The Strategies for Improving Business Productivity

In a formal sense, productivity refers to how well an organization converts input (such as labour, materials, machines and capital) into goods and services or output. But today it is no longer limited to measuring ratios of inputs and outputs. Basically, increasing productivity just means working smarter. You can look for opportunities to improve efficiency just about anywhere in your company. Here are some key areas to consider.

1. Use technology to improve your operations

Web-based technologies enable you to dramatically improve how you run your business. You’re a good candidate if you’re looking to increase market share, aggressively pursue cost reduction or greater efficiency, or prevent customer-service problems. Production management tools range from spreadsheets to off-the-shelf software solutions or business-specific, custom-developed applications. Here are some examples:

• E-purchasing (online buying) is an alternative vehicle you can use to get your materials from suppliers. This technology enables you to get more competitive pricing as you are no longer limited to local merchants. Generally, the cost of transaction processing is reduced and there is less paperwork.
• Smart inventory control systems can help you reduce inventory levels, improve profitability and speed up customer response time. Online and order management systems integrate inventory information with your organization’s purchasing, accounting and e-business systems, so you can easily track order status and the movement of inventory within your company.

2. Review your existing setup

Look at your processes from the point of view of a potential investor. Keep in mind the overall objective and vision of the business, and ensure the processes meet those goals and add value. Draw an accurate map of each process in your material and information flow. By doing this, you can better understand the links between various elements of your production, and you will be better equipped to identify and eliminate waste throughout your company.

3. Implement a continuous improvement approach

Improving productivity is an ongoing activity. Here are some suggestions for setting up a continuous improvement plan:

• Start by assessing the competition and the best practices in your industry, also known as benchmarking. But don’t copy plans of other businesses—develop one that works for your company.
• Get external help to assess your business weaknesses and strengths. This gives you an objective viewpoint from which you can improve productivity and redesign processes.