Académique Documents
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Management
Faculty of Engineering,
University of Ruhuna.
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What is productivity?
Common/Simple Term: Relationship between output and input
(Output/Input)
Multiple Input: Measure of productivity become more complex due to
different inputs
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Measure of Productivity
Total Productivity: Broadest measure of total output to total input
Measure of Productivity
Multi-factor Productivity:
Ratio of total sales to total cost = {Total Sales}/{Total Cost}
Productivity Models: (rather than companywide)
1. Functional and departmental measures:
Output Complexity
Effective production or increase of production simply does not
mean productive
Produce what the market needs, when it needs it, and at
competitive price
I.e., anything produced can not be considered as productivity
Leads to more complication to measure productivity due to
output complexity
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Example:
Labor Productivity:
Input is quantity of labor hours (this is typical focus of Industrial
Engineers)
Output typically be parts produced
But, output may never be sold, may be inventory or may sold at
discount price (not the requirement of company)
Detail definition for productivity is required
No perfect definition, but definition should reflect measure of
success of the organization
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Productivity Definition
No perfect definition for productivity measures to suit each
situation
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In automobile example:
Obvious that some major changes were taking place to yield
15.8% and 13.7% year-to-year cars/employee productivity
improvements
What changes could improve car sales per employee?
Automation? Out sourcing? Major re-design?
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Achieving Productivity
Different ways, depending on the specific situation
Key Elements that impact on productivity:
Inventions
Innovations
Apply existing technologies to create new products or services
Often building or improving new ideas
E.g.: invention electrical motor may not have meaningful purpose, if the
motor is not used innovatively in so many applications
Innovations are much more prevalent (common) than inventions
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Integrations
Effective use of resources through the use of processes, work methods,
systems, etc.
No organization can exists with single resource
Effective integration is a must for productivity improvement
Information
Knowledge and data available to make decisions
Includes education, communication, databases, etc.
E.g.: information regarding the customer requirement and taking right decision
to satisfy them
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