Tan Kin Lian's Blog: Issues relating to productivity

Saturday, March 13, 2010

Issues relating to productivity

To be productive means to be able to produce more units of output in a given time, i.e. to reduce the cost of producing each unit. One can produce more by working faster, but this is likely to result in mistakes and poorer quality. It usually means to find a better way to produce the goods, while maintaining the quality of the product.

The best way to reduce cost is to eliminate waste, which adds to the total cost of productivity. There are many activities that are wasteful and costly and do not add to the value of the products, such as impractical compliance with safety, health and security. While these functions are important, they have to be examined carefully in terms of cost and usefulness, and are not to be complied blindly. Many activities in Singapore have this hidden burden of compliance, which adds to the cost of production.

If the goods are to be produced using a new method, we must be prepared to make a change. Many people are not willing to take the responsibility to make a change in Singapore. They prefer the safety of sticking to the old ways. This tendency to play safe is a negative trait of Singapore and is likely to impede our progress towards productivity.

I am not advocating that we go to the other extreme to abandon safety, health, security or to take short cuts in our production. I am asking that we must have an open mind to examine these issues. If we continue to be risk adverse, and to play safe, we will not be able to achieve th quantum leap in productivity.

Here are my views about improving productivity in Singapore.

Tan Kin Lian

20 comments:

Anonymous said...: I am not sure how much impact this cost factor has affected productivity in Spore. It seemed to me that debate in productivity by government has avoided this cost issue, such as direct and indirect tax. Is our cost doing business becoming unacceptable high because of the various taxes? It has been a joke around that nothing in Spore is cheap except our salary.

If this cost factor is reviewed and reduced by some means, it will be the most effective and fastest way to improve productivity before a long term plan is installed.; March 12, 2010 11:56 AM
Anonymous said...: With a host of things to abide & follow up........PRODUCTIVITY is never FULLY appreciated like going for some sort of DRILLS or what I call "SURVIVAL" Certification.

Companies are now gettng equipped with ISO Certifications / People's Developer Awards/ Skills upgrading / HSE & the many many schemes to follow.

And once we reach the stage of Productivity, salaries may increas or otherwise but if cost is a factor, some companies will outsource or replace a Singaporean worker who commands high salary & engage Foreign Talent at a ratio of 1 to 2 meaning 1 highly paid Singaporean worker for 2 FTs.; March 12, 2010 12:18 PM
Anonymous said...: If I am employer I will prefer to hire foreigners for low level to middle level jobs. Why? Simple, can hire 2 or 3 foreigners for the price of 1 singaporean. What productivity you talking about? I pay half salary that to me is real productivity.
If foreigner learn bad habit from singaporean like complaining and demanding, I can just fire the foreigner for bad attitude and insurbodination. What can he do? Sue me? Let him try. He only has WP or S-Pass, no job and cannot get another job. How much savings he has? Can hire powerful lawyer to fight me? See? Heads I win, tails you lose.; March 12, 2010 2:10 PM
Anonymous said...: REX comments as follows,

I am not fully in agreement with the statement "One can produce more by working faster, but this is likely to result in mistakes and poorer quality"

The problem i have is the word "likely". Whether it is "likely" or "not likely", really depends on the existing situation of the Production System. Some Production Systems are tweaked to be "kiasu" to obtain a certain result. However, it is really possible to increase the throughput by a small adjustment. Examle 1 CPU can be "overclocked" slightly to get a faster PC. Many PC experts do this. Example 2. At one time, the traffic on CTE speed limit was 80km/h even on the very straight parts of the road. It was not very productivite; it was too kiasu approach. The authorities adjusted it to 90km.h at certain parts. More throughput, smoother traffic, no accidents - this is increased productivity.

Therefore, whether quality suffers depends on the existing arrangements. What is necessary is for the designers of systems to re-examine operating parameters, to see whether or not output can be increased without sacrificing quality. Very often this CAN be achieved if the operating parameters were too conservative or "kiasu" . The example of extraordinary "security measures" you quoted, was a good way to demonstrate that a small tweak in the system can improve the productiviyt. And it's not even costing a cent to do the improvements, all it needs is someone with initiative and guts.

I agree that " Many people are not willing to take the responsibility to make a change in Singapore. " Productivity can be increased if we go back to basic principles and ask ourselves honestly why certain things are done in certain ways.

