1. Preface 3

2. Executive Summary 4

3. The NPI and Productivity 5

3.1 Who are we?…………………………………………………………… ….5

3.2 What is productivity? . 5

3.3 What is the NPI’s approach to productivity

improvement?.......………………………....................…....6

4. Understanding the NPI’s strategic focus 6

5. The Strategies Unpacked 8

6. Challenges facing the NPI 15

7. Contact Details 16

Following the National Productivity Institute’s presentation to the Parliamentary Committee on Labour at the beginning of June 2004, we felt that we should consolidate and augment the information discussed at that presentation, in order to make the objectives, challenges and achievements of the NPI even more apparent to Parliamentarians. This document serves as a summary of the organisation’s strategic programmes for the financial periods 2002 – 2004.

This report is intended to provide further evidence of work undertaken by the National Productivity Institute, or the NPI, and to demonstrate how the strategic intent and objectives of the organisation are resulting in clear and sustainable results in the productivity arena, despite considerable hurdles.

For further information, or to engage with the NPI in more detail, please feel free to contact us. The names of key NPI personnel are listed at the end of this document, together with their contact details and area of specialisation.

The National Productivity Institute (NPI) is a centre that provides cutting-edge productivity improvement solutions through research and development, programme management, facilitation, training and dissemination of knowledge and information.

The mandate of the NPI is to serve the interests of government, labour and business through the enhancement of productive capacity. Productivity is defined as both a value system and a science, and improving productivity as adding value to a business enterprise.

To this end, the NPI works towards ensuring that sustainable productivity performance in sectors and organisations is achieved in an inclusive, collaborative manner.

There are six strategic programmes in the NPI, ably supported by the financial and human resource divisions. The NPI programmes’ core objectives are closely aligned with the critical areas identified as national strategic focus areas over the next five years.

The areas are: Job creation and retention, poverty reduction, skills development, building equity and productivity awareness.

The NPI has achieved many demonstrable successes in all these areas, and forged collaborative links or been a resource for, government departments and agencies and other organisations, within South Africa, in the SADC region, and beyond.

3. The NPI and Productivity

3.1 Who are we?

The National Productivity Institute is a Section 21 Company, tasked with improving productive capacity in all spheres of the nation’s economic and community life. It is governed by a tripartite Advisory Council and Board drawn from government, organised labour and business and has offices in Midrand, Durban and Cape Town. It is financed by a mix of consulting fees and government grants.

The NPI has undergone a major transformation between 1999 and 2001 to align its strategies with the South African nation strategy and priorities.

The mandate of the NPI is to serve the interests of government, labour and business through the enhancement of productive capacity. Given this mandate, the NPI carries out its role as that of a knowledgeable resource for these constituencies, demonstrating a clear understanding of the complexities of productivity and providing practical solutions that promote world-class competitiveness and improved service delivery.

The NPI meets its mandate by building capacity through sound project management skills, regarded as a core function of our organisation. Furthermore, the NPI has surpassed its mandate by recognising the need to focus on managing large projects, through pursuing partnerships with other suitable government agencies, and to forge strategic regional links through SADC and Nepad.

Previously, the concept of productivity and competitiveness was taken to be about the efficiency ratio between inputs and outputs, but the debate around the world on productivity is changing. The concept has evolved to include the element of human endeavour and development. Hence, the NPI’s definition of productivity as:

• Converting resources (inputs) into products and services (outputs) efficiently, effectively and with optimum utilisation of human capital and physical resources for the benefit of society, the economy and the environment.

Enhancing productivity leads to improvements in value added. Value added is a measure of the wealth generated by the efforts of workers and investors, and amongst whom it should be shared equitably.

Productivity is thus defined as both a value system and a science, and improving productivity as adding value to business enterprises and organisations.

3. What is the NPI’s approach to productivity improvement?

The NPI’s unique approach to productivity improvement is:

• Customer-focused and people centred;
• Promotes collaboration between management and labour;
• Encourages a productivity mindset that is internalised;
• Is multidisciplinary and integrative; and
• Promotes social and environmental sustainability.

In a nutshell, the aim of productivity improvement is to improve competitiveness, profitability and living standards. These objectives are achieved by championing cutting-edge productivity improvement solutions in South Africa and beyond.

Indeed, recent research shows that the NPI itself is viewed favourably by a spectrum of sizeable stakeholders when compared to similar public or private institutions in South Africa, concerned with promoting productivity and competitiveness.

The National Productivity Institute is a centre that provides cutting-edge productivity improvement solutions through research and development, programme management, facilitation, training and dissemination of knowledge and information. To this end, the NPI works towards ensuring that sustainable productivity performance in sectors and organisations is achieved in an inclusive, collaborative manner.

There are six strategic programmes in the NPI, ably supported by the financial and human resource divisions. The six programmes have successfully positioned the NPI as the key institution that is promoting and enhancing the productive capacity of individuals and organisations in South Africa.

Supports government-led strategic initiatives that improve

productivity and competitiveness and impact on jobs.

Interventions promote social dialogue and collaboration

between our social partners.

