CHAPTER 4

• productivity - the primary responsibilities of a manager is to achieve productive use of an organization’s resources.
• it is particularly important for organizations that use a strategy of low cost, because the higher the productivity, the lower the cost of the output.
• Productivity growth - is a key factor in a country’s rate of inflation and the standard of living of its people.
• Productivity - increases add value to the economy while keeping inflation in check.
• Productivity - is an index that measures output (goods and services) relative to the input (labor, materials, energy, and other resources) used to produce it. It is usually expressed as the ratio of output to input
• productivity ratio - can be computed for a single operation, a department, an organization, or an entire country.
• business organizations - productivity ratios are used for planning workforce requirements, scheduling equipment, financial analysis, and other important tasks.
• Productivity - has important implications for business organizations and for entire nations.
• non-profit organizations - higher productivity means lower costs
• profit-based organizations - productivity is an important factor in determining how competitive a company is
• Productivity growth - is the increase in productivity from one period to the next relative to the productivity in the preceding period.
• Productivity measures - can be based on a single input (partial productivity), on more than one input (multifactor productivity), or on all inputs (total productivity).
• productivity measure - depends primarily on the purpose of the measurement. If the purpose is to track improvements in labor productivity, then labor becomes the obvious input measure.
• Partial measures - are often of greatest use in operations management. The units of output used in productivity measures depend on the type of job performed.
• WHAT ARE THE PRODUCTIVITY MEASURES?

  partial measures

  multifactor measures

  total measures
• multifactor productivity - measure inputs and outputs using a common unit of measurement, such as cost or value.
• Productivity measures - are useful on a number of levels.
• Productivity measures - also can be used to judge the performance of an entire industry or the productivity of a country as a whole.
• For an individual department or organization, productivity measures can be used to track performance over time. This allows managers to judge performance and to decide where improvements are needed.
• Service productivity - is more problematic than manufacturing productivity.
• Service productivity - it is more difficult to measure, and thus to manage, because it involves intellectual activities and a high degree of variability
• process yield - A useful measure closely related to productivity
• process yield (product) - is defined as the ratio of output of good product (i.e., defective product is not included) to the quantity of raw material input.
• process yield (services) - measurement is often dependent on the particular process.
• Numerous factors affect productivity. Generally, they are:

  methods

  quality

  capital

  technology

  management
• Standardizing - processes and procedures wherever possible to reduce variability can have a significant benefit for both productivity and quality.
• Quality differences - may distort productivity measurements.
• Use of the Internet - can lower costs of a wide range of transactions, thereby increasing productivity.
• Computer viruses - can have an immense negative impact on productivity.
• Searching for lost - or misplaced items wastes time, hence negatively affecting productivity.
• Scrap rates - have an adverse effect on productivity, signalling inefficient use of resources.
• use of the internet - It is likely that this effect will continue to increase productivity in the foreseeable future.
• New workers - tend to have lower productivity than seasoned workers. Thus, growing companies may experience a productivity lag.
• Safety - should be addressed. Accidents can take a toll on productivity.
• A shortage of technology-savvy workers - hampers the ability of companies to update computing resources, generate and sustain growth, and take advantage of new opportunities.
• Layoffs - often affect productivity. The effect can be positive and negative.
• Labor turnover - has a negative effect on productivity; replacements need time to get up to speed.
• Design of the workspace - can impact productivity. For example, having tools and other work items within easy reach can positively impact productivity.
• Incentive plans that reward productivity increases - can boost productivity.
• Efficiency - is a narrower concept that pertains to getting the most out of a fixed set of resources