The Productivity Cycle

The Productivity Cycle


The productivity cycle consists of productivity measurement,productivity evaluation,productivity planning and productivity improvement,in that specific order.Accordingly,these are the four phases,or stages,of a formal productivity program.An organization desirous of taking up a productivity program must begin with productivity measurement.After the productivity levels are  measured, they must be evaluated,or compared against the corresponding planned values.Based on this evaluation,

i. Plans are developed for productivity improvement projects/programs(to make up the deficiencies identified) and

ii. Target levels for productivity are set for both short and ong term(e.g. week,month,quarter or year).

This is the third phase of the cycle.After that,the productivity improvement projects are taken up,in the final phase.This is followed by productivity measurement to determine the actual value of productivity achieved.This is being the first phase,signals the start of the next cycle.

The 4 phases of productivity cycle are explained below:

  1. Measurement Phase

The first phase of productivity cycle is measurement. A company must initiate productivity measurement at some point as without measurement it would not be possible to make improvement. Most measurement systems are oriented towards partial productivity. Among total productivity based measurement systems, Sumantha’s Total Productivity model (TPM) is applicable at all levels. The model defines total productivity measure which includes all the tangible output and tangible input factors. Tangible here means that can be directly measured and qualified.  In fact the TPM can be applied in every type of organisation where there are people or where machines, equipment, materials and energy are used.

  1. The Evaluation Phase

Productivity evaluation is the second phase of productivity cycle. It is the comparison of productivity in general and total productivity in particular. There are two basic types of productivity

  • Type I
  • Type II

 Type I Evaluation

The actual levels of total productivity are compared between two time periods. For example Total Productivity is 1.240 in October and 1.110 in November, then the present variation in TP between two month is given by:

Type II Evaluation
Type II evaluation is a comparison of productivity in general and total productivity in particular within a particular time period.For example the TP level of a company is estimated to be 1.138 for October but actual TP level comes out to be 1.110, the percent variation in TP for the month of October is given by
formula 2

  1. The Planning Phase

Productivity planning, the third phase of the productivity cycle, is concerned with the establishment of targets for productivity in general and TP in particular. For example in the preceding example, the company had a target of 1.410 for February; this target was set in the planning phase of the productivity cycle. Productivity planning helps an enterprise to complete more intelligently and wisely in the competitive environment. It helps to gather information regarding the current market and help to set targets to be a market leader and sustain that position.

  1. The Improvement Phase

The fourth phase of productivity cycle is productivity improvement. There are various techniques based on industrial engineering, system control, operations research, computer engineering management, psychology, and other behavioural sciences and many other disciplines to improve the total productivity. Few Examples of such Productivity improvement Techniques are:

  1. Computer aided design (CAD)
  2. Computer aided manufacturing (CAM)
  3. Bio engineering
  4. Management by Objects (MBO)
  5. Worker Participation
  6. Quality Control
  7. Just in time (JIT) inventory
  8. Job design
  9. Job evaluation
  10. Value engineering etc.

The productivity cycle emphasises the following:

  1. Productivity improvement cannot be taken up by the itself,and must be preceded by productivity measurement,productivity evaluation and productivity planning.
  2. All the four stages of the cycle are important,and they must be carried out in a given sequence.
  3. A productivity program should not be treated as a short duration one-off project,and the organisation must be prepared to continue the program till at least the benchmarks are attained,and this can be followed by a productivity audit monitor the productivity levels in an attempt to avert any decline in productivity.


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