 Innovation – productivity - optimization

 https://www.digistore24.com/redir/283755/ajiteshwarshukla
https://www.digistore24.com/redir/283755/ajiteshwarshukla/

Definition of Productivity
 Productivity: Definition

Productivity is the relationship between the

outputs generated from a system and the
inputs that are used to create those
outputs. Mathematically

O
P =
I
 Systems Concept

inputs outputs
transformations Customers
Land Goods
people SYSTEM and
capital services
facilities
equipment
tools O
energy I
materials
information productivity
Mathematically, How Can We
Increase Productivity?
 Productivity Improvement

Productivity Improvement (PI) is the result of

managing and intervening in transformation
or work processes.
PI will occur if:

O O O O O
I I I I I
 Measuring Productivity

 Static: P=O/I in a given period of time (t).

Useful for benchmarking purposes.
 Dynamic: p(1)=O(1)/I(1); p(2)=O(2)/I(2);
then p(2)/p(1) yields a dimensionless index
that reflects change in productivity between
periods. ((p(2)-p(1))/p(1))*100 yields the
percentage change between periods.
Measuring Productivity (Continued)

 Partial-Factor: Uses a single “I” factor;

e.g., output/labor-hour, sales/employee
 Multi-Factor: Uses more than one “I”
factor; e.g. output/direct costs (labor,
materials, and overhead).
 Total-Factor: Uses all “I” factors.
(Note: Total-Factor captures “trade-offs”
between input factors.)
 Measurement Problems

 Multiple products/services (aggregation-O)

 Varied categories, types, and levels of input
resources (aggregation-I)
 Price/cost changes of outputs & inputs
 Redesigned products, services, processes
 “Hard-to-measure” factors (e.g., quality)
Application of Productivity
Measures

 Individual level
 Group level
 Department level
 Corporate level
 National level
 Global level
 Global-Level Productivity

 Why are global-level productivity measures

important?
 How do we compare productivity among
nations?
 How can a nation increase productivity in a
global economy?
 Importance of Global-Level
Productivity Measures
 Measure and compare competitiveness
among nations.
 Contribute to the development of a nation’s
economic, social, and political policies.
 Develop global cooperation among nations.
 Help business organizations make
investment decisions.
 Global-Level Productivity
Measures
 Organisation for Economic Co-operation
and Development (OECD) –
http://www.oecd.org/home/
 GDP per capita (labor productivity * fraction
of people who work) is widely regarded as
the best measure.
 A common currency is used to measure the
GDP.
Factors Affecting Productivity
Improvement at Global Level
 Education
 Technology
 Macroeconomic policies
 Social and culture environments
 Foreign aids
 Foreign investments
 Industry policies & competition
Why is National Productivity
Important?
 Competing on Productivity

 At the national level, growing productivity

• leads to a higher standard of living
• holds inflation in check
• enhances international competitiveness.
 The annual GDP growth is partially due to
• growth in productivity
• growth in inflation
National Productivity Measures
(http://www.bls.gov/)

 Comparisons within a segment of economy

over time
 Comparisons of specific productivity
measures
 International comparisons
 Labor Productivity - Percent
Change from Previous Year
1994 -
2001 2002 2003
2003

Business
2.2 4.9 4.5 2.6
Sector

Non-Farm
2.1 5.0 4.4 2.6
Sector

Manufacturing 2.2 7.2 5.1 4.2

Other Measures Affecting
Productivity

 Efficiency
 Effectiveness
 Quality
 Quality of Work Life
 Innovation
 Efficiency

 Measures the resources expected to be

consumed to the resources actually
consumed.
 Hence, it focuses on the input side of the
system. (To what degree did the system
utilize the “right” things.)
 Effectiveness

 Measures what the system sets out to

accomplish (objective) with what was
actually accomplished; plan vs. actual
 Hence, effectiveness is an output measure.
(Is the output “right” - right quality, right
quantity, on time, etc.)
 Quality

 Degree to which the outputs (products and

services) from the system conform to
requirements or meet customer
expectations.
 The focus is on quality attributes (e.g.,
conformance, performance, convenience,
responsiveness, perceived quality.)
 Quality of Work Life (QWL)

 Measures the way that employees in a

system respond to the sociotechnical
aspects of that system.
 Innovation

 Measures the applied creativity of the

system.
 Relates to the design and development of
improved products, services, and
processes.
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 5 Types of Goals to Set
in Life 
3. Personal 5. Relationship
1. Career Goals 2. Financial Goals 4. Spiritual Goals
Development Goals Goals

“Where do you see The term ‘relationship

Personal development Personal development
yourself in 5 years?” goals’ has become
Career goals and financial goals because are all goals because are all
Anyone who has ever something of a social
goals are often about becoming a better about becoming a better
been in a job interview has media phenomenon. It’s
intertwined. That’s person. And all the money person. And all the money
likely heard this question everywhere you look,
because the former is in the world cannot help in the world cannot help
— or a variation of it. Yet, intertwined with
likely to help you achieve you achieve that. Personal you achieve that. Personal
most people struggle to sometimes over the top
the latter. Financial goals development is a lifelong development is a lifelong
provide an answer, and bizarre ideas of what
are all about money process we should all process we should all
because they haven’t a couple should aim for in
invest in. invest in.
given serious thought to their relationship.
what their career goals
are.
 5 Proven Ways to Grow
Your Business
Diversify
You may already be known for selling
one product, but adding a new one into
the mix can breathe new life into your
business

Expand Your Reach

Another effective way to achieve
business growth is to make your Ask For Referrals
product or service available to an Who better to sing your praises than
entirely new prospective customer pool your already-satisfied customers?

Tap Into Your Existing Market

Focus on getting repeat business Improve Your Products or Services
from people who have already bought You may be able to get existing
from you customers to purchase more and attract
new clientele by simply improving the
products or services you already offer