O'Reilly logo

Operations Management: An Integrated Approach, 5th Edition by Nada R. Sanders, R. Dan Reid

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

PRODUCTIVITY

Sound business strategy and supporting operations strategy make an organization more competitive in the marketplace. But how does a company measure its competitiveness? One of the most common ways is by measuring productivity. In this section we will look at how to measure the productivity of each of a company's resources as well as the entire organization.

Measuring Productivity

Recall that operations management is responsible for managing the transformation of many inputs into outputs, such as goods or services. A measure of how efficiently inputs are being converted into outputs is called productivity. Productivity measures how well resources are used. It is computed as a ratio of outputs (goods and services) to inputs (e.g., labor and materials). The more efficiently a company uses its resources, the more productive it is:

images Productivity

A measure of how efficiently an organization converts inputs into outputs.

images

This equation can be used to measure the productivity of one worker or many, as well as the productivity of a machine, a department, the whole firm, or even a nation. The possibilities are shown in Table 2-2.

images Total productivity

Productivity computed as a ratio ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required