Productivity, Competitiveness, and Strategy
Chapter 2
Stevenson
Productivity
What is productivity?
Related to standard of living
Productivity = Outputs/Inputs
Partial measures - single input
Multifactor measures - multi-inputs
Total measures - all inputs
Productivity Measures
Effective use of resources - scorecard
Compare people, departments, companies, and nations
Track performance over time
Must be compared to a previous period
Measuring is not always easy
Other factors may distort productivity
Approximate indicators, not precise
Factors Affecting Productivity
- Capital
- Technology
- Quality
- Management
- Methods
- Not always the workers
- All are potential sources of productivity
People and Technology
- Productivity gains do not necessarily come from:
- making people work harder
- buying new technology
- Productivity improvement requires careful and strategic planning
Improving Productivity
Develop measures
Quantifiable, documentable, understandable
Identify critical operations
Systems approach
Bottlenecks
Develop methods for improvement
Worker involvement
Teamwork
Improving Productivity
Establish reasonable goals
Get management support
Not the fad of the week
Incentives
Measure & publicize improvements
Don’t confuse productivity with efficiency
Competitiveness
How effectively customer’s needs are met compared to others
Arenas of competition
Price
Quality - materials, workmanship, design
Product differentiation - special features
Flexibility - volume and design
Time - delivery, time to market
Poor competitiveness
Short term horizons
Strategic short-sightedness
Departmental non-cooperation
Neglect operations strategies
Neglecting investments in capital and human resources
Emphasis on products and not processes
Not heeding the voice of the customer
Strategy
Mission - reason for existence
Strategy - plan for achieving goals
Organization
Functional
Operational
Tactics - how to, methods and actions
Operations - doing it
Planning & Decision Making
Strategy Formulation
Distinctive competencies
Special attributes or abilities
Environmental scanning
Threats or opportunities
External and internal, pp. 51-52
New strategies
Quality-based
Final product, design, production, service after sale
Time-based - reduce time to accomplish activities
Examples - page 52
Problems for Ch. 2
You should be able to solve problems:
1 - 4
True or False
Productivity can be increased by making people work harder.
Tracking productivity measures of time provides little important information
Competitiveness is not related to productivity
Wage increases associated with productivity increases exert a reduced effect on the economy
Operational decisions occur at the higher levels of management
Operational decisions are generally narrow in scope
True or False
Productivity is expressed as input over output
Multifactor productivity reflects a combination of inputs
Fill it in
What factors affect productivity?
The purpose of an organization is expressed by its:
Time-based approaches to productivity and competitiveness include:
Three employees assembled 225 workstations in a week. Calculate the labor productivity.
Partial measures of productivity would most relate to: