In the manufacturing industry, improving productivity is important. Why is it important to improve productivity, and what benefits can be gained by doing so? We will introduce the meaning of productivity in the manufacturing industry, the benefits of improving productivity, and specific methods.
The concept and importance of productivity
When considering methods for improving productivity, knowing what productivity means will change the way you approach it. Also, in order to know the results of your productivity improvement efforts, you need to know how to quantify productivity. Let's start by looking at the meaning of productivity and the importance of improving productivity.
Productivity defined
When trying to express productivity in concrete numbers, the definition of productivity presented by the European Productivity Center is well known. In this definition, productivity is the degree of effective use of production factors.
Production factors include everything necessary for production, such as production bases, production equipment, energy, workers, raw materials, and supplies, and when quantified, they are considered in terms of the number of workers and raw material inputs. Productivity represents how much is produced from these production factors. For example, when talking about labor productivity, the productivity per worker is calculated by "production volume ÷ number of workers". When talking about total factor productivity, it is calculated by dividing the production volume by the combined input of all production factors. In this
way, productivity is expressed as the production volume per production factor input, and if a large output can be obtained with a small amount of production factor, productivity is high.
Concepts that are easily confused with productivity improvement
Improving productivity means increasing the degree of effective use of the production factors shown above. When you can obtain as much output as possible with as few production factors as possible, you can say that "productivity has improved."
However, there are words that are easily confused, so care must be taken when working on measures to improve productivity. Typical examples are business efficiency and business improvement. These concepts aim to eliminate waste in business and improve efficiency, and in the context of productivity, they can be said to be "means to reduce the input of production factors." Even if the input of production factors increases, productivity will improve if the output increases by a greater ratio. For this reason, even if business efficiency is achieved, productivity does not necessarily improve.
Business efficiency is one element when considering productivity, but it is important to understand that business efficiency and productivity improvement are not completely equal.
Productivity Benefits
Increased productivity leads to the following benefits:
- Securing and increasing profits
Naturally, if the amount of output increases relative to the input of production factors, greater profits can be obtained. - Cost Reduction
When producing the same amount of product, increasing productivity allows for fewer materials and fewer workers, resulting in cost reduction. - Effective use of internal resources
: When productivity improves and the number of workers, space, capital, and other production factors required are reduced, these personnel and capital can be diverted to other tasks. - Measures to address labor shortages
If we can reduce the number of workers needed to produce the same amount of product, we can come closer to resolving the labor shortage problem. - Improved work-life balance:
When products can be made with fewer workers, employees have more free time, which improves their work-life balance.
Why is productivity important?
In this way, improving productivity has various benefits for companies. However, the reason why improving productivity is important is not just because it benefits each company.
Companies conduct business activities with the aim of fulfilling their social responsibility, and in order to continue their business activities, they must secure profits. Furthermore, in order to expand business activities, it is necessary to maximize the profits secured. If more outputs can be obtained with fewer production factors, profits will also increase, so improving productivity is directly linked to maximizing profits.
However, unfortunately, in the current situation, it cannot be said that the productivity of companies is high when viewed as a whole in Japan. According to the " International Comparison of Labor Productivity 2022 " surveyed by the Japan Productivity Center, a public interest incorporated foundation, Japan's manufacturing labor productivity in 2020 was 18th out of 35 major countries that are members of the OECD. In 2000, it was the top OECD country, but since 2000, its ranking has dropped from 16th to 19th.
In this way, if the productivity of Japanese companies does not improve, Japan may fall behind in global business. Improving productivity is also an issue that must be resolved in order for Japan to maintain its competitive advantage in the global economy.
Specific methods for improving productivity
What exactly should we start with in order to improve productivity? Here are some key points to be effective in improving productivity in the manufacturing industry.
Clarifying the issue
When aiming to improve productivity, you can achieve better results by determining the areas you will focus on and the goals and scope you will work on. By clarifying the issues, you will also be able to see what measures you can take. By setting a period and target values for those areas and working on them while collecting data, you will also be able to clarify the next measures you should take.
Standardize work and tasks
If tasks and operations are not standardized, they may become increasingly dependent on individual workers, which can become a bottleneck in efficiency. In addition, differences in work methods and standards between workers can lead to variations in quality. Variations in quality increase the rate of defective products, which results in a decrease in the number of products produced per hour. In this way, a lack of standardization can lead to reduced productivity. However, by promoting standardization, it is possible to simultaneously improve productivity.
