PRODUCTIVITY

Introduction
• Productivity is the output of any production process, per unit of
input.
• To increase productivity means to produce more with less.
• In factories and corporations, productivity is a measure of the ability
to create goods and services from a given amount of labor, capital,
materials, land, resources, knowledge, time or any combination of
those.
• Output per unit of input employed.
• Increase productivity on the part of capital and labor.
Productivity is the ratio of output and input in any organization.

Productivity = Output
Input
Output is in the form of product quantity and input is in the form of
resources. The resources are in the form of

• Land acquired
• Salaries paid to employees
• Amount paid to purchase material
• Amount spent in infrastructure

*Increasing productivity is essential for improving living standards.

Why is productivity an
important concept in
economics?
• Productivity is essentially the efficiency in which a company or economy
can transform resources into goods, potentially creating more from less.
• Productivity can effectively raise living standards through decreasing the
required monetary investment in everyday necessities (and luxuries),
making consumers wealthier and business more profitable and in turn
enabling higher government tax revenues.
• In economics, physical productivity is defined as the quantity of output
produced by one unit of input within one unit of time.
• The standard calculation for economic productivity involves dividing
output value per unit of input.
• An increase in physical productivity causes a corresponding increase in
the value of labor, which raises wages.
• This is why having an education or on-the-job training is sought after by
employers; it increases the productivity of the workers and makes them
more valuable assets for the firm.
To see how productivity raises wages, consider the following example.
An employer offers you $15 to dig a 25-square foot hole in his backyard.
Suppose that you have insufficient capital goods (your bare hands or a
spoon), and it takes you three hours to dig the hole to his specifications.
How much will be your labor output?
Your labor output is worth $5 per hour.
If you had a shovel instead, it may have only taken you 30 minutes to dig
the hole. How much will be your labor output?
Your labor output just rose to $30 per hour.
With a big enough crane, you may have been able to dig it in five
minutes. How much will be your labor output?
Your labor productivity will be $180 per hour.
Is Money More Important than Productivity?
• In improving the standard of living, productivity is
more important than money because productivity
determines the output while money measures the
value of the output.
• Money is a way to keep score for organizations and
individuals.
Inputs and Outputs of Productivity
• In economic sense, the inputs are:
• Labor as managers, workers, and externally purchased services
• Capital for land, facilities and equipment and
• Materials, including energy requirements
Measurement of productivity
• Productivity can be measured, The amount of output per unit of
input.
• In a factory, it might be measured based on the number of hours it
takes to produce a good.
• While in service industry, might be measured based on the income
generated by an employee divided by his/her salary.
Productivity
• Measures the relationship between outputs and inputs used to
produced them.
• Usually expressed as the ratio of quantity of output to quantity of
input:

Productivity=Output/Input
Two types of Productivity Measurements:
• Labor Productivity
• Multifactor Productivity
•Labor Productivity—reflects output
relative to labor hours worked
•Multifactor Productivity—reflects a
combination of some or all of the
resources used to obtain a certain
output.
Labor Productivity
• The most obvious input in the productivity equation.
• For many service operations, labor is far the largest input.

Labor Productivity = units produced (or the value of units produced)

labor hours (or labor cost)

*the equation for other individual factor of productivity would differ

only by its title and its divisor.
Labor Productivity:
Yards of carpet installed
=Yards per hour
Labor hours

Number of offices cleaned

=Offices per shift
Number of shifts

Board feet of lumber cut

=Feet per week
Number of weeks
*Similar examples can be listed for machine productivity (e.g. the number of pieces per hour
turned out by a machine).
Capital productivity
• Includes all money invested in land, facilities, and equipment as well
as working capital such as inventory.
• Capital productivity can increase when firms invest in new facilities
and equipment that increase output to an even grater extent.
• Capital productivity can also be increased if a company can produce
the same level of output as previously but reduced its inventory level
or other working capital requirements.
Material Productivity
• Materials and energy are often critical inputs to
manufacturing processes, but may be insignificant in
most pure service operations.
• For manufacturing concerns, materials usually
represent more than 50% of the input costs.
Important Trade-Offs
• The ideal situation would be increase productivity
either by increasing output without increasing any
input or by maintaining the level of output while
decreasing all inputs.
• This situation is ideal and difficult to achieve.
• Trading Capital for Labor
• Trading Capital for Material or Energy
• Substituting Materials for Labor
Example # 1
• The automatic machine can make 200,000 roofing nails in 40
hours.
• What is the productivity of the machine?
• Suppose the firm invests in a new piece of equipment that
automatically feeds metal to the machine so the machine
can run faster. Now the machine is able to produce 210,000.
nails in the same 40-hour period.
• Compute for the percent increase in productivity.
Example #2:
• Liberty Insurance Company processes applications forms. The average
output in a week is 600 claims.
• Currently the staff includes six full time employees who work forty
hours per week and earn $18 per hour including fringe benefits.
• Management has invested in computer technology, which has a
weekly cost of $1,200. Materials and energy are not used in
significant amounts.
• What is the productivity of the application process?
Multifactor Productivity:
• Calculation of multifactor productivity involve measuring inputs and
outputs using a common unit of measurement such as cost or value.
For instance, the measure might use costs of inputs and price of the
output:

