The Missing Metric – Productivity

The Missing Metric – Productivity

But of those that have stayed to tackle this challenging topic know that we are on the right track. At the national level, productivity is about improving the standard of living. At a business level, it is important as it indicates how well we can meet customer requirements.

To make sure we are all on the same page, here we are defining productivity is the measure of the efficiency of production and is the ratio of the production output as compared to what is required to produce it (the input).

In many of the companies TXM has visited over past number of years, productivity measusre are very hard to find. When enquiring about productivity, we are more often presented with a profit and loss statement, rather than a true ratio of operational efficiency.

Productivity must be distilled to the cost per unit or one job. This will vary across industries and each company must investigate the best way to present productivity measures to their most important inputs – your staff. This baseline measure can then be compared year on year.

Once we understand our productivity measure, we can then dive into waste reduction and continuous improvement, knowing that we can measure our successes during implementation and how it directly influences our most important measure for out long term competitiveness

Robert Chittenden

Author: Robert Chittenden

Robert Chittenden is a Senior Lean Consultant at TXM Lean Solutions