Chinese state councilor underscores innovation to improve energy efficiency, work safety

Chinese State Councilor Chen Zhili has called for more efforts to promote innovation to improve energy efficiency and work safety in the country.

Chen made the appeal during her inspection tour from Tuesday to Thursday to north China's Shanxi Province, the country's major coal producer that sees frequent coal mine accidents and suffers environmental woes.

She urged local officials to revamp traditional industries to improve productivity, saying scientific innovation is key to transform the economic growth mode.

Chen said more efforts should be focused on developing technologies to reduce energy consumption and better protect the environment.

She also called local officials to replace outdated production facilities with more modern ones and to train more high-skilled work staff.

Xinhua

U.S. Productivity Limps

Economics focus

Making less with more
From The Economist

America's productivity growth has slowed. Does that matter?

THE good news about America's economy is that jobs are plentiful despite slower growth and the housing blues. Some 180,000 new jobs were created in March and the unemployment rate fell to 4.4%, three-tenths of a percentage point lower than a year ago. With employment and wage growth strong, consumers are unlikely to stop spending and throw the economy into recession.

That is not all cause for celebration, however. The drop in the jobless rate at the same time as the economy is slowing implies that the growth in productivity—the amount workers produce in an hour—is waning. If this proves to be a permanent shift, slower productivity growth bodes ill for inflation and living standards.

Few associate America with limping productivity. Central to its success over the past decade has been its “productivity miracle”, the sudden acceleration in workers' efficiency in 1995. After advancing at a measly 1.5% per year for more than two decades, productivity growth soared to an average of 2.5% a year in the late 1990s and over 3% a year between 2002 and 2004.

This spurt set America apart from other rich countries. But between mid-2004 and the end of 2006, the growth in business output per hour outside agriculture, the most common gauge of worker efficiency, slowed to an annual rate of just 1.5%, on average. Judging by the recent jobs figures, its growth in the first few months of 2007 may be lower still.

Complete Article

Washington State Port Business Slowly Slips South

Lower efficiency, smaller markets may share blame


By KRISTEN MILLARES BOLT
SEATTLE POST-INTELLIGENCER
P-I REPORTER

Washington's container ports are losing their tenuous grip on the West Coast market share they gained during 2004 and 2005, when the clogged harbors of San Pedro Bay, Calif., diverted cargo from the ports of Los Angeles/Long Beach to chillier northern climes.

The Port of Seattle does not yet know why volume has fallen 2.1 percent so far this year, compared with the same time in 2006. In March, the volume of containerized cargo flowing through Seattle's four major container terminals declined more drastically -- by 11.9 percent compared with the previous March.

While local port officials in the past have blamed declines on the reabsorption of containers by the ports of Los Angeles/Long Beach, the president and chief executive of the Pacific Maritime Association -- a coalition of domestic and international carriers and stevedores on the West Coast -- said Thursday that it has to do with efficiency.

Or, to be more precise, a lack thereof at Washington's container ports.

"Production in Seattle is the lowest on the West Coast, so to be competitive Seattle has to bring its production up," Pacific Maritime Association Chief James McKenna said, referring to the average number of containers moved by crane an hour, an industry standard for port efficiency.

Complete Article

Rebuilding “success culture” at a fast food chain

By Robert A. Jacobson

For nearly 40 years, a mid-western United States restaurant chain with more than 50 locations was run as a highly successful business in the family-style management of its founder. But when executives of the successor generation almost doubled the organization’s size by acquiring 40 more stores, company profits declined.

The acquired stores were in much worse shape than expected and, most important, the management that came along with the acquisition had been accustomed to a corporate organization, very different from family business practices.

At this point a productivity firm was called in. The firm with a record of implementing change in organizations, generates cost savings and profit improvements for its clients, particularly through behavioral change, motivation and process improvement. If there seems to be an opportunity for significant improvements within a company, the firm sends a team of analysts and productivity engineers into the organization at its own cost.
Analyzing productivity conditions generally takes about three weeks. If the analysis confirms the opportunity, the firm offers a productivity team to install new systems and bring about the proposed cost savings and profit improvements. The firm guarantees its work, so there is no risk to the client.

Since the restaurant organization was barely breaking even, top management knew something had to be done. With the firm’s help, they focused on the enhancing employee productivity, providing more training, restructuring area manager roles and emphasizing increased sales of their most profitable food and beverage items.

Numerous products are available for purchase in a fast-food restaurant and most have a limited shelf life, often less than 24 hours. Daily operations are very predictable and, with effective management, can be very profitable.

The productivity firm’s initial focus was on forecasting expected business for the coming week, the key determinant of how many supplies to acquire and how much staff to schedule. Previously, forecasts for the coming week were based on the previous week’s results — no account had been taken of special events, holidays, seasonal variations and the like. The new forecasting system predicted upcoming business based on levels during that same season on the previous year.

The firm installed a “volume tally” system to measure traffic and service flow on an hour by hour basis. “Food Preparation” and “Waste” charts were prepared to track planned and actual usage. Data gathered resulted in major efficiencies in each restaurant. A “Ready for Revenue Activity Checklist” was installed at each restaurant to make sure everything was prepared for the high-volume lunch and dinner customer flow.

Additional focus came from installation of the Daily/Weekly Operating Report (DWOR) which measures such things as guest check averages, customer complaints, labor yield, ingredient yield, energy consumption, and cash discrepancies. This report had the immediate effect of creating greater awareness among the entire staff of goals and performance.

To compare savings, four main baselines were measured: ingredients used and saved, hours worked, guest check average and energy usage. With the intense involvement of the productivity firm’s behavioral-change experts, there was a significant increase in “upselling” to generate higher average guest checks; labor yield improved and mangers gradually became more adept at planning, training and delegating.

Profits rapidly improved as the new techniques of management control were adopted. Fortunately, the area managers and supervisors across the chain were involved during the entire change, so they accepted the procedures willingly, realizing the benefits of motivation and measurement. All concerned were pleased to share credit for the increased productivity and the rebuilding of a culture of success.

Robert A. Jacobson is chairman of the board of the Association of Productivity Specialists.