Quantity of production at standard price

Labor cost + Material cost + Overhead
Multiple Factor Productivity =

output (units produced or the value of those units

Labor + capital + Material + energy + other (dollars/pesos)
Continuation:
• Suppose Liberty decides to invest in additional computer
equipment that will drive the weekly cost of information
technology to $1,800.
• One of the applications evaluators is retiring and will not be
replaced.
• The remaining five processors should be able to do 650
applications per week with the new technology.
• What is the impact on productivity?
Productivity: Where do we stand?
• Productivity growth is often an indicator of expanding output and
profits as well as an impending economic recovery
• Increasing productivity tends to drive business performance
• As organizations achieve more output with the same consumption of
resources, the economy grows
• Profits of the firm expand even if the selling price of the product does
not increase. The cost structure of the firm (at least the labor portion)
does not change, and there is more revenue from increasing sales.
• Productivity improvements are driven by investments in technology,
and these investments drive economic growth.
 Multiple Factor Productivity
• Accommodates more than one input factor and more than one output factor
when calculating overall productivity

• Multiple Factor Productivity = output (units produced or the value of those units
labor + capital + materials + energy + others (value)

• Percent Increase in Productivity = Change in Productivity

Productivity prior to Change (100)
Substituting Materials for Labor
• There may be advantages in spending more for
materials in order to achieve reduction in labor costs.
• Outsourcing work is becoming a common practice in
both manufacturing and service operations.
Productivity and Wage Rates
• Wage rates and productivity are positively correlated, means,
that organizations with high productivity can afford to pay
their workers better wages because their workers produce
more output.
• A country with low wage rates does not necessarily have low
unit labor costs because workers in the country may have low
productivity.
• Wage rate is not the sole determinant of unit labor cost. The
other important ingredient is productivity or the number of
units produced.
Impact of Productivity Improvements on the
Workforce
• Productivity improvements, such as earth moving
equipment, are essential for designing and building more
goods and services at a lower cost.
• They increase our living standard.
• Society benefits because we can do more work with fewer
total resources.
Enhancing Productivity
Productivity is affected by:
• Issues related to the structure of operations of operations,
such as the number, size, location, and capacity of the
facilities providing the service or producing the good.
• The equipment and methods used in the activities.
• The detailed analysis of the individual jobs and activities.
Enhancing Productivity
• Bigger facilities will result in higher productivity and
lower costs.
• The equipment and methods used to provide the
service or produce the good can also have a
substantial impact on productivity.
• Detailed analysis of individual jobs and activities
focuses on making people more productive.
Approaches that can be used separately or in
combination to increase productivity
• Technology Innovation—bring new ideas, methods, and/or
equipment to the process of making a product
• Automation—substitutes capital for labor. It is different from
technological innovation because existing automation is merely
applied to a new situation.
• Economies of Scale—Allows firms to increase productivity by making
operations larger. Both service and manufacturing operations take
advantage of this tactic to improve productivity and lower costs.
• Business Process design—focusses on the understanding and
redesign of processes that exist within and between companies.
Approaches that can be used separately or in
combination to increase productivity
• Learning and Experience—Enable firms to achieve productivity
improvements because the workforce gains knowledge about the
product and work processes
• Job Design—Enable firms to examine work at a detailed level so that
it can be investigated and improved. The approach tends to examine
individual movement to improve productivity.
• Human resources—make possible productivity improvements without
investing in facilities and equipment, buying high-quality materials,
redesigning jobs and processes, or even spending for employee
training.
Productivity Benefits

• Increase in income/profitability.
• Lowering running cost/operational costs.
• Maximizing the use of all of the company’s resources such as land,
equipment/machineries, factory, workers, and etc.
• Gaining a greater share of the market.
• More cash flows mean more opportunity for the company to expand
and grow.
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 Measures

