PART III: Performing a Productivity Review.

Productivity ReviewPutting the principles of productivity into practice in your diesel repair shop is simply a matter of selecting a system, function, organizational unit, or an activity, then performing the productivity review, and creating a productivity improvement plan.

Following are the 6 steps for performing a productivity review:

1.   Select a system, business function, organizational unit, or activity of importance to your repair shop that you want to review and improve.

2.   Determine the critical outputs (or results) of the system and how they are measured. Deciding on the most useful measure of the result depends on what kind of productivity you’re interested in. If you’re operationally-driven, you’d focus on quality, quantity, speed, and the like. If you’re financially-driven, you’d focus on costs and revenues. However, to conduct a thorough productivity review, you would want to measure both financial and operating indicators of output.

3.   Determine the critical inputs (or resources) of the system and how they are measured. What are “critical” inputs? That depends on the system. For instance, in a steel factory, the amount of electrical power and the content of the iron ore are critical. In a transportation company, fuel, maintenance, and equipment are critical. In a diesel repair shop, labor hours, labor costs, parts, and time are critical inputs.

As we mentioned in Part I of this blog series, inputs are resources of seven different kinds: labor/staff, space/facilities, equipment, supplies, information, time, and money. Critical inputs are the resources that have the greatest impact on the output (or results) of the system, function, or activity. The critical resources should be the focus of your attention. The less of a critical resource you use, or the more effectively you use it, the more productive your system will be.

4.   Define key productivity indicators. Combining critical output measures with critical input measures gives you the critical, or “key” indicators of productivity.

5.   Evaluate productivity. In order to evaluate productivity, the first thing you need is to know your desired productivity, so you can compare it with your actual productivity. If you don’t know what the desired productivity should be, then the actual productivity serves as a baseline from which future improvements can be measured and analyzed. The productivity number is the starting point. The rest of the evaluation relies on the rules of the productivity principles, specifically:

•     Do you have the best, most productive resources?

•     Are you making the “highest and best” use of the resources used in the system?

•     Have you optimized the productivity of the system, including balancing productivity with quality and customer satisfaction?

•     Do you have a process for tracking and evaluating the system on an ongoing basis?

6.   Planning productivity improvement. As you would with any other plan, establish the necessary activities, assign staff accountabilities, and set a time schedule and calendar dates for completing them.

While you’re planning productivity improvements, be sure to remember that if you focus solely on productivity, you run the risk of diminishing the importance of customer service. It’s not that you’re likely to forget your customers, but focusing only on productivity can divert your attention away from them. Making performance evaluations based primarily on productivity could even cause your employees to lose sight of the customer. That’s why the third principle of productivity is to optimize productivity, keeping it in balance with customer satisfaction and quality.

As important as productivity is, it still takes second place to the customer.