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Four techniques to improve labor productivity

I saw a video you posted in your Facebook page about three Japanese professional footballers playing with 100 school kids in a friendly, entertaining soccer match. The game was won by the professional players. It appears in your post that you’re putting it forward as a good example on how we should focus on improving labor productivity. My question is this – how can we make it happen in our real work-life? — Just Asking.

How many people do you need to change a light bulb in Malacañang? The answer depends on your political views. If you’re pro-administration, you’ll proudly say — four persons: One to get a fresh bulb from the stock room. Another one to bring a stepladder into the Palace. The third to hold the ladder steady. And the fourth to actually replace the bulb.

If you’re with the opposition, the answer is: “None. People in Malacañang prefer to work in the dark.”

There are many variations of this light bulb joke on the Internet. This one is a local version that I use whenever I talk about labor productivity. Really, improving labor productivity is one of the difficult jobs that every people manager must face to constantly improve the overall efficiency of the workforce.

The trouble is that many managers, just like you, are at a loss on how to improve labor productivity. At times, you may even wonder why you’re stuck with every incompetent worker in the company. All things considered, there’s little question that improving productivity isn’t easy to do.

This includes the challenges of managing employee absenteeism and tardiness, scheduling overtime work, making do with available company resources, horse playing employees, and for some organizations, dealing with union-related problems. All of these issues must be dealt with before you can even attempt to make your department as productive as possible.

So, how are you going to do it? I will not give you the formula on how to compute labor productivity, but instead, I will talk about this oft-repeated mantra — “doing more with less.” To explain that in practical terms, let me give you the case of a hypothetical mobile phone manufacturer. Knowing that the demand for its popular new phone model is fast rising, its CEO demands that the management team improve its labor productivity by 20%.

The management team is weighing the pros and cons between the Western and Japanese styles of labor productivity improvement. How are you going to do it given that the phone manufacturer produces, let’s say, 100 units a month with 10 workers.

The Western approach is practical, simple, fast and easy to do. Terminate the employment of two workers and require the remaining eight workers to produce 100 units. On the other hand, the Japanese approach is a bit different. They will produce with as many as 120 units with the same number of workers — 10.

The Japanese approach can be a bit difficult to do but not if you know about Kaizen (continuous improvement). It is much better because it offers long-term benefits, not only for the organization, but for the employees, their families, and society in general.

To implement the Japanese approach of “doing more with less,” here are some basic and practical points that could help you improve labor productivity:

One, hire only people with the right attitude, not skills. All things being equal, hire only those who are willing to learn and be trained so they can fit into your organization. Be strict with the hiring and screening process. Announce the important qualities of people that you prefer to hire. And be serious about it.

Since it’s difficult to locate people with the right attitude, always be on the lookout for impressive individuals who are not actively seeking work. When they are not looking, observe them from afar and find out. If you’re convinced, invite them to join your organization.

Two, train people to have basic skills in quality and productivity. Don’t be afraid to invest in training and lose them over time. As long as you treat the workers well, they will stick to you for life. Pay them in accordance with their skills and their contribution to cost savings, among others. Create an army of problem-solvers out of ordinary workers.

Above all, make multi-skilling a norm. People with the most number of skills should be paid more. Instead of having one clerk and one secretary performing administrative support to the office, hire only one person who can perform the two jobs, and pay that person more than the industry average.

Three, outsource the non-core functions of your business. Allow a subcontractor with the right people, machinery, tools and expertise, among other things, to do it for you at the right price. Chances are, they can do it better and at a much lower cost. Monitor the performance of your subcontractors so they follow strictly your standards for quality, cost and delivery of products or services to customers.

Last, allow all workers to be active in your productivity quest. It’s easy to secure the cooperation of people when the idea comes from them. This is the principle of co-ownership. Management must be considerate when employees have a different view about certain policies and procedures. Be an active listener and give all suggestions a fair hearing. Don’t ignore ideas just because they are flimsy or trivial.

ELBONOMICS: If you start something today, you’ll get there in no time.

