PTTQM (BU-3)

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SUBJECT: PRODUCTIVITY TECHNIQUES & TOTAL QUALITY MANAGEMENT

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1. What is productivity?
Productivi ty =

Outputs
Inputs
Productivity is a measure of the effective use of resources, usually

expressed as the ratio of output to input.

2. Distinguish between production and productivity.

Point of

Productivity

Production

It is defined as the rate at which

It is defined as the act of manufacturing

goods are produced.

It is the utilization of resources

goods for their use or sale.

Difference
Definition
Use
Work done
Measurement

to form goods.
It is the amount of work one

It is the actual process of conversion.

It is the amount of work done or

gets for a certain spending cost.

manufactured that is the output.

It is the measure of efficiency.

It is the measure of produced goods.

3. Mention the use of productivity ratios.

Productivity ratios are used for
Planning workforce requirements
Scheduling equipment
Financial analysis
4. Distinguish between efficiency and effectiveness.
Efficiency is determined by the amount of time, money, and energy i.e. resources that are
necessary to obtain certain results. In order to meet our daily production quota, we commit a
specific machine that uses up energy, make operators and maintenance personnel available,
and provide raw materials. For example, if we are able to meet our daily production with less
energy and fewer operators, we have operated more efficiently.
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Effectiveness is determined by comparing what a process or installation can produce with

what they actually produce; therefore, effectiveness does not tell anything about the
efficiency the amount of resources that have to be committed to obtain that output. If we are
successful in manufacturing better product in the same time period, effectiveness will
increase. A valuable discussion could be whether good product should be seen as Good
product with customer demand to prevent over-production.

Productivity is determined by looking at the production obtained (effectiveness) versus the

invested effort in order to achieve the result (efficiency); in other words, if we can achieve
more with less effort, productivity increases.

5. How do you measure productivity?

Productivity measurement
Since productivity is measured as a ratio of output to input, we have various measures of
productivity depending on whether a single input is used or multiple inputs are used. When
just one resource (such as labour or capital or material) is used, the productivity is referred to
as single factor or partial productivity.

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When input consists of several factors such as land, labour, capital, material, machine, energy
etc., productivity is referred to as multifactor or total productivity.
Partial measures
Output / labor, Output / Machine, Output / Capital, Output / Energy
Multifactor measures
Output / Labor + Machine, Output / Labor + Capital + Energy
Total measure
Output / All inputs used to produce them
Productivity measures are useful on a number of levels. For an individual department or
organization, productivity measures can be used to track performance over time.
This allows managers to judge performance and to decide where improvements are needed.
For example, if productivity has slipped in a certain area, operations staff can examine the
factors used to compute productivity to determine what has changed and then devise a means
of improving productivity in subsequent periods.
Productivity measures also can be used to judge the performance of an entire industry or the
productivity of a country as a whole.
These productivity measures are aggregate measures. In essence, productivity measurements
serve as scorecards of the effective use of resources.
6. Explain the factors affecting productivity.
Factors affecting productivity
Capital
Quality
Technology
Management
Other factors affecting productivity
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Standardization

Use of Internet

Searching for lost or misplaced items

Scrap rates

Safety

Shortage of IT workers

Layoffs

Labor turnover

Design of the workspace

Incentive plans that reward productivity

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7. Explain the ways of increasing productivity.

Many companies have formal programs for improving productivity. Whether they have a
formal program or not, companies are constantly looking for ways to improve quality, and
reduce downtime and inputs of labor, materials, energy, and purchased services. Simple
changes to operating methods or processes often increase productivity, such as the
implementation of assembly lines. The biggest gains normally come from adopting new
technologies, which may require capital expenditures for new equipment, computers, or
software. Some ways to increase productivity:
1. Reducing rejections and rework
2. Reducing cycle time
3. Reducing setup time
4. Reducing wasted time by method study
5. Good training
6. Automation
8. What is learning curve? Explain.
Workers take more time in the beginning when the task or product is new. As they gain
experience their performance improves. The reduction in time taken is drastic in the
beginning, tapers off and finally the time taken is constant.
There are mathematical models to estimate the time taken such as :

Arithmetic analysis

Logarithmic analysis

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Typical learning curve is as below

Time taken

No. of components

9. What is job design? Explain.

Job design specifies a jobs content, the employee skills and training needed to perform that
job and the degree of specialization appropriated for the job. Job design aims to organize
tasks, duties and responsibilities into a unit of work.
The objective may be:

To increase Productivity

To reduce costs.

job satisfaction

motivation

Poor job design may lead to

Lower productivity

High attrition rate

Absenteeism

Complaints

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Sabotage

10. State the objectives of job design.

Objectives of Job design
Technical feasibility Jobs (set of tasks) should be able to be performed by the person (s)
with y the equipments and systems available.
Economic feasibility cost of performing the job should \be as low as possible
Behavioral feasibility- motivation and mental simulation are considered.
11. Briefly explain the techniques of job design.
Techniques of Job design
Work simplification- Big job is broken down into small parts and assigned to one employee.
Less trained or less skilled persons can do the job. This may also result
in highly repetitive jobs and less job satisfaction.
Job rotation

- Persons are assigned different jobs at different times. It reduces boredom,

monotony and exposes employees to different aspects of the process.