Increases the productivity awareness and build the

productive capacity of SMMEs, women and young

entrepreneurs, entrepreneurs with disability and community

projects, as well as to build stakeholder relations with

government and community organizations working within the

targeted markets.

Develops the productivity competencies of individuals and

institutionalising key internal competencies, the productive

capacity of SMMEs and updates and develops productivity-

related learning programmes.

Initiates and co-ordinates productivity-related action

research and generate information that will allow the NPI to

have a positive influence on policy debates and formulation

that impact on productivity and competitiveness.

Applies productivity tools and approaches for the enhancement of productivity of enterprises in South Africa and the SADC region, and promotes productivity-related practices of industrial, commercial, public sector and community-based organisations.

Creates and maintains awareness and understanding amongst public and private organisations and the general public of the concepts of productivity, productive capacity building and productivity best practices and about productivity issues.

The programmes’ core objectives are closely aligned with the critical areas identified as national strategic focus areas over the next five years.

• The Social Plan aims, where possible, to prevent job losses and employment decline through the development and implementation of turnaround and redeployment strategies. The NPI’s role is to provide technical support to the Future Forums that have been established to develop and implement these strategies. To date, the Future Forum’s turnaround /redeployment strategies have impacted on some 13 885 jobs.

• Eight Sector Initiatives in potential growth sectors have been established. These include Forestry, an Internet Clearing House, an Informal Clay Brick Initiative, the Sugar Cane Value Chain, Low Cost Milling, and Clothing. A Western Cape Dried Fruit cluster of eight companies has been established to pursue productivity improvement and job retention through a train-the-trainer process.

• Through the Workplace Challenge, 64 new companies employing 10 597 people in eight clusters embarked on a productivity improvement process through collaboration in the workplace.

The Blackheath Manufacturing Cluster comprises eight SMME companies in the Cape Town area, in the Western Cape, 75 per cent of them owned by previously disadvantaged individuals. Together they employ some 300 employees.

How, as small businesses, to increase productivity, increase sales and market share, while simultaneously boosting employee morale and performance - the challenge of embarking on world class processes.

The Workplace Challenge Programme was implemented in each of the eight organisations, to increase productivity and to develop workplace change processes that lead to improved operating practices. Companies were organised into geographically proximate clusters for logistical reasons. Grant funding to cover much of the cost of running the 18-month programme was made available. As SMME businesses, each agreed to pay 10 per cent, or R10, 000, of those costs.

After initial orientation, business owners brought in mentors or consultants who assisted them to roll out the programme, employing best-in-class manuals and material for training and measurement purposes. Another important requisite for starting the programme was buy-in from workers, which was crucial in order to achieve many of the change processes at shop floor level. The Workplace Challenge programme allowed companies to learn from the experiences and challenges faced by others in their cluster through regular workshops and meetings.

Overall, there has been improvement in the following areas among the Blackheath Cluster companies:

• Production up by 86%
• Cost savings up by 38%
• Staff attendance up by 38%

Productivity Capacity Development Programme for SMMEs: 500 SMME owners and workers have been trained in productivity improvement solutions. Of those who participated in the programme, 11 registered as legal businesses, 6 for VAT purposes, 10 moved from backyards into business premises and 8 became business partners.

SMMEs face legal and skills constraints as well as infrastructure and funding limitations

The NPI approach is to conduct productivity audits on individual SMMEs and then to suggest turnaround strategies to encourage growth and sustainability.

A system of coaches sourced from a pool of service providers already working within the sector are selected and trained and matched with a group of 10 businesses. Each coach must ensure that the entrepreneurs they select are representative of the core constituencies of young people, disabled people, women and community groups. The SMME provincial directorates in each province are also involved in monitoring the coaches’ progress, in conjunction with the NPI.

Each coach is monitored for six months through a Productive Capacity Building Programme, developed by the NPI, after which they receive accreditation. The coaches are then enrolled on a productivity forum to maintain continuity and provide support in best operating practices.

Results

Between 2001 and 2003, 35 coaches now operate in Gauteng, KwaZulu Natal, Mpumalanga and the Free State provinces.

1131 SMMEs and 334 SMME service providers were exposed to productivity awareness programmes amongst those trained. Thirty-one service providers were in the disability sector and 99 were entrepreneurs with disabilities.

• A Cosatu and NPI partnership project to support job creation in rural communities was established in the Western Cape.

A pilot project to support job creation, established in conjunction with Cosatu in the Western Cape, is a joint programme aimed at promoting economic development in marginalised areas that will contribute to greater economic stability and job creation in those regions.

The initiative has already been successful in establishing partnerships under the DTI’s Sector Partnership Fund and new business developments in areas such as Tulbagh/Ceres, George, Upington and Grabouw.

One such partnership resulted in the establishment of the Tulbagh Wine Route under the Proudly South African campaign and encouraged the expansion of existing wineries as well as new farm tourism developments.

In Grabouw, the programme initiated a process that aims to establish a Development Agency under the IDC in the Theewaterskloof region, which will in turn facilitate large-scale developments such as the expansion of the Caledon airport for tourism purposes, the development of a golf course and residential and waterfront development.

