Labour productivity is related to individual productive capacity and can be calculated by analyzing the quantity produced in a specific period of time, such as a working year, divided by the dedicated labour workforce, that is, theIndividual annual Labour Productivity (ILP):
ILP¼QP=ðDLþILÞ where:
• QP is the quantity of products produced in the year by plant (number of vehicles, engines, transmission, components…);
• (DL?IL) is the average value of the staff during the year, including direct and indirect labour.
To increase ILP, it may become necessary to decrease the workforce employed for manufacturing a specific quantity of product (see earlier direct and indirect labour requirement calculation), so ILP mostly depends on the following factors:
STn standard working time for each product series n g direct labour efficiency
i indirect labour incidence
The reduction of standard working times STnis the first relevant factor for the improvement of productivity and the reduction of ‘‘transformation variable cost ’’.
To reduce STn, it is necessary to analyse it with accuracy; it is mainly given by STn¼ ATn + ITn
where AT is the active time assigned to operators and IT is the operator’s idle time due to technical factors (i.e., machine downtime or other technical requirements) or unbalancing, which keep operators idle. So, the first improvement is the reduction or possible elimination of the idle time IT.
Improvement activity should then be concentrated on looking deeply at active time, which can be divided into two different categories:
ATn¼ NVAAn + VAAn
where:
1. NVAA (Non Value Added Activities) are the activities that do not generate value for the final product (handling, moving, walking, turning, waiting…).
2. VAA (Value Added Activities) are the only activities that generate value for the final product (assembling, screwing, fixing, painting, welding…).
Reduction is possible by concentrating on the NVAA portions of the standard working time; some of them are harder to eliminate and can only be reduced, while others could be eliminated completely through the application of the following criteria during the design or improvement phases:
• workplace organization improvement activities (ergonomics improvement, application of visual management on standard procedures and instructions, optimization of material presentation…);
• continuous improvement of working tools, equipment and methods;
• application of low cost automation (LCA) as mentioned in Chap. 3 at the of Sect. 3.4and/or hard automation for handling activities (remaining NVAA);
• product changes in terms of ‘‘design for manufacturing’’.
It is very interesting to note that the world class carmakers, inside their standard working time, are still far from 100 % of VAA, which indicates that big oppor- tunities for continuous improvement are still in place. Of course, those values depend on the level of detail by which motion is studied: the more you deploy the single activities, the higher the opportunity to isolate and remove NVAAs will be.
Engineering activities in workplace organization have to address implementa- tion of the following steps:
1. Analyse and reduce/eliminate ergonomic issues (MURI); those activities require specific knowledge of physical efforts and working conditions in order to minimize the impact on worker activities in the workplace; particularly relevant are the concepts of the ‘‘golden zone’’ and ‘‘strike zone’’ in which operators can move more easily by minimizing all physical effort, as shown in Fig.4.1. As described in Table4.1, each of the areas in the golden and strike zones are classified based on the difficulty in handling items (parts to be assembled and tools) in the working areas.
2. Analyse and reduce variation in the operation (MURA); those improvements can be achieved by analytically examining the sequences of the operations and strictly applying the principle of standard work, in order to minimize variations between different operators and those performed by the same operator Fig. 4.2.
3. Finally, after having reducedMURIandMURA, the remaining NVAA activities (MUDA) can be drastically reduced and eliminated by focusing on material handling operations affecting the operator’s work, such as re-organizing the material’s display on the side of the line and dealing with other unnecessary movements, possibly by use of some intelligent low-cost automation solutions.
In Fig.4.3, an example is shown of such an optimization on an assembly line by simply feeding the parts to the line by the right logistic method (further details
on Logistics and Supply Chain Management will be addressed inChap. 6) and presenting necessary tools at the right spot, actions that drastically reduce the need for operators to walk away from their stations.
Coming back to increasing labour productivity in general, thesecond impor- tant factor is labour efficiencyg, which proportionally influences productivity.
