Productivity Measurement and

Improvement in Work Study and

Measurement

ENGR. WALTER M> REYES

OBJECTIVES

• Define Work Study and Measurement

• Understand productivity and its measurement
• Know Benefits of Productivity Improvement
• Compute for Productivity
• Key Performance Indicators
Productivity Measurement

● Productivity measurement refers to the systematic process of

quantifying the efficiency and effectiveness of an organization's
operations or processes.
● It involves assessing the relationship between outputs (goods or
services produced) and the inputs (resources such as labor, time,
and capital) used to generate those outputs.
Productivity Measurement

Key Elements of Productivity Measurement

● Outputs: The tangible or intangible results of a process, such as
the number of units produced, services delivered, or tasks
completed.
● Inputs: The resources consumed during the production process,
including labor, materials, energy, and time.
Productivity Measurement

Purpose of Productivity Measurement

● To evaluate and compare the efficiency of different processes,
departments, or organizations.
● To identify areas for improvement and implement strategies to
enhance overall performance.
● To make informed decisions regarding resource allocation, process
optimization, and technology integration
Productivity Measurement

Units of Measurement
● Productivity can be measured using various units, such as output
per hour, output per employee, or output per dollar invested.
● The choice of units depends on the specific goals and context of the
productivity measurement.
Importance in Work Study and Measurement
● Integral to the field of work study and measurement, productivity
measurement provides a quantitative basis for assessing work
processes.
● Facilitates the identification of bottlenecks, inefficiencies, and
opportunities for improvement.
• Bottlenecks
– Bottlenecks refer to points or stages in a process where the
flow of work is impeded or slowed down, leading to a reduced
overall efficiency of the system. These constraints act as
limiting factors, causing a backlog of work or delays in the
completion of tasks. Bottlenecks can occur in various
processes, from manufacturing and production to project
management and information systems.
 Key Characteristics of
Bottlenecks
● Constriction of Flow: Bottlenecks represent areas in a
workflow where the input and output rates are not synchronized,
causing a slowdown in the overall process.
● Limited Capacity: Bottlenecks often occur at specific resources
or stages with limited capacity, preventing the system from
handling higher volumes efficiently.
● Impact on Throughput: The presence of a bottleneck directly
affects the overall throughput or output of the entire system,
leading to longer cycle times and potential delays in meeting
deadlines.
 Key Characteristics of
Bottlenecks
• Varied Causes: Bottlenecks can result from a variety of factors,
including equipment limitations, resource constraints, inefficient
work processes, or mismatches in workloads.
• Critical Points: Identifying and addressing bottlenecks is
critical for optimizing processes and improving overall system
performance. Failure to manage bottlenecks can lead to
decreased productivity, increased costs, and customer
dissatisfaction.
Productivity and Formula

These formulas provide a quantitative measure of productivity in different

aspects of business and industry. It's important to adapt the formula based on
the specific metrics and goals relevant to the organization or process being
evaluated.

• Labor Productivity
• Machine Productivity
• Capital Productivity
• Total Factor Productivity
• Multifactor Productivity
• Sales Productivity
Labor Productivity

Labor Productivity=Output / Labor Input

​

Where:
Output: The quantity or value of goods or services
produced.
Labor Input: The amount of labor (hours, workforce)
used in the production process.
Machine Productivity

Machine Productivity=Output / Machine Input

​

where:
Output: The quantity or value of goods or services
produced.
Machine Input: The utilization of machines or
equipment in the production process.
Capital Productivity

Capital Productivity=Output / Capital Input

​

where:
Output: The quantity or value of goods or services
produced.
Capital Input: The amount of capital (financial
investment) used in the production process.
Total Factor Productivity (TFP)

Total Factor Productivity (TFP)=Output / Total

Input
​

where:
Output: The quantity or value of goods or services
produced.
Total Inputs: The combined input factors, including
labor, capital, materials, and energy.
Multi-Factor Productivity

Multi-Factor Productivity=Output / Combined

Input Factors
​

where:
Output: The quantity or value of goods or services
produced.
Combined Input Factors: The total of various input
factors, which may include labor, capital, materials,
and energy.
Sales Productivity

