Productivity improvement in the New Zealand heavy engineering industry

Abstract

An analysis of the industrial productivity of New Zealand heavy engineering companies is presented, and methods for improving the overall productivity of the heavy engineering industry and similar industries with job-shop type production are developed. The industry's productivity problems had been obvious for years. However, due to the lack of data and inadequacy of existing productivity improvement approaches, it had never been possible to quantify the extent of these problems, to analyse their causes and to develop methodologies for long-term improvement. The present investigation consists of two major aspects. The scientific element is concerned with the development of a methodology for productivity improvement appropriate to the situation of heavy engineering in New Zealand. This is supported by practice-oriented work in the industry, consisting of data acquisition activities in general, and of pilot studies in selected companies in order to assemble, analyse and evaluate specific data on productivity problems, and to apply and test the results thereof. The development of a methodology for productivity improvement is based on an extensive survey of literature on productivity measurement and improvement methods. The results of this survey, which was performed in parallel with the collection of industrial data, indicate that existing methods are not adequate to satisfy the requirements of productivity improvement in the local heavy engineering industry. On this basis, in-depth pilot studies in ten heavy engineering companies were performed. The objectives and methodology of these pilot studies are described in detail, as their results have a sizeable impact on the overall methodology chosen for this research. One of the most important conclusions drawn from the pilot studies is that productivity problems in the New Zealand heavy engineering industry cannot be solved by concentrating solely on workshop fabrication and technological factors. Generally these problems have complex cause-and-effect structures, and a multitude of non-technological factors from outside the workshop are involved. In order to account for these interrelated factors, a systems engineering approach was used, which offers a suitable basis for a productivity improvement methodology applicable to the situation as identified in the pilot studies. A main step in the system engineering approach is the development of a systems model which is used for structuring the complex inter-relationships found in practice. On the basis of this systems model of heavy engineering productivity a Productivity Assurance Programme is developed. This programme combines elements of quality assurance methods and the 'productivity cycle' principle of continuing improvement. The main elements of the Productivity Assurance Programme are matrices developed for the evaluation of the requirements of productive heavy engineering operation, and for the analysis of the productivity levels of the company where they are applied. The combination of these aspects provides a decision base on which organisational improvements can be founded. Due to its modular structure and the flexibility in defining specific productivity requirements, the applicability of the Productivity Assurance Programme is not limited to New Zealand heavy engineering companies, but also covers other job shop type industries with similar productivity problems. I case study illustrates the application of the Productivity Assurance Programme in practice.