Production Operation Management

OPERATIONS STRATEGY

PRODUCTIVITY, COMPETITIVENESS, STRATEGY

Productivity is about how effective an organization is in the use of its resources.

Competitiveness is how effective an organization is in the marketplace compared with other organizations that offer similar products/services.

Strategy shapes the plans that determine the direction an organization takes in pursuing its goals.

(US companies, suffering from impressive success of foreign companies on the US marketplace place increased emphasis on operations strategy).

Productivity = Output / Input

(the index, that measures output resources [goods, services] relative to input [ labor, material, energy, and other resources]).

Productivity may encompass a range from a single operation to an entire country.

Productivity measures can be based on a single input (partial productivity) or on more than one input (multifactor productivity), or on all inputs (total productivity).

Productivity examples

|Partial measures |Output/Labor, Output/Machine, Output/Capital, Output/Energy |

|Multifactor measures |Output/(Labor + Machine), Output/(Labor + Capital + Energy) |

|Total Measure |Goods or Services produced / All inputs used to produce them |

Partial measures are often of the greatest interest in operations management.

Examples of partial productivity measures

|Labor productivity: |

|Units of output per labor hour; |

|Units of output per shift; |

|Value-added per labor hour; |

|Dollar value of output per labor hour. |

|Machine productivity:...