Review of production management methods
Deciding the number of people, raw materials, and supplies to be allocated to production plans is also an important part of production management. If this production management is not accurate, waste will occur and productivity will decrease. In order to carry out accurate and efficient production management work, reviewing production management methods can also be effective in improving productivity. Production management systems have become widespread in recent years, and systems that utilize AI are also beginning to be used.
For more information on production management systems and the use of AI, please see this article:
The Benefits of Using AI in Production Management - How to Solve Production Management Issues | Stratus Blog
Improvement of facilities, equipment, machinery and tools
The facilities, equipment, machinery, and tools used in production activities have a significant impact on work efficiency. Improving their functionality and efficiency will increase production volume. However, if costs are incurred for these improvements, those costs will also be included in the inputs. Compare the costs incurred with the increase in production volume, and consider how much productivity can be expected to improve within a certain period of time before starting.
Introduction and utilization of IoT
For the modern manufacturing industry, the devices and systems that realize IoT are now so widely used that they can be said to be indispensable.
In fact, by utilizing IoT, it is possible to reduce the burden on employees and prevent problems from occurring in advance. Reducing the burden on employees leads to labor savings, and accumulating labor savings makes it possible to reduce the number of workers required. Labor savings means a reduction in the input of production factors, which improves productivity. In addition, by visualizing equipment and production status in real time, problems can be prevented and production can be stabilized. Stable production also ensures production volume, which leads to improved productivity.
In this way, the use of IoT can be expected to have a significant effect as a method of improving productivity. For more information on the use of IoT in the manufacturing industry, please see this article:
Manufacturing and IoT - Introducing the benefits of implementation and use cases | Stratus Blog
Automation through digital technology
IoT is not the only technology that can improve work efficiency and reduce manpower in the manufacturing industry. The use of AI and robots can also have a significant effect. Automating tasks with industrial robots and reducing manpower and labor through the use of collaborative robots can be expected to have a significant effect on improving productivity. In addition, by using machine vision systems, it is possible to automate inspections using image processing with AI. In this way, there are many parts of the production process that can be automated by using digital technology. Let's consider what kind of digital technology can be used while clarifying the issues.
Examples of companies that have successfully improved productivity
Here are some examples of successful productivity improvements:
Introducing machines with highly stable control and high-precision processing
This is an example of how productivity was improved by changing parts directly involved in the manufacturing process.
A metal processing company in Nagano specializes in cutting and forging, and mainly manufactures automobile parts. Many automobile parts are made by combining multiple processing methods, and improving the efficiency of the machines used in one process leads to overall productivity improvement. In metal processing, the evolution of machine tools that perform cutting processes has been remarkable, making it possible to automate complex processes and perform continuous work.
This company took advantage of a subsidy system and introduced a new machine tool. Until now, it took time to adjust dimensions in micro units, but now it is possible to achieve accurate finishing with fewer adjustments. By reducing the work time, the waiting time when combining multiple processing processes was also reduced, and process management became more flexible. As a result of not having to keep people at the machines, employees can now take charge of multiple processes. This not only eliminates the dependency of work on individuals, but also leads to information sharing and improved awareness as an organization. In addition, it is said that the ability to perform high-precision processing has made it possible to consider manufacturing parts in new fields.
In this way, the benefits of updating the equipment and machinery used in production do not only improve productivity at the time. It can also lead to other benefits such as improved corporate culture and increased business opportunities.
Digitization of work information in metal heat treatment plants
A company in Osaka that performs heat treatment and painting of metal parts began digitizing paper documents around 2000. In 2018, the company updated its core system, digitizing records such as processing quantities and work times, and using them for production management. Tablets that can be used on-site have been introduced, enabling real-time information sharing and on-site input and output of forms. Previously, processing details were recorded on paper with a pencil, then entered and analyzed later, and reflected in subsequent work.
By inputting and analyzing this in real time, it is possible to apply it to production at that time, and adjustments can be made to reduce the defect rate. In addition, mistakes in recording data have been reduced, and recording time has been reduced. Digital data can be used as is for subsequent compilation and analysis, so back-office work time can also be reduced. In areas where painting work is possible, basic quality is stabilized through digital control. The company is also considering using image recognition tools, and by further automating the process, it is expected that craftsmen will be able to make more detailed adjustments and take on more difficult work, further improving productivity.
Future productivity improvements in manufacturing will depend on the use of digital technology
When considering ways to improve productivity in the future of manufacturing, it is impossible to think about it separately from the use of digital technology. The question is how to effectively use digital technology to increase the amount of output while reducing the input of production factors. It is important to understand the benefits of improving productivity and then tackle specific methods to improve productivity.
