HomeIndustrial Engineering

How to Measure Labor Productivity?

byPrasanta Sarkar-February 04, 2011
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Definition of Labor Productivity

Most simply, productivity is the ratio between output and inputs.

Laboor Productivity = (Labor output/labour input) 

Within a factory, industrial engineers or factory managers and line supervisors measure the number
of garments produced by a line of sewing machine operators in a specific time frame. Generally, the
factory works 10 to 12 hours a day. Total production (output pieces) of a line and total labor involved
in producing those pieces is required to calculate labor productivity. See the following example,

Assume that

Total production in day =1200 pieces

Total labor (operator +helpers) = 37
Working time = 600 minutes (10 hours)

So, Labor productivity per 10 hours is =Total pieces produced/ total labor input = (1200/37) Pieces
=32.4 pieces.
Another productivity measure is labor efficiency, which is a comparison of the time spent working
productively to the total time spent at work. These metrics are appropriate for analyzing and
comparing the productivity of a particular production line or factory that turns out specific apparel
products. However, comparing productivity levels across products or operating lines can be
difficult, because the benchmarks differ from one garment to another.

Calculation of labor efficiency is shown below. Consider the above data.

SAM (Standard allowed minutes) of the garment = 8.9

Minutes produced by each labor =(32.4 pieces X 8.9) = 288 minutes
Available minutes was 600

So, Labor efficiency = (Produced minutes/available minutes) = (288/600*100)% = 48%

To compare productivity estimates across products, factories, or even industries, economists define
labor productivity as the production value added that each worker generates. In this case, labor
productivity equals the value of production divided by labor input. The value of production is
generally measured as value added, equal to the gross value of sales minus the value of purchased
inputs such as fabric, trim, and energy. Labor input is measured by total work hours. Labor
productivity can thus be estimated at the national, aggregate level and for specific industries in an
economy.

Also read: How to calculate machine productivity?

TagsIndustrial Engineering

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