Productivity and its importance
Productivity- A measure of the effective use of resources, usually
expressed as the ratio of output to input.
Input-labor, materials, energy and other resources used to produce
the product or service
Reference- Operations Management, Twelfth Edition by William J.
Stevenson ; SlideShare
Effectiveness and Efficiency drive Productivity
Effectiveness

Effectiveness must come first in all of your considerations about
productivity

Effectiveness is doing the right things

You must make sure that all your objectives serve your goals, which
in turn serve your purpose.

Start by looking at whether you are doing the right things, and
whether you are asking employees to do the right things.
Efficiency

Once you have employees doing the right things, you can make
sure they do things right- whether that means moving faster, getting
work done with fewer resources, accomplishing big projects with a
smaller budget, or otherwise doing “more” with “less.”

Examine all employee tasks and determine if there is a better way to
get them done.

Find more efficient ways to get work done through computerization,
streamlined communication channels and rearranging of the
physical environment.
Productivity

Productivity is doing the right things in the right way.

Once you ensure employees are being effective and efficient, you
will see a rise in productivity.

You can use metrics such as number of units produced, sales or
customer-satisfaction surveys.
Computing Productivity
Productivity measures can be based on a single input (partial productivity),
on more than one input (multifactor productivity), or on all inputs (total
productivity).
Some examples of different types of productivity
measure
Some examples of partial productivity measures
Computing Productivity
Computing Productivity
Importance of Productivity
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. For
example, if productivity has slipped in a certain area, operations staff can
examine the factors used to compute productivity to determine what has
changed and then devise a means of improving productivity in subsequent
periods
Business leaders are concerned with productivity as it relates to
competitiveness: If two firms both have the same level of output but one
requires less input because of higher productivity, that one will be able to
charge a lower price and consequently increase its share of the market.
Or that firm might elect to charge the same price, thereby reaping a
greater profit.
Importance of Productivity (a
summary)

For companies, a higher productivity relative to their competitors
gives them a competitive advantage in the marketplace.

With a higher productivity, they can afford to undercut
competitors’ prices to gain market share or charge the same
prices but realize greater profits!
Factors Affecting Productivity
Factors Affecting Productivity