Job enlargement

Adding similar tasks to a job. It is done to add variety and

autonomy and to make work more meaningful.

Job enrichment

- tasks of planning, organizing and controlling are assigned along with

routine tasks. Objective is more involvement, motivation and
satisfaction.

12. What is ergonomics? Explain.

Ergonomics is concerned with designing of work situations with human characteristics in
mind.

Human and machine interfaces-

some considerations are : location on tools ,

switches, parts for assembly , controls, levers, push buttons, Working height, sitting
height, left hand and right hand operations, heights at which readings are taken,
weights lifted, forces applied , direction of force .

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Environmental factors which affect morale, productivity, quality and long term
heath problems. Ambient temperature (26-38 degree C), Noise (< 90 dB), Lighting
( 100 ft-candles Machines), vibrations, air circulation, comfortable furniture.

13. How do you measure productivity in direct and indirect areas?

Productivity is a measure of the efficiency of production. Productivity is a ratio of production
output to the input required to produce it. The measure of productivity is defined as a total
output per one unit of a total input.
At the plant level, input statistics are commonly kept as monetary units, weights or volumes
of raw or semi-finished materials, kilowatt hours of power, and worker hours. It is therefore
tracked as sets of partial productivity, such as kilowatt-hours per ton or yield (weight of
output divided by weight of input), both of which are used in the chemical, refining, wood
pulp, and other process industries. Quality statistics such as defect rates are similarly tracked.
Summary reports are routinely issued to various departments and the department managers
are held accountable for managing inputs in their respective areas.
At the national level, productivity growth raises living standards because more real income
improves people's ability to purchase goods and services, enjoy leisure, improve housing and
education, and contribute to social and environmental programs. Productivity growth is
important to the firm because more real income means that the firm can meet its obligations
to customers, suppliers, workers, shareholders, and governments (taxes and regulation), and
still remain competitive or even improve its competitiveness in the marketplace.
Productivity is one of the main concerns of business management and engineering.
Practically all companies have established procedures for collecting, analyzing, and reporting
the data relevant to productivity. The accounting department typically has the overall
responsibility for collecting, organizing, and storing the data, which normally originates from
various departments.
14. Explain the sub-processes of a manufacturing company that affect productivity.
A manufacturing company can be divided into sub-processes and the following five are
identified as main processes, each with a logic, objectives, theory, and key figures of its own.
The main processes of a company are as follows:
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Real process

Income distribution process

Production process

Monetary process

Market value process

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Productivity is created in the real process and productivity gains are distributed in the income
distribution process; the real and income distribution processes constitute the production
process. The production process and its sub-processes, the real process and income
distribution process, occur simultaneously. Only the production process is identifiable and
measurable by traditional accounting practices. The real process and income distribution
process can be identified and measured. This is why they need to be analyzed separately in
order to understand the logic of production performance.
Real Process
Real process generates the production output from input, and it can be described by means of
the production function. It refers to a series of events in production in which production
inputs of different quality and quantity are combined into products of different quality and
quantity. Products can be physical goods, immaterial services, or combinations of both.
Income Distribution
Income distribution process refers to a series of events in which the unit prices of constantquality products and inputs change, causing an alteration in the income distribution among
those participating in the exchange. The magnitude of the change in income distribution is
directly proportionate to the change in prices of the outputs and inputs and to their quantities.
Productivity gains are distributed, for example, to customers as lower product sales prices,
which may lead to higher sales revenues, or to staff as higher wages, which gives them
additional income to spend.
Production Process

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Production process consists of the real process and the income distribution process. A result
and a criterion of success for the owner is profitability. The profitability of production is the
share of the real process result that the owner has been able to keep to himself in the income
distribution process (profits earned). Factors describing the production process are the
components of profitability, which are revenues and expenses.
Monetary and Market Value Processes
Monetary process refers to events related to financing the business and the inputs of
production. Market value process refers to a series of events in which investors determine the
market value of the company in the investment markets.
15. How productivity is important to the industry?
Productivity is the main determinant of living standards it quantifies how an economy uses
the resources it has available, by relating the quantity of inputs to output. As the adage goes,
productivity is not everything, but in the long run it is almost everything.
Higher productivity can lead to:
(1) Lower average costs: These cost savings might be passed onto consumers in lower prices,
encouraging higher demand, more output and an increase in employment.
(2) Improved competitiveness and trade performance: Productivity growth and lower unit
costs are key determinants of the competitiveness of British firms in global markets.
(3) Higher profits: Efficiency gains are a source of larger profits for companies which might
be re-invested to support the long term growth of the business.
(4) Higher wages: Businesses can afford higher wages when their workers are more efficient.
(5) Economic growth: If the British economy can raise the rate of growth of productivity then
the trend growth of national output can pick up.
At an industry level, productivity growth can be important to allow the
industry to compete with other sectors of the economy for resources
(labour,

capital

and

raw

materials)

and

maintain

international

competitiveness.
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It is important to note, however, that some sectors of the economy have

traditionally had low productivity growth but are vitally important to
aggregate productivity growth, for example, the health and education
sectors. The outcomes from these sectors become the inputs to all sectors
in the form of skilled, educated and healthy workers. This is also a
reminder that government policies which only focus on sectors exhibiting
productivity growth could be at the detriment of supporting productivity
growth as a whole.

Prof. Raghavendra, KSM, Bangalore

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