Productivity is the ratio of output to input.
Output is the number of items produced and input
consists of the total resources (i.e material,
labor, machine, tools etc) used to produce these
items. The increase in productivity results in
decrease in production cost and hence increased
profits without sacrificing the quality. Thus
Productivity = Output (Number of items produced) / Input
(Total Resources used)
Productivity is increased if
Increase in output without increase in input.
Output remains same with decrease in input.
Rate of increase in output is more than rate of increase
Methods to increase productivity:
Simplification in product design.
Less variety of products.
Better machines, tools, jigs and fixture.
Improvement in production planning and production
control techniques so that more items can be produced with existing
Improvement in process by process analysis.
Application of work study technique to improve the
method of working operations so that more items can be produced in
Measurement of Productivity:
Following are the common methods to measure productivity
Partial Productivity: It is the ratio of total output to individual output
i.e Partial productivity = Total output/Individual input
For Example: Capital productivity = Total Output / Capital
Material productivity = Total Output / Material Input
Labor Productivity = Total Output / Labor Input
measured to calculate the independent inputs so that improvement may be
done in individual input.
Total Productivity: It is the ratio of total output to total input.
Total productivity = Total Output / Total Input
This represents the most accurate performance of an
Total Factor Productivity (Multi Factor Productivity): It is the ratio of net output
to the sum of Inputs of labor and capital.
Productivity = Net Output / (Labor + Capital Inputs)