Productivity

Question 1

What is labour productivity?

Answer 1

Labour productivity measures the output per employee in a given period

=

total output/number of employees

Question 2

What is efficiency?

Answer 2

Efficiency measures how well inputs are used to generate output.

If a process becomes more efficient it uses fewer inputs to produce a given output and the unit cost should fall.

Question 3

Ways of increasing labour prodcutivity?

Answer 3

• Invest in technology so employees have access to more equipment
• Improve training
• Change the way the work is organised and the design of jobs to improve the flow of work
• Change the way employees are rewarded to provide more incentive

Question 4

What is lean production?

Answer 4

Lean production occurs when managers reduce waste and therefore operations become more efficient

Question 5

How does lean production reduce waste?

Answer 5

• Improve quality
• Reducing the amount of inventory held as this reduces costs of protecting and storing it
• Reducing the time items are waiting for something to happen to them
• Reducing the time when items are moving from one stage of process to another

Question 6

What processes does a business have to adopt to become leaner?

Answer 6

Kaizen:
- emphasises continuous improvement, small changes made regularly leads to big changes over time

Andon:
- If a problem in production occurs then the andon cord is pulled and production stops, flashing lights highlight where the problem occurred.

Changes to the layout of a store or factory and changes to the process used to make it more efficiently

Question 7

How does technology help businesses develop lean production?

Answer 7

• Be more flexible to customer needs
• Reduce costs by having more efficient processes with less errors
• Be innovative

Requires:
- Finance
- Training
- Understand and manage the impact of functions