What is Productivity? Definition, Example and Benefit of Measuring Productivity

Definition of Productivity

Manufacturing Productivity can be given as “OUTPUT” compared to “INPUT”.

According to Marsh, Brush (2002) in his article Journal of industrial technology, productivity is a measure of the efficiency and effectiveness to which organizational resources (inputs) are utilized for the creation of products and/or services (outputs). Productivity measurement is both a measure of input utilization and an assessment as to whether or not input utilization is growing faster than output.

In the case of a garment manufacturing factory, “output” can be taken as the number of products manufactured, whilst “input” is the people, machinery and factory resources required to create those products within a given time frame. The key to cost-effective improvements in output – in “productivity” – is to ensure that the relationship between input and output is properly balanced. For example, there is little to be gained from an increase in output if it comes only as a result of a major increase in input. Indeed, in an ideal situation, “input” should be controlled and minimized whilst “output” is maximized.

An example of productivity calculation

Let's calculate the labor productivity of a sewing production line. Let assume,
Total garment production in a day =800 pieces
Total labor (operator +helpers) = 40
Shift hours  = 8 hours (working hours in a day)

Labor productivity calculation formula is given as 
= (Total line output in pieces / Total labor input in manpower )
Therefore, calculated labor productivity per  8 hours shift 
 = (800/40) Pieces =20 units of garment per labor per shift.

Benefits of measuring productivity

Higher productivity provides more products from the same number of people, in the same time frame. This, in turn, improves “overhead recovery” related to factory costs, such as electricity and fuel, because overheads are fixed within that time frame. So, the more products produced in a given time frame the less overhead allocation per product, which, in turn, reduces the cost of each individual item and therefore improves competitive edge.

Dr. Bheda in his book "Managing Productivity in the Apparel Industry" explained the different ways of measuring productivity. Productivity can be expressed in many ways but mostly productivity is measured as labour productivity, machine productivity or value productivity. These three ways of measuring shop floor productivity in a garment unit.
  • Labour productivity - Output per labour (direct +indirect) in a given time frame (in pieces) 
  • Machine productivity - Output per machine in a given time frame (in pieces) 
  • Value productivity - Total value of output in a given time frame. 
In the apparel manufacturing, shop floor productivity can be improved by using one of these methods

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