It is best if we put in fresh people. Because old people will look at the parameters in exactly the same way they had been brought up to be comfortable with, therefore, if the people are not replaced it is hard to change existing systems.

rex; March 12, 2010 2:34 PM
Anonymous said...: Hi,
The theme "productivity" seems to borrow from Mr Najib's New Economic Model when our neighbouring country is facing a shortage of skilled labour and graduates from their Chinese community as migration is the root cause. If that's the case, it is understandable why our definition of the term is so ambiguous that our ministers can't explain it clearly and how we should go about it. My 2 cents' view!; March 12, 2010 3:48 PM
Anonymous said...: The best is in the West!.........Never heard about productivity?...UNION POWER!.....Why work hard like a dog as LIFE is short......so better be productive in one's life journey. Eat, Travel and be less stressful as even Confucius will be confused about "PRODUCTIVITY" gimmicks!; March 12, 2010 4:02 PM
SD said...: In my opinion, you do not need to work faster to increase productivity. Top level management just need to simplify a lot of processes, and I am sure that will help a lot. I always find the people here are making things complicated so that people looks busier and cleverer. I might be wrong, but I have the perception that things are worse (as in more complicated) in the public sector than private. People are afraid of making decision and hence always get more and more people involve. Things can get much improved if we start looking at simplifying processes and getting people to have more accountability on simple issues.; March 12, 2010 4:49 PM
Anonymous said...: Talk about safety it reminds me the installation of speed limiter in every heavy trucks since 10 years ago. It has caused all obedient or timid(you may say) transporters to be less productive because they are only able to travel at 60km/h. But you can see on the road everydays, our counterparts from neighbouring country are speeding like nobody business they are more productive than us. Too many new safety rules will only resulting in future you see on roads people pull down their trouser to fart.; March 12, 2010 9:02 PM
C H Yak said...: Q
"I am not advocating that we go to the other extreme to abandon safety, health, security or to take short cuts in our production. I am asking that we must have an open mind to examine these issues. If we continue to be risk adverse, and to play safe, we will not be able to achieve th quantum leap in productivity."

When it concerns "safety and environmental health" it is a sensitive matter.

We can outsource for productivity, but we cannot "outsource" responsibility for implementation of safety. Consultancy on "safety" is often just "paper safety" and "wasteful".

I am pleased in today's Parliament sitting, it was announced by MOM that such outsourcing of "safety" works would not be allowed anymore.

Following the Nicoll Highway collapse incident, I wrote to the press to highlight the risks of such outsourcing on safety works ... especially on safety consultancy services. It took so long for MOM to realise and come up with the right regulation now.

If not regulated, it is not just causing loss of productivity but also add risks to the workplace.; March 12, 2010 11:33 PM
Anonymous said...: Talk about productivity, it should start with gahment sector. Why so many SM, ministers, minister of state, acting ministers, MP, mayors, etc, etc. The titles are really creative. But how big is S'pore in terms of land and population? How big is our GDP compared to other developed countries. Personally, I think the head counts are out of proportion ! Gahment must lead by example, just like what they teach in OCS. Otherwise, the citizens will think it's wayang wayang, just to have something to do or talk about before election come. After election, no more news...; March 12, 2010 11:58 PM
Anonymous said...: In Mid 90's, I was working as an engineer in a MNC semiconductor factory. We worked hard to compete with overseas semicond companies and even though we are profitable, the operation finally shifted to Penang due to lower cost. We done many things to cut cost and increase productivity but low labour cost,price competition and low profit margin finally shut us down.

Does the present companies' mgt knows this? Yes, they all came from that era. You can talk about cutting cost and improve productivity, but ultimately having cheap foreign contract workers [PMET] helps them compete for oversea contracts. Same skill sets and qualification with locals, cheaper and best of all on contract i.e. when too expensive, not delivering, sales downturn, just let them go. No headache from MOM etc.

Don't think that these companies' mgt are stupid or followed everything the govt said, to them bottomline is everything. As of managing Foreign workers inflow and increase productivity, these are old tried ideas which suit the present setting else how to justify for that kind of Minister pay since President Obama and China Premier destroyed our top leaders' argument that Low salary = Corrupt minister.; March 13, 2010 9:50 AM
Tan Kin Lian said...: Many people think that the older workers are not prepared to implement change, and that younger workers are more daring.

From my observation, this trait of "fear to change" apply to both older and younger workers. In many cases, the younger workers are less willing to change, as they do not have the experience to manage change, and are more fearful of its negative impacts.

