EFFICIENCY

‡ EFFICIENCY IS THE RATIO OF THE ACTUAL OUTPUT TO THE STANDADARD OUTOUT EXPECTED. ‡ HOW WELL THE RESOURCES ARE UTILISED TO ACCOMPLISH THE RESULT IS REFERRED TO AS EFFICIENCY. ‡ DOING JOB IN RIGHT WAY IS EFFICIENCY.
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EFFECTIVENESS
‡ EFFECTIVENESS IS THE DEGREE OF ACCOMPLISHMENT OF OBJECTIVES. ‡ HOW WELL THE SAID RESULT IS ACCOMPLISHED REFLECTS THE EFFECTIVENESS. ‡ DOING A RIGHT EFFECTIVENSS. JOB IS
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PRODUCTIVITY
Productivity is defined as the ratio of output to input. The organisation is productive if it achieves its¶ goals by transferring input to output at the lowest cost. Productivity is the combination of both effectiveness and efficiency.
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PRODUCTIVITY = = = = NATIONAL PRODUCTIVITY = OUTPUT INPUT COST+ADDED VALUE COST GROSS INCOME GROSS EXPENDITURE VALUE OF OUTPUT VALUE OF ALL INPUT GNP POPULATION 4 .

MODEL FOR LOW PRODUCTIVITY TRAP LOW PRODUCTIVITY GROWTH LAGGING CAPITAL FORMATION LOWER UTILISATION OF PLANT CAPACITY RISING UNIT COST RISING PRICES SLUGGISH SALES 5 .

Second generation people. 6 . Third generation concept. Fifth generation aspirations. Fourth generation computers.PROBLEM WITH INDIAN INDUSTRIES ‡ ‡ ‡ ‡ ‡ First generation systems.

REASONS FOR LOW PRODUCTIVITY ‡ Inefficient Method ‡ Bad Working Conditions ‡ Unsafe Practices ‡ Penny-wise Pound Foolish Policies ‡ Absence Of pride In our own product 7 .

(Contd«) REASONS FOR LOW PRODUCTIVITY ‡ Grasshopper sales policies ‡ Honest wrong beliefs ‡ Rigid perceptions ‡ Lack Of scientific management 8 .

PARTIAL PRODUCTIVITY Partial Productivity is the ratio of output to one class of input. Labour Productivity Material Productivity Capital Productivity Energy Productivity = = = = Output Human Input Output Material Input Output Capital Input Output Energy Input 9 .

TOTAL FACTOR PRODUCTIVITY Total Factor Productivity is the ratio of the net output to the sum of associated labour and capital input. Total Output Intermediate Materials & Services Purchased Labour + Capital Input 10 Total Factor = Productivity . Net Output = Total Output Intermediate Materials & Services purchased.

Total Productivity = Total Output Human + Material + Capital + Energy + Other Expenses 11 .TOTAL PRODUCTIVITY Total Productivity is the ratio of total output to the sum of all input factors.

10000 Find out : Partial Productivity.100000 Rs. 12 .10000 Rs.20000 Rs.10000 Rs. Total Factor Productivity and Total productivity.30000 Rs.Following company: Output Materials Labour Capital Energy Others data = = = = = = are available for a Rs.

Partial Productivity : A) Labour Productivity B) Material Productivity C) Capital Productivity D) Energy Productivity = = = = 100000 20000 = 5 100000 30000 = 3.33 100000 10000 = 10 100000 10000 = 10 13 .

25 14 = .Total Factor Productivity = [100000 -(30000+10000)] 20000 + 10000 60000 30000 = = 2 Total Productivity= 100000 30000+20000+10000+ 10000 1.

FACTORS WHICH CAN IMPROVE PRODUCTIVITY ‡ Working Conditions ‡ Method Study ‡ Work Measurement ‡ Efficient Maintenance Management ‡ Long Term Planning 15 .

(Contd«) FACTORS WHICH CAN IMPROVE PRODUCTIVITY ‡ ‡ ‡ ‡ ‡ ‡ Cycle Time Reduction Value Engineering Value Analysis Scrap Reduction Efficient Marketing Management Training & Education 16 .

(Contd«) FACTORS WHICH CAN IMPROVE PRODUCTIVITY ‡ ‡ ‡ ‡ ‡ ‡ Quality Circle Total Quality Management Re-engineering Just In Time Creativity Techniques Root Cause Analysis 17 .

