Productivity: Standard Of Living Definition Of Productivity
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Productivity
Standard of living Definition of productivity
Standard of living
The extent to which a person is able to provide the things that are necessary for sustaining and enjoying life. Standard of living of a representative family differs greatly in different parts of the world. What is considered a necessity in one part of the world could be considered a luxury in the other. Basic necessities of a minimum decent standard of living: Food, clothing, housing and hygiene. Also, security and education also considered constituents. Greater the amount of goods and services produced in any community, the higher its the average standard of living. Compiled by Mrs.Reena Pant
2
Standard of living There are two ways of increasing the amount of goods and services produced: - Increase the employment and investment in creating jobs. So that more people are producing goods required for the society. - Increase productivity. Same amount of labor produces more goods. We want: More and cheaper food by increase in agricultural productivity More and cheaper clothing and housing by increased industrial productivity More hygiene, security and education by increasing overall productivity.
Compiled by Mrs.Reena Pant
3
Productivity
Ratio between output and input. Arithmetic ratio between the amount produced and the amount of any resources used in the production. The resources may be: land, material, plant, machines, tools, labor. It could be combination of all! Over a period of time, one can say that productivity has increased.
How? Combination of improved technology, better planning, greater skills etc. Compiled by Mrs.Reena Pant
4
Productivity
Note that, increased production does not mean increased productivity. Higher productivity means that more is produced with the same expenditure of resources; that is, at the same cost in terms of land, material, machine, time or labor. Alternatively, same amount is produced at less cost in terms of land, labor, material etc; thereby releasing some of these resources for the production of other things.
Compiled by Mrs.Reena Pant
5
Productivity and standard of living
1. 2. 3. 4.
If more is available at the same cost, or the same amount is available at lesser cost the whole community benefits. As per the ILO, higher productivity provides ways for raising the standard of living by: Larger supplies of both consumer goods and capital goods at lower cost and prices Higher real earnings Improvement in working conditions, e.g. by reduced working hours In general, strengthening of the economic foundations of human well-being. Compiled by Mrs.Reena Pant
6
Allocation of Total Task Time
Compiled by Mrs.Reena Pant
7
Productivity in industry
Many factors affecting productivity of each organization; also, they are dependent. Depending on the individual environments, decisions are to be made. Industries where labor and capital costs are low compared to the material costs, better use of material and plant gives the greatest scope of cost reduction. In countries where capital and skilled labor are in shortage compared to unskilled labor, one should look to increase the output per machine or per skilled worker. Increasing the number of unskilled workers may be beneficial if by doing so an expensive machine or skilled craftsmen are enabled to increase production. Compiled by Mrs.Reena Pant
8
Government’s responsibility
1. 2. 3.
Government can create conditions favorable to raise productivity. It can: Have a balanced programs of economic development Take steps necessary to maintain employment Make opportunities for employment. Last step is specifically important for a developing country like India. Government should make provisions for workers who are going to loose jobs because of technology improvement – training and education programs. Example: India’s First Five-Year Plan (1952). Compiled by Mrs.Reena Pant
9
Management’s responsibility
The main responsibility for raising productivity in an individual organization lies with the management. It can implement productivity programs. It can create a positive environment and obtain cooperation of the employees. Trade unions should encourage its members to provide such co-operation when the productivity program is beneficial to workers, as well as the organization on the whole. We will look at management’s role in increasing productivity of individual resource: Compiled by Mrs.Reena Pant
10
Productivity of material At the design stage: Ensure least consumption of material, Purchase equipments and plants consumption of material is economical.
