After the cuts.

Labour productivity is measured by increasing output without increasing labour or maintaining output with reduced labour. The second option means cutting the headcount, either done very quietly or with big announcements.

In late 2011 a new State government was elected in Victoria, Australia. A part of its election policy was to ‘reduce waste’ in government services. If you are a manager, reducing waste is part of your job, so you will know what the government did.

Yes, they retrenched in excess of 4,000 employees at a ‘saving’ of $1b. It has since been revealed that government departments have hired contractors and temporary staff from agencies, to cover the gaps in services at a cost of $900m and increasing. The ‘saving’ was a mirage.

This situation is a continuing occurrence among commercial businesses and governments. There is an expectation that people can be retrenched, but nothing done about changing processes and somehow the remaining staff will just work harder (or longer) to get the goods out.

Know your processes

Logistics operations in organisations are based on processes. A process is a series of actions or tasks intended to achieve a particular output; it can be described and diagrammed; have its performance measured and be improved. Within the description should be a flow process chart identifying the time that people are required to complete the process. The chart will also identify the non-value adding activities; these provide managers with information to improve the process.

Remove the people and not change the process is not being effective as a manager in logistics.