05 13.34 27.01 18 .FACTORS AFFECTING PRODUCTIVITY FACTORS Human Related Factors Communication & Control Process Structure Related Resource Availability Equipment & Machinery Related Others FREQUENCY (%) 36.66 7.92 9.02 6.

ORGANISATION PRODUCTIVITY Ability Motivation Potential Human Performance Organisational Productivity = = = Knowledge x Skill Attitude x Situation Ability x Motivation = Human Performance x Resources 19 .

2. Technology based Material based Employees based Product Based Task Based 20 for . 3. 4. 5.SUMANTH FIVE APPROACH Sumanth Five Approach productivity improvement : 1.

TECHNOLOGY BASED : ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ CAD CAM CIM Robotics Laser Beam Technology Maintenance Management Rebuilding Old Machinery Energy Conservation Technology 21 .

MATERIAL BASED : Inventory Control Material Requirement Planning Quality Control Materials Handling System Improvement ‡ Materials Re-use and Recycling ‡ ‡ ‡ ‡ 22 .

EMPLOYEES BASED : ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ Financial Incentives Non-financial Incentives Job enrichment Job enlargement Job rotation Worker¶s participation Training Working condition improvement Flexi-time 23 .

PRODUCT BASED : ‡ ‡ ‡ ‡ ‡ ‡ Value Engineering Value Analysis Product Diversification Product Simplification Emulation Advertising & Promotion 24 .

TASK BASED : ‡ ‡ ‡ ‡ ‡ Work Study Method Study Work Measurement Job Evaluation Human Factors Engineering 25 .

TOTAL PRODUCTIVITY MODEL Total Productivity Total Tangible Output = = Total Tangible Output Total Tangible Input Value of Finished product + Value of Partial Units Produced + Dividends from Securities + Interest from Bonds + Other Income Value of Human Input + Value of Materials Input + Value of Capital Input + Value of Energy + Value of Other Expenses Workers + Managers + Professionals + Other Staff 26 Total Tangible Input = Value of Human Input = .

TOTAL PRODUCTIVITY MODEL Value of Capital Input = Land + Plant & Building + Machinery + Working Capital Basic Raw Materials + Bought Out Materials Oil + Gas + Coal + Water + Electricity Travel + Taxes + Professional Fees + Marketing + R&D + General Admin.Expenses 27 Value of Materials Value of Energy Other Expenses = = = .

AMERICAN PRODUCTIVITY CENTRE MODEL (APC) Here Productivity profitability. Profitability = = = = measurement related to Sales Cost Out Quantity x Price Input Quantity x Unit Cost Output Quantity x Price Input Quantity Unit Cost Productivity x Price Recovery Factor 28 .

AMERICAN PRODUCTIVITY CENTRE MODEL (APC) Inclusion of Price Recovery Factor shows whether Gains or Losses of a firm are due to changes in productivity or due to fluctuation of prices of materials consumed and sold. 29 .

‡ Review & Revision 30 . ‡ Organisation Development & Performance Improvement Planning. ‡ Implementation of Action Programme.ILO APPROACH TO PRODUCTIVITY IMPROVEMENT Five phases of this approach are : ‡ Preliminary Diagnosis. ‡ Organisation Diagnosis & Action Planning.

Eliminate known barriers to productivity.Procedures to improve Productivity based on 27 published actual cases : Identify and Prioritise objectives. ‡ ‡ ‡ ‡ 31 . Fix criteria for output. ‡ Develop productivity measuring methods. Prepare action plan.

Procedures to improve Productivity based on 27 published actual cases : Calculate base period productivity. Execute Action Plan. ‡ ‡ ‡ ‡ 32 . Measure and Report. Motivate workers and supervisors to improve productivity. ‡ Maintain momentum.

The only sustainable competitive advantage is your organisation¶s ability to learn. 33 .THE ACCELERATING ORGANISATION It is not enough to be the biggest and the best and even to be getting better. change and improve faster than any potential competitor.

A team environment. where employees are fully empowered and decisions are developed close to the culture of learning rather than blame. Officer driven. 34 . where the whole is greater than the sum of its parts.The new authority will be : Member led. A flat management structure. Customer focussed.

35 . A firm commitment to delivering high quality public services through a combination of direct provision and effective partnership.A clear sense of direction and purpose.

2.Findings from survey why customers do not come back to you : 1. 6. Die Move away Other finds Competitive reasons Project dissatisfaction Because of an attitude of indifference towards the customer by some of your employees. 3. 1% 3% 5% 9% 14% 68% 36 . 5. 4.