Productivity Improvement
Content
1.1.1.1.
Productivity Improvement
Productivity is a basic measure of performance for economies, industries, firms and processes. Improving productivity is a major trend in operations management because all firms face pressures to improve their processes and supply chains so as to compete with their domestic and foreign competitors. Productivity is the value of outputs (services and products) produced divided by the values of input resources (wages, cost of equipment, and so on) used: Productivity
!utput Input
It is interesting and even surprising to compare productivity improvements in the service and manufacturing sectors. In the last few decades, employment in the service sector has grown rapidly, outstripping the manufacturing sector, but service sector productivity gains have been much lower. If productivity growth in the service sector stagnates, so does the overall standard of living regardless of which part of the world you live in. "he way processes are managed plays a #ey role in productivity improvement. $anagers must e%amine productivity from the level of the supply chain because it is the collective performance of individual processes that ma#es the difference. "he challenge is to increase the value of output relative to the cost of input. If processes can generate more output or output of better quality using the same amount of input, productivity increases. If they can maintain the same level of output while reducing the use of resources, productivity also increases.
Productivity Improvement
Productivity is a basic measure of performance for economies, industries, firms and processes. Improving productivity is a major trend in operations management because all firms face pressures to improve their processes and supply chains so as to compete with their domestic and foreign competitors. Productivity is the value of outputs (services and products) produced divided by the values of input resources (wages, cost of equipment, and so on) used: Productivity
!utput Input
It is interesting and even surprising to compare productivity improvements in the service and manufacturing sectors. In the last few decades, employment in the service sector has grown rapidly, outstripping the manufacturing sector, but service sector productivity gains have been much lower. If productivity growth in the service sector stagnates, so does the overall standard of living regardless of which part of the world you live in. "he way processes are managed plays a #ey role in productivity improvement. $anagers must e%amine productivity from the level of the supply chain because it is the collective performance of individual processes that ma#es the difference. "he challenge is to increase the value of output relative to the cost of input. If processes can generate more output or output of better quality using the same amount of input, productivity increases. If they can maintain the same level of output while reducing the use of resources, productivity also increases.
