Productivity Productivity ratios are used for Productivity Planning workforce requirements Scheduling equipment Financial analysis Productivity A measure of the effective use of resources, usually expressed as the ratio of output to input.

Productivity Productiv ity = Outputs Inputs Partial measures output/(single input) Multi-factor measures output/(multiple inputs) Total measure output/(total inputs) Productiv ity = Outputs Inputs

A. Productivity Growth Productivity Growth = Current Period Productivity – Previous Period Productivity Previous Period Productivity

C. Examples of Partial Productivity Measures Units of output per kilowatt-hour Dollar value of output per kilowatt-hour Energy Productivity Units of output per dollar input Dollar value of output per dollar input Capital Productivity Units of output per machine hour machine hour Machine Productivity Units of output per labor hour Units of output per shift Value-added per labor hour Labor Productivity

Example 7500 Units Produced Sold for Rs.10/unit Cost of labor of Rs.10,000 Cost of materials: Rs.5,000 Cost of overhead: Rs.20,000 What is the multifactor productivity “MFP”?

Example Solution MFP = Output Labor + Materials + Overhead MFP = (7500 units)*(100) 10,000 + 5,000 + 20,000 MFP = 750,000 35,000 MFP = 21.420

Factors Affecting Productivity Management Capital Technology Quality

Factors Affecting Productivity CAPITAL QUALITY TECHNOLOGY MANAGEMENT

Other Factors Affecting Productivity Standardization Use of Internet Computer viruses Search for right product or misplaced item Scrap Rates New Workers

Other Factors Affecting Productivity Safety Shortage of IT Trained Workers Layoffs Labor turnover Design of the workspace Motivation or Incentive plans that reward productivity

Bottleneck Operation Bottleneck is one process in a chain of processes, such that its limited capacity ( increased time of completion, or increased labour requirement) reduces the capacity of the whole chain

Improving Productivity Develop productivity measures Determine and isolate critical (bottleneck) operations Develop methods for productivity improvements Establish reasonable goals Get management support Measure and publicize improvements Clearly differentiate between productivity and efficiency

Pakistani Productivity Example Calculate the change in productivity of Pakistani Textile Industry between the years 2003-04 and 2004-05? ( Installed Capacity) Parameter 2003/4 2004/5 Change Number of mills 399 426 Spindles (000) 9286 9815 Rotors(000) 145.6 151.6

Pakistani Productivity Example Calculate the change in productivity of Pakistani Textile Industry between the years 2003-04 and 2004-05? ( Working Capacity) Parameter 2003/4 2004/5 Change Number of Looms(000) 4.3 4.9 Spindles (000) 7710 8531 Rotors(000) 67.3 75.1

Pakistan Automobile Industry Calculate the Productivity Change for Pakistani Automobile Industry between the years 2003-04 and 2004-05? Type 2003-04 2004-05 % change in Productivity Cars 79655 100213 Motorcycles 263149 386589 Trucks 1669 1999 Buses 1151 1503 Tractors 28583 35308