1. 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.

2. 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

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

4. 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

5. 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”?

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

7. Factors Affecting Productivity
Management
Capital
Technology
Quality

8. Factors Affecting Productivity
CAPITAL
QUALITY
TECHNOLOGY
MANAGEMENT

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

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

11. 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

12. 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

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

14. Pakistani Productivity Example
Calculate the change in productivity of Pakistani Textile Industry between the years and ? ( 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

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