Keith Matthews was a German
plant technician who came once
in a while to service and repair a
certain brand of packaging machine called
Fawema. I don’t know if that brand still
exists, but it was quite popular with flour
packaging then.
Keith was a well-built guy with bushy
hair and wild beards. He looked like those
well-fed cowboys from Texas that we used
to watch in movies. He draped in a half
coat, or vest, to complete that cowboy look.
He was quick-paced but with a limping
gait. He always carried an old leather bag
that looked like it had been passed down
many generations.
Keith was a meticulous guy when behind
the Fawema machine. In his leather bag,
were his valuable tools, 2 bottles of cold
water, and a green apple. He had a kind
of ritual style of organizing his tools
based on the order of use. He would put
on his overall, place a sweat towel next to
the tools just before he started work. He
profusely sweated.
When he started to work, ideally from
CROSSFIRE
Productivity: Issue At
The Top And Bottom Of
The Future Business
Agenda
9:00 am, he was like a dog with a bone,
with minimum movements, he would be
on it till 5:00 pm, save for short apple or
pee breaks. Every time he finished with a
tool, he would wipe it clean and return it
to its designated storage space in the bag.
This man Keith was productive too.
Within four to five days, he would, alone,
finish working on the machine; work that
would take our local technicians a whole
month.
After Keith, I couldn’t help noticing
how our local technician went about his
tasks. Ouma would dither and dally for
30 minutes looking for the number 10
spanner. After unbolting a section of the
machine, he suddenly realizes he needs
grease. So, grease is sent for. Another 1
hour wasted. Meanwhile, Ouma walks
around chatting with colleagues. When
the grease comes, he realizes that some
rings are worn out and needs replacement.
And that cycle went on and on and on.
Productivity is all about work done
within a particular time frame. The
output generated from a certain input;
During these hard times, no asset is limited.
We must stop walking our assets and start
running them. Make all your assets sweat.
We must identify the near maximum potential
of each asset and switch them to top
gear. I don’t mean we run around to show
the sweat of our brow, rather, we must show
the results for it.
By Herman Githinji
total performance from the resources you
employ. Effort and hard work are good
virtues but they have become ancient in the
face of technology and competitiveness.
Today, and into the future, every resource
must produce at the highest level at any
given moment. People and machines
must be employed to produce at the full
potential within a limited time. Innovation
and technology must also be engaged
skillfully for resources to yield maximum
productivity.
Companies that don’t have productivity as
their main non-financial key performance
indicator, will suffer loss in the short
run. In the beginning, the heat is not felt
because the industry may be young, hence
a few competitors. With fewer players, it’s
a sellers’ market. You charge a premium
and there is always some fat to cushion
the muscle and the bone, even when costs
spiral out of control.
But when the industry reaches maturity
stage, competitiveness from more players
force prices down, and the fat goes. The
muscle and bones are exposed. If industry
prices go lower, any price cuts start to
touch the bone and the pain is teeth
gnashing.
When competitiveness in the industry
forces prices downwards and internally cost
reduction options have been exhausted,
then productivity is the panacea. How do
small companies become unproductive in
the first place? They honor and respect the
effort and hard work instead of output.
So, when a staff seems to be overwhelmed
with their role, instead of re-evaluating
their output, skills, and scope of work,
they add another staff. When a driver
is overwhelmed with work, instead of
investigating the truck and driver output,
they buy another truck instead. They keep
investing to have the work completed
hoping they are safe and customers are
happy. Eventually, the company is awash
with excess resources and gagged by a
bloated and uncompetitive cost structure.
How unproductive are your resources?
In a ready-mix company that I consult
for - Rhombus Concrete, we started with
identifying all the resources we have and
their output.
If it’s People, how many do we have?
What is our total pay per month or year?
For Trucks, how many do we have? What
do they carry per trip in tons? How many
trips do they do per day? If Plant, what is
the capacity? How many cubic meters of
concrete does it produce per day? About
concrete pumps, what is their capacity per
day? What do they pump per day? This
first stage is to identify the resources we
have and set an output baseline.
What productivity levels are we looking
for? There are two ways of benchmarking
productivity. One is to identify the most
productive company in the industry to
benchmark with, or the industry average.
If that is not available or is hard to get,
then the second option is to get the top
productive person, machine, or process
within your own company.
At Rhombus Concrete, we looked at the
productivity numbers of all our trucks and
took the best, for the plant, we took the
best-performed output per hour, for the
people, we took the best performed month
or year.
The next step is to create your own
productivity standard based on the
industry best, or industry average, or the
best own performance. At Rhombus, for
example, we said that each truck must
carry within the capacity of 30 tons per
trip and should make 3 trips in a day.
That was based on the best performing own
driver and also within acceptable industry
standards. If all drivers performed at that
level, we would only need 5 trucks instead
of 8 trucks that we used. The extra 3 trucks
were hired for about Kshs. 30,000 per
day, meaning, if we just improved all our
drivers to the best standard, we would save
millions per month from the hiring cost.
Now, when you compare your current
productivity with the best standard you
have identified for all your resources, you
will realize how much money is going
down the drain just by not maximizing
productivity. With people, please don’t pay
on hours worked or overtime, but pay on
productivity.
At Rhombus Concrete, we realized that
some drivers were getting overtime while
their trucks were not achieving the newly
set performance standard. At the same
time, our best performing driver, on
productivity, was only getting a basic pay.
He was actually being punished for being
efficient and more productive.
During these hard times, no asset is
limited. We must stop walking our assets
and start running them. Make all your
assets sweat. We must identify the near
maximum potential of each asset and
switch them to top gear. I don’t mean we
run around to show the sweat of our brow,
rather, we must show the results for it.
Effort is sublime and it’s noble to
recognize it, but we must reward results.
Keith used to plan and organize for his
efforts to yield the highest productivity,
while Ouma runs around like a headless
chicken beating about the wrong bush,
and getting paid for it. Keith sweated.
Ouma sweated. But Ouma, for the wrong
reasons!
Herman Githinji is a management
and seasoned marketing consultant
and law graduate from the University
Of Nairobi. You can commune with
him on this and related issues via email
on: [email protected].
ltd
04
MAL36/20 ISSUE