• Organization for Economic Co-operation and

Development (OECD)
• 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

• 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.
Productivity and Productivity Improvement
• Improving productivity means increasing or raising productivity with
the help of using same amount of materials, machine time, land,
labor or technology.
• The following examples of each type of productivity may make
improved or higher productivity meaning clearer.
1. Improved productivity of land:
If by using better seed, better methods of cultivation
and more fertilizer, the yield of corn from a particular
hectare of land can be increased from 4 quintals to 6
quintals, the productivity of that land, in the
agricultural sense is increased (improved) by ___
percent. The productivity of land used for industrial
purposes is said to have been increased if the output of
goods or services within that area of land is increased
by whatever means.
2. Improved productivity of materials:

A skilled tailor is able to cut 12 suits from

a bale of cloth where an unskilled labor is
able to cut only 10 suits from a bale of
cloth, then the productivity of the bale
used by skilled worker is ____ percent
greater than unskilled labor.
3. Improved productivity of machines
• A machine tool is producing 90 pieces per
working day (i.e. 8 hours). Considering that
through the use of improved cutting tools, the
output is increased to 120 pieces, then the
productivity of that machine will be increased by
____ percent.
4. Improved productivity of Men (Labor)
• The worker is producing 32 plates per hour. Considering that
with the improved methods of work, he will be able to
produce 42 plates per hour, then productivity of worker will
be improved by ____ percent.
• Thus it can be said that more output results into higher
productivity or improvement from same amount of
resources which means lower money costs and higher net
money returns per unit of output.
• Another productivity concept known as Japanese Holistic View of
Productivity explains productivity as a comprehensive holistic
phenomenon encompassing all elements required to improve
products/ services (output).
• Productivity in the future must be concern itself with seeking
affluence of a kind which will provide people with material wealth as
well as spiritual satisfaction.
• Also the outputs particularly in the form of physical pollution must be
controlled in the context of increasing concern of society for clean
environment and sustainable development.
• To improve productivity, products must be designed to satisfy
customer need with optimum consumption of resources without
generation of waste in the manufacturing process.
 No. Concept Summary
1 Productivity as - It can be measured, ideally against a universal standard.
an objective - Organizations can monitor productivity for strategic reasons such as
concept corporate planning, organization improvement, or comparison to competitors.
- Can be used for tactical reasons such as project control or controlling
performance to budget.

2 Productivity as a - Can be logically defined and empirically observed.

scientific - It can also be measured in quantitative terms, which qualifies it as a variable
concept and therefore, it can be defined and measured in absolute or relative terms.
- It is much more useful as a concept dealing with relative productivity or as a
productivity factor.

