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IJPPM REFLECTIVE PRACTICE

60,7
The productivity potential
assessment method
758
Assessing and benchmarking the improvement
Received December 2010 potential in manufacturing systems at
Accepted April 2011
shop-floor level
Peter Almström and Anders Kinnander
Department of Materials and Manufacturing Technology,
Chalmers University of Technology, Göteborg, Sweden

Abstract
Purpose – The paper’s aim is to focus on the productivity potential assessment (PPA) method which
has been developed to measure and assess the productivity potentials at shop-floor level in Swedish
manufacturing industry.
Design/methodology/approach – A study was carried out in one day by two certified analysts
using a highly standardised work process. The focus is on a selected bottleneck area of a factory.
Measurement from the selected area is combined with a broad data collection to make an assessment
of the potential for increasing the productivity in the factory. The results were fed back to the factory
management orally on the same day and in a written report.
Findings – The paper shows that the PPA method was not designed to be a research method. It is a
practical method that is based on a systems perspective where as many factors affecting the
productivity and productivity development are gathered in one day.
Research limitations/implications – A consecutive article will present the result from the studies.
Practical implications – The method has been applied in over 70 cases and has had an impact on
all these cases for the factories studied.
Social implications – Productivity is of utmost importance for society. Productivity development
has been neglected in many companies during recent decades.
Originality/value – The PPA method is unique in its combination of scope, analysis methods, and
public availability. There are similar methods but no others found that make this combination.
Keywords Productivity measurement, Production improvement, Assessment, Work sampling,
Manufacturing systems, Performance measurement, Sweden
Paper type Research paper

1. Introduction
The productivity of a company is an important factor for its success in the fierce
competition on the global market. Swedish labour productivity (gross domestic
product per worked hour) is high, and Swedish productivity growth is good compared
International Journal of Productivity
and Performance Management
Vol. 60 No. 7, 2011 The Swedish Agency for Economic and Regional Growth (Nutek) has financed several
pp. 758-770 successive projects concerning PPA since spring 2005. Numerous individuals from academia as
q Emerald Group Publishing Limited
1741-0401
well as from industry have made important contributions to its development. They are all
DOI 10.1108/17410401111167825 properly acknowledged in the reports on PPA.
to other countries (Organisation for Economic Co-operation and Development, 2010). The PPA method
Productivity in economic terms, both on an enterprise level as well as on a national
level, is calculated based on financial measures, such as the relation between the value
of sales and the costs of labour. This figure is drastically improved if work is
outsourced to so-called “low cost” countries. However, this kind of productivity
improvement is superficial and says nothing about the actual productivity or
utilisation (utilisation is defined later in the text as a factor that contributes to 759
productivity) on the shop floor of in-house production. The official figure for the
national average of capacity utilisation was close to 100 per cent prior to 2007
(Statistics Sweden, 2010). However, capacity utilisation is based on figures provided
through a questionnaire sent to a random sample of manufacturing companies and not
on measurement of actual utilisation on the factory floor. The combination of an
already high level of productivity in international comparison and a perceived
utilisation of close to 100 per cent has contributed to many outsourcing decisions when
company management has concluded that the only factor left to decrease costs is to
find a supplier or a factory in a country where wages are low.
The possibility of decreasing costs by increasing productivity at the workplace level
is neglected, and the potential is often considerably higher than the management of the
company in question imagine. The PPA method was developed to measure and study
the productivity potential in Swedish industry based on actual performance on the
shop floor. PPA is an abbreviation for “productivity potential assessment”. The
method was developed in order to counter the outsourcing trend of production that was
very strong in Swedish industry around the years after the turn of the millennium.
The purpose of this article is to describe the method and to relate it to similar
methods. The method is described in full length in Swedish (Almström and Kinnander,
2006) and the method has previously been presented in English at the Swedish
Production Symposium (Almström and Kinnander, 2007, 2008).

2. Productivity definition
Productivity is usually defined as output over input, for example correctly produced
products that fulfil their specifications over the value of all resources spent for
producing these products during a specific time period (Tangen, 2005). There are many
different productivity measures and there is definitely no one best way to measure it.
Inputs and outputs vary between different products, production systems, and
businesses. Every company and every workstation within a company might have its
own unique definition of productivity (e.g. number of products X produced per shift). In
general, productivity measures can be divided into two categories:
(1) partial; and
(2) total.

