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Chapter 19 - Improving Productivity
19-12
Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
• Improved safety
• Satisfied employees. [p. 398]
4. What is the difference between time study and motion study?
Motion study is concerned with determining how a task is being performed and if it can be
5. Briefly describe the PDCA Cycle.
PDCA Cycle is an approach to methods improvement and stands for the four stages that
6. Explain the concept of kaizen.
Kaizen is a management philosophy that originated in Japan, which literally means “good
7. What is a Kaizen blitz?
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8. Name six major guidelines that should be followed when making attempts to reduce costs.
Six major guidelines that should be followed to reduce costs are as follows:
9. What are the general cost categories with which most supervisors come into contact?
General cost categories most supervisors come into contact are as follows:
• Direct labor costs
10. Name 11 general strategies for reducing costs.
Following are 11 general strategies for reducing costs:
• Increase output
• Improve methods
Chapter 19 - Improving Productivity
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11. List several areas that tend to be more susceptible to cost overruns than others.
Several areas that tend to be more susceptible to cost overruns than others are as follows:
• Overtime
12. What are the three major types of inventories?
The three major types of inventories are raw material inventories, in-process inventories, or
between the final stage of production and shipping or delivery of the product. [p. 412-413]
13. List several reasons that inventories are carried by organizations.
Inventories provide added flexibility and efficiency to the production system by allowing
14. List several other terms that are used to describe just-in-time (JIT) systems.
Chapter 19 - Improving Productivity
SKILL BUILDING QUESTIONS
1. If your boss asked your opinion of methods improvement, what would you say?
Students’ answers may vary. Methods improvements are important because they:
• Help put interest and challenge into the job
• Contribute toward a happier, more satisfied work group
2. Some people argue that methods improvement is too old fashioned for today’s work
environment. How would you respond to this argument?
Students’ answers may vary. Persons who have this view probably look at methods
3. Why do you think most employees are not enthusiastic about cost control? What can the
supervisor do about this problem?
Students’ answers may vary. Typically, employees do not see cost control as one of their
support, and solicit their ideas on ways in which cost control can be improved.
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4. Why do you think overtime is abused in so many organizations?
5. In light of today’s high standard of living, why do you think that employee theft is such a
widespread problem in industry?
children; etc.
REFERENCES
ADDITIONAL READINGS
SKILL BUILDING APPLICATIONS
Incident 19-1: The Lines at Sam’s
Students are asked to help Sam solve some of the scheduling (queuing or work flow) problems
his restaurant faces.
1. From a methods improvement viewpoint, what suggestions would you make to Sam?
Chapter 19 - Improving Productivity
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the customers) try out the improvements, check the results, and fine tune or implement the
2. How might Sam implement Kaizen at his cafeteria?
voice in correcting them.
Incident 19-2: Here We Go Again
This case illustrates the necessity of getting everybody genuinely committed to a cost reduction
program if the program is going to be successful.
1. Can costs always be reduced? Discuss.
2. How successful do you think Emory will be in reducing his departmental costs?
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3. What provisions of a cost-reduction program do you feel are warranted in this situation?
Exercise 19-l: Improving Your Exam Performance
1. Do you think the PDCA Cycle helped improve your performance? Why or why not?
2. Can you think of any other applications for the PDCA Cycle in your role as a student?
Exercise 19-2: Processing Customers
1. Which customer processing system do you like best? Why?
2. From a methods improvement viewpoint, what advantages and disadvantages can you
identify for each system?
Chapter 19 - Improving Productivity
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• Customers are served in a first come first serve sequence.
• Perception seems “fair.”
3. From a methods improvement viewpoint, can you think of any improvement that could be
made to either system? If so, explain it.
Exercise 19-3: Preparing a Cost Report
Exercise 19-4: Cost Overruns
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1. Working by yourself, outline the different cost categories in which you think costs might
be reduced. What cost-reduction guidelines should you implement? Formulate a plan for
carrying out your ideas.
blanks.
2. Get together with three or four of your fellow students and compare the ideas that each of
Exercise 19-5: Comparing Costs
computations and summary are shown below.
Option #1 ($3.50 per order) and “Materials Cost” in Option #2 ($0.80 per order).
B. If Que expects approximately 1,500 orders per month from its Washington customers,
should it implement Option 1 or Option 2? Which option should it implement if it expects
to average 3,000 orders per month?
firm is $25,200. The revenue earned by the firm should be equal to (1,500×13) or $19,500.
Chapter 19 - Improving Productivity
19-21
Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Therefore, at 1500 orders, it will make money on Option #1 and lose on Option #2.
At 3000 orders, they’d have to turn down 1000 of them and make only $3,160 per month
with Option #1. With Option #2, they’d be able to handle all orders and make $11,400 per
month.
SUPERVISORY ANECDOTES
By moving the decision-making on production from the executive suite to the factory floor,
tracking progress on work orders with a computerized information system, and giving customers
Supplement) Nov. l994 p: 44-45
A discrete event simulation model, using the SIMAN computer simulation language, was
141-151.
Chapter 19 - Improving Productivity
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Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
spool microfilm accurately so it could be done in-house. A 1993 profit improvement was
estimated at $60,000. The suggester’s award came to $2,400.
Source: “Money-Making Ideas for the Profit-Minded Supervisor.” by Buckley Mintcloud in
Supervision Vol.: 55, Iss.: 10, Oct. 1994, pp. 22-23+
RELATED VIDEOS
1. The Goal, American Media Inc., 50 mins. (in two parts). (1994). This video is based on Eli
Goldratt’s controversial best selling business book by the same title, this is a portrayal of
the challenges faced in trying to make operations more efficient.
study on different factors in improving efficiency.
8. Increasing Employee Productivity, Crisp Publications, 22 mins. This video depicts value
management techniques to help employees find better ways to do their jobs.
9. Six Principles at the Heart of Quality, ASQC Quality Press, (no time listed). Produced with
the US Chamber of Commerce & ASQC, this video discusses the difference between quick
fix profits and real changes for quality. (1992)
