Productivity Benchmarking and Optimization in India

Improvement programmes for increasing productivity without proper quantitative baseline assessment would yield improvements which cannot be prioritized according to their impact or monitored for the benefit realized since the starting point would not have been determined quantitatively. IMARC Engineering makes an assessment of the baseline for productivity improvement using a structured process on all the four critical areas of productivity improvement concurrently. Labour productivity is assessed based on the quantity produced per operator hour relative to shift patterns and activities. Equipment productivity is evaluated based on overall equipment effectiveness, which comprises the availability, performance, and quality of the equipment. Material productivity is analysed based on the difference between actual output and theoretical output in terms of losses incurred during each phase of production. Energy productivity is measured based on energy consumption relative to sector standards.

Benchmarking for productivity can be as good as the benchmarks used for comparing performance. Benchmarks used for evaluating performance that are generic to manufacturing without considering the product type, manufacturing process, volume, and regulatory compliance costs associated with the particular facility lead to misrepresentation of performance comparison, either exaggerating the gap in performance or setting impossible goals for improvement. IMARC Engineering uses specific sector-based benchmark data for pharmaceuticals, food manufacturing, chemicals, fast-moving consumer goods (FMCG), and industrial manufacturing sectors. The benchmarks consider the manufacturing process, facility size, regulatory compliance environment, and market orientation. Benchmarks are derived from industry literature, international productivity studies, and IMARC Engineering client performance data.

Assessments for productivity that pinpoint problem areas in productivity but do not dig out the root causes of the problems will only be able to recommend measures that treat symptoms and not causes; hence the resulting improvements will be short-lived, especially when the causes of the underlying problems come back into play. IMARC Engineering makes sure that every productivity gap found is subjected to a comprehensive root cause analysis through the use of tools such as fishbone analysis, 5-Whys analysis, and value stream mapping. If the finding of excessive machine downtime is made, the company will then investigate further to find out if it was due to poor preventive maintenance, skills issues, lack of spare parts, excess setup time, or inefficient scheduling of production runs since they all require a different solution to the problem.

Productivity benchmarking engagements that conclude with a gap analysis report and a list of improvement recommendations deliver limited operational value if the implementation of those recommendations is left to internal teams without structured methodology and external expertise. IMARC Engineering provides implementation support through established lean manufacturing and Six Sigma tools including 5S workplace organisation, SMED setup time reduction, Kaizen rapid improvement events, TPM preventive maintenance programmes, Statistical Process Control for quality yield improvement, and Value Stream Mapping for end-to-end production flow optimisation. Each improvement intervention is selected based on its applicability to the identified root cause, implemented with IMARC Engineering facilitating the change process, and verified against the baseline measurement to quantify realised productivity improvement.

PLI scheme performance commitments and manufacturing investment decisions both require credible evidence of current operational performance and achievable improvement trajectories, evidence that informal productivity assessments cannot reliably provide. IMARC Engineering's productivity benchmarking produces independently assessed performance baselines and quantified improvement projections that support PLI scheme investment planning, capacity expansion business cases, and investor due diligence. For PLI scheme participants, benchmarking demonstrates that committed production targets are grounded in achievable operational performance rather than aspirational projections. For investors evaluating manufacturing assets, productivity benchmarking quantifies the performance gap between current operations and best-in-class benchmarks, translating that gap into the financial value of achievable improvement and the investment required to realise it.

Costs related to energy account for 8-15% of the manufacturing costs in most Indian industries, and benchmarking on energy efficiency relative to peers within a given sector highlights areas of improvement where savings can be achieved by cutting down costs, thereby ensuring sustainability and compliance with ESG reporting. IMARC Engineering performs benchmarking analysis on energy productivity as part of the manufacturing productivity assessment process through measuring energy consumed per unit of output at different stages of production, comparison with energy intensity benchmarks of the industry sector, and determination of the particular equipment, process, and operation that cause higher than normal energy consumption.