Lesson 01

Work System Design

Introduction

Dr. Inderdeep Singh

Department of Mechanical and Industrial Engineering

1
 Work System Design: Introduction
 Work System Design deals with the systematic examination of
the methods of doing work with an aim of finding the means of
effective and efficient use of resources and setting up of
standards of performance for the work being carried out.
 The systematic examination of work involves – what is done?
and how it is done? As well as what is the standard time to do the
work?
 This is required to have an in-depth analysis of all the elements,
factors, resources and relationships affecting the efficiency and
effectiveness of the work being studied.
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Work System Design

https://archive.ahrq.gov/about/annualmtg07/0928slides/carayon/Carayon-7.html

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Main Areas/Module of Work System Design

Productivity
Ergonomics

Method Study
Work Measurement

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 Module 1 (Productivity)
 This module highlights the importance of productivity as one of the important
measures of evaluating the well-being of an organization.
 The importance of work study as a tool of improving productivity is also
highlighted.

http://www.veriday.com/blog/increasing-productivity-technology/

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 Productivity Productivity
Measures Measurement
Model

Productivity
Improvement Productivity Concept
Technique

Causes of
Low
Productivity

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 Module 2 (Method Study)

 This module considers the various techniques of work study and their
selection as well as outlines the phases of conducting a work study.
 It discusses the various techniques of constructing graphical aids for
representing a process and an activity.
 The examination and analysis of the graphical aids is also considered in order
to develop a best method of doing the work.

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 Recording
Techniques
in Method Study

Chart Based on Chart Based Diagram Based on

Sequence on Time scale Movements

? ? ?
 EXAMPLE
Flow process chart:
Inspecting and
marking incoming
Improved
parts (Current
method) method ??

Source: Introduction to work

study, ILO, Geneva
 Module 3 (Work Measurement)

 The module deals with the calculation of standard time for

performing the work using various techniques of time study.

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How Various Allowance helps to Build Standard Time?

http://nptel.ac.in/courses/112107142/9

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 Module 4 (Ergonomics)

 The last module consider the concepts

and principles of ergonomics for
designing a work system, which gives
high productivity and also a system that
provides a comfortable and safe working
environment for the worker.

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 Lesson 02
Work System Design
Introduction and Concept of Productivity

Dr. Inderdeep Singh

Department of Mechanical and Industrial Engineering

1
 Productivity
 Productivity is an attitude of mind. It is the mentality of
progress of the constant improvements of that which exits.

 It is the certainty of being able to do better today than

yesterday and continuously.

 It is the constant adaption of economic and social life to

changing conditions.
-EPA(European Productivity Agency)
Production system

Source:- https://www.google.co.in/search?q=production+system&safe
 Productivity Output and Input Examples

Examples of output Examples of input

 Accomplishment of a task  Labour force or man hours, man days
 Distance travelled  Area of land
 Number of pieces produced  Volume of material or fluid
 Time taken to carry out a job  Units of power
 No. of customers served  Time etc.
 Misconceptions about Productivity
Misunderstanding about productivity to the workers, higher productivity means
higher work load, higher efforts, more profits to owners and un-employment
and threat to job security etc.

There are several misconceptions :

• Productivity = Production
• Productivity means only Labor Productivity
• Productivity is relevant only in manufacturing not relevant elsewhere
• Productivity is only for commercial enterprises and not for the public

Source: Lecture of T.M.JAYASEKERA , Managing Director -Innovative Skills (Pvt.) Ltd

 Misconceptions about Productivity
 Productivity can be increased by getting people to work harder
TRUE TO SOME EXTENT

 Productivity can be increased by cutting costs across the company

 Productivity is directly related to profits. In other words a

profitable organization is always productive

Source:Lecture of T.M.JAYASEKERA , Managing Director -Innovative Skills (Pvt.) Ltd

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 Introduction
 Productivity is a measure of the efficiency of production.

 Productivity is the ratio of what is produced to what is

required to produce it.

