INDUSTRIAL ECONOMICS

INDUSTRIAL PRODUCTIVITY PREETI ROLL NO-8

DEFINTION

Productivity is an economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in revenues and other GDP components such as business inventories.

PRODUCTIVITY

• Productivity = output/input • ` Partial Productivity (measures of output against a specific

input) Partial Productivity e.g. items made/employee ` • Multifactor Productivity (ratio of output to a group of

inputs such as labor and material) • ` Total Productivity (includes all inputs in an organization

i.e. labor, materials, overheads, capital) Total Productivity = Revenues, Profits/All inputs

MEASURES OF PRODUCTIVITYProductivity is an overall measure of the ability to produce a good or service. More specifically, productivity is the measure of how specified resources are managed to accomplish timely objectives as stated in terms of quantity and quality. Productivity may also be defined as an index that measures output (goods and services) relative to the input (labor, materials, energy, etc., used to produce the output). 

.

LABOUR PRODUCTIVITY -Quantity of output / labor hrs Quantity of output / shift MACHINE PRODUCTIVITY -Quantity ) of output / machine hrs ENERGY PRODUCTIVITY– Quantity / kwh

CAPITAL PRODUCTIVITY- Quantity of output / value of input

MULTIFACTORPRODUCTIVITY

MULTIFACTOR PRODUCTIVITY=

output/labour+machine,

output/labour+energy

TOTAL PRODUCTIVITY

GOODS AND SERVICES PRODUCEDALL INPUT USED TO PRODUCED THEM

PARTIALPRODUCTIVITY

TYPES OF INPUT MEASURES

TYPES OF OUTPUT MEASURES

LABOUR

CAPITAL CAPITAL & LABOUR

CAPITAL, LABOUR AND INTERMEDIATE INPUTS (ENERGY, MATERIALS, SERVICES)

GROSS OUTPUT

labour productivity (based on gross output)

Capital productivity (based on gross output)

Capital-labour MFP (based on gross output)

KLEMS multifactor productivity

VALUE ADDED Labour productivity (based on value added)

Capital productivity (based on value added)

Capital-labour MFP (based on value added)

-SINGLE FACTOR PRODUCTIVITY MEASURES

MULTIFACTOR PRODUCTIVITY MEASURE

PURPOSE OF PRODUCTIVITY MEASURES TECHNOLOGY- A frequently stated objective of measuring

productivity growth is to trace technical changeEFFICIENCY –It means that a production process has achieved the maximum amount of output that is physically achievable with current technology, and given a fixed amount of inputs (Diewert and Lawrence, 1999). Technical efficiency gains are thus a movement towards “best practice”, or the elimination of technical and organizational inefficiencies.REAL COST SAVINGS. A pragmatic way to describe the essence of measured productivity change. Although it is conceptually possible to isolate different types of efficiency changes, technical change and economies of scale, this remains a difficult task in practice

FACTORS AFFECTING - TECHNOLOGICAL FACTORS: The technological advancement always strives to achieve the increased of production with minimum of costs and efforts, 

MANAGERIAL FACTORS: Progressive and imaginative managerial skill always taps greater output of the human and nonhuman resources. Good organizational relationship

FINANCIAL FACTORS: The availability of financial resources enables the organization to spend moneys for the research and development, employment of professional executives, adaptation of latest technology, provision of amenities, effective stock piling and material control

NATURAL FACTORS: The natural resources like geographical physical and climatic conditions directly affect the level of the productivity. 

SOCIOLOGY FACTORS: The generic characteristics, racial quality etc. has a great impact on the productivity of the labor.

GOVERNMENT POLICY: The Government policy regarding financial incentives taxation policy, tariff policy, industrial licensing labor laws

NATIONAL PRODUCTIVITY COUNCILThe national Productivity Council (NPC) was established in India in February 1958. NPC is registered as an independent autonomous body under the Societies Registration Act, 1860.

OBJECTIVE

1)To promote productivity consciousness in all sectors of national economy

2) To disseminate the knowledge of the concepts n techniques of productivity and demonstrates their values and validity in the practical application.

THANK YOU