Productivity for Labour Cost
The CEO of this company contacted a consulting firm in order to get professional consulting support. A MDC consultant looked around the factory and a brief presentation was made concerning productivity improvement. The presentation left a very good impression to board members, but nothing happened to start the consultant support activity for six months.
The CEO contacted the consultant later and asked to start professional support. The reason why he waited for 6 months was that the CEO did not want to make any misunderstanding regarding rationalization for recovering the company’s situation in red and productivity improvement. The CEO took those months for firing employees in order to rebalance company performance. There was no misunderstanding after MDC project started among labour union, employees, middle management.
The project activities lasted for more than five years. As a result of firing employees, the total input man-hours for production decreased by 30 percent. Then after the project was completed, the project activities contributed to man-hours decreasing nearly of 50 percent more. On the other hand, production in money increased more than two times without any additional employee increasing. This result was the effect of MDC project activities, the total productivity reached 562 percent level. The man-hours input decreased and the results absorbing production and sales volume increased.
The CEO proposed to labour union that the company pay special bonus to all employees.
Top management, labour union and employees are always together for real productivity growth? Are their goals always congruent?
1. Manufacturing Cost Policy Deployment(MCPD) and Methods Design Concept(MDC), The Path to Competitiveness, Alin Posteuca and Shigeyasu Sakamoto, CRC Press, USA, 2017.
2. Beyond World-Class Productivity, Industrial Engineering Practice and Theory, Shigeyasu Sakamoto, Springer, UK, 2010.
3. Design concept for methods engineering in Maynard Industrial Engineering Handbook, the Fourth ed. Hodson, Shigeyasu Sakamoto, McGraw Hill, 1992.