3 Productivity as a - Useful as a relative measure of actual output of production compared to the

measure concept actual input of resources, measured across time or against common entities.
- As output increases for a level of input, or as the amount of input decreases
for a constant level of output, an increase in productivity occurs.
- "productivity measure" describes how well the resources of an
organization are being used to produce input.
No Concept Summary
4 Productivity as - Productivity is often confused with efficiency. Efficiency is generally seen as the
an efficiency ratio of the time needed to perform a task to some predetermined standard time.
concept However, doing unnecessary work efficiently is not exactly being productive.
- It would be more correct to interpret productivity as a measure of effectiveness
(doing the right thing efficiently), which is outcome-oriented rather than output-
oriented.
5. Productivity as an Factor concept
5.1 Partial Factor - Considers a single input in the ratio.
Productivity - Partial-factor productivity would be - the ratio of total output to a single input.
- Output/labor, output/machine, output/capital, or output/energy.
5.2 Multi Factor - Utilizes more than a single factor.
Productivity - Multifactor productivity is the ratio of total output to a subset of inputs.
- A subset of inputs might consist of only labor and materials or it could include
capital
5.3 Total Factor - Measured by combining the effects of all the resources used in the production of
Productivity goods and services (labor, capital, raw material, energy, etc.) and dividing it into the
output
Japanese Productivity Improvement
Techniques
• Productivity improvement techniques can be applied effectively in
enterprises of any size, from one-person companies to corporations with
thousands of staff.
• Japan developed number of productivity improvement techniques after
World War II .
• The TPS comprises the following productivity improvements components.
• Toyota, a giant Japanese automobile company was pioneer in development
and application of various productivity improvement techniques under
Toyota Production System (TPS).
• Taiichi Ohno developed the Toyota Production System (TPS) after World
War II.
 Japanese Productivity Improvement
Techniques
• JIDOKA • Just-In-Time
• HEIJUNKA • Kanban
• Process Oriented Management
• KAIZEN Techniques (POM)
• FiveS • Visual management
• Muda elimination • Work Standards
• Poka-Yoke • The PDCA/SDCA Cycle
• Single Minute Exchange of Die • Statistical Process Control (SPC)
(SMED) • Suggestion Systems
• Total Productive maintenance
(TPM)
 Jidoka
• Jidoka is a Toyota concept aimed at describing the man-machine
interface such that people remain free to exercise judgment
while machines serve their purpose.
• The Jidoka system shows faith in the worker as a thinker and
allows all workers the right to stop the line on which they are
working.
• Jidoka is often referred to as “automation with a human mind”.
• The jidoka way of working consists of following three principles-
Do not make defects, Do not pass on defects, Do not accept
defects.
HEIJUNKA
• Heijunka focuses on achieving consistent levels of production.
• It is defined as “distributing the production of different [body types]
evenly over the course of a day”
• It incorporates the principles of line balancing by attempting to
equate workloads, leveling demand out by creating an inventory
buffer and replenishing that buffer.
• It believes in providing even work load for all employees.
• Heijunka has the capability of reducing lead times by minimizing time
losses due to frequent process changeovers.
 AN EXAMPLE OF HEIJUNKA IN PROCESS
• Leveling the type and quantity of production enables production to
efficiently meet customer demands while avoiding batching and results in
minimum inventories, capital costs, manpower and production lead time
through the whole value stream.
• With regard to level production by quantity of items, suppose that a
producer routinely received orders for 1000 items per week, but with
significant variation by day: 400 items arrive on monday, 200 on tuesday,
100 on wednesday, 200 on thursday and 100 on friday. To level production,
the producer might place a small buffer of finished goods to cover the
demands and level production at 200 units per day through the week. By
having a small stock of finished goods at the very end of the value stream,
producer can organize demand to its plant and to its suppliers, making for
more efficient utilization of assets along the entire value stream while
meeting customer requirements.
Example of leveling production by type of
item
• On the picture you can see that a shirt company offers Models A, B, C,
and D to the public and that weekly demand for shirts is five of Model
A, three of Model B, and two each of Models C and D. A mass
producer, seeking economies of scale and wishing to minimize
changeovers between products, would probably make the shirts in
the weekly sequence A A A A A B B B C C D D. A lean producer, would
try to build in the repeating sequence A A B C D A A B C D A
B (infrequent batches of orders upstream to suppliers), making
appropriate production system improvements, such as reducing
changeover times. This sequence would be adjusted periodically
according to changing customer orders.
KAIZEN Techniques

•Kaizen (Continuous improvement) is a

management supported employee
driven process where, employees make
a great number of continuous
improvement efforts.
(i) Five Ss of Housekeeping:
• A structured approach to achieve clean and orderly work place by fixing
place for everything. Five S is an abbreviation for the Japanese words: Seiri,
Seiton, Seiso, Seiketsu and Shitsuke. It means:
• Seiri (Sort) - getting rid of unnecessary items
• Seiton (Set in order) - Arranging items (materials, tools, gauges)
systematically for easy retrievability.
• Seiso (Shine/Sweep)- Keeping work place scrupulously clean.
• Seiketsu (Standardize) - Scheduling regular cleaning and clearing out
operations.
• Shitsuke (Sustain/Self-discipline) - Making all the above task meet agreed
standards at agreed intervals.
(ii) Muda elimination:
• Muda means “Waste”.
• Here muda elimination implies an “on going” and systematic
reduction or elimination of waste.
• Seven kinds of major waste: Overproduction Muda, Stock Muda,
Transport Muda, Defects Muda, Delay Muda, Motion Muda, Over
processing Muda.
• It helps to eliminate redundant processes or parts of processes,
delete non-value added activities, simplify motions, minimize fatigue,
reduce wait time, etc.
(iii) Poka-Yoke:

•It is powerful and comprehensive

method of “error proofing”. A work
process to eliminate inadvertent errors
to ensure quality products and services.
It helps in defect prevention and defect
detection.
(iv) SMED:
• Single Minute Exchange of Die (SMED) is a
technique of performing a set up operation in
lesser amount of time. It affects a machinery
setup for change over from job to another in less
than 10 minutes expressed as a single digit. It
helps in reduced Work-in-progress, better
average daily production, increased capacity and
faster delivery to customers.
(v) Total Productive Maintenance (TPM):