• Securing a W Kellogg Foundation grant to create awareness of global competitiveness and build South Africa’s capacity by training productivity coaches to address small business needs for growth.

• The incorporation of productivity concept into the school curriculum. A Memorandum of Understanding (MoU) has jointly been drawn up by the NPI and the Department of Education, which will involve a pilot programme involving 140 000 learners in the GET band. Some 63 schools in all 9 provinces will participate.

• The NPI facilitated a process of incorporating productivity concepts in 6 of the Further Education and Training (FET) colleges’ qualification.

• The NPI has developed new productivity-specific programme for 14 learnerships.

• 552 learners and 105 educators were exposed to productivity issues through schools debates.

During 2004 the NPI received a site visit from the Services SETA. This was part of the fourth phase of the accreditation programme and was aimed at auditing the quality of all aspects and activities related to education and training. As a result, the institutional accreditation of the NPI has been extended to 31 March 2005.

Accreditation confirms that the NPI is deemed as an organisation that possesses policies, systems and practises that can support quality education and training. Therefore, public and private organisations that make use of NPI training services can do so with peace of mind.

• The REALST tool (a productivity accounting tool) developed by the NPI was commissioned for use in the footwear industry by the Department of Trade and Industry.

• The Export Readiness Tool, named Export Readiness Assessment Tool (ERANPI) was developed and launched in November 2003. This assists companies to assess whether or not they are ready to enter the export market and also helps to prepare companies to face the challenges posed by the foreign markets.

• Within the NPI, a sound financial management system has been developed and managed effectively, while key human resource policies have been developed and implemented that have transformed the organisation and allowed it to become more responsive to productivity challenges of South Africa.

• Productivity capacity building is being developed among rural communities, entrepreneurs with disabilities, young people and women. SMME entrepreneurs are coached and supported by specially trained productivity trainers and these groups of entrepreneurs always include disabled people and women in their number. Building equity here refers to enabling constituencies to access skills and opportunities and institutional support.

• The NPI’s successful establishment of a capacity building partnership with the Development Bank of South Africa, the South African Local Government Association and the Department of Local Government to create awareness among municipalities. The NPI played a key role in the successful launch of the Vuna Awards, local government service delivery awards.

• A national schools debate on productivity and productivity issues, coupled with workshops and support material (developed by the NPI) which involved 552 learners and 142 educators.

• Productivity awareness campaign endorsement by more than 20 major corporations

• Free media coverage (both print and electronic) which exceeded more than R2 million in value)

The National Productivity Month 2003 was one of the prime events on the South African events calendar.

This high profile productivity awareness campaign was presented for the first time over a one-month period – a decision that had proved to be a resounding success. The campaign aimed to generate awareness of the importance of improved productivity and solicit buy-in from the private sector, government and the public for a more productive way of working and living.

A productivity month logo icon was launched during 2003. The objective was make the logo the face of the awareness campaign.

The South African business environment was encouraged to carry forward the message of productivity to management, staff and clients. Seminars, workshops and visual display material, including billboards were employed with great success in this regard.

A multi-pronged advertising campaign, anchored by television further enhanced the message of productivity month. Interactive promotions were used to reach the lower end of the target market. Interactive productivity awareness promotions were held at strategically positioned taxi ranks and train stations across South Africa.

• South Africa is signatory to a Productivity Declaration, signed by Presidents of the SADC countries, which commits the country to:

• Creating and strengthening productivity institutions
• Facilitating an increase in productivity level.
• Collaboration between countries for regional economic growth.
• Increasing the research capability not just nationally but in the region.

• The NPI helped to establish productivity centres in African countries, including, Kenya, Zambia and Zimbabwe and as a key resource organisation for productivity knowledge in Botswana, Mauritius, Zambia, Namibia, Swaziland, Kenya and Lesotho.
• The Secretariat of Pan African Productivity Association is housed at NPI.

6. Challenges facing the NPI

Despite the strides made by the National Productivity Institute as demonstrated above, nevertheless, there are considerable constraints and challenges that affect the efficacy and sustainability of the organisation’s impact on its target constituencies. Some of these are:

• Getting the entire nation to embrace the productivity principle

• Achieving a common understanding of productivity amongst all stakeholders (business, government and labour) and obtaining total commitment from stakeholder principals to drive productivity improvement

• Productivity is a specialised environment and developing expertise takes time. Such specialised skills are in great demand and are highly marketable.

In conclusion, we should state that financial constraints resulted in us abandoning some critical projects and revising targets as set out in our Three-Year Business Plan.

It is clear to us that the NPI needs more resources in terms of finance and human capital to ensure that our programmes have wider impact on South Africa’s economic activities.

Physical Address:

International Business Gateway

Cnr New Road and Sixth Rd.

Midrand

Postal Address:

Private Bag 235

Midrand, Gauteng, 1685

Contact Numbers:

Tel: 011 848 5300

Fax: 011 848 5555

Website: www.npi.co.za