Industrial Management

Lecture - 3

Production

• It is a process of creating or enhancing utility by transforming a set of inputs such as men machinery, material & money into a specific set of output such as finished goods or services

• It is a process by which goods & services are created

Inputs:

•Men•Machinery•Material•Money

Transformation Process:

•Product Design•Process Planning•Production Control•Maintenance

Outputs:

•Products•Services

• It may be defined as the ratio between output & input

• Output means the amount or numbers of items produces & inputs are the various resources employed such as men machinery, material & money

• It is the measure of the quantity of output per unit of input

Productivity = Amount of Output/Amount of Input

Productivity

Productivity IndexLabor productivity =

OutputNo of Labour employed

Direct labor cost productivity =Output

Amount of wages paid

Capital productivity = Output

Capital Employed

Energy productivity =Output

No. of Units of power used

Raw material productivity =Output

Cost of raw materials

Direct cost productivity =Output

Sum of all direct costs

Material productivity =OutputCost of

(Raw Material+ Packaging material+ Supplies)

Total Factor Productivity =Output

Labour+ Capital Invested

Factors affecting Productivity

Factors affecting national productivity1. Human resources2. Technology and Capital Investment3. Government Regulation

Factors Affecting Productivity in organization:-1. Product( or system ) design2. Machinery and Equipment3. Skill and Effectiveness of the worker4. Production Volume

Measures to Increase Productivity

• Material• Labor• Plant, Equipment and Machinery• Land and Buildings

Types of Production Methods / Systems

1. Continuous• Mass production• Process or continue flow type

2. One time Large Projects

3. Intermittent• Batch production• Job Production