The APO Center of Excellence on Public Sector Productivity
Philippine Standard Time:
Category: Featured Innovation and Practices
About the Tool
Purpose: Productivity Measurement
The scatter diagram, a cause analysis tool, is also known as a scatter plot, scatter graph, or correlation chart. It provides information about the relationship between two variables and how closely they are related. One variable, typically the independent variable, is plotted on the horizontal axis, while the other variable (the dependent variable) is plotted on the vertical axis. The distribution of points on the diagram shows the degree of correlation between the variables.
Lean Six Sigma and data-driven process problem-solving heavily rely on scatter diagrams. The patterns help with process variable and performance metric analysis by showing the relationship between variables. They are commonly utilized due to their simple, appealing visual layout, versatility, ability to include multiple variables, and ability to perform statistical tests like correlation, regression, and clustering. They convey information effectively without lengthy explanations.
How to Use the Tool
Estimated Time Needed: 2 hrs
Target Participants or Users: Process Owners, Planning Officers, Quality Control Inspectors, Project Managers
Steps
Gather and list of paired sets of data.
Determine dependent and independent variables.
Construct the horizontal (x) and vertical (y) axes.
Plot the data by placing a mark at the point corresponding to each x-y pair.
Assign independent variables to the horizontal or x-axis.
Assign dependent variables to the vertical or y-axis.
It records data in a systematically organized manner by tracking the frequency of specific events, defects, or other information. Check sheets are used to see how a process works and to count mistakes by type, location, and cause.
Examples of check sheets:
A Tally Sheet is frequently used to gather information on quality issues and calculate the frequency of occurrences.
A Checklist for Process Probability Distribution is used to obtain primary frequency distribution data.
The Defect Checklist categorizes process flaws based on deformity and frequency of occurrence.
The Defect Cause Sheet tracks the causes of problems in the process.
A Location Sheet uses a visual representation of the problems by indicating exactly where the problem is in a certain material.
Graphical Sheets help people see information and understand how data spreads out.
Using a check sheet in the workplace helps individuals complete their tasks quickly and efficiently.
How to Use the Tool
Estimated Time Needed: 1 hr
Target Participants or Users: Process Owners, Planning Officers, Quality Control Assessors/Evaluators
Steps
Decide on what data needs to be recorded.
List the specific information to be monitored and provide a space for comments
Determine the frequency of data gathering.
Create the form and label accordingly. Include title, date/time, location, name of the checker/assessor, and categories.
To verify that all necessary information is provided and that the form is user-friendly, pilot test the checksheet and revise based on the given suggestions.
Micro, Small, and Medium Enterprises (MSMEs) in India have been a major contributor to the socio-economic development of their country, contributing 18.5% to its 2019 to 2020 Gross Domestic Product (GDP). The sector has also contributed immensely to entrepreneurship development, especially in the semi-urban and rural areas of India. However, the global pandemic has affected every sector in the world indiscriminately, albeit in varying degrees, and MSMEs have proven to be more vulnerable to income and asset losses than larger firms.
To better understand and address this issue, India’s National Productivity Council (NPC), in association with the Asian Development Bank Institute (ADBI), decided to conduct an online survey to look into the pandemic’s size, aspects, incidence, and how it has impacted MSMEs in India, Bangladesh, Pakistan, Indonesia, the Lao PDR, Mongolia, Vietnam, and Malaysia. They combined elements of qualitative and quantitative research approaches in their study design to ascertain the level of sectoral distress at the peak of the nationwide lockdown in May 2020. The results were concerning, as they showed that production levels fell from an average of 75% capacity to just 13%, firms retained only 44% of their workforce, and 69% of firms reported an inability to survive longer than three months.
The study had some notable findings on the state of MSMEs since the onset of the COVID-19 pandemic. First, they found out that MSMEs in developing Asian countries experienced considerably reduced employment and sales revenues in the first few months after the outbreak. The reduction in employment was, of course, more severe for the employment of non-permanent employees, but the employment of permanent or regular employees was also significant. Although there are considerable differences among countries, one-fourth to one-half of the sample MSMEs experienced a temporary close down during this period and one-third to two-thirds were facing a cash shortage at the time of the survey. Thus, the impacts of the pandemic on employment and the sustainability of business were quite severe.
Second, some enterprises were earning from online sales before the pandemic, many of them were either 1) young firms, 2) export-oriented firms, 3) even firms facing a cash shortage, and 4) those who have already been using online sales. Moreover, these firms are also planning to increase their utilization of online sales amid the pandemic.