•TPM is keeping machines in good

working condition through
systematic maintenance of
equipment so that they fail less
frequently and production process
continues without interruption.
(vi) Just-In-Time:
• JIT is a management philosophy aimed at eliminating waste from every
aspect of manufacturing and its related activities.
• The term JIT refers to producing only what is needed, when it is needed
and in needed quantity.
• The aim of JIT in a factory is to reduce lead times, minimize inventory,
reduce the defect rate to zero and accomplish all of the above at minimum
cost.
• Three essential ingredients to effective manufacturing excellence through
JIT:
• (i) JIT manufacturing techniques that aims to promote a rapid response to customer
demand while minimizing inventory
• (ii) a total quality culture to pursue excellence in both the product and every area of
the business, including customer service, purchasing, order taking, accounting,
maintenance, design, etc.; and
• (iii) people or employee involvement in the development of the organization through
its culture and its manufacturing and other business processes.
(vii) Kanban:
• Kanban is a manual production scheduling technique
controlled by a process or machine operator. Kanban
means card in Japanese, is attached to given number
of parts or products in the production line instructing
the delivery of given quantity. The kanban card after
all parts/products have been used up is returned by
the operator to its origin. Production is controlled
through demand originating from external customer.
(viii) Process Oriented Management (POM):
• Traditional management focuses mainly on
results and individuals on their ultimate
achievement. Kaizen management emphasis on
process of achieving the results. Managers in
POM are judged by people centered skills as
time management, education and training, inter-
team participation, communication and morale
boosting.
(ix) Visual management:

•Visual management is the method of

providing, in a clearly visible manner, to
both workers and management, information
on the current status including target of the
various operations performed as well as
various work pieces found at the work
place.
(x) Work Standards:
• Work standards represent the best way of doing a job and it consists of set
of documented policies, rules, directives and procedures established by the
management for all major operations to enable employees to perform
their jobs without errors and to enable management to minimize variations
in output, quality, work-in-progress and cost.
• Three elements of standardized work are takt time, work sequence and
standard work-in-progress. The key steps in implementing work standards
are:
• (i) identify the key issues in the current process
• (ii) map the process
• (iii) improve the process
• (iv) implement the process and
• (v) sustain the process.
(xi) The PDCA/SDCA Cycle:
• The PDCA (Plan-Do-Check-Act) cycle is an endless improvement
cycle which demands that each team Plans (establish a target
for improvement through action plan), Does (implement the
plan), Checks (monitor and evaluate effects), Acts
(Standardizes new procedures or set goals for further
improvement)
• Since every process is initially unstable, it must be stabilize
using SDCA (Standardize-do-check-act) cycle.
• Thus, a SDCA cycle must precede every PDCA cycle to
consolidate gains into current process before raising the
standard threshold.
(xii) Statistical Process Control (SPC):
• Statistical Process Control is the application of statistical
techniques to control a process and eliminate process
variations due to assignable causes.
• Statistical process control requires operators to do
periodically sampling of the quality of their own output,
enter data into control charts, analyze the trend, and decide
for themselves when to shut down the process and when to
make adjustments / corrections to the process to prevent
defects.
xiii) Suggestion Systems:
• Suggestion Systems- the fundamental to the
Kaizen philosophy is the process owned by
employees through designed to benefit the
company, inviting employees to suggest /
implement any idea, large or small, novel or
mundane concerning any aspect of the company
life.
Work Study as a Productivity Improvement
Technique
• Work study is the investigation, by means of a
consistent system of the work done in an organization
in order to attain the best utilization of resources i.e.
Materials, Machines, Men and Money. All the
technologies and management systems are related
with productivity.
Objectives of Work Study
1. To analyze the work in order to achieve work
simplification and thereby improving productivity of
the system.
2. To have optimum utilization of resources
3. To evaluate the work content through work
measurement.
4. To set time standards for various jobs.
Work Study
• Work study is mainly concerned with the examination of human
work. In fact planning is not possible unless one knows how long it
will take to do a particular job.
• Thus, time is very important to the manufacturer who must keep to
promise, to estimate quantities and to other industrial and business
arrangements or organizations.
• Work study is not a theoretical concept but essentially a practical one
and deals with human beings who have their own attitude and style
of working. So the success of work study is dependent upon the
relations between the labour/employees and the management.
Definition and Concept of Work Study