The fear to change is a large part of the cautious approach of Singaporeans, and reflects the unwillingness to take risk.

There is also a tendency to focus on the negative, i.e. "what can go wrong" rather than the positive, "what are the advantage to be gained by making the change?"

We have to go a long way to change the culture and the mindset of Singaporeans. But, it is a challenge that must be taken. For nearly three decades, we have spent time to "say the right things" but have not gone into the root of the problem.

This is the first change to make, i.e. to change our approach towards making a change.; March 13, 2010 9:54 AM
Tan Kin Lian said...: Reply to 9:50 AM

Thank you for contributing your perspective and experience.

Unfortunately, the operating cost in Singapore is high due to the following factors:

a) higher wages which are need to pay for expensive housing
b) government taxes, ERP, COE, etc
c) wastefulness - doing things that look nice, but not really necessary
d) strong Singapore dollar
e) high property prices
f) profiteering by businesses and banks

So, it will be difficult for Singapore to attract many compete in the areas that you have identified.

Anyway, it does not make sense for Singapore to attract MNCs that need to have many low cost foreign workers in Singapore.

The solution to our problem needs a different approach, a different mindset, and a different style of leadership.; March 13, 2010 10:10 AM
jamesneo said...: There are certain new industries whereby at least for the next 10-20yrs the labour costs are an insignificant part of the overall cost due to the roll to roll aspects of its manufacturing such as solar (photovoltic)cells. Effective process and development to reduce the costs of the solar cells themselves are more critical. I hope that private initiatives can grow this new green industry faster else we will lose out to countries like china, germany and japan again where they have been aggressively pursuing the growth of their green energy through legislation and incentives. Attracting MNCs again is not the best move since we will once again become only the marketing/sales HQ instead of the research/development HQ whereby we can launch to capture the asean markets. Hyflux at least from what we observed from the news are one such homegrown successful company that we could emulate.

In this new industry, the greater success would likely not come from so called productivity gain but from an environment of creativity and feedback between the management and the R@D staffs and the technician, chemist and engineers at the ground levels.; March 13, 2010 12:08 PM
Anonymous said...: Taxis are the most uproductive lot.
In view of the current MRT situation, the transport minister should come out with a plan to alleviate this overcrowding problem. Taxis should be put to more produtive use with lower rental and exempt from COE. Car pooling utilising taxis should be considered.; March 13, 2010 4:50 PM
Anonymous said...: Can you increase the productivity of taxi drivers by allowing them to go faster; e.g. increase the speed limit of our express ways to 180Km/Hr?

Some people simply think that higher productivity means going faster. Even if you can ran 100 meters within 10 seconds, our beloved minister LSS would still likely to tell you to go faster, how about 5 seconds as a goal for a start?; March 13, 2010 8:19 PM
Anonymous said...: We will need to use "spurs" to get change in Singapore.

The talking is over.; March 13, 2010 9:14 PM
Anonymous said...: I suggest to the ministers to lead by example first shouting to the heartlanders "Cheaper, Faster and better" A minister draws $150,000 a month while a typical heartlander $1,500. This kind of salary is much more that US President Obama and China Premier who have a population of more than 100x of Sgp.

i) Is drawing a big salary more important than service to the nation?

ii) Why draw such salary and cannot deliver better performance than other countries? e.g. Minibond.

iii) Why paying yourself so much as compared to the heartlanders and keep asking the heartlanders to be Cheaper, Faster and Better?

iv) Why use the last election mandate or winning margin to claim that this unpopular high salary of minister is supported by the people?

vi) GDP growth and improvement is the reason for raising ministers' salary. Does 2009 means ministers' salary should cut deeper?

vii) What proof is there that all the ministers' deserve this kind of salary?; March 14, 2010 9:16 AM
Anonymous said...: Why need to complicate matters?

I see the discussions seemed to overlook the most important factor in productiviy: money!

Increase salary and you will get increase productivity.

Everytime, I need to increase production, I just let my workers know that they can earn more if they produce more. It works, and it is that simple.

Remember the KISS principle: Keep It Simple, Stupid!; March 15, 2010 1:54 PM
Anonymous said...: In the past, if a worker needs to work overtime they get OT pay. You want to increse productivity, just pay the worker extra & if you are generous enough, pay for transport and meal allowance for working late or over the weekend also.; March 16, 2010 5:07 PM

Saturday, March 13, 2010

Issues relating to productivity

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