 

Send anonymous workplace questions to elbonomics@gmail.com or via https://reyelbo.consulting

Prime Infra hopes to get go signal for Wawa project next week

PRIME Metroline Infrastructure Holdings, Inc. (Prime Infra) of tycoon Enrique K. Razon, Jr. is expecting the government’s green light for its plan to develop the Wawa Dam in Rizal.

“The project is calendared for Metropolitan Waterworks and Sewerage System (MWSS) board of trustees’ approval next week, May 9, 2019,” Prime Infra said in a statement Thursday.

The infrastructure company said it wants to bring in 80 million liters per day (MLD) of raw water supply by 2021, and more than 500 MLD by 2025.

“We look forward to the endorsement of MWSS to authorize its concessionaire, Manila Water [Co., Inc.], to move forward with this high priority project.“ Mr. Razon was quoted as saying in the statement, noting the Wawa water supply project had already been turned over by the MWSS to President Rodrigo R. Duterte.

He earlier said the company is investing around P20 billion to fund the plan to build a 500-MLD water supply facility at the Wawa catchment. This is the first venture of Mr. Razon, whose main business includes ports and casinos, into the water business.

Part of Prime Infra’s project is ensuring the water supply security of Manila Water with the new water source, and immediately delivering 80 MLD in two years.

“Wawa JVCo. will be responsible for the raw water supply source development, while MWSS concessionaire, Manila Water, will treat the water and distribute to east zone customers,” it said, referring to the joint venture of Prime Infra and San Lorenzo Ruiz Builders & Developers Group, Inc. — Denise A. Valdez

How PSEi member stocks performed — May 2, 2019

Here’s a quick glance at how PSEi stocks fared on Thursday, May 2, 2019.

 

Malacañang grants victory lap to economic team after S&P upgrade

MALACAÑANG said on Thursday that the sovereign credit rating upgrade issued by Standard & Poor’s (S&P) confirms the positive impact of policies implemented by the government’s economic managers.

S&P on Tuesday raised the Philippines’ long-term credit rating to “BBB+” from “BBB.”

In a statement, the President’s Spokesperson Salvador S. Panelo noted that a higher credit rating means a borrower country is a “creditworthy sovereign that can have access to a wider pool of funds.”

“This is the highest credit rating in the economic history of the Philippines,” he added.

Mr. Panelo attributed the rating to the performance of President Rodrigo R. Duterte’s economic managers.

He said “the economic team of the President has done a splendid job in putting the economic house in order and spearheading bold economic reforms, in cooperation with Congress, in bolstering the domestic economy, which is projected to become a top-25 economy.”

The reforms, he added, “include tax reform, liberalization of the rice sector, strengthening of the Bangko Sentral ng Pilipinas charter, ease of doing business, relaxing the foreign investment negative list and modernizing infrastructure, among others.”

Mr. Panelo said the President “understands that a thriving economy under an environment free from drugs, crime and corruption is essential to bring our people to a life which is comfortable and secure.”

Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guinigundo was quoted as saying in a statement from the Investor Relations Office (IRO) Tuesday: “With such an upgrade, this would bring more interest among foreign investors to participate in the growth process and in the end, further establish and strengthen the upward trajectory of the Philippine economy.”

In the same statement, National Treasurer Rosalia V. De Leon said the upgrade is a “recognition of our sound policies on liability management.”

“We have kept our debt in check — even as we invest more on infrastructure and social services. We are committed to fiscal discipline, and this makes the Philippines a truly creditworthy sovereign in the eyes of the international financial community,” she added. — Arjay L. Balinbin

Power panel passes amendments to EPIRA IRR

THE Joint Congressional Power Commission (JCPC) on Thursday approved amendments to the implementing rules and regulations (IRR) of the Electric Power Industry Reform Act Law (EPIRA) to facilitate the granting of benefits to host communities.

“We want to empower and to give the benefits as quickly as possible to the LGUs (local government units),” Senator Sherwin T. Gatchalian, who co-chairs the JCPC, said in a hearing.