•Generally work study is used to describe a

complete set of techniques with the help of
which work can be simplified, standardized
and measured.
• When it is possible to simplify the existing work or new methods are
designed and introduced such that the task/activity becomes
simpler than following advantages are possible:
1. More production with less effort so goods/products are available at
cheaper rates.
2. Better equipment utilization shall lead to marked increase in the
total production without addition of new resources, thus
productivity may improve.
• These advantages are possible through the willing cooperation of the
people engaged in production work. In view of these far reaching
benefits, work study has become an important tool of management.
In industries work study is considered as a tool
of improving productivity by way of:
1. Resource utilization to a satisfactory level.
2. Capital investment to introduce latest
technology.
3. Better management of the system.
Need For Work Study:
• Principles of work study have been used since long to
identify the improvements to be incorporated, when
industrial set up was simple and involved lesser
problems. The industries of today with increased
complexities and modernization naturally demand a
more systematic approach like work study in its
present form for solution of various problems.
Work study is most valuable tool of
management because:
1. It is a direct means of improving productivity of the system involving very
less or no cost.
2. The approach is simple, systematic, consistent and based on handling of
facts. Thus the part played by opinions in taking decisions is minimized.
3. No factor affecting the efficiency of operation is overlooked in this
approach.
4. It provides most accurate means of setting standards of performance
which are helpful in the process of production planning and control.
5. Application of work study result in immediate savings.
6. It is a universal tool for management.
7. It is a most penetrating tool of investigation available to the
management of the industrial unit.
Techniques of Work Study:
• Method study
• Work measurement

