Production and Productivity in Manufacturing

 Production and productivity:

Production is defined as the process or procedure to transform a set of input into output having the desired utility and quality. Production is a valueaddition process. Production system is an organized process of conversion of raw materials into useful finished products.

The concept of production and productivity are totally different. Production refers to absolute output where as productivity is a relative term where in the output is always expressed in term of inputs. Increase in production may or may not be an indicator of increase in productivity. If the production is increased for the same input, then there is an increase in productivity.

If viewed in quantitative terms, production is the quantity of output produced, while productivity is the ratio of the output produced to the input(s) used.

Productivity = Production / Resources employed

Productivity is said to be increased, when

1. the production increases without increase in inputs.

2. the production remains same with decrease in inputs.

3. the output increases more as compared to input.

Example:

A company produces 160 kg of single jersey fabrics by consuming 200 kg of

yarn for a particular period. For the next period, the output is doubled (320 kg)

by consuming 420 kg of yarn and for the third period, the output is increased

to 400 kg by consuming 430 kg of yarn. Comment based on productivity.

Productivity = Output / Input

                    = 160 / 200

                    =  0.80 

                    = 80%