Sales Productivity=Output / Sales effort

​

where:
Revenue: The total income generated from sales.
Sales Effort: The resources or effort invested in sales
activities.
 Sales Effort

Prospecting
• Identifying and reaching out to potential
customers or leads.
• Conducting market research to find new
business opportunities.
 Sales Effort

Cold Calling and Outreach:

• Initiating contact with potential customers
through phone calls, emails, or other
communication channels.
• Presenting products or services to
generate interest and potential sales.
 Sales Effort

Client Meetings and Presentations:

• Holding meetings with clients to

understand their needs and present
solutions.
• Delivering product or service
demonstrations to showcase value.
 Sales Effort

Follow-Up and Relationship Building

• Following up with leads and clients to

maintain engagement.
• Building and nurturing relationships to
enhance customer loyalty.
 Sales Effort

Sales Calls and Visits

• Making in-person or virtual sales calls to

potential clients.
• Conducting site visits or presentations to
showcase products or services.
 Sales Effort

Sales Proposals and Quoting:

• Creating and presenting proposals

outlining product or service offerings.
• Providing quotes or estimates for pricing
and contract terms.

AND ETC..
Key Performance Indicators
(KPIs)
A Key Performance Indicator (KPI) is a measurable value that
reflects the performance or effectiveness of a business,
department, project, or individual in achieving specific goals or
objectives. KPIs are critical metrics used to assess progress and
success in various areas of an organization. They serve as
quantifiable markers that help organizations understand how
well they are performing in relation to their strategic
objectives.
Example of KPI
• Monthly Growth Percentage Rate
- Measures the percentage increase in total sales from one
month to the next.
Example of KPI
• Customer Acquisition Cost (CAC)
- Represents the average cost incurred to acquire a new
customer.
Example of KPI
• Customer Lifetime Value (CLV)
- Predicts the total revenue a business can expect from a
customer throughout their entire relationship.

"Average Purchase Value" typically refers to the average amount spent by

customers in a given period or across a specific set of transactions.
"Average Purchase Frequency" is a metric that indicates how often, on average,
customers make a purchase within a given time frame.
Example of KPI
• Conversion Rate

- Measures the percentage of potential customers who

take a desired action, such as making a purchase or
filling out a form.

Benchmark: A higher conversion rate indicates the

effectiveness of sales or marketing efforts.
Example of KPI
• Sales Target Achievement
- Evaluates the percentage of the sales team's achieved targets
against the set sales goals.

Benchmark: A higher percentage indicates successful goal

attainment.
Example of KPI
• Average Deal Size
- Measures the average value of each sales deal closed by
the team.

Benchmark: Monitoring fluctuations in average deal size helps

assess the impact on overall revenue.
Time and Motion Study

A Time and Motion Study, also known as motion

and time study, is a systematic method used to
analyze and improve work processes. This
methodology aims to increase efficiency,
productivity, and effectiveness by closely examining
how tasks are performed and how much time each
task takes. Time and Motion Studies are often
applied in manufacturing, services, and other
industries to optimize workflows and resource
utilization.
Key components of a Time
and Motion Study include
Observation: The study begins by carefully observing and recording each
step of a particular job or process. This involves documenting the
sequence of tasks, the movements involved, and the time taken for each
activity.

Time Measurement: Accurate timing is a critical aspect of a Time and

Motion Study. Researchers use various tools, such as stopwatches, to
measure the time it takes to complete specific tasks or the entire process.

Data Analysis: After gathering data, analysts review and analyze the
information to identify inefficiencies, redundancies, and areas for
improvement. This analysis may involve calculating average times,
identifying bottlenecks, and evaluating the overall effectiveness of the
process.
Key components of a Time
and Motion Study include
Standardization: The goal of a Time and Motion Study is often to establish
standardized procedures and best practices. This helps streamline
operations and ensures that tasks are performed in the most efficient and
effective way possible.

