3.Concepts of productivity measure

8/7/2019 3.Concepts of productivity measure

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Concepts ofConcepts of

PRODUCTIVITYPRODUCTIVITY

MEASUREMENTMEASUREMENT


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PRODUCTIVITY

Productivity deals with

how to produce output

(goods and or services)efficiently and effectively

Productivity = Output / Input


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Efficiency (Doing things right):

Dealing with the use of particular amount of input toproduce output as much as possible or

Represents the use of as few as possible input to producea particular amount of output

Effectiveness (Doing right things):

Degree to which desired results are achieved

Efficiency

and

Effectiveness

Productivity


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Possibility of productivity improvements :

O

I

O

I

O

I

O

I

O

I


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ORGANIZATION OBJECTIVES

As Peter Druckersuggests:

Marketshare

Innovation

Productivity

Physical andfinancial resources

Profitability

Manager performance anddevelopment Worker performance and attitude

Publicresponsibility


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AccordingtoEricson:

High productivity

Industrial leadership

Organizational stability

Profitmaximization

Organizational efficiency

Organizationgrowth


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TOTAL

PRODUCTIVITY

PRODUCT

QUALITY

AND SERVICE

PRODUCTION

COST

RESOURCE

CONSERVATION

MARKET SHAREPROFIT

R & D

REVENUE

GROWTH

MULTINATIONAL

ENTERPRISE

DIVERSIFICATION

SOCIAL

RESPONSIBILITY

EMPLOYEE

WELFARE

FINANSIAL

STABILITY

RELATIONSHIPBETW EEN PRODUCTIVITYAND

ORGANIZATIONOBJECTIVES


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1. It is intended to reflect overallproductivity, and

2. It incorporates a comprehensivemeasure of inputs

Typesof

ProductivityMeasure:

Total Productivity:

Total Output Total OutputTotal = =

Productivity Total Input (Material+ Energy+ Capital + Labor)


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Example:

The number of = 200 pieces

The price of = Rp.5.000,-

Total material cost = Rp.100.000,-

Total energy cost = Rp.50.000,-

Total capital cost = Rp.200.000,-

Total labor cost = Rp.150.000,-


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Number of 200

Total = =

Productivity Total Input (100.000 + 50.000 + 200.000 + 150.000)

= 200 / 500.000 = 2 / 5.000 = 0,0004

ExampleofTotal productiviymeasurement

Value of 200 x 5.000

Total = =Productivity Total Input (100.000 + 50.000 + 200.000 + 150.000)

= 1.000.000 / 500.000 = 2

or:


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Partial Productivity:

1. It measures a sub-operations output ,

and2. It measures only a particular input

Total Output Particular OutputPartial = or

Productivity Particular Input Particular Input

Typesof



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The price of Harga = Rp.10.000,-


The price of = Rp.5.000,-

Material cost / kg = Rp.1.000,-

Material = 1.000 Kg

The cost of / person = Rp.100.000,-

The number of = 10 persons

Example:


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valueof + valueof

Partial productivity =

For material Material used

(200 x 10.000) + (100 X 5.000)

=

1.000

= 2.500.000 / 1.000 = 2.500

Exampleof Partial ProductivityMeasure


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Valueof + Valueof


for material Value of material

(200 x 10.000) + (100 X 5.000)

=

1.000 x 1.000

= 2.500.000 / 1.000.000= 2,5

Or :


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valueof + valueof


For Number of

(200 x 10.000) + (100 X 5.000)

=

10

= 2.500.000 / 10 = 250.000


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valueof + valueof


for value of

(200 x 10.000) + (100 X 5.000)

=

10 x 100.000

= 2.500.000 / 1.000.000 = 2,5

Or :


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It is intended to reflect productivity by

comparing the overall output (netvalue) against the labor and capitalinputs

Total Factor Produktivity:

Total Output (net value)Total factor =

Productivity (Labor + Capital)


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Productivity Index:

It is used to compare the productivity at a particularperiod against the productivity at base period

Productivity at particular period

Productivity = X 100 %

Index Productivity at base period


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Productivity Index

example:

2003 2004Goods produced 120.000 150.000

Working time utilized 40.000 37.500

Materials consumed (Kg.) 1.200.000 1.428.571

Produktivitas parsialProduktivitas parsial

Tahun 2003 Tahun 2004Tahun 2003 Tahun 2004

Labor Productivity 3,000 4,000

Material Productivity 0,100 0,105

150.000/37.500

150.000/1.428.571

120.000/40.000

120.000/1.200.000


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Productivity Index for Labor in 2004:

IPT.K_2004 = 4 / 3 x 100 % = 1,33 x 100 % = 133 %

It means, labor productivity in 2004 increases 33 % when

compared to that in 2003

Productivity Index for material in 2004:

IPBB_2004 = 0,105 / 0,1 x 100 % = 1,05 x 100 % = 105 %

It means, material productivity in 2004 increases 5 % when

compared to that in 2003


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Productivityimprovement

Cost

Reduction

Logicalconsequence:


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3.Concepts of productivity measure