He said there are “P6 billion to be released to the LGUs and because of red tape and complication of the process. This P6 billion is not being utilized by the LGUs,” he said.

The Department of Energy, upon the issuance of Department Circular 2018-08-0021, proposed to directly remit the benefits to communities hosting power generation facilities, which was not addressed in the current IRR of Republic Act 9136, or the EPIRA Law.

The circular calls for all financial benefits which accrued from Oct. 26, 2018 to Dec. 25, 2018 to be directly remitted within 15 days. For the succeeding quarterly billing periods, the benefits are to be remitted also within 15 days following the end of each billing quarter.

The EPIRA Law requires generation companies to provide financial benefits equivalent to P0.01 per kilowatt-hour of total electricity sales to the host community.

Energy Secretary Alfonso G. Cusi said the proposed circular “would really help deliver the money faster to the host community and the host community will be able to make use of it.”

“There are something like P6 or P7 billion that has been stranded over time. This money should have been used much earlier, so we hope now with this circular, the host community would be able to implement their projects in a timely manner,” he told the panel.

The DoE, through the DC 2018-03-0005, also proposed to include indigenous peoples as beneficiaries, which was also approved by the JCPC in the same hearing. — Charmaine A. Tadalan

Dispute breaks out over RCEF funding as DA insists on P10B

THE Department of Agriculture (DA) has signaled that it will claim the full amount of P10 billion once tariffs start generating funding for the Rice Competitiveness Enhancement Fund (RCEF), arguing that a P5 billion advance provided in 2018 was meant for other rice projects.

“There was confusion on the initial P5 billion that was released to the DA on Dec. 28… it’s meant to support the rice program of the DA,” Agriculture Secretary Emmanuel F. Piñol said in a briefing Thursday.

“Definitely, the P5 billion is not part of RCEF,” he said, with the liberalization of rice imports only implemented this year, while the initial P5 billion was given last year.

The RCEF is meant to be funded by tariffs generated by rice imports, raising P10 billion each year to improve farmers’ access to financing, rice seed, machinery and know-how, among others.

He said that the DA has fully allocated the P5 billion released in December, with P4 billion going to the regions before the end of 2018, and P1 billion set aside for lending programs.

The Department of Budget and Management (DBM) has requested for the latter to be returned to help finance the acquisition of rice drying facilities and other equipment.

The financing will be provided by LANDBANK and the Development Bank of the Philippines, which will charge 2%.

National Economic and Development Authority (NEDA) Assistant Secretary Mercedita A. Sombilla has said that the P5 billion was meant to be used for projects that meet the RCEF mandate while the Rice Tariffication Law, which authorizes the RCEF, was still being implemented.

The Rice Tariffication Law aims to bring down the price of rice by liberalizing the imports of cheap foreign grain.

The need to support farmers while imports increase their footprint in the market is intended to help make them more competitive. The threat of more imports has already exerted pressure on domestic prices of palay, or unmilled rice, reducing farmer incomes and highlighting the need for them to be more cost-efficient.

“I talked to Secretary Mon (Ramon M.) Lopez and he agrees that that amount should not be part of the RCEF. Binalik lang naming ’yung P1 billion para lang makatulong na hindi na masyadong maghanap ng pera ang gobyerno [We returned the P1 billion to help ensure the government is not pressed for funding],” Mr. Piñol said.

He said the DA will initiate a dialogue on the matter.

For the deployment of the actual RCEF funds, he said, “We are still in the process of organizing the project steering committee… when organized, I will ask all the agencies involved in the RCEF to make a presentation of their programs. As the only accountable officer for the P10 billion, I will have to ask them to present their project proposals and I will have to make sure that money really goes to the rice farmers.” — Vincent Mariel P. Galang

Solar irrigation rollout targeted for early 2020

THE Department of Agriculture (DA) and various other agencies have agreed to fast-track the Solar-Powered Irrigation project so the network will be largely in place by the next El Niño.

