Stevenson in his book "Operations Management" discussed the importance of productivity, factor affecting productivity and steps to improve productivity.
Factors That Affect Productivity
Important factors that affect productivity. Methods (Operator methods and motions), Equipment, Quality (performance specifications and defects) , Technology, and Management (production plans and schedules, organization and layout,motivation, job evaluation, wage and salary incentives, use of industrial engineering).
A commonly held misconception is that workers are the main determinant of productivity. But the fact is that many productivity gains in the past have come from technological improvements. Familiar examples include:
Fax machines, Automation, GPS devices, Copiers, Calculators, Smart phones, The Internet, search engines, Computers, Apps, Voice mail, cellular phones,E-mail, 3-D printing, Software, Medical imaging
Adoption of the above technologies increased productivity in production - distribution systems.
However, buying technology or technology assets alone won’t guarantee productivity gains; it must be used wisely and thoughtfully. Careful planning is required to determine the productivity provided by the new technology to the systems of the organization after ascertaining the it is a feasible technology for the organization.
There is a dip in productivity that results while employees learn to use new equipment or procedures that will eventually lead to productivity gains after the learning phase ends.
Other factors that affect productivity include the following:
Standardizing processes and procedures wherever possible to reduce variability can
have a significant benefit for both productivity and quality.
Quality differences may distort productivity measurements. One way this can happen
is when comparisons are made over time, such as comparing the productivity of a factory
now with one 30 years ago. Quality is now much higher than it was then, but there
is no simple way to incorporate quality improvements into productivity measurements.
Use of the Internet can lower costs of a wide range of transactions, thereby increasing
productivity. It is likely that this effect will continue to increase productivity in the foreseeable
Computer viruses can have an immense negative impact on productivity.
Searching for lost or misplaced items wastes time, hence negatively affecting productivity.
Scrap rates have an adverse effect on productivity, signaling inefficient use of
New workers tend to have lower productivity than seasoned workers. Thus, growing
companies may experience a productivity lag.
Accidents can take a toll on productivity. Safety has to be improved.
A shortage of technology-savvy workers hampers the ability of companies to update computing
resources, generate and sustain growth, and take advantage of new opportunities.
Layoffs often affect productivity. The effect can be positive and negative. Initially, productivity
may increase after a layoff, because the workload remains the same but fewer
workers do the work—although they have to work harder and longer to do it. However,
as time goes by, the remaining workers may experience an increased risk of burnout,
and they may fear additional job cuts. The most capable workers may decide to leave.
Labor turnover has a negative effect on productivity; replacements need time to get up
Design of the work space can impact productivity. For example, having tools and other
work items within easy reach can positively impact productivity.
Incentive plans that reward productivity increases can boost productivity.
Equipment breakdowns and shortages of parts or materials.
The education level and training of workers and their health can greatly affect productivity.
The opportunity to obtain lower costs due to higher productivity elsewhere is a key reason many organizations turn to outsourcing. Hence, an alternative to outsourcing can be improved productivity.
Moreover, as a part of their strategy for quality, the best organizations strive for continuous improvement.
Productivity improvements can be an important aspect of that approach.
A company or a department can take a number of key steps toward improving productivity:
1. Develop productivity measures for all operations. Measurement is the first step in managing
and controlling an operation.
2. Look at the system as a whole in deciding which operations are most critical.
3. It is overall productivity that is important. Managers need to reflect on the value of potential productivity improvements before okaying improvement efforts. The issue is effectiveness of productivity improvement efforts.
There are several aspects of this. One is to make sure the result will be something customers
want. For example, if a company is able to increase its output through productivity
improvements, but then is unable to sell the increased output, the increase in productivity
isn’t effective. Second, it is important to adopt a systems viewpoint: A productivity
increase in one part of an operation that doesn’t increase the productivity of the system
would not be effective. For example, suppose a system consists of a sequence of two
operations, where the output of the first operation is the input to the second operation, and
each operation can complete its part of the process at a rate of 20 units per hour. If the
productivity of the first operation is increased, but the productivity of the second operation
is not, the output of the system will still be 20 units per hour.
4. Develop systems for achieving productivity improvements, such as soliciting ideas
from workers (perhaps organizing teams of workers, engineers, and managers), studying
how other firms have increased productivity, and reexamining the way work is done.
5. Planning productivity - Establish reasonable goals for improvement.
5. Make it clear that management supports and encourages productivity improvement. Provide
incentives for doing productivity improvements in all departments at all levels in the organization.
6. Measure productivity improvements and publicize them so that others in the organization recognize the opportunity for improvement.
To rewrite once again.