Productivity and Competitiveness (PAC) Methodology
Key Concept
Productivity and Competitiveness (PAC) is a high value added platform incorporating a coherent framework that links the organisational, operational and skills aspects of productivity and competitiveness. It is premised on a valid, proven and standardised approach to measuring value. For successful delivery it requires mature partnership relationships between participant organisations and an effective strategic relationship with the company which is building value on the platform.
The PAC Process
Overview
The PAC process provides the basis for a consistent and coherent approach to productivity and competitiveness improvement across manufacturing and the wider economy. The core competitiveness is divided into seven clearly defined and validated measures which have been strictly evaluated in operation in a large number of projects. A proven evaluation methodology has been developed which has proved in practice that movement on the measures delivers increase in value added per person and increased profitability. The evaluation approach has been reviewed and validated by the head of programme evaluation at BERR.
The keystone of the PAC approach is the PAC Analyst who uses metrics to appraise a prospective company's current performance and who mentors the management team in the small company to facilitate progress to high performance working. On the basis of the initial company level diagnostic metrics, a trained engineer goes into the company to work with them implementing improvements, providing the workforce with operational exposure to key techniques; in due course, the analyst goes back into the company to re-measure performance. The sustainability of the transfer of knowledge and skills to the company is secured by vocational training and assessment. The flow diagram in Figure 3 provides the basis for the approach that can be applied across the breadth of manufacturing and processing in the UK.
Stage 1 - Employer Identification and Commitment
To initiate the PAC process, the PAC Analyst must engage the employer with the idea of measuring and benchmarking the company's existing performance to establish the magnitude of the potential gain of improvements and underpinning staff with the skills to realise and sustain the improvements. The prospect of this high value gain is the main means of engaging the employer's commitment.
Initially a decision must be made concerning the company's suitability, capability and commitment to gain from the implementation of the PAC framework. If the company fails to meet the threshold criteria at this stage then a remedial improvement plan will be developed to enable the company to access the framework process at a future date.
Stage 2 - Initial Measurement of Productivity Performance
Using quality, cost and delivery (QCD) data from the company, seven key measures of competitiveness are calculated and used to benchmark the company's performance and select a focus where improvements can be made. The seven key measures of competitiveness taken are:
| Quality | Cost | Delivery | |
|---|---|---|---|
| Not right first time (NRFT) |  |
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| Delivery schedule achievement (DSA) |  |
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| People productivity (PP) | |
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| Stock Turns (ST) | |
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| Overall equipment effectiveness (OEE) | |
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| Floor space utilisation (FSU) | |
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| Value added per person (VAPP) | |
Key:
= Measure has primary impact
= Measure has secondary impact
Stage 3 - Training Needs Analysis
Once the focus for improvement has been selected the members of the improvement team undergo an Individual Employee Training Analysis (IETA) to ensure that the training they receive is suitable to enable them to make the improvements identified at the previous stage. The key point here is that the management of the company have an opportunity to see that qualifications for individual employees can be linked to a programme aimed at delivering higher value added at the level of the whole company.
Stage 4 - Process Improvement And Skills Delivery
Partner agencies (e.g. MAS and skills providers) are enlisted, where required, to support the improvements for the company. The changes are implemented, managed and monitored to deliver the identified goals and the portfolio of support is designed to deliver against the business needs identified in a coherent way, driving the employee development programme.
Stage 5 - Re-measurement of Productivity Performance
After the improvement project has been completed, the PAC Analyst will re-measure the QCD performance of the business and calculate the benefits. Further, a roll out plan to sustain the changes or continuously improve is developed with the company.
Timings
The timescale shown here is for illustration purposes. Typically between six and twelve months is expected, however, the duration of the entire program will depend on many factors:
- How soon candidates sign up for the NVQ
- How quickly the underpinning knowledge (UPK) delivery can be carried out
- How soon the company can accommodate the interventions
- The rate at which the candidates generate the required evidence
- How quickly the assessor can judge the evidence
