Operations Management Chapter 5 Managing productivity at work

Operations Management Chapter 5 Managing productivity at work Lamiae Bemakhlouf, AOU Dammam

Definition of productivity Efficiency of an operation is usually measured in terms of its output or productivity. Productivity is expressed as a ratio of output produced against the input to achieve it. Productivity = Output produced/Input consumed Lamiae Bemakhlouf, AOU Dammam

Types of productivity National productivity: usually expressed in terms of percentage of exports by each country per year. Industry productivity: often expressed in terms of output per employee per hour Organizational productivity: usually measured in monetary terms and expressed as the ratio of the output sold to the costs of inputs. Lamiae Bemakhlouf, AOU Dammam

Ways to improve productivity of an operation Increasing the working speed by improving the output from the operation whilst utilizing the same amount of input Improving the working methods by obtaining the same output from the operation using less input. Reducing cost and wastage by increasing output from the operation whilst reducing the input to the operation Lamiae Bemakhlouf, AOU Dammam

key resources to review to improve productivity People: sound planning, motivation, innovating new work methods, effective training and empowerment. Equipment: effective capacity planning and control, simplifying operations and efficient management of maintenance activities Materials: efficient planning and control of materials and effective sourcing and management of the supply chain Space: better layout design and organization of productive resources Money: sound budgetary planning and control Time: People late for work and absenteeism can be reduced Lamiae Bemakhlouf, AOU Dammam

Critical issues in productivity improvement Change management: change should be considered a way of life and everyone in the organization should expect change Empowerment: senior managers should be able to released the full potential of their employees through involvement, training, recognition and effective communication. Customer orientation: organizations should make every effort to know their immediate markets and clearly understand their customers’ requirements. Innovation: companies should welcome the pressure put upon them by customers in terms of price reduction, flexibility, delivery, and design and quality improvements. Customer delight: Customers should always be regarded as the ‘focal point’ whenever companies are considering any change or innovation in their products, services and processes. Lamiae Bemakhlouf, AOU Dammam