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Productivity vs. Efficiency

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  • #47404

    Joe1
    Participant

    I was wondering if someone could explain the difference, if any, between productivity and efficiency. And a formula to calculate each in regards to manufacturing.
    Thanks

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    #158507

    hint
    Participant
    #158508

    hint
    Participant

    Unfortunately this site doesn’t display the URL correctly. Please copy and past it into your browsers URL-window  or add :productivity or :efficiency to the link followed.

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    #158509

    Effectiveness
    Participant

    Hi,
    indeed you can find several definitions in the web and they seem to lead in the same direction.
    So, how do productivity and efficiency differ?
    Productivity measures the total product out the door–completed work.
    Efficiency measures the amount of work done, regardless of how much completed product there is – it’s process-oriented.
    When you raise efficiency, productivity will necessarily improve – provided that efficiency increase does not come at the cost of efficiency elsewhere in the productivity chain.

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    #158510

    Rajsekhar
    Participant

    Productivity as per me, would be the ability to produce a certain good or service, to a set standard. When we say A has a higher productivity than B, we normally mean he is able to get more done, than B in a given time. Here the assumption is that the work being done has a ready market.Efficiency on the other hand is rate at which one can get a thing done. It would seem to mean the same as Productivity.But you could efficiently be producing things for which the market has either gone by, or yet to arrive.I think Productivity is all about being efficient in producing the right things.

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    #158521

    KT
    Participant

    I see productivity as the amouont of goods or services completed, typically measured against a time standard.  Where as, effiiciency is the comparison of the current amount produced versus the optimal amount that should/could be produced.  Therefore the two do not always go hand in hand.
    Hope this helps.

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    #158525

    mcleod
    Member

    I think you will see that productivity ans efficiency mean differnet things to differnet people.  Generally,  productivity is the amount of product that can be produced over a certain time (300 parts per hour or min).  Improving productivity by decreasing the amount of time – let say to product 300 parts per hours your cycle time is 33 seconds, by reducing your cycle time to 25 seconds your can now produce 320 parts per hour (these are not real numbers).  Efficiency is usually a measure of what it takes to get this done (Labor, rework times etc).  So producing more produce with less reources makes you more efficient.  This does not alway occur and a good example would be getting someone to produce more product in a shorter time but using the time saved for something more value-added.  Companies play around with these numbers.  I had one company I was working with improve production in one area of the plant, move displaced people from that area to an area that was under performing so they could meet their productivity goals.  This was veiewed as more efficient but the general costs for labor for the plant were fixed every year so really the plant was not any more efficient just the individual areas.  I hope you see what I mean here.

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    #158534

    Alderman
    Participant

    Hello all, IMO, Productivity is the amount of product produced verses the amount of product scheduled. Efficiency is the time it actually took verses the time standard. Just my opinion….

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    #158540

    Ed Herbert
    Participant

    Efficiency is effectiveness vs time and effort.  Productivity is the sum of the above.
    Ed
     

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    #158541

    Helper
    Participant

    Productivity = Output
    Efficiency = Output/Input
    Hope this helps…

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    #158565

    jediblackbelt
    Participant

    Wow.. tons of answers so I might as well give my two cents worth and maybe only that.
    Efficiency is based on actual versus standard. 
         Earned hours = pieces * standard hrs/piece
         Efficiency = earned hours / hours worked on standard
    Utilization = hours making parts / clocked hours
    Productivity = utilization * efficiency
    Just another opinion.  I have always looked at it as efficiency is based on a normal, engineered standard of expectation.  So while you are working against a standard you are performing at this level.  Then you calculate how you utilize your labor.  From those two things you calculate how productive you really are.  So you could be 100% efficient but only utilize your crew 50% of the day so you are 50% productive.  Now you can start to move your crews around in order to make your plant more productive and minimize labor cost. 
     

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    #179611

    Clarence Yu
    Participant

    Hi,
    I work in a manufacturing plant, where we produce chocolate.
    Based on experience, productivity is how much you get (output) using how much you put in (input-resources like raw materials, labor, utilities).  You can measure productivity in terms of finished product (total output of finished goods/total input of resources).  It is simply a measure of how much you get out of how you put in. 
    Efficiency is basically, in the context of productivity, the concept of how to optimize what you put in, how to squeeze every bit of resource you have got, to get that finished product. 
    Both are deceivingly similar, but there is a big difference.  I see productivity as a direct result of efficiency gains.  The more efficient you get, the more productive you get. 
    So, any report that includes productivity should necessitate an inclusion of efficiency. 
    Hope this helps all, and myself as well.
     

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    #179612

    Clarence Yu
    Participant

    Also, a further example of efficiency as a means to increase productivity.
    Say, that you have 12 hours to produce 120 cases of chocolate.  This is the rate established, based on time and motion studies of your production line.  If you are able to produce 120 cases in 12 hours, you have 100% efficiency.  If, for example, your line experience some stoppages because of an unplanned downtime (i.e. a bearing wore out), and results in a one hour idle period, you produce only 110 cases.  In this case, your efficiency drops to 110/120, or 91.67%.  In terms of time, 110 cases is a result of a theoretical 11 hours production run, but the actual time ran was 12 hours.  So, 11/12 is also 91.67%.
    Your total resources to produce are still there (labor, materials, utilities) but your output declines due to efficiency losses.  Thus productivity drops.
    It is thus important to measure both side by side as there is a correlation between the two.
     
     

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