Partial measures concern the connection between a single production factor and the
production result. The most common partial estimate is made up of labour productivity
(SOU, 1991). The yearly production outcome divided by the number of employees or
the total costs of personnel constitutes a general estimate of labour productivity. On a
national level, the gross domestic product per worked hour is used (Organisation for
Economic Co-operation and Development, 2010). However, this estimate is misleading
if the number of part-time employees varies from year to year and is unsuitable for
IJPPM comparisons between different companies and different proportions of part-time
60,7 employees. Moreover, it is important to point out that there are risks inherent in using
partial productivity estimates due to the fact that partial estimates presuppose that the
remaining production factors are held constant during the period studied. For example,
labour productivity can be increased by outsourcing work. In the automotive industry
an inverted productivity measure is used: labour hours per vehicle (Work Study, 2002).
760 However, that measure is only valid for the assembly line in the final assembly plant,
and is heavily affected by the rate of value added in the assembly plant in relation to its
suppliers, as well as the complexity of the vehicle.
There are several methods proposed in the literature for measuring total
productivity (e.g. Rathore et al., 2003; Hannula, 2002; Sahay, 2005). A common
denominator for these methods is to convert different kinds of inputs and outputs to
monetary units. However, these methods are seldom used in industry since they are too
complicated for management to employ (Hannula, 2002).

3. Improving productivity
Productivity can be improved by increasing output or decreasing input. To achieve
this at the activity level in an organisation there are three basic factors that can be
improved:
(1) the method (M);
(2) the performance (P); and
(3) the utilisation (U) (Saito, 2001; Helmrich, 2001).

This is equally applicable to machine work and manual work. The relation can be
expressed as equation (1):

Productivity ¼ M £ P £ U :

Method improvement is the most important factor where, for example, using an
automatic lathe over a manual lathe increases productivity tenfold. The method factor
is the ideal method performed at normal speed and without any disturbances, it is
expressed as a productivity measure on an activity level (e.g. products produced per
time unit). The performance factor is the speed factor, i.e. working faster or slower than
normal. Normal speed for manual work is defined by an accepted predetermined time
system like MTM-1 (Niebel and Freivalds, 2003). The performance rate of a machine is
the current speed in relation to the ideal cycle time. The ideal cycle time is the shortest
cycle time that has been achieved with a certain product in the machine. The
performance factor it is expressed as a percentage of the normal or ideal speed. Finally,
the utilisation factor determines how large part of the available working time that is
spent on the intended method. Typical losses that result in less than 100 per cent
utilisation are break-downs, set-ups, and “waiting for operator” for machines, and
balance losses, disturbance handling, and personal time for workers. When improving
utilisation the target for utilisation is 100 per cent but for machines that produces
different products, time need to be allowed for set-up and likewise for operators there is
always the need for personal time and relief (micro breaks). The multiplication
relationship between the factors means that a relatively small improvement of each
factor will result in a considerable productivity improvement. The PPA method
focuses on the utilisation factor, but the other two factors are considered as well, but The PPA method
not measured.

4. The PPA method

The development of the PPA method started in spring 2005, through an initiative from
the Swedish Agency for Economic and Regional Growth (Nutek). The challenge from
Nutek was to prove the thesis that there is a large potential for productivity 761
improvement at the factory floor level. Nutek’s interest was to get reliable statistics of
the productivity potential in Swedish industry in order to make well-informed
decisions about government-financed research and development programmes. An
important side effect is that by offering subsidised PPA studies, Nutek can provide
substantial aid for manufacturing companies to reach further in their efforts towards
continuous improvement.
When developing the PPA method it became obvious that in order to make the
productivity measure comparable between different companies producing totally
different kinds of products, one must focus on the input part of the productivity
equation – in other words, focus on how the resources are utilised and on how the
waste can be minimised in the production. From the outset of the first PPA project, the
ambition was to find a measure for total productivity, but it was soon realised that the
existing total productivity measures were too cumbersome to use for our purpose and
it was also concluded that such a measure would be too difficult to interpret. Therefore,
it was decided that the method should measure and assess a number of separate
parameters, where the meaning of each parameter can be easily interpreted. The focus
is on the utilisation factor, because the utilisation factor is comparable between
different kinds of operations, companies, and products. The performance factor would
also be possible to compare. However, for manual work it is hard to measure in a short
time, the improvement potential is generally smaller than the utilisation improvement
potential, and it is also a more sensitive issue to measure on people. However, the
performance for machines is included in the measure used.
An important requirement was that all parameters should be applicable to a large
range of manufacturing companies, regardless of size, line of business, or type of
product. The idea was to be able to compare the data between different companies.
Another important requirement was that the method should be efficient to complete,
i.e. speed is to some extent chosen over precision. That requirement has resulted in a
standardised work procedure (see section 4), where the analysts complete a PPA study
in just one day.
All together the parameters will provide a comprehensive picture of all important
factors that can be improved in order to increase the productivity of the studied
factory. Each study is normally focused on one factory. Data from the studies are
collected in a database that facilitates comparison between different companies and
factories within the same company, in different ways on a detailed production
engineering level.
The parameters forming the PPA Method are divided into different levels (Figure 1).
Level 1 is the core of the method, constituting two parameters for measuring utilisation
in manual work and machine work respectively. Level 2 parameters affect productivity
at the corporate level, while level 3 parameters indicate the company’s ability to
improve the production while maintaining a sound work environment. The potential of
IJPPM
60,7