such
that
At the operation stage: Use of correct process Right use of the process Operator training Proper handling and storage of products at all stages Proper packaging to reduce damage in transit Compiled by Mrs.Reena Pant
11
Productivity of land, machines and manpower
Effective utilization and maximum productivity is an important source of cost reduction. Reduction in the original specification, before the land is purchased saves capital outlay (as well as interest expenses) A savings in material which has to be imported saves import duty and excise. Productivity of manpower and machines is typically measured in terms of time (man-hours; machinehours). Compiled by Mrs.Reena Pant
12
Factors tending to reduce productivity Work content added due to the product The product or its components are designed such that it is impossible to use most economical manufacturing processes. Excessive variety or lack of standardization. Incorrect quality standards. Excessive amount of material removal required. Compiled by Mrs.Reena Pant
13
Factors tending to reduce productivity Work content added due to process Incorrect machine (and/or hand tool) used Process not operated properly Non-optimal layout with wasted movements. Working methods of operation causing wasted movements, time and efforts. Compiled by Mrs.Reena Pant
14
Factors tending to reduce productivity Ineffective time due to management Marketing policy which demands unnecessarily large number of products. No standardization of components between as well as within products. Failing to meet customer’s requirement from the beginning. No plan for flow of work. Improper supply of material, equipment. Improper maintenance of plant and machines. Insufficient safety measures. Improper working conditions resulting in interrupted work. Compiled by Mrs.Reena Pant
15
Factors tending to reduce productivity Ineffective time within the control of worker Taking time off without good cause: by lateness, by idling at work etc. Careless workmanship causing scrap or rework. Failing to observe safety standards. Compiled by Mrs.Reena Pant
16
Management techniques to reduce work content
Nature of management
Management is the organization and control of human activity directed towards specific ends. Management techniques are systematic procedures of investigation, planning and control which can be applied to management problems. Systematic approach to the solution of the problems proceeds step by step from known to the unknown, always on the basis of ascertained facts. Since management deals with human beings, it can never be completely scientific, and must partly be regarded as an art. Compiled by Mrs.Reena Pant
18
Reduce work content due to the product Coupling of product design and process design phases (design products such that most economical processes can be used). Pilot project/ prototyping to avoid mistakes at a advanced stage (very common in chemical companies). Standardization of components. Setting correct quality standards Stricter standards lead to increased manufacturing time, lenient standards lead to greater variability. Knowing the customer – Management should conduct market research and consumer surveys to know the customer better. Compiled by Mrs.Reena Pant
19
Reduce work content due to the method
Process planning – Identification of correct machines for the process. In chemical industry, this is specified by the R&D division or the license seller. Process research – Identification of best manufacturing technique. Proper maintenance. Method study – Combine with process planning to give most suitable tools for the operative. Includes factory layout, working methods of the operative. Operator training – Improve working methods of the operative. Compiled by Mrs.Reena Pant 20
Reduce ineffective time due to the management
Strategic decisions – Which markets to enter can affect ineffective time to a great extent. Production planning – It is planning of proper programs of work so that plant and workers are kept supplied without having to wait. Proper programs should be applied only on the basis of sound standards of performance. Work measurement – Setting up those standards. Material control – Workers and machines should not be idle because of non-availability of material and tools. Compiled by Mrs.Reena Pant
21
Reduce ineffective time within control of the worker
Training. Make worker want to reduce ineffective time. (Create conditions to make the worker get on with his work. Hawthorne effect) Effective personnel policy and management’s attitude towards the worker. Good relationship between management and worker. A sound wage structure, including incentive schemes (typically based on time standards derived from work measurement). Compiled by Mrs.Reena Pant
22
Standard of living Definition of productivity
Standard of living
The extent to which a person is able to provide the things that are necessary for sustaining and enjoying life. Standard of living of a representative family differs greatly in different parts of the world. What is considered a necessity in one part of the world could be considered a luxury in the other. Basic necessities of a minimum decent standard of living: Food, clothing, housing and hygiene. Also, security and education also considered constituents. Greater the amount of goods and services produced in any community, the higher its the average standard of living. Compiled by Mrs.Reena Pant
2
Standard of living There are two ways of increasing the amount of goods and services produced: - Increase the employment and investment in creating jobs. So that more people are producing goods required for the society. - Increase productivity. Same amount of labor produces more goods. We want: More and cheaper food by increase in agricultural productivity More and cheaper clothing and housing by increased industrial productivity More hygiene, security and education by increasing overall productivity.
Compiled by Mrs.Reena Pant
3
Productivity
Ratio between output and input. Arithmetic ratio between the amount produced and the amount of any resources used in the production. The resources may be: land, material, plant, machines, tools, labor. It could be combination of all! Over a period of time, one can say that productivity has increased.
How? Combination of improved technology, better planning, greater skills etc. Compiled by Mrs.Reena Pant
4
Productivity
Note that, increased production does not mean increased productivity. Higher productivity means that more is produced with the same expenditure of resources; that is, at the same cost in terms of land, material, machine, time or labor. Alternatively, same amount is produced at less cost in terms of land, labor, material etc; thereby releasing some of these resources for the production of other things.
Compiled by Mrs.Reena Pant
5
Productivity and standard of living
1. 2. 3. 4.
If more is available at the same cost, or the same amount is available at lesser cost the whole community benefits. As per the ILO, higher productivity provides ways for raising the standard of living by: Larger supplies of both consumer goods and capital goods at lower cost and prices Higher real earnings Improvement in working conditions, e.g. by reduced working hours In general, strengthening of the economic foundations of human well-being. Compiled by Mrs.Reena Pant
6
Allocation of Total Task Time
Compiled by Mrs.Reena Pant
7
Productivity in industry
Many factors affecting productivity of each organization; also, they are dependent. Depending on the individual environments, decisions are to be made. Industries where labor and capital costs are low compared to the material costs, better use of material and plant gives the greatest scope of cost reduction. In countries where capital and skilled labor are in shortage compared to unskilled labor, one should look to increase the output per machine or per skilled worker. Increasing the number of unskilled workers may be beneficial if by doing so an expensive machine or skilled craftsmen are enabled to increase production. Compiled by Mrs.Reena Pant
8
Government’s responsibility
1. 2. 3.
