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Methods and Work Measurement

Methods and Work Measurement. Lecture 3 : Measurement model of productivity 27 February 2009. Why do We Care About Productivity?. Productivity is affected by efficiency, effectiveness, and quality.

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Methods and Work Measurement

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  1. Methods and Work Measurement Lecture 3 : Measurement model of productivity 27 February 2009 Hanna Lestari, ST, M.Eng-FTI-UII @ 2009

  2. Why do We Care About Productivity? • Productivity is affected by efficiency, effectiveness, and quality. • Productivity, together with innovation and quality of working life, determine the total organizational performance – profitability • Without productivity improvement, businesses do not survive in a global economy. • Higher productivity means higher standard of living Hanna Lestari, ST, M.Eng-FTI-UII

  3. Total Organizational Performance Efficiency Innovation Effectiveness Profitability (organizational Performance) Productivity Quality of working life Quality Hanna Lestari, ST, M.Eng-FTI-UII

  4. Productivity Measurement Techniques Hanna Lestari, ST, M.Eng-FTI-UII

  5. Partial Productivity Hanna Lestari, ST, M.Eng-FTI-UII

  6. Partial Productivity ContohSoal: Dalamsebulan PT. Noodle mampumemproduksi 10.000 units produkdengan 500 jam kerja, berapaproduktivitastenagakerjaperusahaantsb? Jawab: 10,000 units/500hrs = 20 units/hour Hanna Lestari, ST, M.Eng-FTI-UII

  7. Multi-factors Productivity Hanna Lestari, ST, M.Eng-FTI-UII

  8. Case Study Berikutiniadalah data output hasilproduksidan input yang digunakanoleh PT. Noodle dalamsatuperiodewaktu: - Output : $ 5000 - Labor : $ 600 - Material: $ 800 - Energy : $ 500 - Capital : $ 400 - Other expense input : $ 500 berdasarkan data-data tersebutdiatasmakarasioproduktivitasparsialdan total perusahaantsbpadaperiodedasaradalah: Hanna Lestari, ST, M.Eng-FTI-UII

  9. Answer : Partial Productivity Hanna Lestari, ST, M.Eng-FTI-UII

  10. Answer: Total Productivity • Total Productivity : = Total Output/ (labor + material + capital + energy + other expense input) = 5000 / (600+800+400+500+500) = 5000/2800 = 1.785 Hanna Lestari, ST, M.Eng-FTI-UII

  11. Measurement Model of Productivity Hanna Lestari, ST, M.Eng-FTI-UII

  12. Objective Matrix (OMAX) • OMAX is a partial productivity measurement developed for controlling productivity in the each part of firm system based on criteria of productivity. • Developed by James L. Riggs (Dept. of Industrial Engineering at Oregon State University) in 1980. Hanna Lestari, ST, M.Eng-FTI-UII

  13. Objective Matrix (OMAX) Model Definition block Quantification block Weight and value block

  14. Objective Matrix (OMAX) Model

  15. Objective Matrix (OMAX) Model: Example

  16. Objective Matrix (OMAX) Model : Example • Index of Performance = (Productivity Indicator – Based Performance)/Based Performance) x 1 00% • Based Performance = 300 • Productivity Indicator = a sum of all values = 120+180+30+30+30+70 = 460 • Value = Score x Weight • Index of Performance = ((460 – 300)/300) x 100% = 53.33% Hanna Lestari, ST, M.Eng-FTI-UII

  17. Model of Marvin E. Mundel • This model measures total productivity by comparing between productivity in Measured Period and Base Period • Index of Productivity in base period is 100 so that there are three states of index of productivity in measured period: • IP < 100. It means that the productivity in measured period less than base period • IP = 100. It means that the productivity in measured period equals base period • IP > 100. It means that the productivity in measured period more than base period • The better the productivity, the higher the IP. The IP is always more than 100 Hanna Lestari, ST, M.Eng-FTI-UII

  18. Model of Marvin E. Mundel

  19. Case Study : Garuda Indonesia has data as follow: Determine: AOMP,AOBP,AIMP,AIBP,CPI,BPI,OI,II and IP Model of Marvin E. Mundel

  20. Model of Marvin E. Mundel Solution: 1. Statements of output: • Ticketing • Cargo service • VIP flight service 2. Statements of input: • Direct labor cost • Indirect labor cost • Overhead cost • Building cost for rent • Maintenance cost • Administration cos Hanna Lestari, ST, M.Eng-FTI-UII

  21. Model of Marvin E. Mundel • AOMP = 15 + 1.4 +0.600 (billion) = 17 billion • AOBP = 10 + 2 + 0.500 (billion) = 12.5 billion • AIMP = 5 + 3 + 0.700 + 2 + 0.500 + 0.300 = 11.5 billion • AIBP = 4 + 2 + 1 + 1.5 + 0.800 + 0.200 = 9.5 billion

  22. APC Model • The American Productivity Center (APC) has been advocating a productivity measure that relates profitability with productivity and price recovery factor. The way this measure is derived is: Hanna Lestari, ST, M.Eng-FTI-UII

  23. APC Model • The “productivity” ratio gives an indication of the amount of resources consumed to produce the firm’s output • The changes in “price recovery factor” over time indicate whether changes in input cost are absorbed, passed on, or overcompensated for in the prices of the firm’s output • In this model, the capital input is given by total depreciation plus profit relative to the total assets (i.e. fixed assets + working capital) employed • Thus, the capital input for any particular period = depreciation for that period + (return on assets in base period) x (current assets employed)

  24. APC Model Example:

  25. APC Model • In period 1, the firm had capital assets $ 100,000, yielding $10,000 depreciation at the average rate of 10%. • The profit earned in period 1 was the difference between the revenue and total input cost, that is, $49,000 output minus $38,100 resulting in $10,900. • The base period (period 1) return on total capital is calculated as follows: Hanna Lestari, ST, M.Eng-FTI-UII

  26. APC Model • Assuming that the working capital in period 1 was $50,000; Hanna Lestari, ST, M.Eng-FTI-UII

  27. APC Model • In period 2, we have assumed that the fixed assets remained at $100,000, but the working capital increased to $80,000. • Thus return (profit) of the firm is $13,140, which is the profit should have made if it had maintained its profitability relative to its total assets • However, the actual profit in period 2 is given as $54,500 minus $44,500 resulting in $10,000 • This means that the firm’s profit fell short by ($13,140 - $10,000) = $3,140.

  28. APC Model

  29. APC Model

  30. APC Model : • Table 7.3 shows that labor productivity improved by 11.81 % in period 2, and that the wage rates increased considerably, as indicated by a price recovery index of 0.814 • This means that the productivity increase was overshadowed, with the net effect of a drop in profitability by 1.000 – 0.962 = 0.038 or 3.8%

  31. Model Craig Haris • Pt = produktivitas total • C = Faktor masukan total • L = Faktor masukan tenaga kerja • R = Raw material and purchased parts input • O = Faktor masukan barang dan jasa lain • Ot = total ouput Hanna Lestari, ST, M.Eng-FTI-UII

  32. Hanna Lestari, ST, M.Eng-FTI-UII

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