762
Figure 1.
The levels in PPA

improving productivity by improving the M factor of equation (1) is represented by

level 4. Finally, company facts are a collection of parameters used to sort the database.

4.1 Level 1
Manual work is measured in a selected part of the factory. Usually a relatively
small and well limited production unit is selected, typically a work group and the
machines that the group is operating. The criteria for selection are two-fold. First,
the production unit and the product or products that are being produced there must
be important for the company. Secondly, the selected workplace must be planned to
be 100 per cent used during the measurement period. Ideally, it should be a
bottleneck for the production flow. The company propose one or more suitable
workplaces and the PPA analyst decides which one to choose. The measuring
technique used for PPA is work sampling. Work sampling is a statistical technique
for work studies, where random objects are studied at fixed time intervals or fixed
object sequences are studied at random time intervals (Niebel and Freivalds, 2003).
The PPA Method uses random objects at fixed time intervals, with 480 samples
taken during four hours. The number of objects, in this case workers or work
stations, is generally between three and six, but the upper limit could be higher,
depending on the distance between the workers. The lower limit is set because of
the intention to measure a group and not individuals. The work sampling study is
simplified in the sense that all workers are considered to carry out activities that are
classified into one out of three general categories:
(1) value adding;
(2) supporting; and
(3) not value adding.

The definition of the above categories is standardised and dependent on the level of
automation. However, it must always be fine-tuned at every individual company. The
standard definition for the two levels of automation – i.e. manual work and
semi-automated work – are given in Table I. Manual work is usually manual assembly
but can also be other types of manual manufacturing operations where an operator
runs a manually controlled machine, for example. Semi-automated includes all kinds of
operations where the operator serves a machine, while the machine carries out most of
the value adding work.
 The productivity of the machine work is measured using overall equipment The PPA method
effectiveness (OEE; Nakajima, 1988) on a bottleneck machine. The basic definition of
OEE is the ratio between the time spent on producing goods of approved quality to the
scheduled time (loading time). The OEE measure is wide spread in industry and it is
usually calculated as the product of three factors as in equation (2):

OEE ¼ availability £ performance efficiency £ quality rate: 763

Availability is defined as a ratio of planned production time minus down time

(breakdowns and changeovers) over planned production time. Performance efficiency
is the ideal cycle time times the number of products produced over actual runtime. The
quality rate is the ratio between accepted products over number of products produced.
The OEE measure is affected by the surrounding system, e.g. the manning of the
machine (De Ron and Rooda, 2006)), and of special interest in the PPA method is to
analyse the combination of utilisation of machine and operator. OEE is not the same
thing as the U factor in equation (1). It is U multiplied by P (performance) and quality.
It does not include the M factor.
The parameters constituting OEE are not measured by the PPA analyst, but the
companies’ own data is used. The motivation for this is that it is usually impossible to
get significant data on, for example, change-over time and major breakdowns in just
one day. Some companies do measure OEE according to the definition above, and thus
it can be used directly. However, in most cases encountered this far, data must be
retrieved from different systems and converted to be useful.

4.2 Level 2
Level 2 consists of familiar result parameters that are used by a vast majority of
manufacturing companies for their control of operations. The parameters are:
.
inventory turnover;
.
delivery accuracy;
.
scrap rate; and
.
customer reject rate.

All of these parameters affect productivity. Inventory turnover can be regarded as a

direct measure of the productivity of the material being used in the production process.