Third, the share of online sales has a nonlinear relationship with employment. As the share increases until it reaches about 40% of the total sales, its relationship with employment is negative, suggesting that the use of online sales displaces labor input. Fourth, MSMEs tend to prefer tax payment deferral, tax rate reduction, and loan repayment deferral to many other possible forms of government support for MSMEs, even though considerable differences exist among countries and among firms regarding which type of support they prefer
The lessons presented by these findings are of significant use to the public sector as well. The difficulties faced by MSMEs, as seen in the study’s overall findings of sectoral distress across the board during the height of the pandemic, should be taken into consideration by the public sector in its development of interventions to drive recovery from COVID-19. Especially concerning is the widespread layoffs among MSMEs, which could have widespread ramifications that the public sector will have to address.
How will governments be more productive? This is the big question addressed in the fourth installment of World Bank’s six disruptive debates and constructive conversations in the Future of Government series, held on 1 September 2021.
The forum aims to provide global leaders and thinkers an avenue to share views and ideas on how governments might seize the opportunity from the current global pandemic crisis and climate crisis to achieve greener, more resilient, and more inclusive future development (GRID) outcomes. It featured global experts such as Francis Maude, Peck Kem Low, Francisco Gaetani, Marta Arsovska Tomovska, Edward Olowo-Okere, and Raj Kumar.
Government Productivity
Government productivity is fundamental to the world’s future. The pressure to do more with less is heightened now more than ever, especially as the time frame for Sustainable Development Goals achievement nears its end and the global pandemic remains ongoing.
Maude, FMA chairman and former UK Minister, shared his insight on how this can be carried out. First is by ensuring efficiency. He shared about how he had helped in reforming procurement during his term in the UK government program in efficiency and reform. “We did a huge digital transformation program which saved a lot of money but also got the UK ranked best in the world by the UN for e-government,†Maude added.
Maude noted that the government’s procurement of goods and services from outside must be done better. Specifically, he highlighted the necessity of getting rid of restrictive practices that can, in the end, corner the government with an oligopoly of suppliers. He added, “In the UK, we got rid of a lot of the restrictive practices. That was a real factor in driving or enabling the huge growth upsurge in the tech sector. Startups were finally able to bid for and win government contracts and they grew off the back of it. So procurement, major projects, digital transformation, all of that– these are reforms available to every government that [are] crucial.â€
Another factor he brought forward was impact investment, a strategy that aims to generate positive social and environmental impact alongside financial returns. A few examples of this are government partnerships with small social entrepreneurs and efforts to support environmental initiatives with economic benefits. The UK was the first in the world to set up a social investment bank, which offers another, more holistic option to address social problems other than providing in-house services or having to go full on conventional, commercial outsourcing.
Digital transformation toward improving productivity
Tomovska, director for Public Administration Reform and eGovernment at the Office of the Prime Minister of Serbia, shared how they were able to realize ‘doing more with less’ in Serbia through digital transformation. She underlined the value of investing in digital transformation given that there are still governments that are apprehensive about what such a shift may entail.
“Some governments are hesitant to take this road. Either they don’t have a vision or they don’t have enough talent in the government for digital transformation. Sometimes, investment is a challenge because digitalization itself is not a cheap toy. But the crisis showed that every single dollar invested in the digital transformation of the government paid off and then paid over big time,†she explained.
The director, who was also the former Macedonian Minister for ICT and Public Administration, pointed out that digital transformation not only makes services more efficient, more effective, and low cost, but more so it provides a safeguard against corruption. She said, “In some parts of the world where corruption is a challenge, digital government can be seen as an excellent tool to fight corruption. There is no physical contact, no discretionary decisions; everything is recorded in the systemâ€
Tomovska also cited a few technologies that are now in the spotlight for digital transformation. One of which includes automated decision-making systems which use algorithms that sync across sectors in the government. Tomovska shared that, in Serbia, they were able to save millions of dollars annually and cut down costs in terms of time, electricity, water, and even paper sheets because of the said innovation. In the past two years alone, they were able to save around 180 million sheets of paper, which is equivalent to 18 thousand trees, 76 ml. water, and six thousand watt-hours of electricity. Another example she mentioned was big data and algorithms for data-driven policies, which contribute to better planning, improved outcomes, and increased savings.
She also shared about software robots that can do basic routine tasks. She added, ‘[The technology] frees up hours for some crucial things, for example, dealing much more with the citizens and understanding their needs. There are a lot of things to be done there. And we’ve seen some numbers, which are in billions of dollars, with what would be the cost savings if we introduce this kind of automation.â€
In her conclusion, Tomovska emphasized that digital transformation must be a collective effort. There are many avenues for cooperation to contribute to government productivity. The private sector, startups, and innovative companies may play a significant role in this.
