Session 7_Productivity IN Operations Management.pptx

PRODUCTIVITY IN OPERATIONS MANGEMENT

1. Productivity

2. Productivity Productiv ity = Output Inputs Productivity is a measure of how efficiently inputs are converted to output.

3. Measuring Productivity Partial measures output/(single input) Multi-factor measures Uses some but not all inputs output/(multiple inputs) Total measure uses all inputs output/( Rs value of all inputs)

4. Measures of Productivity Partial Output Output Output measures Labor , Machine , Energy Multifactor Output Output measures Labor + Machine , Labor + Capital + Energy Total Goods or Services Produced measure Rs value of all inputs used to produce them

5. Units of output per kilowatt-hour Dollar value of output per kilowatt-hour Energy Productivity Machine Productivity Labor Productivity Examples of Partial Productivity Measures Units of output per labor-hour Dollar value of output per labor-hour Units of output per machine-hour Dollar value of output per machine-hour

6. Numerical Example Output Labor Machine Units 500 x x Hours x 26 6 Cost/unit x Rs 8 Rs 3 Price/unit Rs 15 x x MP = 500/6 = 83.33 units/machine-hour MP = 500*15 = 7500/6 = 1250 INR/Machine-hour

7. Partial Measures Explain meaning? Units/labour hr

8. Partial Measures Explain meaning? /labour hour

9. Partial Measures Explain meaning? 500 Units/rupees input

10. Partial Measures Explain meaning? Units/machine hour

11. Multi-factor MFP = (500)/[(6 * 3) + (26 * 8)] = 500/[18+208] = 500/226 = 2.21 units/INR

12. Multi-factor Units/ Rs input

13. Measuring Productivity Measure Outputs Inputs Partial Units or dollars Units or dollars Multi-factor Units or dollars Dollars Total Units or dollars Dollars

14. Summary Output in units/Input in hrs. = Output per input hour Output in $/Input in hrs. = X Produced output worth $X per input hr. Output in units/Input in $ = Y Produced Y units per $ spent on input Output in $/Input in $ = Z Produced Z units per $ spent on input

15. Bottleneck Operation Sanding Machine Polishing 50 units/hr 30 units /hr Bottleneck operation

16. Improving Productivity Eliminate bottleneck operations Eliminate non-value added steps Use improved technology Improve quality Less rework More good units produced the first time Productivity should measure number of good units produced the first time