Productivity Analysis And Improvement Of Tanneries In Kenya. A Case Study Of Sagana Tanneries

Abstract

Productivity of a system is one of the key factors that affects overall competitiveness of an organisation. Productivity is the measure of the effective use of resources which is expressed as the ratio of output to inputs. Therefore productivity is the relationship between result and the time it takes to accomplish them and it is used to examine efficiency and effectiveness of any activity that is conducted in an economy,business or an individual hence it refers to the measure of the efficiency of a person,system,equipment,e.t.c in converting inputs to useful outputs. Leather processing has emerged as a very important economic activity in several developing countries that depend on Agro-economy, because of the high labour intensity of the process of converting hides and skins to leather which is a source of employment opportunity. Leather processing also promises good returns due to value addition. Kenyan leather industry was identified to be one of the promising Agro-based industries with immense potential in East Africa. In its vision 2030 to become industrialized, kenya identified the leather secctor as one of the flagship project. Leather production in kenya has not reached full potential due to a number of reasons chief among them low productivity by individual tanneries. A case study was carried out in Sagana Tanneries. Sagana Tanneries which is one of the major players in leather processing in the country, has been experiencing low productivity levels, which has hindered it from meeting its market share; hence affecting its competitiveness. The purpose of the study was to explore the factors that are affecting productivity in Sagana Tanneries and develop improvement strategies. The objectives were to analyse the productivity levels in Sagana Tanneries, to carry out Root Cause Analysis of productivity losses in Sagana Tanneries and finally develop strategies for productivity improvement. The objectives were achieved by analysing the utilization levels of production equipment through their cycle time, throughput and OEE’s. Productivity loss analysis was done by using RCA analysis tools like fish bone diagram, why-why analysis and a pareto chart. The OEE rate was analysed to be 8.97% which is below the worlds ideal OEE values of 85%. The cycle time was analysed to 19 days compared to an established standard of 15 days, labour productivity was calculated as 42 sq. ft/man-hour against a target of 96.15 sq. ft/man-hour, and equipment utilization analysis indicated that 40% of the available time is when the equipment was available. From Root Cause Analysis the factors that affected productivity in Sagana tanneries using the Pareto chart were; equipment breakdown, power failure, low speeds (process bottlenecks) and lack of raw materials were found to be the vital few causes of low productivity. Lean manufacturing and TPM principles were developed as the best strategies for productivity improvement. With the development of productivity improvement strategies which are lean manufacturing and TPM principles, the tannery in practice will be able to increase equipment utilisation by reducing the downtimes. Cost of production will also be reduced and the cycle time of the production process reduced and labour productivity increased. This in turn will increase sales which will makes the tannery competitive and able to meet the customer demands. Hence with the improvement in the production processes in the tanneries, Kenya as a country will increase its leather output and become competitive in the global market which will lead to improved living standards of its people.