Business Management - Operations management: relationship between
operations, productivity and competitiveness
Relationship between operations, productivity and competitiveness
Every organisation attempts to improve its productivity i.e. its rate
of production output per unit of input in a given time period. Increasing
productivity produces a more competitive cost structure for the
organisation and enables the organisation to offer more competitive prices
to its customers.
The three types of productivity. Image.
There are three types of productivity - technological productivity,
employee productivity and managerial productivity.
Increased technological productivity refers to the use of more
efficient equipment, robots, computers and other technologies to increase
output. Organisations in their attempt to achieve and then maintain
competitive edge must remain at the forefront of technological advances.
These advances include employing flexible manufacturing systems
manufacturing systems that use computers to control machines and the
production process automatically so that different types of parts or
product configurations can be handled on the same production line. With a
flexible manufacturing system, a single line can be readily readapted to
small batches of different products based on computer instructions.
Examples of other technological advancements that organisations can adopt
to enhance their competitiveness include:
* CIM - Computer-integrated manufacturing is the computerised integration
of all major functions associated with the production of a product. CAD/CAM
forms the basis of CIM systems i.e. Computer-aided design (CAD) and
Computer-aided manufacturing (CAM).
* CAD enables engineers to develop new product designs in about half
the time required using traditional methods. Engineers can use the CAD
system to design the pattern layouts and then determine the manufacturing
changes needed to produce new sizes and styles, expected labour standards
and bills of materials.
* CAM is where the computer is harnessed to help guide and control
the manufacturing process.
Increased employee productivity means having employees produce more
output in the same time period. This may be achieved by better training of
employees. Improved training could involve cross and multi-skilling, the
re-engineering of work practices, the introduction of participative
management styles, or the altering of remuneration levels or types.
Increased managerial productivity simply means that managers do a better
job of running the business. Management productivity improves when
managers emphasise quality over quantity, break down communication barriers
and empower employees using a participative decision-making management
style. Managers must learn to use reward systems, to use management by
objectives, to increase employee involvement, to better utilise
teamwork and to adopt other management techniques in order to increase
Increases in productivity are, therefore, dependent upon both people
and operations variables and are a significant contributor to improved
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