Productivity – How to improve it

    Most business people agree that increasing productivity is a good thing if it can be done in a cost-effective manner.  Alan Greenspan has attributed much of the great economic expansion over the past 10 years to productivity increases.

    Before you can increase productivity in your organization you must know how to define it.  Simply, productivity is the output per unit of input.  Input is generally defined as a full time employee or even down to the man-hour level.  Output depends on your business and can be “# widgets produced” if you are a manufacturer or can be “# new home insurance policies” if a service provider.  The first step is to define the output measures for your company.  These measures can be company-wide (revenue), for a particular function (# sales calls made), for a particular person (# of accounts payable vouchers processed), or some combination.  The goal is to increase the number of ‘whatever’ with the same or fewer people.

    Economists agree that computer and factory automation has largely been responsible for productivity increases to-date.  Now being affordable, hardware and software systems have been implemented to aid even the smallest business.  People can keep track of customer requests, customer orders, customer history, vendor contracts, purchase orders, and on and on much more easily and more accurately than anytime in history.

    That brings us to the hard part…  how do you increase productivity from here? Beachwood Systems has assisted hundreds of businesses with automation and has gained a few insights that you may find useful.  1) Get your people working together.  In order to do this effectively, you must have common platforms and common repositories of data.  Far too often we have seen spreadsheet after spreadsheet as well as personal Access databases that virtually duplicate what is in a company’s ERP system simply because employees do not know the capabilities of their systems.  2) Use your system the way it was meant to be used.  Management must instill the attitude that it is the end results that matter and be open to changing specific processes to better match a systems’ functionality. 3) Use the business model that propelled the Japanese economy to number three in the world… make small improvements every day.  What do you find yourself doing that takes a lot of time?  Is there a way to automate it? 4) Document your procedures and standardize.  It is amazing how clear processes become after you get them on paper and how you can combine and standardize what was previously believed to be very unique processes.  The toughest part is to learn how to document exceptions and to develop a process to formally change a procedure.

    Smart business people will continue to seek to improve productivity through selective technology.  Please call us if you have some ideas you are considering. 



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