MEASUREMENT OF MANUFACTURING PRODUCTIVITY AT THE PLANT LEVE

A Productivity Modeling and Measurement system was developed which is an application of the Leontief Input-Output method to the measurement of manufacturing productivity at the plant level. Productivity is indicated using a group of multiple measures relating to the efficiency by which a department in a plant utilizes its resources to generate its output and the effectiveness of the outputs of that department to the users. The ability of Leontief Input-Output analysis to clearly show the interdependencies of plant departments on each other is a major improvement over traditional productivity measurement systems.;The productivity measurement system which is developed in this manner can be implemented in an actual manufacturing plant without extensive new data collecting systems to drive the model, using traditional information on normal costs of department operations and manager's judgments of how resource costs relate to department outputs.;It was concluded that a very powerful plant-level productivity measurement system can be developed to assist plant management in tracking present plant productivity on a periodic basis and to allow management to generate productivity improvement scenarios and predict the effect of contemplated changes on future plant productivity. The methodology is expected to have an impact on productivity measurement at the plant-level by providing the practitioner with an alternative to "factor" type measurement systems to be used in identifying where productivity improvements can be made in plant operations. Responses from an industrial survey concerning the proposed system showed that the majority of the plant managers responding believed that the system could provide them with information useful in decision making relating to the operation of their individual plants.