Singapore’s Example
Singapore, with its advanced technology and efficiency, may be a hint of what the future of government would look like.
Fast service is one of the things that the country can take pride in. Chief human resources officer & workforce management advisor in the Singapore Government, Kem shared, “Today, in Singapore, when you land in Singapore airport, from the point you land to the point you’ve grabbed your luggage bag, checkout and get a taxi, [it would take] no more than ten minutes. That’s the level of technology that we have invested in.â€
Kem spoke about how Singapore has been focusing its efforts in driving towards a smart nation. Given the country’s limited resources, going digital is not merely an option but is integral to its system.
She explained, “For us, going high tech or digital is not an option, mainly because we are so small and we really don’t have enough people. We don’t have natural resources. Our only natural resource is our people, even our people, we don’t have enough Singaporeans per se, and one-third of our workforce is really from all over the world… because we don’t have the warm bodies to fill those jobs, very often, we have to make use of technology in order to still deliver services, and yet, high touch.â€
In this era of continuous change – where technological, societal and economic changes are accelerating at an exceptional pace—there is a rising challenge for sustainability in the uncertain future. While technological advancements escalate, traditional strategies and processes fall behind. The public sector needs to shift its stance from reactive to proactive in able to surf the trends and exploit opportunities to better serve its citizenry.
While the Philippine government has established systems to identify and manage risks, another dimension that needs to be looked into is actively taking advantage of prospects and developments. Future thinking not only requires recognizing risks and opportunities, but rather anticipating and embracing change. In enhancing an organization’s agility, flexibility and adaptability to deviations, scenario planning identifies the driving forces, critical uncertainties, and forward inferences to develop plans for multiple scenarios. As Peter Schwartz, author of The Art of the Long View: Planning for the Future in an Uncertain World, said, scenarios are a tool for helping us take the long view in a world of great uncertainty. Strategic foresight explores these uncertainties and formulates potential pathways or strategies. It has three approaches to developing scenario sets: (1) Deductive Approach; (2) Incremental Approach; and (3) Inductive Approach. Deductive approach constructs a matrix from two uncertainties and uses the axes as driving forces to deduce four scenarios for four quadrants of the matrix. Incremental approach alters a few key variables of a definite future and identifies alternatives. Lastly, inductive approach clusters various uncertainties to formulate stories and possible futures.
Being the sole provider of basic citizens’ services, governments should be at the forefront of change in order to deliver in the best interests of the citizens. Moving from traditional planning to prospective analysis and scenarios, strategic foresight strengthens public sector organizations to promote good governance, innovation, strategic evaluation, and proactive shaping of the future. Truly, foresight is key to sustainable productivity.
Total Quality Management has its roots in industrial engineering disciplines. The concept originated when Walter Shewhart developed the statistical process control and applied it to product quality control. It was adopted and further developed in Japan in 1940s when Edward Deming and Joseph Juran visited the country and applied the method to increase the quality of products while also involving everyone in the organization. Shown below is Deming’s idea of TQM: The successes of TQM in various sectors are well documented. In recent years, TQM has been attracting attention among public sector organizations as citizens become more demanding of governments to do more with less. In Japan, for example, the government has adopted the PDCA (plan, do, check, action) cycle and it has since become part of the policy formulation process. TQM is a holistic management approach to long-term success through customer satisfaction. The focus is on improving the quality of outputs, either goods or services, through continual improvement of internal processes. Apart from implementing new methods and software solutions, TQM also requires a change in culture. However, many organizations are unable to start this transformation unless they are faced with a disaster or are forced by their customers. There are five basic principles of TQM.
Quality oriented – The mission and vision of the organization must be balanced with its own needs and of the citizens. The leadership must have a political will to establish policies that are supportive of TQM.
Customer focused– One of the goals of TQM is to ensure that you meet and exceed customer’s satisfaction. In defining its processes and functions, the organization must always consider its customers’ point of view.
Total employment involvement – Top management support is imperative and is pivotal in the implementation of TQM. In addition, the role of the employees in TQM is very different from the traditional view. TQM employees are empowered to make decisions, and their suggestions and contributions are highly valued by the management.
Continuous process improvement – TQM revolves around the philosophy of never ending improvement. Since the customers’ expectations are always changing, there is a need to always improve results in all aspects of work, to harness the capabilities of the employees, and to enhance processes and technology.