As seen at the beginning of this Chapter inSect. 4.1, labour efficiency is strongly influenced by process stability, so main keys to influence positivelyg are:
1. striving for process stability and high level of equipment efficiency (OEE) through the application of Autonomous Maintenance and Professional Main- tenance methodologies to minimize failures due to a poor Maintenance (see Chap. 5);
2. stabilizing and synchronizing Internal and External Logistics to guarantee a continuous feeding to production lines (see Chap 6);
Table 4.1 Strike and golden zone areas classification
Golden zone Strikezone
AA All the items can be provided to the assembly point within the field of vision and without changing the heights of the item supply points
All the items can be handled at the right height without raising hands
A Items are placed within a region three times as big as the assembly unit. Items can be taken by stretching out elbows. Both hands can be used
Items can be handled at the right height but by raised hands
B Items can be taken by stretching out elbows although they go up beyond shoulder height. Items are placed within a region six times as big as the assembly unit
Items can be handled by raised hands through extending arms and raising elbow over the shoulder
C Items can be picked up by turning the body Items can be handled only through considerable extension of body and arms and/or using additional step/ladder, etc.…
D Items can be fetched by walking Items are totally out of range and the worker needs specific aids to reach them
STRIKE ZONE
A B
C
AA
D A
AA B
D C
GOLDEN ZONE Fig. 4.1 Strike and golden
zone concept
3. searching for first time quality by engineering more robust processes; this is possible by working on labour intensive processes in minimizing human error possibilities through the application of ‘‘standard work’’ logic and labour effective training; conversely, for capital intensive processes it is necessary to reinforce the control of component and parameter that directly influence quality aspects; all these action relate to Total Quality Management methodology (see also Chap. 8).
Thethird factor is containment of indirect labour incidence i, because this labour factor does not contribute directly to the value of the final product. It is important to underline that all the above mentioned actions necessary to improve direct labour efficiency are also beneficial for a better organization of indirect labour force and its containment.
The utilization degree for labourcorresponds to:g=ð1þiÞ
This indicator, considering the same equipment and product, can be progres- sively incremented by acting on the labour.
For the automotive industry (Final Producers and Main Component Producers), labour still represents the main factor, even if automation is becoming more
1. Initial situation with variation between different operators
3. Standardized cycle with reduction of variation within same operator (repetitiveness guaranteed with standard work)
2. Standardized cycle by eliminating variation between different operators (still variations within same operator)
VARIATIONS FROM STANDARD WORK (MURA) REDUCTION STEPS
Fig. 4.2 Reduction of variations
relevant day by day. For Western European productions, the impact of labour is, for the Final Producers, about 70 % of the final cost of production, including all the value added along the ‘‘supply chain’’ for components, equipment and tooling and services provided.
Once again, we remember how much the availability of labour is relevant to operative planning, so as to avoid misalignments between production capacity and product sales.
Finally, the labour factor is the ‘‘critical resource’’ for the competitiveness of productive systems for its influence on both « make and buy » costs and the capacity to answer the customer’s demand.
For all these reasons, let us conclude this section by again pointing out the parameter generally used to measure and compare different plants, operating homogeneously in industrial activities and product range, in terms of global labour productivity, which means analysing the individual annual labour productivity(see beginning of this section).
BEFORE AFTER
PARTS ON THE SIDE OF THE LINE
TOOLS SEQUENCED PARTSPRODUCT
TOOLS
PRODUCTPRODUCT
PRODUCTPRODUCTPRODUCT
KITTED PARTS
KITTED PARTS KITTED PARTS TOOLS
TOOLS
TOOLS - 90 %
walking
Fig. 4.3 Example of reduction of walking time on an assembling line
This synthetic parameter depends mostly on the standard working times (ST) and consequently also on the automation level of processes. It also depends on labour efficiency (g) and the indirect labour incidence (i), but also on the number of working hours established by the contract (without considering holidays), as well as absenteeism for accidents and sick legally recognised permissions… In ‘‘benchmarking’’ research for manufacturing systems, it is important to use this factor when the different realities are comparable. To obtain an objective analysis, it is important to consider the data based on the product characteristics (dimension, complexity) and examination of the verti- calization degrees of the production (‘‘make-or-buy’’ configuration), correcting opportunely if necessary.
The above-mentioned productivity indicators, associated with unitary labour cost (payment and taxes), influences strategic decisions on new and existing sites for production activities, following the criteria discussed inSect. 1.2.
To conclude this section, it is important to underline that labour produc- tivity is not separate from product quality. In fact, a well-engineered process with efficient automatic systems contributes to optimization of working con- ditions, even from an ergonomic point of view, and at the same time improves product quality. So, productivity and quality of labour improve together.