Manual work Semi-automated work

Value adding Assembly and all activities that are Load-unload, finishing operation, and
part of the normal work cycle all activities that are part of the normal
work cycle
Supporting Planning, material handling outside the Set-up, planning, material handling Table I.
work area, cleaning and maintenance outside the work area, cleaning and Definition of standard
maintenance activities included in each
Not value adding Disturbance handling, waiting (balance Disturbance handling, waiting, category in the work
loss), personal time personal time sampling study
IJPPM Inventory turnover is defined as total revenue of the factory divided by the sum of raw
60,7 material, work in progress, and finished goods.
Delivery accuracy, on the other hand, is a more indirect measure of productivity. It
is very different what delivery accuracy actually means for different companies
depending on their customers and the customers’ requirements. For example, for a
supplier of just-in-time products to a car assembly line, it is absolutely crucial to have
764 100 per cent accuracy, while for a supplier that delivers stock products in times of high
demand, it is not a big problem to have lower accuracy. In the PPA context, delivery
accuracy is more relevant as a measure of internal precision. Low delivery accuracy is
a sign of an inability to plan the operation and the system’s difficulty in handling
variety.
Scrap rate and customer reject rate both affect productivity, since they have a direct
effect on the output of the manufacturing operation. The collected scrap rate value is
by default the sum for the whole factory. For some processes the scrap rate is hidden,
for example plastic forming processes where scrap can be used directly in the process.
In such cases scrap and reuse will affect the performance factor in the OEE calculation.
The customer reject rate is of course the more severe of the two, because it affects the
relationship with the customer and the possibilities of future business. The customer
reject rate is defined differently in different businesses. In automotive industry defect
parts per million (ppm) is used. This definition is used as first hand choice in PPA. In
other businesses the number of rejected orders or at worst the value of rejected
products has to be used. The customer reject rate does not effect OEE.

4.3 Level 3
The parameters at level three are not measures of productivity, but rather measures of
the ability of the company and its management to run and develop production. The
first parameter is the level of production engineering, which is defined as the number of
“yes” answers from a list of 40 questions. The questions are sorted into 11 topics:
(1) strategy – goals;
(2) work methods;
(3) maintenance;
(4) competence;
(5) cleanliness and order;
(6) material handling;
(7) change over;
(8) continuous improvements;
(9) calculations;
(10) planning; and
(11) quality.

Altogether the 40 questions evaluate how close the manufacturing unit is to what the
authors consider being an ideal state of production engineering. That ideal state is not
based on any particular production philosophy, but rather on the authors’ experience of
sound production practice and traditional industrial engineering principles. The
original PPA project’s reference committee, including several representatives from The PPA method
manufacturing industry, provided important input to the list of questions. Some of the
questions are inspired by rapid plant assessment (RPA; Goodson, 2002). The full list of
topics and questions is presented in Table II.
The second part of level 3 is the assessment of the work environment. The physical
work environment, workload ergonomics, and the psychosocial work environment are
assessed on a scale from 1 to 5 based on three different lists of questions. The questions 765
are answered by the PPA-analyst, based on the analyst’s objective observations
combined with interviews with the shop-floor personnel. The assessments are
compared with personnel turnover, short time absence, and total absence due to illness.
The basic hypothesis is that a good work environment (i.e. a high score in the
assessment) does not affect the productivity either positively or negatively. However, a
low score may affect productivity negatively, through increased absence and personnel
turnover and possibly performance drop due to lacking motivation and discontent
(Hackman and Oldham, 1980). Therefore, the rationale of doing the work environment
assessments in PPA is to be able to get quantified evidence for the cases when the
environment is bad.

4.4 Level 4
Level 4, i.e. productivity increase through method improvement, is not a formal part of
the PPA method. The method improvement potential cannot be fetched in one
parameter that is comparable between different companies. Furthermore, it is random
whether or not the analyst has the right experience to actually be able to assess the
method from just one day’s study. This is obvious when considering the method aspect
for the machine, i.e. the chosen machine technology, where it is very likely that the
technicians at the company studied have deeper knowledge of machine technology
than the PPA analyst. However, for manual labour and especially for material
handling, it is very common that the PPA analyst observes productivity potential that
can be at least roughly estimated. This rough estimation is a valuable input to the
discussion with the corporate management after the study about the productivity
potential. But, this estimate cannot be documented in the database and will therefore
not affect the PPA statistics. Similarly, the P factor in equation (1) (i.e. performance)
can be measured using a predetermined time system (Niebel and Freivalds, 2003).
However, it takes too long time to carry out properly. It is also quite controversial and
therefore avoided as a formal part of the PPA method.

