PRODUCTIVITY

PRODUCTIVITY

1. Definition

   • The ratio of output to input (e.g., units per labor hour).
     • Linked to
       • Quality, Technology, and Profitability.
     • Improvement Methods
       • Controlling inputs, improving the process and improving technology
         • Modern Dynamic Concept
           • Competition, rightarrow, higher productivity, rightarrow, Better Customer, value, rightarrow, higher market share, rightarrow, keener competition
             • Productivity Measurement
               • Factor (Partial) Productivity
                 • Measures a single input (e.g., labor, material). Used at the firm/industry level.
                 • Total Factor Productivity
                   • Measures all inputs combined. Used at the national/international level.
               • Productivity Analysis Types
                 • Trend: Over a period of time. Horizontal: vs. similar-sized firms. Vertical: vs. different industries or sizes. Budgetary: Setting future norms/goals

2. Factors Affecting Productivity

   • Capital/Labour Resource Scarcity Work-force Changes (Turnover)
     • Innovations and Technology
       • Regulatory Effects Managerial Factors (Planning & Skills) Quality of Work Life (QWL)

3. International Dimensions

   • Competitive Strategies
     • Moving to new, advanced products (e.g., microelectronics, fiber optics)
       • Employing flexible systems (e.g., computers, robotics)
   • Japanese Model Characteristics
     • Priority: Employees & Customers over Shareholders
       • Time Horizon: Long-term viability > Short-term profits
         • Systems: Automation, quality is paramount, minimal inventories
           • Employment: Long-term, high loyalty, cooperative unions
             • Worker Participation: Quality circles, suggestions

4. SCOPE OF OPERATIONS MANAGEMENT

   • Definition: The conversion of inputs into outputs, using physical resources to provide utility to the customer.
     • Key Activities & Functions
       • Location of Facilities
         • Long-term strategic decision. Involves large investment. Seeks optimal location
           • Plant Layout & Material Handling
             • Layout: Physical arrangement of departments, work centers, and equipment. Material Handling: Moving, packing, and storing materials; aims to reduce costs and increase output
               • Product Design
                 • Conversion of ideas into reality. Links customer needs (Marketing) with manufacturing capabilities
       • Process Design
         • Macroscopic decision on the process route. Involves selection of technology and workflow analysis.
           • Production Planning and Control
             • Planning: Deciding in advance what, how, when, and who.
               • Routing: Selecting the production path
                 • Scheduling: Fixation of time and date for each operation
                   • Dispatching: Release of orders; authority to start work
                     • Follow-up: Reporting progress and investigating deviations
       • Quality Control
         • A system to maintain a desired level of quality. Aims for prevention of defects at the source. Ensures customer satisfaction and reduces costs
           • Materials Management
             • Acquisition, control, and use of materials. Objectives: Minimize material cost, ensure continuous supply, reduce investment in inventory
       • Maintenance Management
         • Manages equipment and machinery. Objectives: Achieve minimum breakdown, keep plant in good working condition, and ensure optimal capacity