Productivity
IE11
Work Study and Measurement
James Louie R. Meneses, PhD, CIE, AAE
Learning Objectives
At the end of the lesson, the student must be
able to:
•Define productivity
•solve productivity problems using single-factor
and multi-factor
Productivity Challenge
Productivity is the ratio of outputs (goods
and services) divided by the inputs
(resources such as labor and capital)
The objective is to improve
productivity!
Important Note!
Production is a measure of
output only and not a measure
of efficiency
Improving Productivity at Starbucks
A team of 10 analysts
continually look for ways to
shave time. Some
improvements:
Stop requiring signatures Saved 8 seconds
on credit card purchases per transaction
under $25
Change the size of the ice Saved 14 seconds
scoop per drink
New espresso machines Saved 12 seconds
per shot
Improving Productivity at Starbucks
A team of 10 analysts continually
look for ways to shave time. Some
improvements:
Operations improvements have
helped Starbucks increase yearly
Stop requiring revenue per outlet
signatures by $200,000
Saved 8 secondsto
$940,000 in six years.
on credit card purchases per transaction
under $25 Productivity has improved by 27%,
orof
Change the size about 4.5% per
the ice year. 14 seconds
Saved
scoop per drink
New espresso machines Saved 12 seconds
per shot
Productivity
Units produced
Productivity =
Input used
Measure of process improvement
Represents output relative to input
Only through productivity increases can our
standard of living improve
Productivity Calculations
Labor Productivity
Units produced
Productivity =
Labor-hours used
1,000
= = 4 units/labor-hour
250
One resource input single-factor productivity
Multi-Factor Productivity
Output
Productivity =
Labor + Material + Energy +
Capital + Miscellaneous
Also known as total factor productivity
Output and inputs are often expressed
in dollars
Multiple resource inputs multi-factor
productivity
Collins Title Productivity
Old System:
Staff of 4 works 8 hrs/day 8 titles/day
Payroll cost = $640/day Overhead = $400/day
8 titles/day
Old labor = = .25 titles/labor-hr
productivity 32 labor-hrs
Old System:
Staff of 4 works 8 hrs/day 8 titles/day
Payroll cost = $640/day Overhead = $400/day
New System:
14 titles/day Overhead = $800/day
Old labor = 8 titles/day = .25 titles/labor-hr
productivity 32 labor-hrs
New labor = 14 titles/day = .4375 titles/labor-hr
productivity 32 labor-hrs
Old System:
Staff of 4 works 8 hrs/day 8 titles/day
Payroll cost = $640/day Overhead = $400/day
New System:
14 titles/day Overhead = $800/day
Old multifactor = 8 titles/day = .0077 titles/dollar
productivity $640 + 400
New multifactor = 14 titles/day = .0097 titles/dollar
productivity $640 + 800
Productivity Example
1. A foundry produces circular utility access hatches
(manhole covers). If 120 covers are produced in a
10-hour shift, the productivity of the line is?
a. 1.2 covers/hr
b. 2 covers/hr
c. 12 covers/hr
d. 1200 covers/hr
e. none of the above
Productivity Example
2. A foundry produces circular utility access
hatches (manhole covers). Currently, 120 covers are
produced in a 10-hour shift. If labor productivity can
be increased by 20%, it would then be
a. 14.4 covers/hr
b. 24 covers/hr
c. 240 valves/hr
d. 1200 covers/hr
e. none of the above
Productivity Example
3. Susan has a part-time "cottage industry" producing
seasonal plywood yard ornaments for resale at local craft
fairs and bazaars. She currently works 8 hours per day to
produce 16 ornaments.
a. What is her productivity?
b. She thinks that by redesigning the ornaments and
switching from use of a wood glue to a hot-glue gun she can
increase her total production to 20 ornaments per day. What
is her new productivity?
c. What is her percentage increase in productivity?
Productivity Example
4. Gibson Valves produces cast bronze valves on an
assembly line, currently producing 1600 valves
each 8-hour shift. If the productivity is increased by
10%, it would then be?
Productivity Example
5. A firm cleans chemical tank cars in the Bay St. Louis area. With
standard equipment, the firm typically cleaned 70 chemical tank cars
per month. They utilized 10 gallons of solvent, and two employees
worked 20 days per month, 8 hours a day. The company decided to
switch to a larger cleaning machine. Last April, they cleaned 60 tank cars
in only 15 days. They utilized 12 gallons of solvent, and the two
employees worked 6 hours a day.
1. What was their productivity with the standard equipment?
2. What is their productivity with the larger machine?
3. What is the change in productivity?
End of Presentation
