Production line productivity in business must first be defined and then measured accordingly. Knowing these variables is the first step for a business to start tackling their production line productivity challenges and how to therefore improve this level of output which is clearly in the best interests of all linked to the business.
For businesses both large and small, efficiency is everything. The goal in an efficient business is to produce more sales, units and revenue for less labour, waste and total cost. After all, the steeper the distance is between revenue and cost, the larger the profits enjoyed by a business owner. Many business owners make the cardinal error of focusing solely on increasing revenue but then neglecting an issue which is just as important, namely, increasing efficiency by cutting costs. In business, where income equals revenue minus expenses, this level of negligence is bound to end in poor results for important decision-makers.
Defining Production Line Productivity & Efficiency
Efficiency measures a company’s performance accurately. Unlike productivity, which a company achieves by maximizing the number of units produced in a given time frame, efficiency requires the minimization of costs and the maximization profits for a given level of output. Efficiency enables a business to make the best possible use of the resources at their disposal. Efficiency sees to it that a company produces a greater number of quality products, with less waste, using less energy and other resources during a given period than an inefficient one.
Efficiency is measured by dividing a worker’s actual output rate by the standard output rate and multiplying the outcome by 100 percent. The standard output rate is “a worker’s normal rate of performance or the volume of work a trained employee can produce per unit of time using a prescribed method and with the usual effort and skills.” Logically, production costs drop as the rate of production efficiency increases. The level of skill and effort produced by a worker directly influences the rate of output and this output rate is also affected and influenced by the operations strategy, technology, job design and processes involved.
The role of video surveillance in boosting productivity
Managers can use CCTV video surveillance to monitor employee productivity, isolate job performance areas of relative weakness (areas needing improvement) and ensure that employees follow company health and safety policies. These methods should all be implemented in an ethical, transparent and upfront manner.
Maintenance employees can use video surveillance cameras to efficiently and easily locate equipment that needs repair or equipment that is unsafe for use. Video surveillance can essentially serve as the eyes in the back of a company’s head since employees, managers and supervisors cannot be in two places at once. This technology essentially means that the hiring of additional security personnel is unnecessary, a factor which boosts productivity and a company’s bottom line.
Standard Efficiency Rates
Small businesses can use time studies to determine the average time required to perform tasks. These averages consequently serve as performance targets in the future. To conduct the time study, the times required for multiple employees to complete a task are recorded and the average completion time is calculated. This average time becomes the standard or benchmark. The business can evaluate employees’ actual production efficiency for a number of reasons and with a few benefits:
- Production efficiency rates can serve as a basis for bonuses and raises based on good and/or efficient performance.
- The efficiency rates can also identify opportunities for improvement in a production line.
- Efficiency rates can serve as an input for operation planning and control systems.
Production line productivity is clearly something that all business owners should strive to improve in all areas of their business. It must always be remembered that there are many ways to improve the production line productivity in a business, not just increasing revenue. The balance between increasing revenue and lowering costs is a delicate one and will vary from industry to industry but it should not be forgotten that sometimes lowering costs can have just as profound an effect on profits as increased revenues. Aggressively pursuing the latter at the expense of the former isn’t necessarily an efficient strategy.