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what is Productivity

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what is Productivity

  1. 1. What is productivity ?• Productivity is a measure of the efficiency of production.• Productivity is a ratio of what is produced to what is required to produce it.• Productivity is the determinant of the efficiency of an enterprise to convert its variable resources into useful finished goods and services.• Productivity = output/input.
  2. 2. Partial productivity• Easiest to measure, there can be more than one input factor but the output is one factor.• It uses a single major input which plays an important role to determine the productivity ratio.Total productivity• It is a systematic & quantitative approach .• It was developed by “David .J. Sumanth”.• It is customer oriented one integrating technical and human resources situation during the conversion process.
  3. 3. Reasons to improve Productivity• Increase in income & profitability.• Lowering running costs & operational costs.• It important to improve productivity at all levels by an organization to be more competitive.• An organization is in problem when if its human resource is not productive.
  4. 4. Methods to improve productivity• Ineffective time in work content front.• Product and process front.• Labour front.• Building trust to improve productivity.• Incentives and bonus front.• Use of electronics waste reduction front.• Six sigma
  5. 5. Following are Factors Affecting Productivity in Diamond Industry- Employees Training. Automation. Equipments Used by Employees- polishing tangs. diamond wheels. Quality and Availability of Raw Diamonds. Standard of Diamonds Produced by firms. Management Policies.
  6. 6. Comparison of Two Firms- Company A Company BRate of Production 200 units per day 175 units per dayPolishing tangs Fully geared Semi gearedDiamond wheels Latest LatestAutomation Automation in all phases Automation in later phasesWastage level Less MoreWorkload on work force Less MoreNo. of working days in a 28 28monthNo. of Employees 10 12Employees Training Level same sameNo. of labor hours per days 10 10
  7. 7. Analysis of Cost Pattern of Two Firms-Cost per Unit Company A Company BLabor Cost- Rs 70 Rs 80Electricity Cost Rs 10 Rs 15Capital Cost Rs 40 Rs 35Packaging Cost Rs 05 Rs 05Management Cost Rs 20 Rs 20Other Cost Rs 05 Rs 05Total Cost Per Unit Rs 150 Rs 160
  8. 8. Comparison of Two Firms- Production cost Per 1000 units Company B Company A 145000 150000 155000 160000 165000 Cost of Production in Rs.
  9. 9. Comparison of Two Firms-Productivity Ratios Company A Company BProductivity= 200/30000=0.0067 175/32000=0.0056Output/InputEmployee Productivity* 36000/10= Rs 3600 31500/12 = Rs 2625=Output/No. ofEmployeesTotal Productivity*= 36000/30000= Rs 1.2 31500/28000= Rs1.125Total Output/Total Input*= Assuming selling price Rs 180 per unit
  10. 10. Production
  11. 11. Introduction• Production involves the step by step conversion of one form of material into another through chemical or mechanical process with a view to enhance the utility of the product or services.• According to Elwood Butta “production is a process by which goods or services are created”.
  12. 12. Characteristics of production system• Production is an organized activity.• The production system transforms the various inputs into useful outputs.• Production system does not operate in isolation from the other organizational systems.• There exists a feed back about the activities which is essential to control and improve system performance.
  13. 13. Types of production• Job production• Batch production• Mass production• Continuous production
  14. 14. Functions of production management • Production planning • Production control • Factory building • Provision of plant services • Plant layout • Physical Environment • Method study • Inventory control • Quality control • Product department
  15. 15. How is production different from productivity ?• Production is related to the activity of producing goods or services. It is a process of converting input into value-added output.• Productivity is related to the efficient utilization of input resource produced in the form of value added goods or services.
  16. 16.  For example :• “A” spends 90rs, makes 10 products So, productivity = 10/90 = 0.111• “B” spends 280rs, makes 30 products So, productivity = 30/280 = 0.107• “C” spends 350rs, makes 40 products So, productivity = 40/350 = 0.114
  17. 17. We have understood three things from the above example:• Production and productivity are two different things.• Increase in production does not necessarily mean increase in productivity.• Productivity is always associated with the context in which it is calculated. – For example, in the above case, we have calculated total productivity. While in another case, someone may like to know about material productivity or energy productivity.
  18. 18. Conclusion• Productivity is a concept, whereas production is a fact.• Production is achieved by means of resources, productivity is measured through means of maximum manpower, machinery, financial support.• Production is a variable, dependent on many factors such as labour availability, motive power, etc. whereas productivity is the optimum measure of what or how much can be achieved or realized.
  20. 20. Performance•Performance is the accomplishment of a given taskmeasured against preset known standard of accuracy,completeness, cost and speed.•Performance is usually related to a personal matter and ina contract is deemed to be the fulfillment of obligation in amanner that releases the performer from all liabilitiesunder the contract.
  21. 21. IMPORTANCE OF PERFORMANCE MANAGEMENT•Wayne Eckerson of The Data Warehouse Institutedefines Performance Management as “a series oforganizational processes and applications designed tooptimize the execution of business strategy”•Performance management is a quickly maturing businessdiscipline. Like its better known siblings—sales andmarketing, human resources, supply chain management,and accounting and finance—performance managementhas a key role to play in improving the overall value of anorganization.
  22. 22. SCOPE AND BENEFITS OF PERFORMANCE•Business performance management involves consolidationof data from various sources, querying, and analysis of thedata, and putting the results into practice•A good performance management system works towardsthe improvement of the overall organizational performanceby managing the performances of teams and individuals forensuring the achievement of the overall organizationalambitions and goals.