*Thus work study is the term used to embrace the techniques of Method Study and
Work Measurement which are used to ensure the best utilization of manpower and
material resources in carrying out specified activity.
The sequential order of the correct procedure to be adopted for
having effective or purpose oriented results of method study include
the following:
1. Select the work/procedure to be analyzed.
2. Record all the relevant information related with the existing work
system with the help of various recording devices or techniques.
3. Make critical examination of collected data/facts.
4. Develop and improve the method which is economical and practical
after giving due consideration to the alternative method possible.
5. Install the new selected method with proper instructions.
6. Maintain the latest standards of methods through periodic
verification etc.
Similarly, the logical order of correct procedure to be adopted
for having effective results of work measurement includes the
followings:
1. Divide the selected procedure into small work elements.
2. By direct observations record the relevant information regarding
the various work elements.
3. In the light of relevant information examine the work critically.
4. Measure the work content in the terms of time of the work
elements involved in method being adopted.
5. Define and design the new selected method.
6. Finally convert the work content time in standard time.
Objectives of Method Study:
1. Better design of plant equipment and buildings.
2. Less fatigue or workers by avoiding unnecessary movements of manpower.
3. Better working conditions and environment for workers/employees.
4. To have more effective utilization of materials, machines and manpower and
money.
5. Better Product quality.
6. Efficient and fast material handling equipment.
7. Leads to standardization, rationalization, simplification and specialization.
8. Efficient planning of the section.
9. Streamlined working procedures.
Objectives of Work Measurement
• Effective planning and control of production,
distribution and administration can not be achieved
unless these are based on facts.
• One of the most important of these facts is the time
required for job completion which can be obtained by
motion study or work measurement.
Other objectives of work measurement are as
follows:
1. When two alternative methods which seem equally advantageous, one
which requires less time for completion of the job (i.e. faster) can be
established.
2. The man power required for a job or new plant can be determined on
the basis of accurate knowledge of the amount of work that has to be
done so it helps in manpower economy.
3. Work measurement data provides reliable basis to decide equipment.
4. Provides requisite information for effective production planning and
improving efficiency of the system.
5. Provides basis for fair and reliable incentive schemes.
6. Decides realistic labor budgeting and provides a basis for standard
costing system.
Advantages of Work Study:
1. It is direct means of improving productivity.
2. It results in uniform and improved production flow.
3. It reduces the manufacturing cost.
4. With its help fast and accurate delivery dates are possible.
5. It provides better service and consumer satisfaction.
6. It improves employee-employer relations.
7. It provides job satisfaction and job security to workers.
8. Better working conditions are possible for workers.
9. It is most important tool of analysis and can help in providing better wages to workers
on scientific basis.
10. Most accurate method and yet provides a sound basis for production planning, control
and incentives for man power.
11. Everyone concerned with industries is benefited from it such as worker, consumer and
management of the unit.
Steps or Procedure Involved in Methods
Study
1. SELECT the work to be studied and define its boundaries.
2. RECORD the relevant facts about the job by direct observation and collect such additional data as
may be needed from appropriate sources.
3. EXAMINE the way the job is being performed and challenge its purpose, place sequence and
method of performance.
4. DEVELOP the most practical, economic and effective method, drawing on the contributions of
those concerned.
5. EVALUATE different alternatives to developing a new improved method comparing the cost-
effectiveness of the selected new method with the current method with the current method of
performance.
6. DEFINE the new method, as a result, in a clear manner and present it to those concerned, i.e.,
management, supervisors and workers.
7. INSTALL the new method as a standard practice and train the persons involved in applying it.
8. MAINTAIN the new method and introduce control procedures to prevent a drifting back to the
previous method of work.
Selection of the Job for Method Study
• Cost is the main criteria for selection of a job, process and
department for methods analysis. To carry out the method study, a
job is selected such that the proposed method achieves one or more
of the following results:
(a) Improvement in quality with lesser scrap.
(b) Increased production through better utilization of resources.
(c) Elimination of unnecessary operations and movements.
(d) Improved layout leading to smooth flow of material and a balanced
production line.
(e) Improved working conditions.
CONSIDERATIONS FOR SELECTION OF
METHOD STUDY
• The job should be selected for the method study based upon the
following considerations:
1. Economic aspect
2. Technical aspect, and
3. Human aspect.
A. Economic Aspects
• The method study involves cost and time. If sufficient returns are not
attained, the whole exercise will go waste. Thus, the money spent
should be justified by the savings from it. The following guidelines can
be used for selecting a job:
(a) Bottleneck operations which are holding up other production
operations.
(b) Operations involving excessive labor.
(c) Operations producing lot of scrap or defectives.
(d) Operations having poor utilization of resources.
(e) Backtracking of materials and excessive movement of materials.
B. Technical Aspects
• The method study man should be careful enough to select a job in
which he has the technical knowledge and expertise. A person
selecting a job in his area of expertise is going to do full justice.
• Other factors which favor selection in technical aspect are:
1. Job having in consistent quality.
2. Operations generating lot of scraps.
3. Frequent complaints from workers regarding the job.
C. Human Considerations
• Method study means a change as it is going to affect the way in which
the job is done presently and is not fully accepted by workman and
the union. Human considerations play a vital role in method study.
These are some of the situations where human aspect should be
given due importance:
1. Workers complaining about unnecessary and tiring work.
2. More frequency of accidents.
3. Inconsistent earning.
Recording Techniques for Method Study
• The next step in basic procedure, after selecting the work to be studied is
to record all facts relating to the existing method.
• In order that the activities selected for investigation may be visualized in
their entirety and in order to improve them through subsequent critical
examination, it is essential to have some means of placing on record all the
necessary facts about the existing method.
• Records are very much useful to make before and after comparison to
assess the effectiveness of the proposed improved method.
• The recording techniques are designed to simplify and standardize the
recording work.
• For this purpose charts and diagrams are used.
Recording techniques for method study
CHARTS USED IN METHODS STUDY
• This is the most popular method of recording the facts. The activities
comprising the jobs are recorded using method study symbols.
• A great care is to be taken in preparing the charts so that the information it
shows is easily understood and recognized.
• The following information should be given in the chart.
• These charts are used to measure the movement of operator or work (i.e.,
in motion study).
(a) Adequate description of the activities.
(b) Whether the charting is for present or proposed method.
(c) Specific reference to when the activities will begin and end.
(d) Time and distance scales used wherever necessary.
(e) The date of charting and the name of the person who does charting
Types of Charts
• It can be broadly divided into (A) Macro motion charts and (B) Micro
motion charts.
• Macro motion charts are used for macro motion study and micro
motion charts are used for micro motion study.
• Macro motion study is one which can be measured through ‘stop
watch’ and micro motion study is one which cannot be measured
through stop watch.
(A) MACRO MOTION CHARTS
Following four charts are used under this type:
1. Operation Process Chart It is also called outline process chart. An
operation process chart gives the bird’s eye view of the whole process by
recording only the major activities and inspections involved in the
process. Operation process chart uses only two symbols, i.e., operation
and inspection. Operation, process chart is helpful to:
(a) Visualize the complete sequence of the operations and inspections in the
process.
(b) Know where the operation selected for detailed study fits into the entire
process.
(c) In operation process chart, the graphic representation of the points at
which materials are introduced into the process and what operations and
inspections are carried on them are shown.
(A) MACRO MOTION CHARTS
2. Flow Process Chart Flow process chart gives the sequence of flow of
work of a product or any part of it through the work center or the
department recording the events using appropriate symbols. It is the
amplification of the operation process chart in which operations;
inspection, storage, delay and transportation are represented.
However, process charts are of three types:
(a) Material type—Which shows the events that occur to the materials.
(b) Man type—Activities performed by the man.
(c) Equipment type—How equipment is used.
The flow process chart is useful:
(a)to reduce the distance travelled by men (or
materials).
(b)to avoid waiting time and unnecessary delays.
(c)to reduce the cycle time by combining or eliminating
operations.
(d)to fix up the sequence of operations.
(e)to relocate the inspection stages.
3. Two Handed Process Chart
A two handed (operator process chart) is the most detailed type of flow
chart in which the activities of the workers hands are recorded in
relation to one another. The two handed process chart is normally
confined to work carried out at a single workplace. This also gives
synchronized and graphical representation of the sequence of manual
activities of the worker. The application of this charts are:
• To visualize the complete sequence of activities in a repetitive task.
• To study the work station layout.
4. Multiple Activity Chart
It is a chart where activities of more than subject (worker or
equipment) are each recorded on a common time scale to
show their inter-relationship. Multiple activity chart is made:
• to study idle time of the man and machines,
• to determine number of machines handled by one operator,
and
• to determine number of operators required in teamwork to
perform the given job.
Diagrams Used in Method Study
• The flow process chart shows the sequence and nature of movement
but it does not clearly show the path of movements. In the paths of
movements, there are often undesirable features such as congestion,
back tracking and unnecessary long movements. To record these
unnecessary features, representation of the working area in the form
of flow diagrams, string diagrams can be made:
1. To study the different layout plans and thereby; select the most
optimal layout.
2. To study traffic and frequency over different routes of the plant.
3. Identification of back tracking and obstacles during movements.
Diagrams are of two types: 1. Flow diagram and 2. String diagram.
1. FLOW DIAGRAM
• Flow diagram is a drawing, of the working area, showing the location of the
various activities identified by their numbered symbols and are associated with
particular flow process chart either man type or machine type. The routes
followed in transport are shown by joining the symbols in sequence by a line
which represents as nearly as possible the path or movement of the subject
concerned. Following are the procedures to make the flow diagram:
1. The layout of the workplace is drawn to scale.
2. Relative positions of the machine tools, work benches, storage, and inspection
benches are marked on the scale.
3. Path followed by the subject under study is tracked by drawing lines.
4. Each movement is serially numbered and indicated by arrow for direction.
5. Different colors are used to denote different types of movements.
2. STRING DIAGRAM

