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Competitiveness, Strategy and Productivity: Prepared By: Maria Socorro M. Bunda

Here are the steps to solve the examples: 1a) Labor productivity = Output/Labor hours = 100,000 units/ 10,000 hours = 10 units/hour 1b) Multifactor productivity = Output/Total inputs spent = 100,000 units/($35,000 + $15,000 + 10*10,000 + 5,000*10) = 100,000/170,000 = 0.588 units/$ 2a) Old system: Labor productivity = Output/Labor = 80 carts/hour/5 workers = 16 carts/worker-hour New system: Labor productivity = Output/Labor = 84 carts

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Krislyn Ann Austria Alde
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39 views18 pages

Competitiveness, Strategy and Productivity: Prepared By: Maria Socorro M. Bunda

Here are the steps to solve the examples: 1a) Labor productivity = Output/Labor hours = 100,000 units/ 10,000 hours = 10 units/hour 1b) Multifactor productivity = Output/Total inputs spent = 100,000 units/($35,000 + $15,000 + 10*10,000 + 5,000*10) = 100,000/170,000 = 0.588 units/$ 2a) Old system: Labor productivity = Output/Labor = 80 carts/hour/5 workers = 16 carts/worker-hour New system: Labor productivity = Output/Labor = 84 carts

Uploaded by

Krislyn Ann Austria Alde
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Competitiveness,

Strategy and
Productivity
Prepared by: Maria Socorro M. Bunda
Competitiveness relates to how effective an
organization is in the marketplace compared with
other organizations that offer similar products or
services.

Strategy relates to the plans that determine the


direction an organization takes in pursuing its goal.

Productivity relates to effective use of resources.


Competitiveness

Business organizations compete with one another in a variety of ways:


1. Price is the amount a customer must pay for the product or service.
2. Quality refers to materials and workmanship as well as design.
3. Product or service differentiation refers to any special features that cause a
product or service to be perceived by the buyer as more suitable than a
competitor’s product or service.
4. Flexibility is the ability to respond to changes.
5. Time refers to a number of different aspects of an organization’s operations.
6. Service might involve after-sale activities that are perceived by the customers as
value-added.
7. Managers and workers are the people at the heart and soul of an organization.
Strategy a plan for achieving organizational goals.

Mission the reason for existence of an organization.

Mission statement a statement of purpose that serves as a guide for strategy and decision making.

Tactics the methods and actions to accomplish strategies.

Operations strategy the approach, consistent with the organization strategy, that is used to guide the operations function.
Strategy Formulation

1. Order qualifiers. Characteristics that customers perceive as minimum


standards of acceptability to be considered as a potential for purchase.
2. Order Winners. Characteristics of an organization’s goods or services tha
cause it to be perceived as better than the competition.
3. Distinctive Competencies. The special attributes or abilities that give an
organization a competitive edge.
4. Environmental Scanning. The considering of events and trends that present
threats or opportunities for a company.
Quality and Time Strategies

 Quality-based Strategy. Strategy that focuses on


quality in all phases of an organization.
 Time-based Strategy. Strategy that focuses on
reduction of time needed to accomplish tasks.
Organizations have achieved Time
Reduction in some of the following:
 Planning time. The time needed to react to a competitive threat, to develop
strategies and select tactics, to approve proposed changes to facilities, to
adopt new technologies, and so on.
 Product/service design time. The time needed to develop and market new or
redesigned products or services.
 Processing time. The time needed to produce goods or provide services.
 Changeover time. The time needed to change from producing of one type of
product or service to another.
 Delivery time. The time needed to fill orders.
 Response time for complaints. These might be customer complaints about
quality, timing of deliveries, and incorrect shipments.
PRODUCTIVITY

is a process whereby an organization effectively and efficiently converts


its resources into products and services it offers for sale

RESOURCES
can be classified as labor, capital, energy, and materials

Productivity

is a creation of surplus through productive operations


it is define as the output-input ratio within a time period with the
consideration for quality

output
Productivity =
input
PRODUCTIVITY GROWTH

is the increase in productivity from one period to the next, relative to the
productivity in the preceding period

current period previous period productivity


Productivity Growth =
previous period productivity

quality of production at standard price


Multifactor Productivity =
labor cost + material cost +overhead cost
Productivity measures are useful to the following:

To track performance over time

To determine what has changed


and then devise means of improving
productivity in the subsequent
periods

To judge the performance of an


entire industry or the productivity
if a country as a whole
EFFECTIVENESS

is the achievement of objectives


the extent to which goals are achieved, concerned with the results or the
outputs of a system
measures the degree of a goal’s attainment

EFFICIENCY

is the achievement of the ends with the least amount of resources


it measures how well resources are being utilized
Factors that Affect Productivity

Methods

Capital

Quality

Technology

Management

Raw materials

Equipment

Working condition or environment


PRODUCTIVITY MEASUREMENT

SINGLE FACTOR PRODUCTIVITY


indicate the ratio of one resource (input) to the goods or services
(output)

output
Productivity =
labor

output
Productivity =
materials

output
Productivity =
capital

Productivity = output

energy
PRODUCTIVITY MEASUREMENT

MULTIFACTOR PRODUCTIVITY

indicate the ratio of many or all the resources (inputs) to the goods and
services produced (output)

output
Multifactor Productivity =
labor + material + overhead

output
Multifactor Productivity =
labor + energy + capital

output
Multifactor Productivity =
labor + machine
PRODUCTIVITY MEASUREMENT

TOTAL FACTOR PRODUCTIVITY

indicate the ratio of total resources (input) to the


goods and services produced (outputs)

goods and services produced


Total Factor Productivity =
all inputs used to produce them
Example:

1. Osborne industries is compiling the monthly productivity report for the


Board of Directors. From the following data, calculate a) labor productivity
b) the multifactor productivity of dollars spent on labor machine, materials
and energy. The average labor rate is 15 and hour and the average
machine usage rate is 10 an hour.

Given:

Units produced - 100000


Labor hours - 10000
Machine hours - 5000
Cost of materials - $35,000
Cost of energy - $15,000
Example:

2. A company that makes shopping carts for supermarket and other


stores recently purchased some new equipment that reduces the labor
content of the job needed to produce the shopping carts. Prior to
buying the new equipment, the company used 5 workers, who
produce an average of 80 carts per hour. Labor cost was 10 per hour
and machine cost was 40 per hour. With the new equipment, it is
possible to transfer one of the workers to another department and
equipment cost increased by 10 per hour while output increased by 4
carts per hour.

a) Compute for labor productivity under each system.


b) Compute for multifactor productivity under each system.

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