Is your company as productive as a “tukang bakso” ?
I’ve just heard this very good comparison to get you thinking about whether your company’s productivity needs improving.
Let’s take a “tukang bakso” here in Jakarta. Lets say he charges Rp. 5000 per bowl and lets say he can sell about 200 bowls a day. At the end of the day he will have generated Rp 1 million. So one tukang bakso generates Rp. 1 million per day.
Now if you take your company’s revenue, divided by the number of employees, and divided again by 365, you will get how much each person in your company generates on average. Does this number measure up to what the tukang bakso can generate ? If your company generates Rp 1 million per day per person, then your company’s productivity is the same as the tukang bakso. However, the tukang bakso probably doesn’t even have a complete high school education, whereas your employees most likely have bachelors or masters degree. Shouldn’t the productivitybe way higher ?
To complicate matters you can also divide your equity by the number of employees, to get the equity that each person gets per year.
Lets say the tukang bakso can start his business with Rp. 10 million. This means that with Rp. 10 million he is able to generate Rp. 1 million every day.
How much equity does each person need in your company to generate how much revenue per day ? Does it measure up to the tukang bakso’s numbers ?
Can you beat the tukang bakso’s productivty ? Or maybe you should just start your own bakso enterprise…
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Tags: Productivity
December 26th, 2007 at 11:52 am
Dear Pak Kwik,
Firstly, Im not quite sure whether the ‘tukang bakso’ can sell 200 bowls perday and keep selling constantly that way, because there are a lot of factors affecting that kind of continual performance, at least on the ‘tukang bakso’ level. Because, in my perspective, a good performance, is a sustainable, continual & increasing one, not just in some periods.
Next, maybe if we want to make our own Bakso Enterprise, it must been through a long & winding road to step-in the Mature phase & definitely it could turn out more complicated rather than when we push that gerobak by ourselves, because we must down into lotsa problem, due to those same affecting factors, from the human resources problem to make the bakso, the ingredients, until quality assurance of each bakso produced.
I dont think that the comparison between employees & tukang baksos can be done ‘eye-to-eye,’ since they are producer-seller in one (d productivity can be measured from one people) & in a company, there must be skilled employee work in a interdependency system to produce the ‘product’ to achieve revenue, so that not every one giving direct contributions to revenue, but just in supporting function & in the end we cant easily measure every single person’s contributions.
Skilled person & big equity, of course after an appropriate HR placement, maybe can give the business more growth, expansion, sustainable conditions, etc, & can not be merely measured by how much revenue they own per person.
To my confusion, Ive seen a lot of well-known-family-developed traditional food keep stick on their originality & dont want to expand themselves. Theres must be quite explanation why they want to keep these old ways.
Finally, its just from my point of thinking, your corrections will be highly appreciated.
December 27th, 2007 at 6:28 am
Hi Alvin:
Good observations and insights.
Sure, we can’t actually compare the two directly, since there are so many factors affecting the two types of ventures, but this analogy gives a way for people to start thinking about productivity in their respective companies.
It definitely got me thinking about our own productivity.
The whole analogy is a gross exaggerations of things, but it is done that way to drive home a crucial point, and that is that you may think that you are doing well in terms of productivity, but in reality there are lots of other companies that are much more productive than your own.
You may find out that you’re doing a lot of non value add things that don’t contribute to the core purpose of satisfying your consumers’ needs. These things should be dropped or oursourced. Ofcourse, it’s much harder doing it than saying it. The line between value add and non value add is thin, especially when you put cost consideration into the picture, but we should at least be aware of it and strive to do something about it.