4.5 Company facts

The company facts parameters are not used for the assessment of productivity. The
motivation for collecting them is to be able to compare the result from different PPA
studies and to be able to sort the database. It includes trivial data like the number of
employees and turnover, i.e. public facts that can be read from the previous year’s
annual report, as well as some parameters that are collected based on discussion with
the management. The latter category includes a rough calculation of the
manufacturing cost distribution and the management’s own view of which
competitive and order-winning criteria are most important.
IJPPM Topic Question
60,7
Strategy – goals 1. Can the management present a clear production strategy, based on
qualifying and order winning criteria?
2. Is the strategy converted into measurable goals for production?
3. Are the goals measured regularly and are these measures available to the
766 shop-floor personnel?
4. Is the fulfilment of the goals connected to any kind of reward?
Work methods 5. Is a standardised work method used and is it documented?
6. Is the standardised work method changed if the workers find a better
method?
7. Do operators serve several machines?
Maintenance 8. Is down time measured and are causes for stoppages documented?
9. Is down time measured by an automatic system?
10. Are small stoppages monitored and actions taken to eliminate them?
11. Is preventive maintenance used?
12. Is condition based maintenance used?
Competence 13. Is there anyone responsible for and competent to measure manual work?
14. Has the first line manager knowledge about the work to lead improvement
actions?
15. Is there a competence development plan?
Cleanliness and order 16. Have all material, tools etc. fixed positions and is everything in place when
not used?
17. Is there enough space around the workplace to move all material as
planned?
18. Are the floor and other surfaces free from waste material, scrap products, etc.?
Material handling 19. Are the load carriers (pallets, etc.) adapted to the components?
20. Does the batch size correspond to the delivery pace?
21. Is the same load carrier used for a component as far as possible?
22. Is material stored close to the point of use?
23. Is the shop independent of trucks, cranes etc. to move the material?
Changeover 24. Are changeover times measured?
25. Is there a continuous effort to reduce changeover time in the bottleneck?
26. Are tools, fixture etc. stored close to where they used?
Continuous 27. Is the continuous improvement work carried out systematically, and is it
improvements documented and visualised?
28. Are the workers engaged in the improvement work?
29. Has the management a realistic idea about the productivity potential?
30. Is knowledge from previous development projects used systematically?
Calculations 31. Are investment calculations revised?
32. Are product calculations revised?
Planning 33. Is the ideal cycle time known and is it based on facts?
34. Are real operation times reported to the planning system?
35. Are the operation times in the planning system updated based on the real
operation times?
36. Is the production planned according to pull principle when possible?
37. Are lead times measured in order to reduce them?
Table II. Quality 38. Is there a standardised quality system in use (e.g. ISO 9001)?
Level of production 39. Is the single operator responsible for the quality of his own work?
engineering 40. Are there systematic methods used to eliminate the occurrence of errors?
5. Work procedure The PPA method
The PPA method is carried out in one day by two certified analysts. The work
procedure is standardised with regard to what is going to be done and at what time (see
Figure 2). However, individual adjustments are needed at each study. Analyst 1 is in
charge of collecting and assessing most of the parameters and getting an overview of
the factory and the company. This is done through interviews with the factory
management, observations during a factory tour, and by reading different documents. 767
Analyst 2’s task is to carry out the work sampling study. While doing that, the analyst
makes observations of the workplace and the work method. Analyst 2 also performs the
work environment study, by observations and by interviewing the operators.
After the parallel tasks are completed, the two analysts get together and conduct the
overall analysis and document the study using a prepared report template. In the late
afternoon the analysts can feed back the result to the corporate management and have an
open discussion about the productivity potential and what means there are to utilise the
potential. This discussion is depends very much on the analysts’ skills and experience.
However, future research will make the analysis more accurate and based on scientific
conclusions about the relation of different parameters. All data collected is reported to
the PPA database, administrated by Chalmers University of Technology. The database
of the PPA studies will gradually provide more accurate comparison data.

6. Application of the PPA method

In total, more than 70 studies have been carried out and more than 30 consultants have
completed the course to become certified PPA analysts. The principal line of business
that has been studied is suppliers to the automotive industry. These companies are
pushed by OEM companies to decrease prices every year, and the best way for them to
do that is to increase productivity. Other types of companies have been studied as well.
The results from the PPA studies will be published in a subsequent article.

