Basic productivity is calculated by comparing the amount of goods and services produced by the inputs that were used in production. This results in a basic productivity formula of;
Productivity = Output/Input
This basic productivity formula can be used to calculate the productivity of your complete production process, or of a particular process or machine within your production process.
Output must be expressed as a numerical value, and is the finished value of goods or services produced by a person, machine, or process.
Input must also be expressed as a numerical value and is the value of input that was used to produce the output, such as labour, materials, machine time.
The widget making machine produces 100 units a day, the finished value of each unit is £10.00. This means that the output of the machine is £1000.00 per day.
The total cost to make 1 widget is £2.50. This cost includes £1.50 of materials, £0.50 of labour and £0.50 of machine time. This means that the total input cost for 100 units is £250.00.
So the basic productivity calculation is £1000/£250 = 4. Therefore the productivity for this machine on this particular day is 4. Having established a productivity factor for this particular machine, it is then possible to use this same formula to compare the productivity of identical work stations, or to monitor the productivity of this particular machine over time.
To make it easier for you to calculate productivity in your factory or process we've created a downloadable Basic Productivity Calculator. Simply complete the form below to download your free basic productivity calculator tool.