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What Can Be Done to Increase

American Productivity?

 

Many American businesses are working hard to improve their productivity and many are having

success. For the most part they are adopting a combination of strategies com­monly known as Total Quality Management (TQM). TQM is designed to improve both productivity and product quality. Several TQM principles are described below.

 

Focus on the Needs of the Customer. This involves questioning customers to determine exactly what they want and surveying them after a sale to be sure they received the product and service expected.

 

Focus on Quality. In the 1970s and '80s, when it appeared that the Japanese could produce better quality products at a lower price than Americans, people asked, "What is the secret of Japanese suc­cess?" The secret, they learned, was that the Japanese had adopted the ideas of an American engineer, W. Edwards Deming. Dr. Deming had been hired by the Japanese to help them rebuild their industries following World War II. He had developed a complex web of ideas that manufacturers could use to improve productivity and product quality at the same time. His strategies involve preventing errors in the production process rather than detect­ing them in finished goods. This requires:

 

• Setting clear quality standards and providing the training and equipment that guarantees these standards can be met.

• Involving production workers in the quality con­trol process. These workers make frequent mea­surements and have responsibility for the quality of their work.

• Allowing and encouraging production workers to make adjustments in a production process, improving efficiency and reducing waste.

 

Reduce Waste. In the past, improving quality was considered expensive. Today, attention to quality is considered a cost-saver. High-quality work and materials reduce discards, rework, and returns while improving the company's reputation and increasing customer satisfaction. Other waste-saving ideas include:

 

• Developing trusted supplier networks and limit­ing suppliers for any particular project to as few as possible. Companies do this by guaranteeing orders to suppliers who can deliver high-quality materials as needed.

• Involving concerned employees in an ongoing study of all processes in a product's production and distribution to eliminate unnecessary steps. This theory mimics the Japanese principle of kaizen - continually making small improvements in each process.

• "Just-in-time" inventory control. Rather than maintaining a large inventory of parts, a manu­facturer asks suppliers to deliver parts frequent­ly - just in time to meet current production needs.

 

Create Shared Vision. Sharing a vision means nur­turing employees' commitment to the company and its goals. Motorola focuses on "customer satisfaction," and Ford's slogan, "Quality Is Job One," is a motto every employee can adopt and follow.

 

Few businesses have done more to improve product quality and adopt TQM principles than the American automobile manufacturers. Saturn is now a world leader in high-quality manufacturing. In 1992, for the first time in many years, the American automo­bile industry regained some of the market share it had lost to competitors throughout the world.



 

But improving productivity throughout the economy involves more than implementing TQM principles in individual businesses. Other suggestions for improv­ing productivity in American business include:

 

• Reduce business taxes to stimulate investment in new plant and equipment.

• Reduce the number of government regulations that add to the costs of doing business.

• Find and develop lower-cost sources of energy

and reduce dependence on foreign oil.

• Develop ways for management and labor to work as partners rather than adversaries.

• Provide incentives for corporations to set aside short-run profits to increase long-run productivity.

• Provide better education and job training oppor­tunities for youth.

• Replace private enterprise with government man­agement teams by "nationalizing" certain large corporations. (Nationalization refers to a govern­ment takeover of what had been a privately owned business enterprise or industry.)

• Replace nationalized industries with private enterprise by "privatizing" certain government-run industries.

 

Some of these suggestions are quite controversial. For example, not everyone would agree that reduc­ing business taxes and government regulations is an effective way to increase productivity. Similarly, the nationalization of industry has never been popular in the United States.

 

Most economists would agree, however, that an increase in capital spending (the amount that busi­ness invests in new plant and equipment) is a sure way to increase American productivity.

 


Date: 2015-02-16; view: 839


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