“Today with NIA (National Irrigation Administration) and BSWM (Bureau of Soils and Water Management), we agreed to fast-track the project because this is the only way we can protect our farmers from next El Niño,” Agriculture Secretary Emmanuel F. Piñol said in a briefing Thursday.

“We have to fast-track it because if hindi namin mahabol [the system is not in place] by early 2020, 2021 [will be the next window for] implementation,” he said.

Currently, the dry spell has caused crop damage worth P7.96 billion with an estimated volume of 447,889 MT worth of output lost.

The interagency committee met today to draft the national irrigation map (NIM), a plan which hopes to identify more areas for food production along with the needed water resources.

An Israeli company, LR Group, has offered to fund the deployment of 6,200 solar-powered irrigation units for P44 billion. These units have the capacity to irrigate 500,000 hectares, out of the over two million hectares estimated to be in need of irrigation.

“(LR Group) agreed that as things stand now, they are not part of the project because it will be a government-to-government engagement. We are waiting for a document from the Israeli government for a Memorandum of Agreement (MoA) on the solar-powered irrigation system project cooperation,” he said.

The Philippines has a total of 3.9 million hectares of farmland, with only 1.2 million hectares effectively irrigated.

After the document is studied by the DA’s legal team, it will be signed by the DA and the Israeli government. Then, the department will submit a proposal to the National Economic and Development Authority -Investment Coordination Committee (NEDA-ICC), which will then approve the project, setting up a Swiss Challenge, where alternate providers can submit better bids while LR holds the option to match them.

The funding plan calls for repayment within 10 years and a grace period of two years. The total cost of the project is P50.5 billion, including counterpart funding of P6.6 billion.

Mr. Piñol said the DA hopes to submit the proposal to the NEDA-ICC by June.

Mr. Piñol added that the current dry spell struck at a time when many crops were being harvested or had reached maturity. As a result, the DA is maintaining its 20 million metric-ton (MT) target for rice this year and 8.64 million MT for corn. — Vincent Mariel P. Galang

Piñol says pork imports cannot be restricted amid calls for protection

THE Department of Agriculture (DA) said pork is a deregulated commodity which businesses are free to import, amid complaints from domestic producers about oversupply and the resulting tight supply conditions for cold storage.

“We cannot stop it because it’s a deregulated commodity. For as long as you pay tariffs, for as long as you don’t smuggle it,” imports will be allowed, Agriculture Secretary Emmanuel F. Piñol said as he opened the Mango Festival at DA headquarters Thursday.

“We are looking at this problem not from a position that we offer temporary solutions, but institutionalized solutions,” he said when asked what can be done with the oversupply.

Mr. Piñol has announced possible plans to “rationalize” the importation of both hog and poultry. He noted that “poultry in cold storage right now is about 27.805 million kilos. For pork it’s 34.330 million kilos,” which he said was equivalent to three months’ supply.

Due to low world prices for hogs of hog, domestic producers cannot compete with imports due to high production costs, especially hog raisers using commercial feeds. In response, the government is aiming to expand sorghum production by next year to help keep a lid on feed costs. It hopes to expand the area planted to sorghum to 200,000 hectares by early 2020.

Sorghum is one of the five most important cereal crops along with rice, wheat, maize, and barley. It is also suited to hot and dry regions and able to withstand drought.

He said the DA is looking into encouraging the private sector to export pork to China to tap demand there due to the Chinese hog industry’s current struggles with African Swine Fever (ASF).He noted that about 20 million hogs in China have been affected by the virus.

The DA has banned imports of pork from affected countries such as Cambodia, Vietnam, Japan, China, Hungary, Belgium, Latvia, Poland, Romania, Russia, Ukraine, Bulgaria, the Czech Republic, Moldova, South Africa and Zambia.

“I cannot take the risk. We have to be very strict about this because the moment na pinasukan tayo ng ASF [ASF enters the country], mamamatay ang ating hog industry [our hog industry will die],” he said.

