A PROFESSOR at the Asian Institute of Management (AIM) yesterday urged companies to embark on productivity strategies to increase competitiveness and stay in business.

“I’ve observed that the Japanese are obsessed with quality and productivity. And over the years, I realized that this is a survival strategy (in any situation),” Prof. Rene
Domingo told participants of the 12th Regional Quality and Productivity Congress yesterday at the Cebu Grand Convention Center.

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He said productivity makes a local firm competitive and enables it to cut costs and compete, say, with China.

Different mindset

Measuring productivity, said Domingo, requires a “different mindset and different set of metrics” that is able to measure the sales per head, the number of patients per bed, the number of guests in a room, and the sales generated in a square meter area, among others.

As an example, he said, a nurse should be tending patients rather than wait, fill out forms and do other things. The nurse is not being productive, he said.

Similarly, commercial airplanes should fly people on time than stay on the ground.

The concerns of productivity, Domingo noted, run across almost all types of industries, including banking, health care, garments, mining, logistics, manufacturing and food.

Management support

He said productivity strategy requires top management support and leadership, training of technical and managerial skills of the employees, adopting productivity tools and technologies, setting metrics and indicators, establishing a rewards and recognition system, and continuously improving the system for the business.

“Can you repair your roof during the rainy days? No, otherwise you will get wet, get sick, and slide off the roof. Repair your roof during the sunny days,” said Domingo, in reference to the business operations amid global financial crises.

He urged firms to increase their productivity by 10 percent annually so that when the next economic slowdown occurs and hurts their sales by 10 percent or more, they can still continue to operate and earn.

Profitable in the end

“When a crisis comes, you can cut your costs and still be profitable. If your competitors follow you by lowering their prices but are not implementing a productivity strategy, they will be bound to collapse,” he said.

Productivity also addresses the wastes in over-production, processing, transport, waiting, inventory, motion and defects.

As an example, Domingo cited poor routing plans for company trucks and the long distance between a company and its suppliers.

If a company cuts only the obvious wastes in its operations, it is only cutting 20 percent of its total wastes, he said.

“Create waste visibility, waste consciousness, waste ownership, waste measurement, and waste elimination. Declare a war on wastes,” he advised.