Measuring productivity in manufacturing isn’t that difficult. It starts with some basic knowledge of the inputs: Machinery, Manpower, and Materials!
Individual Resource Productivity, or IRP, is a basic ratio of the output per individual resource. It is the calculation of the output per machinery, manpower, and material resources. The Output is a quantity of units or a total dollar value of production within a given time. The resource inputs: Machinery and Manpower, are often expressed in hours of operation. But the resource input: Material, is often stated by weight, volume, or number of equivalent units.
By computing the productivity for each of the input resources, more insight is often gained. If the productivity of an individual resource appears questionable, it may be further analyzed. Below is a summary of the Individual Resource Productivity Metrics.
Measuring Productivity in Manufacturing: Case Study
The following is an example taken from the food packaging industry. Foam trays are often used by various fast food restaurants. Each tray gets made from material that’s fed through a machine that molds the material into the desired shape. Each production shift is 8 hours. During this time, the machine ran for 5 hours, the operator was available for 7 hours and the material consumed weighed 200 lbs. During this production shift the output was a total of 90,000 food service trays.
In the table above, the machine was only available for five out of eight hours. Second, scheduled breaks account for one hour in lost production. If the three-hour loss due to unscheduled machine downtime was solved would productivity improve? If we redeployed manpower could we gain one more hour of production and improve productivity?
Did we gain more production?
The following table shows the increase in output as a result of changes to the machine and a re-deployment of manpower.
A close examination of the data reveals some interesting facts shown in the summary below. As a result of our improvement efforts, production increased by almost 60%!
Let’s look at productivity. Did it improve? If so, what contributed to its increase?
Resolving the unscheduled downtime in machinery did nothing to increase its productivity. There was a slight decrease of -0.04%. But, without it the increase in manpower productivity could not be realized. Notice how an increase in one manpower hour improved productivity by almost 40%!
With an increase in machine up-time and manpower, material consumption naturally increased. No gain in material productivity was observed. Yet, a slight decrease of 1.58% occurred because of an incremental rise in production scrap.
Now, management might look at these numbers with much happiness. Let’s face it getting more production and improving manpower productivity is an accomplishment. But, as the old saying goes, money makes the world go around! So let’s look at the IRP and compute their individual costs and see if they’re lower. Remember, a company whose product meets the need of the market, at the lowest cost, gets more business and market share.
What do the pre and post Output per Individual Resource Cost say?
The following tables show the pre and post improvement summary. They’re expressed as the number of Output Units per Dollar Resource Cost.
Let’s see the change in the pre and post productivity numbers by Output per Dollar Resource Cost. In the table below, the change in productivity is due to a large improvement in manpower productivity. The number of units produced per dollar increased by almost 40%! This is the same result seen earlier.
The project team is happy! They report a 39.5% improvement in manpower productivity to management. While management is happy to see this improvement, they want to know if the total cost per unit decreased. So they ask to have the Total Resource Productivity (TRP) computed! Now that is another topic for another post!
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