Performance measures – An organization should manage its TQM initiatives based on facts and not on gut feelings. There must be an established baseline to assess the results from improvement.
In implementing TQM in the public sector, factors such as political environment, financial limitations, and old paradigms must be addressed first. The focus should not be on short term but on long term goals with cohesive vision of systemic change. Most importantly, the success of TQM hinges on the improvement of the whole organization and not just the performance on selected components.
Total productive maintenance (TPM) is a maintenance management approach that looks at maintenance as a productive function, and considers that it should be the concern of every unit in the organization. It aims to eliminate big losses on equipment effectiveness e.g. setup time, breakdown, speed losses, waiting time, etc. TPM stemmed from Productive Maintenance which originated in the United States in the 1940’s and was characterized by developing maintenance techniques to improve the reliability and longevity of equipment. TPM, on the other hand, was developed by the Japanese and is focused on achieving maintenance efficiency through a comprehensive system based on respect for individuals and total employee participation. TPM was initially implemented within the automotive industry, particularly in Toyota, Nissan and Mazda. TPM later spread to America and the West and many companies and organizations began to implement TPM such as Dupont, Exxon, Kodak, AT&T, Ford, Hewlett-Packard, among others. By the late 1990’s, TPM has swept across other industries and was well established as a continuous improvement effort. TPM aims toward four zeros: zero defect, zero breakdown, zero accident, and zero waste. It has seven pillars as shown below:
Focused improvement – The aim is to return the equipment to a good-as-new condition after usage. It involves the following improvement activities – restoring the equipment to its optimal condition, determining and eliminating productivity loss modes or causal factors such as physical or operator reasons.
Autonomous maintenance – This is aimed to maintain and improve the condition of the equipment. Operators accept and share the responsibility for the performance and status of the equipment. Autonomous maintenance involves detecting signs of productivity losses, discovering indications of abnormalities and acting on these discoveries.
Planned maintenance – Under this pillar, the focus is on devising a planned maintenance system which will result to no failures and no defects. It involves regular preventive maintenance, corrective maintenance, and breakdown maintenance.
Education and Training – Under this pillar, the objective is to fill in knowledge gaps necessary to achieve TPM goals. This applies to managers, operators and maintenance personnel.
Quality Maintenance – This focuses on preventive action (before it happens) rather than reactive measures (after it happens). Equipment and processes are ensured to be always functioning properly.
Early Equipment Management – Also known as Early Management, Initial Phase Management and Initial Flow Control, this pillar is aimed to minimize the life cycle cost of an equipment.
Safety, Health and Environment – Also described as “maintenance of peace of mindâ€, the pillar works to identify and eliminate safety and environmental incidents. As this becomes an increasing point of focus, it now also includes reduction of energy consumption, elimination of toxic waste, and reduction of raw material consumption.
Studies show that TPM implementation successfully reduced equipment breakdown, minimized idle and minor stops, lessen quality defects, increased productivity, trimmed labor and costs, reduced number of accidents, and encouraged employee involvement. Other indirect benefits of TPM are improved organizational image to customers and stakeholders, increased confidence of employees, and promotion of a standard and disciplined work culture.
“Quality comes not from inspection, but from improvement of the production process.â€
-Dr. W. Edwards Deming
W. Edwards Deming, an American mathematical physicist, statistician, professor, author and management consultant, is considered to be the Father of Quality Evolution. He is famously known for his work on quality management and for his contributions such as the plan-do-check-act cycle or the Deming wheel. Another of his well-known contribution is his 14 points for management which Deming discussed in his book “Out of the Crisis†which was published in 1986. 14 points is Deming’s 50 years of experience condensed in 14 concepts. While many see them as guide to product and process improvement, they also reflect the process for innovation. 14 points can be applied to any type of organization – big or small, service or manufacturing industries, etc. They can be applied to any process within a company.
Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.
Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.
Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.
Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.
Institute training on the job.
Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.
Drive out fear, so that everyone may work effectively for the company.
Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.
Eliminate slogans, exhortations, and targets for the workforce, asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the workforce.
Eliminate work standards (quotas) on the factory floor. Substitute leadership.
Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.
Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.
Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective
Institute a vigorous program of education and self-improvement.
Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job.
Many of his principles were philosophical, while others are programmatic. But it is without doubt that all are transformative in nature. The central idea behind Deming’s philosophy is that variation is the biggest bottleneck towards productivity. If organizations subscribe to 14 points, Deming argues, that they will be able to reduce variations and thus, improve their performance and competitiveness. It is worthy to note that 14 points did not provide specific tools in implementation. Deming posited that the organizations themselves should develop the means to successfully implement them according to their own situation and needs. Decades after its publication, the concept and ideas 14 Points still resonate and following these points will surely lead any organization to a culture that encourages and celebrates new ideas.
