REVIVAL OF PAKISTAN’S INDUSTRIES THROUGH CONTINUOUS QUALITY AND PRODUCTIVITY IMPROVEMENT/ KAIZEN

Abstract

Pakistan adopted a conscious growth strategy of rapid industrialization at the cost of agriculture sector, which signifies typical syndrome of a post-colonial state. The period of rapid industrial growth in first two decades demonstrated that despite the lack of infrastructure, policy makers succeeded in converting the merchant capital into progressive entrepreneurs through a package of incentives. This import substituting industrialization was promoted by a policy of heavy protection, over valued currency and fiscal concession. This led to market bias in favour of capital intensive large-scale industries and inadequate participation of small-scale labour intensive industries. The major policy issues of this period were inefficiency of the industrial structure and concentration of industrial power. The period of seventies witnessed, the reversal of the policies led by nationalization and the rise in the public sector investment. A critical evaluation of public sector enterprises reveals that although their financial programme was fair but suffered from over employment and declining productivity / quality. Historically, Pakistan has primarily concentrated on low-tech to intermediate types of industries like textiles, food & beverages, wool, ghee and oil etc. Heavy industries, the locomotive of industrial development has by and large been neglected except for a few mega projects in areas of steel, fabrication of plants, fertilizer etc. which are mostly in the public sector. The capital-intensive industries in the chemical sector are in the stage of infancy. The biotechnology sector is yet to materialise in Pakistan. Pakistan is going through a stage of industrial stagnation and low productivity / quality products and services. Due largely to a deep recession in the economy caused by multifarious mix factors, both external and internal, the industrial sector is on the decline since long. This blight has touched our large and medium scale organized industrial sector as well as small and micro level industries in the formal sector. Due to a steep fall in fresh investment in the last decade as well as credit squeeze from banking sector, rejuvenation of the existing industrial productivity / quality as well as introduction / installation of new industries has been adversely affected. In view of stagnation in industrial growth, a major policy shift was made to export led growth with de-regulation, import liberalization and tariff reform and flexible exchange rate. The thesis comprise of nine chapters, initially, efforts have been devoted to review the concept of continuous improvement, productivity, quality and the “Gurus” of continuous improvement philosophy who brought revolution in the Japanese industries. Then an effort has been made to enlist major factors of Japanese success. In light of the principles of continuous improvement, productivity, quality and teachings of different industrial gurus, an analysis has been carried out in chapter eight from the following:  Japanese Success Factors  Industrialization Process of Pakistan  Investment Climate In Pakistan  Manufacturing / Engineering Industry of Pakistan  From the Success Factors of ACL It is now generally recognised that an export led development strategy with the private sector playing key role in economic activity can lead to rapid industrial development. At the present scenario, Pakistan requires an industrial sector, which is globally competitive with the capability of utilizing vast reservoir of human capital and raw materials. A framework has been chalked-out to address the problems of Pakistan’s industrial sector. This framework will be fruitful if a well-coordinated and integrated approach is adopted to harness the potentials of all three major players i.e. government, academia and industrialists. Academia should assist the government and corporate sector to improve the human capital:  Redesigning the education syllabi in accordance with modern teaching of business & technical training needs  Teachers should change their teaching style, their conduct should be as facilitators rather than lecturers  Improving the education system of Pakistan in order to have skilled and disciplined manpower.  Assist the corporate sector to provide literate environment to absorb the new technology and to change the mindset of the stakeholders.  Case studies should be developed on local enterprises operating in local business and regulatory environment.  Efforts should made to inculcate the habit of conducting research among faculty and students by providing reasonable incentive i.e. rewards, recognition etc  Carryout critical analysis of prevailing environment of Pakistan’s industries and entrepreneurs in order to suggest measures in the peculiar environment of Pakistan Following steps taken by the industrialists will pave the way for continuous productivity/quality improvement: • Adequate budget earmarked for the training of the employees • A variety of different skills associated with effective managerial performance i.e. technical, interpersonal, conceptual and diagnostic skills will enhance the performance of the organization • Managers should spent 60 % of their time on continuous improvement of the systems and little time on commanding and controlling the people • People are the key to the success of firms hence their involvement and satisfaction is vital to enhance quality and productivity • Recognition of excellent performer influence others and creates a healthy competitive environment • Quality begins with education and ends with education hence institute continuous training. Encourage education and self improvement of everyone in the organization • Quality strategy must permeate an organization throughout its business activities • Good corporate governance and regular evaluation of business performance in term of processes improvements and cost of quality reduction instead of annually pays rich dividends • To continuously increase value to customers by designing and continuously improving organizational processes and systems to provide improved value to customers • Processes must evolve by gradual improvement rather than radical changes • Flexible and quick response to the environmental changes is essence of continuous improvement Planning establishes coordinated effort and gives direction to managers and non-managers alike. Without planning, departments could be working at cross purposes and prevent an organization from moving efficiently toward its objectives, hence following actions are suggested: • Carry out SWOT analysis • Set a benchmark to start with • Re-defining the organization’s vision or mission statement and goals or objectives in the light of changing environment and future challenges • With a view to provide quality products/services to the customers following steps are recommended:  All management activities should eventually lead to increased customer satisfaction. People at all levels are the essence of an organization and their full involvement enables their abilities to be used for the organization’s benefit  Carry out BMR  Acquire adequate technology to add value to the products and services  Higher product quality with lower cost  HR practices to be updated in accordance with the redefined goals/objectives  Evolved the standing operating procedures and monitoring system  Shift the ownership at process level  Devote adequate budget for training of employees  Develop employees mind set to adopt new changes and develop team’s spirit  Management labour relation should be improved To achieve the desire results more efficiently, all related resources and activities should be managed as a process. Execute the new processes/ practices and ensure discipline at the workplace encourage suggestion System. Carryout regular monitoring compares actual performance against the defined objectives/standards and identifies deviation because regular evaluation of business performance pays rich dividends. Evaluate the industrial entity whether it is progressing as learning organization or otherwise Continuous improvement is the constant refinement and improvement of products, services and organizational systems to yield improved value to customers. Real improvement depends on learning that understands why changes are successful through feedback between practices and results, which leads to new goals and approaches.