7. Discussion
The PPA method was not designed to be a research method. It is a practical method
that is freely available for anyone to use. It is based on a systems perspective where as
many factors as affect productivity and productivity development are gathered in one
day. There are, of course, alternatives to PPA: many management consultancy firms,
for example, have their own analysis methods that have similarities to PPA.
Sundkvist et al. (2009) conducted a review of similar manufacturing analysis
methods. These are of different kinds, such as shop floor assessments, statistical

Figure 2.
PPA work flow
IJPPM approaches, different kind of self-assessments, and consultancy firms that have their
60,7 own concepts of how manufacturing should be analysed and improved. Finally there
are complete production system concepts providing several ways for improvement.
The differences in the evaluated methodologies, except that they are representing
different focus and intention of use, are time and cost, who is performing the analysis,
and how the data collection is done. The selection of assessment methods is based on
768 what is used in Swedish manufacturing industry and similar methods described in
academic journals.
The methodologies were divided by Sundkvist et al. (2009) into three categories
(Table III):
(1) internal audit;
(2) external audit; and
(3) self-assessment.

Internal audit is defined as audits made on-site, assessed by personnel at the factory or
within the same organisation. External audit is defined as audits made by independent
consultants or researchers on-site. Self-assessment is defined as assessment
methodologies that can be used off-site using pre-defined performance levels or
self-assessment through questionnaires or interviews.
“Width” is defined as how many system parameters are being analysed. “Depth” is
the level of detail in the study. The cost of a study is estimated based on how many
work days that are required to complete the analysis. Information about that is missing
in some cases. A plus (þ ) means deeper, wider, or lower cost than PPA. A minus (2 )
means less depth or width, or higher cost than PPA. A zero (0) means equal to PPA.
More information about the different publicly available methods in Table III can be
found through the provided references. Information about the proprietary methods has
been gathered through personal communication with representatives from the
companies and internal documents.
There are several methods that have some similarities to PPA. For example, RPA
has been used as an inspiration to PPA, but the focus is totally different. Another

Time/
Classification Method Public Depth Width cost

Internal audit LMT (AstraZeneca) No 2 þ 2

SPS (Scania) No þ þ 2
Benchmark procedure (Plastal Group) No þ 2 2
External audit PPA Yes Ref. Ref. Ref.
RPA (Goodson, 2002) Yes 2 2 þ
Diagnostic workshop (Volvo Cars) No þ 0 2
Productivity improvement (Herron and Braiden,
2006) Yes 2 þ N/A
CVA (solving EFESO) No þ 0 2
Self-assessment LeanNavigator (Swerea, 2009) Yes þ þ 2
Table III. PACE ( Jutras, 2006) Yes 2 2 þ
Method characterisation Just-in-time assessment (Brox and Fader, 2002) Yes þ 2 N/A
example is the diagnostic workshop (Volvo Cars), which is quite similar (e.g. work The PPA method
sampling is used) but the purpose for Volvo Cars is to determine and lower the
manufacturing cost of a specific component at their supplier. The PPA method is used
first and foremost for external audit, but it can also be used for internal audit and
self-assessment. We have heard of companies that use PPA that way, but it is beyond
our control. The method is publicly available and we can only control its use when
certified analysts use it and report data back to the database. 769
8. Conclusions
The PPA method was developed to determine the productivity potential at shop-floor
level in manufacturing industries. The approach is unique, even though there are other
methods that share some commonalities. It has been applied and tested in Swedish
industry for five years and more than 70 studies have been completed. Most companies
that have undergone a study have done it for one of two reasons:
(1) there is a new manager of the factory; or
(2) the company can see that there is a large productivity potential wants to be able
to point out the potential and have it quantified by someone external and
objective.

The other case is the factory that has carried out a comprehensive improvement
program and wants confirmation that productivity is high in comparison to others.
Unfortunately we can conclude that the majority of the manufacturing companies do
not want to know. They do not want someone from outside to tell them that there is
productivity potential. This is the drawback of the method; it requires that the
company is open to criticism about details in its operations from two people that only
have been there for one day.
The results from the studies will be presented in a subsequent article. Apart from
the quantitative results, which are interesting by themselves, several qualitative and
general conclusions can be drawn about the state of Swedish manufacturing industry
in general and suppliers to the automotive industry in particular.

References
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manufacturing industry”, Proceedings of the 1st Swedish Production Symposium, Gothenburg.
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Peter Almström can be contacted at: [email protected]

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