Productivity compare

(ASSIGNMENT#1......3rd SEMESTER Fall-2020-21)

Submitted by

BY

Tamoor Safdar

19014954-027

MCOM-401 (production & Op. Management)

M.Com A

Sir Tariq Sharif

Department of Commerce

UNIVERSITY OF GUJRAT
Question
A U.S. company has two manufacturing plants, one in the United States and one in another
country. Both produce the same item, each for sale in their respective countries. However, their
labor productivity figures are quite different. The analyst thinks this is because the U.S. plant
uses more automated equipment for processing while the other plant uses a higher percentage of
labor. Explain how the labor productivity figures can be misleading in the scenario presented
above. Can you suggest other measures of productivity for comparing the two plants that would
be more meaningful?

Answer

Company

Colgate- Palmolive (introduction)

Founded in 1806, Colgate-Palmolive Company is a publicly traded consumer products company
with $15.7 billion of worldwide net sales in 2019, serving people around the world with well-
known brands that make their lives healthier and more enjoyable.

Net Sales By Geographic Region

22% North America

23% Latin America

16% Europe

17% Asia Pacific

6% Africa/Eurasia

16% Hill’s Pet Nutrition

Colgate Palmolive America

In America Colgate mostly use high technology to produce goods that’s why their productivity is
high rather than India. In recent years America minimizes the role of labor in industries .so using
the more technology America produce more things that’s why their sales are also high.

Colgate Palmolive India

Net sales of Colgate-Palmolive India Limited from financial year 2014 to 2020
Colgate-Palmolive India Limited reported a net sales value of over 45 billion Indian rupees in
fiscal year 2020. There was a consistent increase in net sales since fiscal year 2017. This
company is the subsidiary of Colgate-Palmolive, an American multinational consumer products
company

In India Colgate Palmolive sales increases year by year. But the production in India is less than
America and other developed countries because they mostly use high technology to produce
items but in India mostly things are produced through labor. By using more labor their cost of
production increases. So he sells their products at high price in India.

Increase productivity
In India there is very less use of technology for production process but in America almost all
companies uses high technology for production process. So if India wants to increase their
production they first make a effective strategy then use a technology. Using technology in all
process may result increase in production and then sales. Using more labor force increases their
cost of production. So the undeveloped countries have less per capita income. So they cannot
afford a high priced consumer products. By using effective strategies they produce goods at low
price.