According to data from the Philippine Statistics Authority (PSA), the total Philippine swine population as of Jan. 1, this year, was 12.71 million head, up 0.83% from a year earlier. — Vincent Mariel P. Galang

OWWA, TESDA agree to provide skills training for OFWs

THE Overseas Workers Welfare Administration (OWWA) said it will tie up with the Technical Education and Skills Development Authority (TESDA) to provide skills training and technological education for returning Overseas Filipino Workers (OFWs).

OWWA and TESDA signed a memorandum of agreement (MoA) Wednesday “to collaborate in a partnership venture to strengthen TESDA’s purposive intervention for returning OFWs, and also explore the development of a joint project on technical education and skills training, as well as assessment and certification for returning overseas Filipinos through the Comprehensive OFW Reintegration Program Framework.”

“The primary purpose of this Agreement is to formalize the partnership between the parties in skills training, technical education and assessment & certification for returning OFWs,” according to the MoA.

The programs provided under the OWWA-TESDA MoA will admit OFWs and their families.

Present at the MoA signing were OWWA Administrator Hans Leo J. Cacdac; Department of Labor and Employment Secretary Silvestre H. Bello III; TESDA Secretary Isidro S. Lapeña; TESDA Director-General for Linkages and Partnerships Rebecca J. Calzado; and Trade and Industry Secretary Ramon M. Lopez.

Also covered by the MoA are the Onsite Assessment Program (OAP) and skills training which the OWWA and TESDA will bring to countries where OFWs are based, prioritizing countries with the high numbers of distressed OFWs.

OWWA and TESDA are also authorized to implement an “evaluation mechanism” which will measure the success rates of the initiatives provided under the agreement. — Gillian M. Cortez

Malaysia halal show generates $42M for Philippine firms

PHILIPPINE exhibitors generated $42.08 million worth of sales and investment leads from over 300 foreign buyers at the Malaysia International Halal Showcase (MIHAS) last month, led by food products.

In a statement Thursday, the Department of Trade and Industry (DTI) said 24 companies exhibited Philippine halal-certified products, as well as some of the country’s top tourism destinations, in a national pavilion set at the exhibit that ran four days to April 6 in Kuala Lumpur.

Firms from the Zamboanga City Special Economic Zone generated a total of $30.15 million worth of investment leads while halal products and services generated $11.93 million of sales and orders, up from the $10 million in 2018.

DTI’s Center for International Trade Expositions and Missions Executive Director Pauline Suaco-Juan said 11 out of 24 companies were first-time participants, part of an effort to tap a global halal market estimated at $3.2 trillion.

The eleven new companies were Aliments Makkhan Bistro and Café; Baker’s Field Enterprises; B&C Healthy Snack Foods, Inc.; Cassava Growers and Processors Association; EJT Food Products; Gee’s Agri Coco Products; General Nutrifoods Phils, Inc.; Herbio Agrinature Processing Center; Mira’s Turmeric Products; Permex Producer and Exporter Corp.; and RK Trading and Services.

Returning companies were Ahya Coco Organic Food Manufacturing Corp.; Alter Trade Corp.; Asian Halal Centre; Castillejos Agri-Farms, Inc.; Central Affirmative Co., Inc.; C&H Cosmetics Industry; Fruits of Life, Inc.; Greenlife Coconut Product Phils., Inc.; Magic Melt Foods, Inc.; MFP Home of Quality Products; Psalmstre Ent., Inc.; Stalder Laboratories, Inc.; and Wellness Care Int’l Corp.

Among the best-selling Philippine halal products were cassava chips, coconut water, virgin coconut oil, turmeric brew and canned tuna. For non-food products, whitening soaps and perfumes sold the most.

“We have been successful in our return to showcase our premier halal-certified products and make a statement that our country is ready to meet the demands of the growing global halal market,” said Ms. Suaco-Juan.

MIHAS is considered the world’s largest annual halal event, offering networking and business opportunities for halal exhibitors and buyers. In 2017, it welcomed over 22,000 trade visitors from more than 70 countries.

