems to be the meager rewards offered for their services. The pays the company offers to its white-collar staff compared to other multinationals are fairly less. They have a very small and ineffective Human

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Resource Department in Lahore. They really need to try and retain employees for longer period of time.

11.0 PRODUCTIVITY IMPROVEMENT PLAN:

UNDERSTANDING THE IMPORTANCE OF PRODUCTIVITY: Productivity is nothing but motivation. The top management believes deeply in the fact that productivity can be improved even if only the whole workforce is fully motivated. The top management has a very clear idea of productivity and its importance in achieving organizational effectiveness. They are making a major effort to instill importance of productivity and quality in all the employees from top management to shop floor level. Major efforts are needed to retain the work force especially engineers who are leaving due to fewer opportunities and lesser pays. All the employees are de-motivated by the prevailing situation

ACTION:
First of all the company needs to improve its HR department which is too small and in- effective. It needs to play a positive role in hiring and retaining employees especially technical people. Pay scales and fringe benefits of engineers needs revision.The company needs also to concentrate more on non-financial motivators for workers. The management needs to connect with people emotionally. NEED TO USE ISO 9001 AS A PATH TO TQM: In the four levels of quality management the company falls in the second category, which is quality assurance. This stage covers controlling process quality. It ensures accuracy and consistency of processes. The company needs to realize that ISO 9001 is a pivot to keep companies at a certain level. Documentation has been done so now the next step is to achieve total quality. It should strive to become a customer driven company with a wide approach, to continually improve and upgrade processes, products and services using quality management strategies, tools and techniques. Managers should be given extensive training in quality management especially in the teachings of different quality gurus. After documentation, implementation of quality principles is most important.

Apply Kano Model: Dr. Kano integrated quality along two dimensions. The two dimensions were: 1. The degree to which a product or service performs and 2. The degree to which the user is satisfied. It states that pleasing customers is a moving target.

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THE THREE TYPES OF QUALITY The Kano Model is very useful in providing a level of sophistication not available in a onedimensional model of quality. If the level of customer satisfaction is plotted on a vertical axis and the degree that the product or service has achieved a given performance attribute on the horizontal axis, different types of customer wants and needs can be shown to cause widely different responses. The model shows that the customer's responses can be classified into three types as shown in Figure 2 above i.e., Basic, Performance, and Excitement. BASIC QUALITY The customer expects this quality type. Basic quality fulfills basic need. Customers will express violation of basic quality attributes by complaining. PERFORMANCE QUALITY A second type of customer requirement generates satisfaction proportional to the performance of the product. This quality type is referred to as Performance Quality. EXCITEMENT QUALITY The third quality type generates positive satisfaction at any level of execution. This is referred to as Excitement Quality. In the company, the quality of management needs to be improved especially in the sales department to understand the importance of design characteristics to a customer. By applying this model customer complaints will be reduced. In the year 2000 alone the cost of initiation and disposition of customer complaints was Rs. 294, 000. if this model is followed it can be reduced drastically.

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REPLACE PRODUCT LAYOUT WITH PROCESS LAYOUT: In the company the product layout is in place, which has not been very effective. This layout should be replaced by an assembly line layout in which materials enter from one end and the finished good should go out the other way. This system saves time. The company has done process reengineering but need to apply it more effectively. PROPER MANAGEMENT OF TECHNOLOGY: The company has the latest software in the form of COMET but it is not a well-managed system. Work is being duplicated and too many double checks are taking place in the system. It is not being used as a productivity enhancement tool but rather it is becoming a liability. They need to understand that technology is only effective when it is integrated in the system. Not only the company needs to replace its information system but needs to train its employees. Not only professional training is needed for proper use of COMET but also to train the staff in effective technology management. BELIEVE IN THE COMPONENTS OF BUSINESS EXCELLENCE: Need to integrate these principals for achieving organizational goals. BRAIN - Customer Driven Strategy CONSCIENCE - Continuous Improvement MUSCLE AND BONE - Facilities and Equipment - Links to Customers and Suppliers HEART - People CENTRAL NERVOUS SYSTEM - Operational Planning and Control LIFEBLOOD - New Products REASON FOR BEING - The Customer ANNUAL CHECK-UP - Measurements

11.0 RECOMMENDATIONS AND CONCLUSION:

11.1.0 RECOMMENDATIONS: 1.More professional approach to Marketing by establishing a full-fledged Marketing Department 2. Introduction of laser technology 3. Venture into the Private Sector through personal relationship building 4. Improve Management Structure in terms of decentralization 5. Employ young and energetic workers at the Shop Floor 6. Introduce Air Conditioning at the Shop Floor:
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This has been known to increase productivity by 40%. Specially needed in Pakistani environment 7 Link productivity with Group Incentives 8. Introduction of Ergonomics (Human Method Engineering) 9. Introduction of Standard Hour Plan along with piecework plan Uses hours per piece instead of dollars per piece Earnings are given by Esh = SHE x WR Where SHE is standard hours earned for an item WR is the wage rate per hour Advantages are that standards do not change with changes in basic pay and earnings are easy to compute. 10. Launch a website where suggestions from all staff may be sought 11. Conversion of all existing paper drawing onto the CAD system 12. Introduction of more CNC Machines 13. Increase in salaries to motivate staff at all levels 14. Employment of a qualified doctor on the premises for dealing with any unforeseen emergency 15. Need for improvement of communication channels across Sales and Planning 16.COMET should be extended to Sales Department as soon as possible

11.2.0 CONCLUSION:

ven though many productivity enhancement techniques are being applied in the company, there is room for improvement. The main reason for losses in the company is because of political instability and reliance on government orders. The group strongly recommends that the issue of productivity should be taken up at national level and the national attitude towards working methods needs to be changed. As quoted,

AUTHORS SYNOPSIS

arzana Jabeen is presently Student of MBA2K, National University of Science and Technology, Rawalpindi. She did BBA (Honors), International Islamic University and was Gold medallist in BBA (Honors) for securing highest GPA (3.91/4) and scholarship holder through out BBA (Honors)and MBA. She has working experience as Quality Manager at Enabling Technologies. She also worked as External Research Associate for Yale University, USA, and worked as Teaching Assistant at International Islamic University for eight months. Building organizations is like moving mountains, but Changing hearts is even tougher

Pakistan Institute of Quality Control

www.piqc.com.pk