What Factors Must Be Considered When Calculating Productivity?
- For increases in productivity to be useful to business owners, they need to be quantifiable. Reliable and consistent records of manufacturing inputs and outputs are essential for a business to be able to track its productivity levels and know whether it is improving or not. Campaigns to increase productivity begin with a comprehensive survey and analysis of levels of productivity and waste. Once this baseline has been established, improvements can be measured and different tactics and programs can be analyzed to determine their effectiveness. In this way, the move toward higher efficiency can itself be made as efficient as possible.
- Waste is the enemy of productivity. Measuring and reducing waste is one way to analyze and improve productivity, because any input that isn't being wasted is contributing to productivity. Waste may be found within the physical plant in the form of inefficient buildings, production techniques that create large amounts of trash, or machines and appliances that run poorly. Waste is also found in the human realm; unmotivated staff who don't work hard, tasks that are duplicated unnecessarily and poorly trained workers all contribute to keeping productivity down. An analysis of waste levels and how to decrease them should be a central part of any baseline productivity analysis.
- Some business owners, when they decide to increase their productivity, think that they can do this by simply doing more of what they were doing before. If what they were doing is flawed, however, they will only be making their mistakes larger. Working smarter involves finding more-efficient ways to augment productivity. In some cases this may mean doing less of something rather than more, or changing elements of the business altogether. Measuring productivity in a creative and open-minded way allows managers and owners to see their tasks in a new light and to increase the intelligence of their business, rather than merely working harder.
- Productivity is the gap between input and output. The larger this gap is, the higher the productivity levels are. Productivity can be increased by decreasing output more slowly than input, increasing input more slowly than output, or, ideally decreasing input and increasing output. A large part of productivity measurement is simply keeping track of the exact size of the gap between input and output. When waste is decreased, this gap is enlarged, because a larger percentage of input is being used productively.
