What is productivity improvement? 8 specific approaches and best practices are explained in detail!

What is productivity improvement?

Productivity improvement in business means maximizing output (sales, production volume, added value, etc.) obtained for inputs (number of people, equipment, time, etc.).

Productivity can be quantified by using the following formula.
Productivity = Output (sales, production volume, value added, etc.) ÷ Input (number of people, equipment, time, etc.)

In other words, there are two ways to improve productivity
Decrease the amount of input and maintain or increase the amount of output
・Increase the amount of input and increase the amount of output more than the amount of input

Taking the appropriate pattern for your company's situation will lead to higher productivity.  

What is the difference between operational efficiency?

A TERM SIMILAR TO PRODUCTIVITY IMPROVEMENT IS THE CONCEPT OF "OPERATIONAL EFFICIENCY," BUT EACH CONCEPT IS DIFFERENT. PRODUCTIVITY IMPROVEMENT REFERS TO MAXIMIZING THE QUALITY AND QUANTITY OF OUTPUT PER EMPLOYEE. ON THE OTHER HAND, OPERATIONAL EFFICIENCY REFERS TO STREAMLINING OPERATIONS BY ELIMINATING THE 3MS (WASTE, MURI, AND MURA) IN OPERATIONS. THEREFORE, IT CAN BE SAID THAT OPERATIONAL EFFICIENCY IS ONE OF THE MEANS TO ACHIEVE PRODUCTIVITY IMPROVEMENT.  

Background of the need for productivity improvement initiatives

Decrease in the working population

As is said daily in all media, Japan's birthrate is declining and the population is aging at a rapid pace.
According to the " Decline in the Working Population " released by the Ministry of Health, Labor and Welfare, the "working population," which represents those who are old enough and willing to work, peaked at about 68 million in 2000 and is expected to decline to about 62 million by 2030. As the working population is expected to decline by approximately 6 million over the next 30 years, many industries and business sectors are likely to face serious shortages of human resources. As human resource shortages become more serious, the burden on existing employees will increase, and the importance of companies' efforts to improve productivity will become even greater.

Change in employees' attitudes toward labor

In recent years, the government's call for "work style reform" has been gaining momentum among companies. As a result, an increasing number of workers want to work for companies that offer work-life balance, such as "less overtime," "easy access to paid vacations," and "remote work. They want talented people to stay with the company longer, and to improve productivity in order to attract even more talented people.  

Decline in Japan's international competitiveness

According to the " International Comparison of Labor Productivity 2023 " published by the Japan Productivity Center, Japan's hourly labor productivity was $52.3, ranking 30th out of 38 OECD member countries. From an international perspective, Japan's productivity has been deteriorating every year since 1970. As Japan continues to shrink due to its declining birthrate and aging population, efforts to improve productivity will be essential if the country is to prevail in the global environment.

Five Benefits of Productivity Initiatives for Companies

cost reduction

Productivity improvements can lead to various cost reductions in a company.
For example, AI and IT tools can reduce human costs by reducing the number of employees and overtime hours. Also, by mainly using remote work, material costs can be reduced through office downsizing.

Increase profits and customer satisfaction

The cost savings from productivity improvements can be used to invest in R&D and value-added improvements to existing products, leading to further profit growth and increased customer satisfaction.

Increased employee motivation

Wasteful and inefficient work significantly reduces employee motivation.
Freeing employees from such tasks and allowing them to engage in creative and essential work that leads to business growth will lead to increased employee motivation. Increased employee productivity due to increased motivation will ultimately contribute to increased business performance. If a portion of the increased performance can be returned in the form of bonuses and salary increases, this will further increase motivation and create a positive cycle in the management of the company.  

Reduction of labor shortage

Once productivity gains are realized, the quality and quantity of work per person will improve.
This will help solve the manpower shortage problem, and will enable the company to achieve more efficient results even with limited human resources. While increasing manpower is important, improving the performance of existing employees is also an important concept when aiming to improve productivity.

Improved work-life balance

Increased productivity per employee will result in lower overtime hours and easier access to paid work.
As a result, the work-life balance of employees will improve. An improved work-life balance will also help prevent turnover and, in the long run, lower recruitment costs.

Eight productivity improvement initiatives

Identification of previous work

The first step in any productivity improvement initiative is to identify the details of the work that has been done to date.
For example, if you want to complete a certain task in a shorter time, accurately identify the workflow and the amount of output. By accurately identifying the details of the work, we can identify the bottlenecks that are preventing productivity improvement. As a result of the identification, if there are any wasteful tasks that are conventionally performed or tasks that can be simplified, we will proactively improve them. Of course, if the issues have already been clarified, approach them directly.

Use outsourcing

Consider whether outsourcing can be used for some of your daily tasks.
For example, in the case of a marketing department, outsourcing can be used for writing articles and reports, allowing employees to focus on more creative and core marketing tasks. However, if outsourcing is used, it is advisable that tasks that may risk the leakage of customer information be done in-house.

Manualization of operations

If the way work is performed is left up to the employees, there will be variations in the way work is performed by different people, which may result in time wastage.
For this reason, it is recommended to actively create manuals of work procedures. By having work manuals in place, everyone will be able to perform their work with a certain level of quality by checking the manuals. In addition, when an employee takes a leave of absence, childcare leave, or leaves the company, it will be easier to smoothly take over the work, which will lead to the solution of the problem of employee specialization.

Appropriate staffing

It is also important to ensure that staffing matches the skills of employees with the nature of their work.
If employees are appropriately assigned, the quantity and quality of their work output will improve, and productivity can be expected to increase. Not only that, if employees are able to do the work they are good at, it will also increase their motivation. When reviewing personnel assignments, be sure to interview employees about the work they would like to try and the work they are good at, and consider the current status of each department in a comprehensive manner.

IMPLEMENT IT TOOLS

The introduction of IT tools is essential for improving productivity.
IT tools can reduce the amount of time spent on data processing and other tasks, allowing you to focus your resources on essential tasks that only people can perform. For back-office departments, RPA (Robotic Process Automation) can automate data entry and simple administrative tasks. For sales departments, there are IT tools such as CRM (customer relationship management system) and SFA (sales force automation) that excel at storing customer information and analyzing sales. Identify the issues that are reducing your company's productivity, and introduce IT tools that are appropriate for the issues.
The following article provides a detailed introduction to IT tools by industry that can lead to improved productivity.
The latest 25 recommended tools for improving business efficiency! Thorough explanation of types, how to choose, and points to note!  

Support for employee skill development

Employee skill development is essential for a company to grow and improve productivity.
As employees acquire specialized skills, they can expand the scope of their work by improving operational efficiency and taking on challenges in new business areas. Skill improvement support efforts, such as subsidizing the cost of taking certification exams and providing incentives such as higher salaries for those who acquire qualifications, will encourage employees to actively improve their skills.

Provide opportunities for employees to communicate with each other

Smooth communication among employees is expected to improve business productivity.
Therefore, proactively create opportunities for employees to communicate with each other. For example, it is recommended to create regular lunch meetings and chatting time.

Flexibility in the way we work

It is also important to provide flexibility in the way employees work.
Examples include remote work and flextime. Such systems allow employees to shift or eliminate commuting time, relieving them of the stress of travel time and allowing them to be more productive and produce more output.

Best practices in productivity improvement initiatives

WE DEVELOP AND PROVIDE "UPWARD," A MOBILE CRM AND SFA THAT SUPPORTS THE IMPROVEMENT OF FIELD SALES PRODUCTIVITY. WE WOULD LIKE TO INTRODUCE THREE EXAMPLES OF SUCCESSFUL EFFORTS TO IMPROVE PRODUCTIVITY THROUGH THE INTRODUCTION OF "UPWARD.

Success Stories from Kubota Corporation

Kubota Corporation is engaged in the business of selling and maintaining agricultural machinery and proposing farming management solutions to farmers throughout Japan. Prior to the introduction of "UPWARD," the field sales staff's proposals were becoming more and more diverse, and the time taken up by clerical and administrative tasks meant that they did not have enough time for customer visits. With the introduction of "UPWARD," reporting and communications can now be done in the cloud, allowing sales staff to visit farmers at their own time, rather than being caught up in administrative work at the sales office. In addition, the MAP function of "UPWARD" allows sales representatives to visualize the status of their visits on a map, leading to more active and efficient visitation activities.
Case Study Interview>> The quality of customer touchpointwas greatly improved by introducing the system to all 13 domestic sales companies. Regained mobility in field sales and returned to the starting point.

