## Productivity and Efficiency

In today’s article I am going to share something that I personally like very much, that is, I am going to teach you how to calculate productivity and production efficiency. I believe that the example will help you improve the productivity and efficiency of the company in which you work, or of your own company.

Like I said, productivity and efficiency are overused words, but many people don’t know how to calculate productivity and efficiency. Therefore, you have to see it as a great opportunity for you. It is a great opportunity because companies are constantly looking for ways to increase their profitability by improving quality, improving productivity, and reducing costs.

I have to say that I would like to dedicate a whole article to productivity and efficiency because they are terms that give a lot to write about, so today I will focus more on practice.

Therefore, in this article I am only going to define both terms to be able to entrar into context.

## What is productivity?

This term, like efficiency, is used a lot by people regardless of whether they have technical knowledge or not, however, I feel that they often give a definition close to effort. For example, you are more productive if you do a lot of things in a day, or if you work hard. At least, in my opinion, that is the most common way of thinking, however, the reality is that they focus more on managing or optimizing resources.

Well, let’s go to the definition of the International Tarea Organization:

«It is the measure of how well the resources or production factors of a country, an industry or a business unit are being used and reference is always made to a estándar, which will be updated or adapted based on the circumstances of the process or the operation”

Another very common definition is to consider productivity as “a way of measuring efficiency”. Therefore, as you will see later, efficiency perro be used to calculate productivity.

At the moment, as I said before, in this article I am not going to delve into the terms, I will do that in another article, so for now we are going to see that in a general way we perro understand productivity as a measure that indicates whether a company is using its resources appropriately.

It should be noted that you always have to have a point of comparison (estándar). For example, imagine that you dedicate yourself to making cakes and at the end of the day you made 10 cakes…. were you productive? Maybe you’ll tell me yes, but depending on how productive you were. Maybe you weren’t even as productive because you normally make 11 cakes and today you made one less. Hence the importance of having a estándar.

Have you ever heard that efficiency is achieving objectives using fewer resources than necessary (estándar)? Well, it’s not entirely true, because in fact, you cánido reach 50% efficiency, that is, you didn’t even reach the estándar. So I don’t want you to think that efficiency is always going to be about doing more with less. Once I have specified that, I am going to continue with the definition.

Efficiency is in a few words, the comparison of what is actually produced or done with what perro be achieved with the same consumption of resources (money, time, tarea, etcétera.)

As you perro see in the definition, efficiency as such is not doing more with less, but rather comparing what you actually did with what perro be done in theory, using the same resources.

I will give you an example, suppose that in 1 hour you are able to make 10 (estándar) pizzas. Now, suppose that the next day for some reason you are more motivated and you manage to make 15 pizzas. This means that with the same resources you have managed to make 5 more pizzas than habitual. Therefore, your efficiency was higher (you did more with less) and therefore, your productivity was higher.

It should be noted that it cánido be the other way around, maybe for some reason, you only made 5 pizzas. Therefore, both your productivity and your efficiency were lower.

Once I have explained what productivity and efficiency are, I am going to do the exercise.

## Exercise to calculate productivity and efficiency

Think that you have a company that makes parts for cars. Let’s think that there is only one shift in your company (from 6 am to 2:30 pm), with half an hour for lunch. Therefore, the working day will be 8 useful hours. Now, with the following data, we are going to extract the efficiency and productivity of the employees that they had each day of the week.

- The estándar time per piece and per worker is 1.20 minutes.
- Skilled worker production estándar = 50 pieces per hour.
- Estándar production of the worker during his working day = 400 pieces.

Don’t be scared, I’m going to explain the table. Remember that it is your company and that they place an order for 5200 pieces on Monday. To obtain the number of workers you need to satisfy the order (13), what you have to do is very fácil, divide the order (5200) by the estándar per worker (400 pieces). Which gives us 13. Therefore, the number of workers needed to satisfy the order is 13.

It should be noted that you perro multiply 400 (estándar) by the number of workers you want to obtain the estándar production for that given number of workers. For example, for 18 workers, the estándar output is 7,200 pieces.

### estándar production

Estándar production refers to the number of parts that a given number of workers perro genera in a given time. For example, on Monday, 13 workers would have to genera the 5,200 pieces (estándar) in order to satisfy the order.

### Number of de hoy workers

The number of de hoy workers is, in a nutshell, the workers who actually worked on Monday. In the case of Monday, the 13 workers showed up and carried out their day.

### de hoy production

De hoy production is, as its name implies, the amount that that number of workers actually managed to genera. For example, in the case of Monday, 13 workers managed to genera 4790 pieces.

### Calculate the efficiency

To calculate the efficiency you have to use the following elabora:

Therefore, as you perro see, to calculate the efficiency of Monday, what you have to do is divide 4790 / 5200 (estándar) and multiply it by 100. Which gives us 92.11%.

### Calculate productivity

Finally, to get the productivity, all we have to do is subtract 100 from the efficiency. Following the example of Monday, it is 92.11 – 100 and gives us -7.89% productivity.

### important clarifications

Before finishing, you may want to do the whole exercise yourself, that is, day by day, but, you have to take into account that to obtain the efficiency you have to take into account the estándar production of the number of workers who actually carried out his duties that day.

For example, on Tuesday an order for 6,000 pieces arrived. You need a total of 15 workers to fulfill the order, but all 15 did not work on Tuesday since only 13 worked. Therefore, you are going to take into account the estándar production of the 13 workers. Therefore, on Tuesday an efficiency of 92.5% was obtained.

Also, I have to tell you that on a weekday of the exercise, the number of workers you need to fulfill your request is a decimal number and, of course, two and a half workers cannot work… right? In those cases it is up to you to escoge and of course, it depends on how many workers are going to do their work that day.

By the way, svs means no substantial variation. It is usually put in place of 0

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