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Measures Of Productivity And Ways Of Improving A Work Center's Productivity Case Study

Productivity is the relationship between and enterprise's output and its inputs. High productivity implies that resources (inputs) are being efficiently utilized to produce output. For a logistics company dealing in the storage and movement of materials, productivity can be measured on the basis of: Volume of Materials -- the volume of materials being shipped or stored at any one time should tally with the costs (resources) incurred for such shipment and storage. Costs such as warehouse rent and insurance would be constant regardless of the amount of material stored, in which case productivity would be higher if the volume of material efficiently utilizes the available space.

Volume of Rework -- repeated work would translate to higher input costs at relatively constant output levels. Furthermore, the time used up in rework could otherwise have been put to more productive value-adding activities. This implies that the higher the volume of rework, the lower the productivity index.

Volume of Rejects: in addition to taking up warehouse space, rejects cause a firm to incur...

Larger volumes of rejects and higher frequencies of rejection translate to higher operational costs and a lower productivity index.
Frequency of late deliveries - late deliveries are a sign of an underlying problem, which could be anything from a higher number of customers than the organization can handle to a high employee absenteeism rate. Regardless of the cause, late deliveries are a sign of inefficiency, and obviously, low productivity.

Work-related accidents: while accidents may sometimes be unavoidable and unpredictable, a high number of work-related accidents could be a sign of carelessness, or a result of inadequate training. All in all, accidents impact on progressiveness and work productivity.

Profits: profits are the surest manifestation of business success. Although they may not be an indication of efficiency, profits show that things are being done right, and the firm is, hence, generating high revenues and incurring fewer costs. To this end, a…

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