What is Productivity

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

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

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

4. How Measures are used? Historical comparison Compared with a base year (Index) Compared with competitors Compared with some certain standards Benchmarking

5. Process Input ?? Productivity Measurement Perspectives of productivity • Narrow Perspective • B r o a d Perspective

6. Productivity Measurement Techniques • Partial Productivity • Multi Factor Productivity • Normative Performance • Multi Criteria Performance

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

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

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

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

11. Work Sheet for Output / Input Collections

12. Total Factor Productivity = Total Value Added Total Factor Input PROs VS CONs • 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

13. Dimensions of Productivity Quality Cost Delivery for customers Ethics Environment for everyone Safety Morale for employee สถาบันเพิ่มผลผลิตแห่งชาติ : QCDSMEE

14. PROs VS CONs Normative Performance Broad view Structured group process Delphi Technique

15. PROs VS CONs Multi-Criteria Performance • Aggregate various measures created by Normative approach in an integrated fashion • Develop a new scale (Index) • For example: Objectives Matrix, Balanced Scorecard

16. Objectives Matrix • 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)

17. Objectives Matrix by Carl G. Thor

18. Objectives Matrix Measurement Design Accountant Cook Lecturer Student Home Service Delivery Boy

19. Productivity Taxonomy Select the right model • Dimensions for classification • TD1: Unit of Analysis • TD2: Time Frame for Measurement

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