Improving productivity creates engine for businesses

Could you tell us more about initial results of Program 712?

The program aims at creating strong changes about productivity and quality of key products and improving competitiveness, contributing to promoting the country’s economic growth. After four years of deployment, awareness about productivity and quality has been increased. Big corporations and groups as well as small and medium-sized enterprises have paid special attention to productivity and quality improvements.

In the 2011-2014 period, four projects were implemented and initially achieved success with a focus on improving productivity and quality in businesses. By the end of last year, nearly 800 businesses were supported the application of management systems, models and tools to improve productivity and quality such as the Lean management and TPM overall productivity maintenance models; KPI, 5S and MFCA indicators; and management systems based on ISO 50001, ISO 31000, ISO 22000 and ISO 9001 standards. In addition, the program has developed the national standard system in order to improve productivity and quality for key Vietnamese products with 8,100 standards for 98 sectors as well as timely adopted legal documents and implemented training in-depth of knowledge for businesses.

Program 712 has created development engine for businesses. How do you evaluate the issue?

We have built a pilot model on applying measures to improve productivity and product quality for businesses based on industries and localities and the institute will guide the replication of its model for businesses throughout the country.

During the pilot period, measures have helped improve productivity and operational efficiency in businesses, especially in garment businesses. The garment and textile sector has numerous numbers of labors and a series of production lines. Therefore, we have piloted a model in a number of garment companies such as the Duc Giang Corporation and the Nam Ha Garment Joint Stock Company and worked together with experts and companies to assess the situation, collect data and analyze the activities to identify and classify valued and unvalued activities. Thanks to a survey, processes will be sorted and optimized to eliminate waste in the production process and reduce errors.

Thanks to the application of solutions, the Hung Nhan Garment Co., Ltd. has increased their labor productivity by 25-30 percent. For a production unit in the garment and textile sector with sales of US$1 million per month, if labor productivity increases by 10 percent, revenues will increase by US$100,000. And the gains could be millions of dollars in the whole year. In terms of the Nam Ha Garment Joint Stock Company, labor productivity has increased by 15-20 percent thanks to innovative solutions for semiautomatic production lines.

Economic benefits for businesses will be huge. Increased productivity means that production costs will be down in addition to improved product quality.

What are the weaknesses of small and medium-sized enterprises?

Many enterprises are wasting in trading and production activities. In addition, organization and management activities remain weak. They have not yet applied or not thoroughly applied management systems, models and tools to improve productivity and quality such as the Lean management and TPM overall productivity maintenance models; KPI, 5S and MFCA indicators. The institute has given advice on how to optimize production processes, contributing to shortening the processing and production time for products and improving labor productivity and product quality.

What do you think about businesses that have management system based on ISO standards?

The ISO standard management system is granted for businesses based on production and management processes. Optimal level of these processes in other businesses is different. Therefore, many businesses were granted the ISO 9000 standard management system but have not met productivity and efficiency. Businesses need to see the building of a new management system is fundamental with a focus on improving labor productivity and product quality. These improvements need to be done on a regular basis.