Majority of the Filipino populace have only achieved a secondary school diploma or a technical vocational education and training certificate, with only 20.83% of the labor force having a college degree as reported by the Philippine Statistics Authority in its 2016 Labor Force Survey. The minute percentage of enrollees and graduates in tertiary education is caused by its high financial and opportunity costs. While Filipino families may value education, the pressing burden of expenses outweighs the advantages of investment in further studies. Unfortunately, this not only decreases the opportunity of economic progress for the family through better employment and higher income, but it also affects the country’s capacity and productivity.
In an effort to reach the unmet demand for education, the province of Albay initiated a gallant investment of PHP 30 million annually to its Education Quality for Albayano (EQUAL) scholarship program in 2nd district of Albay Representative Joey Salceda’s vision to have a college graduate for every Albayano family. The program paved way for the introduction of a sustainable higher education funding system for its citizens with proven results of poverty reduction. House Bill No. 5315 and No. 2771 was later introduced in the House of Representative to operationalize the Universal Access to Quality Tertiary Education (UAQTE) which was then signed into law on August 13, 2017 as Republic Act No. 10931. Aiming for equitable providence of all Filipinos for quality tertiary education in both private and public educational institutions, it prioritizes academically-able students coming from poor families. The act contains five key components: (1) Free higher education in State Universities and Colleges (SUCs); (2) Free higher education in Local Universities and Colleges (LUCs); (3) Free technical-vocational education and training in post-secondary Technical-Vocational institutions (TVIs); (4) Tertiary Education Subsidy (TES) for Filipino Students; and (5) Student Loan Program (SLP) for Tertiary Education. The PHP 40 billion addition to the budget of the education sector is an investment for the future. For education’s direct link to employment and productivity curtails how it is a critical determinant for upward mobility and forthcoming overall standard of living. The investment made today will reap exponentially for every Filipino.
The 2017 Corruption Perception Index highlights how majority of the countries are making very little progress in addressing corruption. Two-thirds of the 180 countries surveyed scored below 50 (where 100 is very clean and 0 is highly corrupt). And the most flagrant fact about corruption is that poor countries tend to be the most corrupt. In Asia-Pacific in particular, the average score is 44 which means that the countries in the region are failing in combatting corruption. Even top scorers such as New Zealand and Singapore had experienced their share of corruption scandals in the previous years, while other countries showed very slight improvements. In the public sector, corruption takes so many forms – abuse of power, taking bribes, misappropriation of funds among others. The systemic corruption impacts the entire sector as it undermines the confidence and trust of the citizens to public offices, impairs the delivery of public services, and ultimately deprive the citizens of the services owed to them by their governments. It also adversely affects the private sector because red tape undermines productivity and sustainable growth. Corruption also means additional expenses for the companies to facilitate transactions with governments. Corruption is pretty straightforward in the public sector:
It leads to biased decisions in public expenditures. This is apparent in the many “white elephant†projects that costs so much but with little to no output, and public procurement contracts which rests on kinship and kickbacks rather than value-for-money.
It gives prime importance to relationships. In public offices, some people may be hired not because of their suitability to the position but because of their relationship with the management and staff. Instead of attracting the best talents, corruption breeds nepotism and favoritism.
It hinders the effective delivery of public service. Because of corrupt activities in generating and collecting public revenues, resources that should have been for development projects go to the pockets of some public sector employees.
Governments have been actively pursuing reforms to address corruption. However, the results are varying and are often minimal. Transparency International recommended the following approach to end corruption:
Putting in place laws and institutions that will prevent corruption from happening. In addition, government must ensure compliance in its own legislations.
Reducing impunity for the corrupt. Political power play must be minimized. The justice system, prosecution, and enforcement force must be independent and professional.
Encouraging civil society to actively participate in anti-corruption efforts.
Promoting integrity and values in all aspects. The environment as a whole must foster a culture of integrity through a whole-of-society approach.
Advancing a merit-based civil service with adequate pay and benefits to discourage public sector employees in engaging in corrupt activities.
The World Bank further added the need to simplify regulations, particularly in business entry to promote a competitive private sector. It also emphasizes decentralization with accountability within the government, and budget management to include coverage, treasury procurement, and audit. Finally, this comprehensive approach must be coupled with strong political will among the politicians and civil servants. Otherwise, these reforms will only result to marginal improvements or to no improvement at all.