Productivity Measurement and Enhancement

Most executives and employees have the mistaken assumption that if you make a profit you are productive. Our experience show that this is not always the case. Executives who make decisions based on this mistaken assumption see their organisations coming from being profitable to the brink and in some cases bankruptcy. Employees honestly demand better wages based on this mistaken assumption further pushing the organisation into bankruptcy. We help you discover whether your profits are driven by productivity or by price recovery. Knowing what drives your profitability helps you make better decisions in deploying cash coming from your profits. Traditional profit analysis does not lead to the same conclusions you will
make if you use this approach. We work with organisations who would want to increase their productivity. We will work with you to measure and put in place productivity enhancement mechanisms.

Productivity is a very common concept to the majority of the world populace, but how it is defined within different subgroups is not consistent. The term “productivity” is thrown around so much that it has almost lost all meaning. Most seem to use it as a substitute for the volume of work. To most modern audiences, “productivity” means the rate at which products are created or important work is completed. The European Association of National Productivity Centers (EANPC, 2005) defines productivity as how products and services are produced efficiently and effectively.

Generally speaking, productivity is often defined as a relationship between output generated by a system and the number of input factors used by the system to produce that output. The output can be any consequence of the system here, whether a product or a service, while input factors consist of any human and physical resources used in a process. It follows that the system must either produce more or better goods from the same resources or the same goods from fewer resources, to increase productivity. In other words, improvement in productivity refers to an increase in the ratio of goods or services produced to resources used.

Productivity would take into consideration both the amount of work completed and the quality of that work against the end goals. It is also essential to have a set amount of time for the work being completed to be examined. After all, it is next to pointless to monitor performance without drawing conclusions from patterns. Productivity is closely related to the use and availability of resources as well as to value creation. This means that a company’s productivity is reduced if its resources are not properly used or if there is a lack of resources. High productivity is achieved when activities and resources used in the process add value to the produced goods.

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