•String diagrams is used for solving

movement problems since it shows
congestions and excessive
distances.
Process Chart Symbols
1. Operation—Indicates the main steps in a process,
method or procedure. Usually the part, material or
product concerned is modified or changed during the
operation.
2. Inspection—Indicates an inspection for quality and /
or check for quantity
3. Transport—Indicates the movement of workers,
materials or equipment from place to place
4. Temporary Storage or Delay—Indicates a delay in the
sequence of events : for example, work waiting
between consecutive operations, or any object laid
aside temporarily without record until required.
Process Chart Symbols
5. Permanent Storage—Indicates a Two
symbols may be combined when two
activities are performed concurrently
operation and inspection.
6. Combined Activities—Indicates a
controlled storage in which material is
received into or issued from a store under
some form of authorization; or an item is
retained for reference purposes.
Outline Process Chart
An outline process chart is a process chart giving an overall
picture by recording in sequence only the main operations
and inspections.
• While preparing the outline process chart we use Symbols of
Operation and Inspection
• A brief note of the nature of each operation is made beside
the symbol
• In an outline process chart, only the principal operations and
the inspections carried out are recorded to ensure
effectiveness
Example: Outline process chart of plywood manufacture is given
FLOW PROCESS CHART
• Definition:
• Flow process charts are graphic representations of the
sequences of operations, transportation, inspections, delays
and storages occurring during a process or a procedure and
include information considered for analysis such as, time
required and distance moved.
• To develop an understanding how a process or work
happening and clearly documenting how a particular job is
done, in addition of that mapping a process in flow chart
format helps us where the process can be improved.
Types of Flow Process Charts
• Material or product type.
• Man type.
• Machine type or equipment.

• Material or product type flow process chart:- Records what happens to the
material or product i.e. the changes the material or product undergoes in
location or condition (includes operation and transportation).
• Man type process flow process chart:- Records the activities of worker or
operator i.e. what a worker or operator does. In this type of chart usually
storage term is not applicable.
• Machine or equipment type flow process charts:- Records the manner in which
a machine or an equipment is used.
STANDARD FORMATS USED FOR FLOW
PROCESS CHART
Man type
flow
process
chart