productivity management
Post on 11-Apr-2015
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Productivity is defined as the ratio of output to input
Output value if goods/services
Input cost of resources consumed==Productivity
Resources/Inputs
Materials,Capital,Labour/ManpowerTechnologyinformation
Performance
Productivity Index
Output Performance Achievement Effectiveness Input Resources Consumed Efficiency
= =
Productivity is the ratio of output of wealth Produced to the inputs of resources
Increase in productivity could indicates:
Increase in Production Volume over a given Period
Produce the same volume in lesser time
Produce the same volume with lesser input in a given time
Productivity ----misconceptions
Not a measure of Volume of Production (Relationship of input-output)
Not a measure of Profitability (Reflect lower cost and high profit)
Not an anti inflationary measure(Increase in inputs not matched by outputs)
Not a technique to make worker to work Harder(Approach that encourages workers to work shorter)
Productivity- measurement
Input variables
Payroll CostsEmployment CostsNo. of ManpowerNo. of Hours WorkedTime taken….
Output variables
Units producedProducts soldTasks completedRevenue obtainedValue addedStandard reached…
Output Ratios
Trading Profit Number of Employees
=Profit perEmployee
= =Sales perEmployee
Sales Number of Employees
=Sales perEmployee
Units Produced or Processed Number of Employees
=OutputEmployee
Cost Ratios
Wages CostUnits Produced
= =Sales perEmployee
Sales TurnoverEmployment Cost
Actual Labour Cost per standard HourTarget Cost Per standard hour
Performance Ratios
St. Hours for ProductionActual Hrs Worked
= =Actual PerformanceTarget Performance
Total Productivity Index
Products+ Services Labour+ Materials+ Energy+ CapitalTPI =
Productivity of Labour
LP is defined as total out put divided by number of man hours Worked by all employees
Measuring Labour Productivity
Quantitative Statements
Historical Costs
Variance Statements under Budgetary Control
Variance Statements under Standard Costing
Influencing Labour Productivity
Where labour has no control
Material SuppliesReliability of DesignProduction MethodsProduct VarietyReliability of plant electricity water other services
New Labour…
Influencing Labour Productivity
Where labour has full control
Starting timeStoppage timeLunch breaksScraps due to
Carelessness
Accidents due to…Absenteeism
Productivity of Materials
Higher yieldLow CostHigher ValueLow WasteLow ScrapsLow rejectionsSubstitution of Materials
Manpower & Productivity
Recruitment PolicySkill LevelKnowledge LevelBehaviourTrainingMotivationTechnologyChange Management
Productivity & Profitability
Productivity means the Rate of production measured in terms labour, materials or machines
Profitability means the rate of profit earned measured in termsCapital employed
Productivity & Quality
"Fitness for use“ Fitness is defined by the customer.
"Conformance to requirements".
Productivity & Quality go hand in handa Quality defect can neutralize
productivity
Productivity &Cost Effectiveness
Reducing the value of input through eliminating wasteIncreasing quantity or quality or both of the outputModifying system to get large ratio between input/outputEfficient utilization of men, materials and technologyEnergy ConservationUsing techniques like
Value Engineering Six Sigma Kaizen Operation Research Network analysis…..
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