Productivity Output Input Productivity is a Measure of

Productivity = Output Input Productivity is a Measure of Performance Individual -- Group -- Organization -- Nation 1

Profitability Effectiveness Efficiency Cycle time Quality of Work life Innovation Utilization Productivity Sink et al. (1984( 2

As a manager, what needs to know ? Objectives -- Goals Method -- Path Achievement Are we really up here? 3

Historical comparison Compared with a base year (Index) Compared with competitors Compared with some certain standards Benchmarking 4

Perspectives of productivity J Narrow Perspective J Broad Perspective Input ? ? Process 5

v Partial Productivity v Multi Factor Productivity v Normative Performance v Multi Criteria Performance 6

Productivity = Output Input Labor Productivity Capital Productivity “Capital-labor substitution” PROs VS CONs 7

Consider all output & input at the same time and Convert things to price-based unit Two models • Total Productivity • Total Factor Productivity 8

Total Productivity = Total tangible outputs Total tangible inputs • Define & Calculate Inputs • Define & Calculate Outputs • Develop data collection system 9

Total Productivity = Total tangible outputs Total tangible inputs Outputs = Finished goods + WIP + All incomes (such as interests, dividends, rents, etc. ) Inputs = Capitals (fixed & working) + Materials + Energy + Human + Other expenses PROs VS CON 10 s

Work Sheet for Output / Input Collections 11

Total Factor Productivity = Total Value Added Total Factor Input • Output is total gain from operation • Value Added = Net sales - Cost of good sold - Outsource services • Value Added = Net profit + Salary + Retained earning + Interest + Tax + Rent + Depreciation PROs VS CONs 12

Quality Cost Delivery for customers Ethics Environment for everyone Safety Morale for employee �������� : 13

Broad view Structured group process Delphi Technique PROs VS CONs 14

• Aggregate various measures created by Normative approach in an integrated fashion • Develop a new scale (Index) • For example: Objectives Matrix, Balanced Scorecard ROs P VS CONs 15

Construction Steps • Determine all possible measures • Rate the importance of measures • Develop overall Performance Index Output is a Family of Measures (a weighted index of performance) 16

Objectives Matrix by Carl G. Thor 17

Accountant Cook Student Home Service Lecturer Delivery Boy 18

Select the right model Dimensions for classification TD 1: Unit of Analysis TD 2: Time Frame for Measurement 19

Ind. MA Firm MF MF MF Plant MF MF MF Dept MC MC Group MC MC Indv’l WM WM Min Hrs Days Wk Mth Qtr Year 20