Success Stories of Kureha Corporation

Kureha Corporation has realized a 65% reduction in reporting time and improved work-life balance as a result of using UPWARD to manage the rounders' work. Kureha Corporation's Packaging Materials Division manages the rounders who are responsible for creating sales areas and sales promotions in stores. The existing system was not suitable for inputting data from a smartphone, and the person in charge had to input data from a PC from home or the office after completing work in the field. After introducing "UPWARD," activity reporting from smartphones became possible, and the reporting time was reduced from an average of 20 minutes to 7 minutes, achieving certain results.
Case Study Interview>> Reduced the workload of rounders and deepened communication between manufacturers and actual stores. Reporting time reduced by 65% and life work balance improved.

Success Stories of SophiaMed, Inc.

SophiaMedi Corporation is a company that provides high-quality home healthcare services centered on its home nursing business. By introducing "UPWARD" to its main business, route visits, the company is able to "visualize" where it visits and what kind of conversations it has with patients. The MAP function of "UPWARD" has improved the efficiency of visits, and "UPWARD AGENT" has reduced the burden of reporting work, which has resulted in an increase in the number of visits to sales offices.
SophiaMedi Corporation Case Study Interview>> Number of interviews increased by 150 per month, maximizing the volume of activities and shifting from "quantity" to "quality" based on the accumulated data.

Procedures for implementing productivity improvement initiatives

1. Establish a project team

If this is a company-wide initiative, first establish a promotion team.
Recruit members from related departments, such as back office, sales, marketing, etc., to build a team that is not biased toward any particular point of view. Note that building members from specific departments may result in a narrow perspective. People who have experience in planning and promoting projects and are familiar with the field are best suited for project teams.

Clarify issues and causes

Next, identify the causes and issues that are hindering your company's productivity.
After identifying the causes and issues, prioritize the issues if there are more than one. Once the priorities are determined, consider appropriate solutions for each issue one by one.

3. Define the goal to be attained

When implementing productivity improvement initiatives, decide on a goal to aim for, rather than promoting them in a vague manner.
For example, setting specific numerical goals, such as "reduce report preparation time by 30 minutes" or "increase the number of documents downloaded by 20 or more per month," will make it easier to look back.

4. Establish a schedule for implementing productivity improvement initiatives.

Once you have defined your goals, establish a specific schedule for your productivity improvement efforts.
When creating a schedule, it is recommended to create a Gantt chart or similar chart to clarify what tasks are to be performed and by when.

(5) Verify effectiveness while making necessary innovations and adjustments to increase the accuracy of productivity improvement.

After implementing the measures, periodically verify the effectiveness of the measures to see if the productivity improvement is progressing.
By conducting periodic effectiveness verification, you will be able to understand what effects the measures have had and what improvements are needed. Repeated verification of effectiveness and modification or revision of processes will generate new insights and lead to more effective productivity improvement efforts.

What to Consider When Implementing Productivity Improvement Initiatives

prioritize

As you work to improve productivity, you will face a variety of challenges.
However, if you try to deal with many issues at once, your front-line employees may not be able to keep up with sudden, major changes. Therefore, decide on priorities, such as "those that can be addressed immediately" and "those that will have a large impact on the business," and implement productivity improvement initiatives little by little.

Take a long-term view

Productivity improvement efforts do not always produce results immediately after implementation of measures.
Therefore, we should take a long-term perspective and proactively challenge new initiatives without fear of change. In corporate management, whether or not you have continued your productivity improvement efforts will greatly affect your company's existence or failure in the future.

Promote with employee feedback

When implementing productivity improvement initiatives, be sure to incorporate employee feedback.
Sudden changes in policy or the introduction of tools will not only cause confusion among employees, but also lead to distrust of the company. It is advisable to promote the project not only by the project team, but also by taking the opinions of those in charge of the departments where productivity improvement is needed into consideration.  

summary

In order for a company to continue to grow sustainably, it is important to improve productivity and create an environment in which employees can work comfortably. We encourage you to implement the productivity improvement initiatives introduced in this report.
In addition, we have developed and provide "UPWARD," a mobile CRM and SFA. If you are interested in improving productivity in your outbound and inbound sales departments, please feel free to contact us.
Click here to contact us.