At a Glance
Companies understand the importance of workforce productivity, but most have overlooked measuring workforce productivity, and the lack of measurement often extends to indirect labour and other administrative functions.
The Management Control System (MCS) can be an effective way to improve productivity, streamline workflows and take corrective action on productivity issues.
The MCS is a continuous improvement cycle in the workplace, and the actions identified and implemented can drastically reduce lost time.
It is common for senior executives to have a laser-like focus on ways to improve productivity, recognising its importance in driving long-term business growth. However, productivity is a broad term that can be interpreted in different ways depending on the industry and the company.
The different meanings of productivity
In labour-intensive industries such as manufacturing and construction, productivity is typically measured in terms of individual or team performances, whether it is operating a machine or working on an assembly line.
In contrast, in process-oriented industries such as oil and gas, which rely heavily on machinery and equipment, productivity is often measured in terms of process output, such as maintenance efficiency, because employees’ direct influence on production is limited.
While companies understand the importance of workforce productivity, such as maintenance and inspection in the oil and gas industry, most have overlooked workforce productivity measurement. This lack of workforce productivity measurement often extends to indirect labour and other administrative functions.
Understanding productivity: How to measure it
Productivity can be categorised into two main types:
- Production productivity: Measures the output of physical products, such as parts or tonnes, and is typically applied to direct workers in manufacturing or construction.
- Activity productivity: Focuses on the output of tasks or activities, such as the number of shipping containers moved, and purchase orders processed. This measure is often applied to indirect workers and staff, such as maintenance crews, warehouse staff and clerical positions.
There is a common approach to measuring and managing productivity measurement that involves quantifying current and future workloads, identifying available human resources, and calculating current utilisation rates.
The root cause of low productivity: system or people?
Underutilisation, a common case of low productivity, occurs when resources are not fully utilised, resulting in reduced output. When underutilisation occurs, it results in lost time.
This can be due to a number of factors, including poor supervision, poor layout of the area, inadequate availability of materials, equipment, tools or information, overly complicated bureaucratic processes, lack of management and a poor Management Control System (MCS). Each requires a corrective action. Appropriate corrective action leads to a reduction in lost time and a progressive increase in output.
Improve productivity with a Management Control System
What if there was an effective way to improve productivity, streamline workflows and take corrective action on productivity issues? Enter the Management Control System (MCS).
At Renoir Consulting, the MCS is at the heart of everything we do, involving productivity measurement, variance categorisation, root cause analysis, action identification and implementation. This is a continuous improvement cycle in the workplace, and the actions identified and implemented can drastically reduce lost time. Installing an MCS can ensure productivity improvements by addressing the root causes of lost time. If the MCS clicks and fits into your business, your operations would be able to run processes effectively.
Typically, actions are taken by maintaining the same number of resources, resulting in a progressive increase in output, or removing people from a particular area, but output is maintained at the desired level.
However, productivity issues continue to occur when the company removes the ‘excess’ people but does nothing to address the causes of the lost time. This is because the remaining people will continue to do what they have always done without changing their behaviour or mindset. It is, therefore, important to address the human element. Through a nuanced understanding and proactive approach to people issues, organisations can cultivate a more productive working environment, paving the way for improved results and sustainable success.
Our proven implementation approach focuses on driving behavioural change at scale. Our unique proposition lies in our ability to change behaviour using techniques such as securing buy-in, ensuring change compliance, and redesigning management culture.
With over 25 years’ experience in implementation and change management, we will work with you and your team to develop a practical programme to deliver improved business results.
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