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Management & Leadership Skill Development Lecture 5.ppt

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Management & Leadership Skill Development Lecture 5.ppt

  1. 1. 2-1 Productivity  Productivity ratios are used for  Planning workforce requirements  Scheduling equipment  Financial analysis  Productivity  A measure of the effective use of resources, usually expressed as the ratio of output to input.
  2. 2. 2-2 Productivity  Partial measures  output/(single input)  Multi-factor measures  output/(multiple inputs)  Total measure  output/(total inputs) Productivity = Outputs Inputs
  3. 3. 2-3 A. Productivity Growth Current Period Productivity – Previous Period Productivity Previous Period Productivity Productivity Growth =
  4. 4. 2-4 Units of output per kilowatt-hour Dollar value of output per kilowatt-hour Energy Productivity Units of output per dollar input Dollar value of output per dollar input Capital Productivity Units of output per machine hour machine hour Machine Productivity Units of output per labor hour Units of output per shift Value-added per labor hour Labor Productivity C. Examples of Partial Productivity Measures
  5. 5. 2-5 Example 7500 Units Produced Sold for Rs.10/unit Cost of labor of Rs.10,000 Cost of materials: Rs.5,000 Cost of overhead: Rs.20,000 What is the multifactor productivity “MFP”?
  6. 6. 2-6 Example Solution MFP = Output Labor + Materials + Overhead MFP = (7500 units)*(100) 10,000 + 5,000 + 20,000 MFP = 21.420 MFP = 750,000 35,000
  7. 7. 2-7 Factors Affecting Productivity Management Capital Technology Quality
  8. 8. 2-8 Factors Affecting Productivity 1. CAPITAL 2. QUALITY 3. TECHNOLOGY 4. MANAGEMENT
  9. 9. 2-9  Standardization  Use of Internet  Computer viruses  Search for right product or misplaced item  Scrap Rates  New Workers Other Factors Affecting Productivity
  10. 10. 2-10  Safety  Shortage of IT Trained Workers  Layoffs  Labor turnover  Design of the workspace  Motivation or Incentive plans that reward productivity Other Factors Affecting Productivity
  11. 11. 2-11 Bottleneck Operation  Bottleneck is one process in a chain of processes, such that its limited capacity ( increased time of completion, or increased labour requirement) reduces the capacity of the whole chain
  12. 12. 2-12 Improving Productivity 1. Develop productivity measures 2. Determine and isolate critical (bottleneck) operations 3. Develop methods for productivity improvements 4. Establish reasonable goals 5. Get management support 6. Measure and publicize improvements 7. Clearly differentiate between productivity and efficiency
  13. 13. 2-13 Pakistani Productivity Example  Calculate the change in productivity of Pakistani Textile Industry between the years 2003-04 and 2004-05? ( Installed Capacity) Parameter 2003/4 2004/5 Change Number of mills 399 426 Spindles (000) 9286 9815 Rotors(000) 145.6 151.6
  14. 14. 2-14 Pakistani Productivity Example  Calculate the change in productivity of Pakistani Textile Industry between the years 2003-04 and 2004-05? ( Working Capacity) Parameter 2003/4 2004/5 Change Number of Looms(000) 4.3 4.9 Spindles (000) 7710 8531 Rotors(000) 67.3 75.1
  15. 15. 2-15 Pakistan Automobile Industry  Calculate the Productivity Change for Pakistani Automobile Industry between the years 2003-04 and 2004-05? Type 2003-04 2004-05 % change in Productivity Cars 79655 100213 Motorcycles 263149 386589 Trucks 1669 1999 Buses 1151 1503 Tractors 28583 35308

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