Productivity

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Productivity is a measure of the efficiency of production As ratio of output to input Output means the amount or number of units produced Inputs are various sources employed ex: land and building, equipment and machinery, material, labour etc For entire process

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Measure of the technical or engineering efficiency of production Combining the inputs of production in the process of making output is called technology Production function (use of technology) depicts production performance and productivity is the measure of it Total productivity=output quantity/input quantity Quality also

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Surplus value refers to the difference between returns and costs Indicates that the output value is higher than the input If positive, owner’s profit expectation has been surpassed Higher the productivity more efficient is the production system

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Factors contributing:

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Productivty

Productivity model:

Productivity model By which it is possible to calculate the results of real process, income distribution process, and production process Calculation of profitability based on surplus value Surplus value is the valid measure for understanding the connection between profitability and productivity or understanding the connection between real process and production process Surplus value calculation is the only calculation to conform the requirement

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In earlier days of industrial management, the term productivity generally meant labour productivity Labour productivity alone will not give overall results. This is where management productivity comes in to play There are many ways of measuring productivity Very often, it is situation-dependent

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Output which can be measured in physical terms or in price terms is called labour productivity

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Some ways of measuring labour productivity Worker productivity = Workers’ output expressed in standard hours / Actual hours worked Labour productivity = Workers’ output expressed in Rupee Value / Workers’ wages expressed in Rupee Value Group productivity = Number of units produced / Number of man-hours taken

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Managerial productivity measures: Examples Number of Tons of Aluminium produced / Number of units of power consumed Number of units of power generated / Quantity of Gas consumed (Kg) Number of units produced / Number of persons employed Material Productivity = Production output Value / Material Value consumed Capital Productivity = Value added / Capital employed Inventory Turnover = Sales / Inventory Receivables Turnover = Sales / Amounts Receivable Value added per employee = Value added / Number of employees These are ratios

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Efficiency and effectiveness There should not be efficiency for efficiency sake. Some work may be done at a high efficiency, but the work itself may be totally unnecessary Ask a question “Why to perform a particular function” rather than ask “How to perform a function.” The question is whether we are doing the right thing What we do has to be effective not merely efficient

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Necessary to increase For management: 1) to sell more and earn good profits 2) to clear the debts or loans acquired from different sources 3) to establish better position in the market b) For workers: 1) to get higher wages and standards of living 2) to work in better working conditions 3) to attain job security and satisfaction c) For customers: to obtain articles at reduced price

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Can be increased by By increasing the output, keeping input constant By decreasing inputs for producing the same output By increasing output proportionately higher than increased affected in inputs

Increases in productivity:

Increases in productivity Automation and computerization Ergonomic design and worker comfort

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Some ways of improving Productivity TQM (Total Quality Management) BPR ( Business Process Reengineering) Bench Marking: A company must have a basis of establishing performance goals. The basis for comparison could be the best practice in the Industry, which process is known as BENCH MARKING

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Types of Bench marking: Internal Bench Marking: Follow the best practice of another efficient department, in the same organization Competitive Benchmarking : Follow the best practice of a successful competitor Functional Benchmarking : Follow the best and relevant practices, within the same broad Industry, not necessarily in direct competition Generic benchmarking : Some practices are same regardless of type of business, such as billing and collections. We could emulate any successful organization in the relevant aspect of business, not necessarily in the same type Industry

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Some measures to increase productivity: Be clear about your goals and align all actions towards meeting these goals Follow the right and relevant management techniques: TQM, BPR, Benchmarking etc Look for effectiveness, more than mere efficiency Be customer oriented. Provide value to customer Encourage creativity Empower the people involved Assign right jobs to the right people Make the organization flexible Keep things simple Remember-“Honesty is the best policy”

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1. Make sure the work environment is up to date on all safety requirements. To conscientiously increase industrial productivity you must make certain the work environment is safe and secure. 2. Make certain that all equipment is properly maintained and capable of working for long periods of time without needing corrective maintenance. Industrial productivity is largely controlled by machinery and computers. 3. Design a worker friendly plan for vacation and break time. Having content workers helps increase industrial productivity. 4. Allow workers certain benefit options that allow them to invest in the company. A worker who has a vested interest in the performance of the business will consistently work to increase industrial productivity. 5. Plan team-building exercises so that your workers function as an organic unit. This stimulates a more creative and dynamic work force capable of solving a number of unforeseeable productivity concerns. 6. Remember that your most important resource is your human resource. Having a group of people who are eager to improve their own abilities will improve the abilities and productivity of the company itself.

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Productivity, comes from doing the right thing and doing it right.

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