Essay on Productivity: Business Management

Essay on Productivity (Business Management, Production Management, Industrial Engineering).

What is Productivity

Productivity is the function of providing more and more of everything to more and more people with less and less consumption of resources. The volume of output attained in a given period of time in relation to the sum of the direct and indirect efforts expend in its production.

Productivity is the measure of how well the resources are brought together in an organisation and utilised for accomplishing a set of objectives. Productivity is concerned with establishing congruency between organisational goals with societal aspirations through I/P – O/P relationship. Productivity is the multiplier effect of efficiency & effectiveness

Productivity Measures

1) Partial Productivity Measures (PPM):
Depending upon the individual I/P partial productivity measures are expressed as:

Partial Productivity = Total Output / Partial Input

Labour Productivity = Total Output / Labour Input
Labour Input is measured in terms on man-hours.

Capital Productivity = Total Output / Capital Input

Material Productivity = Total Output / Material Input

Energy Productivity = Total Output / Energy Input

2) Total Productivity Measures (TPM):
It is based on all the inputs. This model can be applied to any manufacturing organisation or service company.

Total Productivity = Total Tangible O/P / Total Tangible I/P

Total Tangible Output = Value of finished goods produced + Value of partial units produced + dividends from securities + interests + other income.

Total Tangible Input = Value of (Human + Material + Capital + Energy + Other I/P) used.

Deflator = Current Year Price/Base Year Price

Features of TPM:

• Gives both firm level and detailed unit level index.
• Helps to find out the performance and productivity of the operational unit.
• Helps to plan, evaluate and control
• An important function to strategic planners regarding expansion or phasing out decisions

3) Total Factor Productivity Measures (TFP):
It is ratio of net output to the labour & capital input.

Total Factor Productivity = Net Output / (Labour + Capital Inputs)

Factors influencing productivity can be classified broadly into two categories: controllable (internal factors) and Non-controllable (or external factors).

• Examples of controllable factors: Product, plant & equipment, technology, materials, human factors, work methods, management style, financial factors, sociological factors.
• Examples of Uncontrollable factors: Structural adjustments, natural resources, government policy, infrastructure.

Productivity Improvement Techniques

1. Technology based: Computer Aided Design (CAD), Computer Aided Manufacturing (CAM), and Computer Integrated Manufacturing (CIM)
   Robotics
   Laser Technology
   Modern Maintenance Techniques
   Energy Technology
   Flexible Manufacturing Systems (FMS)
2. Employee Based
   Finacial and non-financial activities at individual & group level
   Employee Promotion
   Worker particpation in decision-making
   Quality circles (QC), small group activities (SGA)
   Personal Development
3. Material Based
   Material Panning & control
   Purchasing Logistics
   Material Storage & Retrieval
   Source Selection & procurement of quality material
   Waste elimination
4. Process Based
   Methods Engineering and work simplification
   Job design, job evaluation, job safety
   Human factors engineering
5. Product Based
   Value Analysis & Value Engineering
   Product Diversification
   standardisation & simplification
   Reliability engineering
   Product mix and promotion
6. Management Based
   Management cycle
   communication in the organisation
   Work culture
   Motivation
   Promoting Group activity