The four-day event is hosted by the Ministry of International Trade and Industry and organized by the Malaysia External Trade Development Corporation in association with the Halal Industry Development Corp. and the Department of Islamic Development Malaysia.

The DTI aims to increase the country’s exports of halal products by 6 to 8% to as much as $605 million in 2019, from $560 million in 2018. Of the halal exports last year, 90% were food and non-alcoholic beverages.

The DTI estimates that the country currently has more than a thousand halal-certified products. — Janina C. Lim

PSALM in new round of compensation payouts

THE Power Sector Assets and Liabilities Management Corp. (PSALM) resumed its distribution of compensation checks to individuals, families, and enterprises that were affected by the power barge 103 oil spill at the height of Super Typhoon Yolanda.

In a statement, PSALM said the new round of payouts took place on April 11.

The 32-megawatt PB 103 was moored at Barangay Botongon in Estancia, Iloilo when it ran aground due to strong winds and a storm surge on Nov. 8, 2013.

It said 23 of the 26 beneficiaries, hailing mostly from Barangays Botongon and Poblacion Zone I, form part of the sixth and latest batch of claimants where PSALM paid a total of P340,428 worth of indemnities. Beneficiaries who were not yet able to claim their checks may approach with the agency to arrange payouts.

PSALM’s settlement of third-party claims is based on the recommendation of the Government Service Insurance System (GSIS) adjuster, Claims Services International Adjusting Co., and the endorsement of GSIS.

It said to date, a total of P7,798,175 has been settled and released to the first to sixth batch of claimants.

Immediately after the incident, PSALM provided financial aid amounting to P2 million to Iloilo families affected by the oil spill through the provincial and municipal government. — Victor V. Saulon

Invitation still open for Chinese merchant power plant builders — Energy dep’t says

THE Department of Energy (DoE) said it will continue to pursue a program inviting China to put up merchant power plants in the Philippines to help augment the supply deficiency.

Energy Secretary Alfonso G. Cusi told a legislative hearing on Thursday;

“We asked both Japan and China to help us put up a merchant plant and this is part of an MoU (memorandum of understanding) that we successfully signed in China.”

He was appearing before the Joint Congressional Power Committee (JCPC) to present the DoE’s initiatives to respond to the deficient power supply on the Luzon grid, which resulted in yellow and red alert notices from the system operator as reserve power thinned, resulting in rotational brownouts in April.

Aside from the China-funded coal-fired power plants, the DoE has encouraged private sector investment in the construction of an import facility for liquefied natural gas (LNG).

In March, Mr. Cusi said he had issued the notice to proceed to Lopez-controlled First Gen Corp. and Tokyo Gas Co., Ltd., which have signed a joint development agreement to build an LNG facility.

“I have received the invitation of Tokyo Gas and First Gen (for) their ground-breaking (on) May 29,” he said.

Mr. Cusi said his invitation to China was first brought up during his visit to that country in 2016, which led to the signing of the MoU in 2017, and further firmed up during the visit of President Rodrigo R. Duterte to China last month.

Mr. Cusi was part of that visit for the second Belt and Road Forum, which came at a time when tension between the two countries had been heightened.

He said instead of asking for a grant, he had asked China to provide funding to Chinese investors in building merchant power plants, or those without a signed power supply agreement (PSA), but sell their output on the electricity spot market.

“The available supply will be put in the electricity market and will be there upon demand,” he said.

He said China had committed to build merchant plants with a capacity of between 600-1,200 megawatts (MW). Chinese investors are looking at putting up a plant in Luzon and another in Cebu, each with a capacity of between 300-600 MW.

Mr. Cusi said the specific location of the two plants will be up to the Chinese investors after taking into consideration the system impact study.

“DoE is trying to build capacity and we are technology-neutral because we understand the need to have sufficient capacity. Some LGUs (local government units) are prohibiting the establishment of some technology,” he said, referring to resistance by local officials to coal-fired power plants.

“For example, Negros has a not-in-my-backyard policy,” he said. — Victor V. Saulon