PRODUCTION AND PRODUCTIVITY

Production and productivity are two different words with different meaning. Production refers to quantity of production, while productivity means the efficient use of resources consumed for achieving that production. Resources are of several types—material, men, machine hours, energy consumed, space utilised etc. Lesser is the consumption of such resources per unit of production, higher is the productivity. Let us take the example of two motor cycle manufacturers who produce similar motorbikes—same design, same HP etc. If one manufacturer uses 1.5 tons of steel per motorcycle and the other uses 1.4 tons of steel, the latter’s material productivity is higher. Productivity should not be confused with cost of manufacture, although a plant with higher productivity will use less resources and its product is likely to be cheaper. Another example will make the difference between production and productivity clear. If one steel maker uses 6 tones of coke per ton of steel produced, its productivity is higher as compared to another steel maker who uses 6.8 tones of coke per ton of steel produced. The fact that the first steel maker produces only 1.5 m.t. of steel per year, whereas the second steelmaker produces 4.5 mt. of steel per year is of no consequence, when we talk about productivity. Productivity of plants or any other manufacturing activity is a very important concept. Recent growth of Japan is attributed to the high productivity levels achieved by their manufacturing concerns. Productivity alone will make the products competitive, production alone will not help a nation become great.