Productivity and Business competitiveness

Outcomes (What you need to know and be able to do) • What is the link between productivity and an organisation’s

operations?

• Explain the relationship between productivity and business competitiveness.

• Explain three ways in which a manufacturing organisation could improve productivity.

• Explain three ways in which a service organisation could improve productivity.

 

Productivity is a measure of efficiency

Efficiency is the amount of output produced compared to the amount of input required in production

Productivity can be improved by producing more outputs from the same inputs

Productivity can be improve by reducing the level of inputs for the same outputs

Now it is your turn...... using an example of your own explain how........

Productivity can be improved by producing more outputs from the same inputs

Productivity can be improve by reducing the level of inputs for the same outputs

Productivity improvements can be made in any area of the operations system. They can be achieved in human and non-human aspects of the system.

During the remainder area of this area of study we will examine four areas of operations in which managers use strategies to increase productivity:

■ facilities design and layout ■materials management ■ the management of quality ■ new technology

Being competitive refers to a product or service being as good as or better than others of a comparable nature: a car industry competitive with any in the world.

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For example (of prices) low enough to compare well with those of rival traders: we offer prompt service at competitive rates.

Areas of operational competitiveness

Competing on cost

Competing on quality

Competing on speed of delivery

Exit Question

Define the term productivitySuggested solution

Definition of productivity should refer to its being:

• the relationship between inputs and outputs.

• a measure of how efficient the organisation is in turning inputs such as raw materials, employee activity, technology etc. into the final product or service the organisation offers for sale.

Award 1 mark for full definition.

VCAA Assessment Report note:

A good student response: Productivity is the level of output per unit. It is a direct measure of efficiency. High productivity levels mean that the organisation is getting larger levels of output per level of input.