Improvement Recommendations: Based on the findings, the study

provides recommendations for improving the workflow. This could involve
redesigning processes, introducing new equipment, training workers
differently, or implementing other changes to enhance productivity.
Methods Time Measurement

Methods-Time Measurement (MTM) is a

predetermined motion time system used in industrial
engineering to analyze and set standards for the time it
takes to perform a specific task. MTM focuses on
breaking down tasks into basic elements and assigning
predetermined times to each element based on careful
analysis. This allows for the estimation of the total time
required for a task or process.
MTM typically involves the following steps

Task Analysis: Breaking down a job or task into its basic elements,
which are the smallest meaningful motions or actions. Each element is
identified and classified.
Code Assignment: Assigning predetermined codes to each basic element
based on the nature of the motion or action. These codes are
standardized and represent specific types of movements.
Time Values: Associating predetermined time values with each code.
These time values are established through empirical observations and
experiments. The goal is to have a standard time for each type of
motion.
Calculating Total Time: Summing up the time values associated with
the codes to calculate the total time required for the entire task.
Here's a simple example to illustrate the concept of MTM

Task: Assembling a Widget

Task Analysis:
● Grasping a part from a bin (Element 1)
● Placing the part on the assembly table (Element 2)
● Using a tool to attach the part to another component (Element 3)
● Inspecting the assembly (Element 4)
Code Assignment:
● Element 1: GRASP
● Element 2: MOVE
● Element 3: POSITION
● Element 4: INSPECT
Time Values:
● GRASP: 1.5 seconds
● MOVE: 0.8 seconds
● POSITION: 2.0 seconds
● INSPECT: 1.2 seconds
Calculating Total Time:
● If the worker performs the assembly task as follows: GRASP + MOVE + POSITION +
INSPECT
● Total Time = 1.5 + 0.8 + 2.0 + 1.2 = 5.5 seconds
 Factors that affects
Productivity
Productivity in any organization is influenced by a multitude of factors, ranging from internal processes
to external economic conditions. Understanding these factors is essential for businesses to identify areas
for improvement and implement strategies to enhance overall efficiency. Here are some key factors that
can affect productivity:

Technology and Automation:

● Positive Impact: Implementation of advanced technologies and automation can streamline
processes, reduce manual labor, and increase output.
● Negative Impact: Initial setup costs and the need for employee training may temporarily
affect productivity.
Workforce Skill and Training:
● Positive Impact: A skilled and well-trained workforce is more efficient and capable of
handling complex tasks.
● Negative Impact: Insufficient training or outdated skills can lead to errors, rework, and
reduced productivity.
Workplace Environment:
● Positive Impact: A comfortable and well-designed workplace fosters employee satisfaction
and productivity.
● Negative Impact: Poorly maintained or uncomfortable work environments can lead to
distractions and decreased efficiency.
Employee Engagement and Motivation:
● Positive Impact: Engaged and motivated employees are more likely to be productive
and contribute to the success of the organization.
● Negative Impact: Low morale, lack of recognition, or unclear goals can result in
decreased productivity.
Management Practices:
● Positive Impact: Effective leadership, clear communication, and strategic planning
contribute to a positive work culture and improved productivity.
● Negative Impact: Poor management, lack of direction, and inefficient decision-making
can hinder productivity.
Resource Availability:
● Positive Impact: Sufficient availability of resources, including raw materials and tools,
ensures smooth operations and uninterrupted production.
● Negative Impact: Shortages or delays in the availability of resources can lead to
production bottlenecks and downtime.
Health and Well-being:
● Positive Impact: Employee health and well-being contribute to higher energy levels,
reduced absenteeism, and increased focus on tasks.
● Negative Impact: Health issues, stress, and burnout can lead to decreased productivity
and increased errors.
Quality of Inputs:
● Positive Impact: High-quality raw materials and inputs result in better final products
and a reduction in rework.
● Negative Impact: Poor-quality inputs can lead to defects, waste, and increased effort to
rectify issues.
Economic Conditions:
● Positive Impact: Favorable economic conditions may lead to increased demand for
products and services, positively impacting productivity.
● Negative Impact: Economic downturns can lead to reduced demand, affecting
production levels.
Regulatory Compliance:
● Positive Impact: Adhering to regulatory standards ensures legal compliance and
reduces the risk of disruptions.
● Negative Impact: Failure to comply with regulations can result in penalties, legal
issues, and disruptions in operations.
Communication and Collaboration:
● Positive Impact: Efficient communication and collaboration between teams enhance
coordination and overall productivity.
● Negative Impact: Poor communication or lack of collaboration can lead to
misunderstandings, delays, and decreased efficiency.