Government can create conditions favorable to raise productivity. It can: Have a balanced programs of economic development Take steps necessary to maintain employment Make opportunities for employment. Last step is specifically important for a developing country like India. Government should make provisions for workers who are going to loose jobs because of technology improvement – training and education programs. Example: India’s First Five-Year Plan (1952). Compiled by Mrs.Reena Pant
9
Management’s responsibility
The main responsibility for raising productivity in an individual organization lies with the management. It can implement productivity programs. It can create a positive environment and obtain cooperation of the employees. Trade unions should encourage its members to provide such co-operation when the productivity program is beneficial to workers, as well as the organization on the whole. We will look at management’s role in increasing productivity of individual resource: Compiled by Mrs.Reena Pant
10
Productivity of material At the design stage: Ensure least consumption of material, Purchase equipments and plants consumption of material is economical.
such
that
At the operation stage: Use of correct process Right use of the process Operator training Proper handling and storage of products at all stages Proper packaging to reduce damage in transit Compiled by Mrs.Reena Pant
11
Productivity of land, machines and manpower
Effective utilization and maximum productivity is an important source of cost reduction. Reduction in the original specification, before the land is purchased saves capital outlay (as well as interest expenses) A savings in material which has to be imported saves import duty and excise. Productivity of manpower and machines is typically measured in terms of time (man-hours; machinehours). Compiled by Mrs.Reena Pant
12
Factors tending to reduce productivity Work content added due to the product The product or its components are designed such that it is impossible to use most economical manufacturing processes. Excessive variety or lack of standardization. Incorrect quality standards. Excessive amount of material removal required. Compiled by Mrs.Reena Pant
13
Factors tending to reduce productivity Work content added due to process Incorrect machine (and/or hand tool) used Process not operated properly Non-optimal layout with wasted movements. Working methods of operation causing wasted movements, time and efforts. Compiled by Mrs.Reena Pant
14
Factors tending to reduce productivity Ineffective time due to management Marketing policy which demands unnecessarily large number of products. No standardization of components between as well as within products. Failing to meet customer’s requirement from the beginning. No plan for flow of work. Improper supply of material, equipment. Improper maintenance of plant and machines. Insufficient safety measures. Improper working conditions resulting in interrupted work. Compiled by Mrs.Reena Pant
15
Factors tending to reduce productivity Ineffective time within the control of worker Taking time off without good cause: by lateness, by idling at work etc. Careless workmanship causing scrap or rework. Failing to observe safety standards. Compiled by Mrs.Reena Pant
16
Management techniques to reduce work content
Nature of management
Management is the organization and control of human activity directed towards specific ends. Management techniques are systematic procedures of investigation, planning and control which can be applied to management problems. Systematic approach to the solution of the problems proceeds step by step from known to the unknown, always on the basis of ascertained facts. Since management deals with human beings, it can never be completely scientific, and must partly be regarded as an art. Compiled by Mrs.Reena Pant
18
Reduce work content due to the product Coupling of product design and process design phases (design products such that most economical processes can be used). Pilot project/ prototyping to avoid mistakes at a advanced stage (very common in chemical companies). Standardization of components. Setting correct quality standards Stricter standards lead to increased manufacturing time, lenient standards lead to greater variability. Knowing the customer – Management should conduct market research and consumer surveys to know the customer better. Compiled by Mrs.Reena Pant
19
Reduce work content due to the method
Process planning – Identification of correct machines for the process. In chemical industry, this is specified by the R&D division or the license seller. Process research – Identification of best manufacturing technique. Proper maintenance. Method study – Combine with process planning to give most suitable tools for the operative. Includes factory layout, working methods of the operative. Operator training – Improve working methods of the operative. Compiled by Mrs.Reena Pant 20
Reduce ineffective time due to the management
Strategic decisions – Which markets to enter can affect ineffective time to a great extent. Production planning – It is planning of proper programs of work so that plant and workers are kept supplied without having to wait. Proper programs should be applied only on the basis of sound standards of performance. Work measurement – Setting up those standards. Material control – Workers and machines should not be idle because of non-availability of material and tools. Compiled by Mrs.Reena Pant
21
Reduce ineffective time within control of the worker
Training. Make worker want to reduce ineffective time. (Create conditions to make the worker get on with his work. Hawthorne effect) Effective personnel policy and management’s attitude towards the worker. Good relationship between management and worker. A sound wage structure, including incentive schemes (typically based on time standards derived from work measurement). Compiled by Mrs.Reena Pant
22
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