Productivity
In terms of measures of productivity,
we find that traditional key indices, such as value-added
per employee or output per number of direct labour
hours, should no longer be considered as important.
It is suggested that indices such as parts per machine
hour, percent of finished goods completed on-time,
and measures of machine up-time/down-time are more
relevant.
It has been suggested
that we need to think about developing valid measures
of efficient use of capital, energy, and managerial
effort as well as measures of the fit between technical
and social work systems. These measures reflect the
fact that in order to productively operate new technology
machines must be operating and employees' job and
work-flows must be matched with existing human resources
and production policies, procedures, and technologies.
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Costs
In terms of costs, it is suggested
that we need to be developing measures of the costs
of not automating, the cost advantages of flexibility,
the costs of various human resources issues such as
employee attitudes, the costs of training as well
as the costs of not training, and equipment unreliability
costs. Go to related information on costs.
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Up-time/down-time
Up-time or down-time is
considered by many to be the single most valid measure
of new technology implementation success.
According to the work
of Bill Ford in Australia, down-time is a crucial
variable in determining productivity and the success
of new technology in the mining, manufacturing, and
administrative and service sectors of the Australian
economy (Ford, 1986 & 1987). He has identified
several problems leading to high down-time with new
technology:
- The transfer of
new technology as "turn-key" packages rather
than transfer of the knowledge, technology, and culture
that go along with it. In this way, the people who
implement these packaged systems get the hardware,
but not any of the human and social software that
necessarily go along with it in order to realise
its potential benefits.
- The belief that
employees do not need or have skills. This is part
of a process that leads to de-skilled, disempowered,
unmotivated, and uncommitted employees within firms,
and leads to more macro, social problems regarding
training and re-training.
- The lack of recognition
of learning needs, lack of cross- and multi-disciplinary
skill formation, and lack of personal development
for all employees involved with new technology, and
of career-related policies for manual workers. New
technology requires all employees to be able to see
the bigger picture, to understand more of the interrelatedness
of their activities with others' activities and with
the final outputs of the firm that directly affect
customers.
- The lack of consideration
and development of the financial, technical, human,
and organisational aspects of firms in concert with
each other, and a lack of realisation that human
resources need investment, should be considered as
assets, and potentially provide competitive advantages.
- Narrow skill and
occupational classifications such as skilled and
semi-skilled.
- Rigid lines of demarcation
between unions and between functions. The lack of
a participative process, information distribution,
and general awareness and education.
- In order to be successful
we need to distribute and share learning systems
and innovation, to integrate people, processes and
technology as opposed to controlling products, processes,
and people.
- The lack of involvement
of users in the technological innovation and transfer
of technology, and the isolation of R&D.
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Other
measures
Other measures of the
success of new technology that might become relevant,
depending upon your situation, are:
- Growth measures:
Measures of growth in market share, growth in size
of markets, sales, employees, etc., and export capability.
- Innovation measures:
Measures of new product introduction rate, product
change flexibility, time to market, percentages of
met and faster delivery times, and ability to, and
speed of, changing product characteristics to meet
changing customer demands.
- Quality measures:
Measures of the types and number of customer reported
defects, percentage of "first time through"
quality, percent of defects, percent of rework, and
breakdown frequency.
- Inventory measures:
Measures of volume change flexibility, average batch
size, work in process inventory, finished goods inventory,
and purchased goods inventory.
- Customer reactions:
Measures of customer reactions such as satisfaction,
company and product/service image, and customer loyalty.
- Organisational competence:
Measures or indicators of strategic competency and
competitive advantage.
- Flexibility measures.
Measures of flexibility also become more critical
in certain circumstances.
- Software assets:
Software is now recognised as a significant asset
requiring careful management to ensure that the large
amounts of integrated application code with their
complex matrices of interdependencies, can be managed
now, and into the future. Extrapolation of past software
management approaches will lead to architectural
gridlock. Therefore, investments in software must
be considered as tangible assets.
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Holistic Management Pty. Ltd.