 Productivity is the determination of the efficiency of an

enterprise to convert its variable resources into useful
finished goods and services.
Source: https://www.slideshare.net/vish25/what-is-productivity
 Concept of Productivity
 International Labour Organization (ILO) defines productivity
as the ratio between “output of work” to “input of resource”

 It is the concept that guides the management of production

system

 It is an indicator of how well the factors of production (land,

capital, labour and energy) are utilized.
 Productivity Concepts as Viewed by
Different People
Ratio of output to input (partial productivity
ECONOMIST measures and total productivity measures)

ACCOUNTANTS Financial ratios , Budgetary variances

BEHAVIOURAL
SCIENTISTS Labour utilization (Man days)

Capacity utilization , Production per man hour,

ENGINEERS
Manpower efficiency
Source: Industrial Engineering and Production Management by M. Telsang, S. Chand Publication
 How is Production different from
Productivity?
 Production is related to the activity of producing goods or
services. It is a process of converting input into value-added
output

 Productivity is related to the efficient utilization of input

resources to produce output in the form of value added goods or
services
 How is Production different from
Productivity?
Examples

“A” spends 90 Rupees, makes 10 products, productivity = 10/90 = 0.111

“B” spends 280 Rupees, makes 30 products, productivity = 30/280 = 0.107
“C” spends 350 Rupees, makes 40 products, productivity = 40/350 = 0.114

Hence, Increase in production does not necessarily mean increase in productivity

 Lesson 03
Work System Design
Measurement of Productivity

Dr. Inderdeep Singh

Department of Mechanical and Industrial Engineering

1
 Is Productivity Different from Performance?

Productivity Performance

 Output in relation to input  Considers output alone

Actual work done
output
 Productivity =  Performance index = expected or standard work
input

https://www.slideshare.net/samirpotale/
 Is Productivity Different from Performance?
Example:

It takes 3 meters cloth to make a coat. In a day a person is expected to make 50 coats.
He makes 40 coats.

Q. What is his Performance ?

Ans: 40 coats

Q.What is his Performance Index ?

Ans : (40/50) x 100 = 80%

https://www.slideshare.net/samirpotale/
 Efficiency Vs Productivity
Efficiency Productivity
• It is the ability to do • It is the rate at which goods
something or produce are produced or the work is
something without wasting completed.
materials, time or energy. • It is the measure of output
• It is the measure of waste in produced by one unit of
a system. input.
• It depends on the quality. • It depends on production.

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Why Productivity is Important?

Higher standard of living

Higher GDP per capita

Higher Higher
Productivity Investment
Source: Lecture of T.M.JAYASEKERA , Managing Director -Innovative Skills (Pvt.) Ltd
 Benefits of Increased Productivity

 To workers

 To the organisation

 To the nation

 To consumers and society in general

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 Factors Affecting Productivity

Controllable or Uncontrollable or
internal factors external factors

 Plant and equipment: availability and

 Natural resources
reduction of idle time
 Government and
 Technology: Automation infrastructure

 Work methods : improvement in the way

of doing things
Source: Industrial Engineering and Production Management by M. Telsang, S. Chand Publication
 Measurement of Productivity

 Though productivity is an important factor leading to

success of all organizations but the productivity measurement
is difficult from practitioner’s point of view.

 There are number of reasons that make the accurate

measurement of productivity difficult.
 Criteria for Measurement of Productivity
 The measures should accurately reveal actual change in
productivity.

 Input and output must be considered in totality.

 Productivity of all activities must be measured individually

 Productivity data must be made available for managerial action.

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 Objectives of Productivity Measurement
 To compare an organization with its competitors in the market

 To find out the relative performance of different employees,

units and departments

 To compare relative benefits of different types of input according

to their output

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 Approaches in Productivity Measurement

• Traditional approaches

• The Kurosawa structural approach

• Lawlor’s approach

• Gold’s approach

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 Traditional Approaches

 Traditional methods: Based on quantitative operational

information, but in some cases, the traditional methods may
not be suitable and efficient.

 An alternative approach for the traditional methods is

subjective productivity measurement, which is based on
employee’s subjective assessments.

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 Kurosawa Structural Approach
 This approach states that productivity measurement enables to
analyze the past state of the company and, to plan new
operations.
 For the application point of view, this approach can be applied to
establish an information system for monitoring operational
activities of the company.
 Therefore, it is necessary to build the productivity measurement
systems according to the decision-making hierarchy of the
company.
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 Lawlor’s Approach
In accordance with this approach, productivity is a measure of
how efficiently and effectively organizations carry out the five
goals:
 Objectives
 Efficiency
 Effectiveness
 Comparability
 Progressive trends.

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 Gold’s Approach
This approach emphasizes on the rate of return, and attributes
profit to five major elements of performance which are:

 Price of the product

 Unit cost of the product
 Utilization of facilities available within the organization
 Productivity of these facilities
 Allocation of capital resources of the organization between
fixed and working capital
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 Productivity Measurement Problems
1.Technical Productivity Measurement Problems

 Different people such as suppliers, customers, users, sellers,

vendors, etc. use different sets of productivity measurements to
gauge the productivity of an organization.

 Hence there is no single universal measure of productivity

available
 16
 Productivity Measurement Problems
2. Organizational Productivity Measurement Problems

 Within an organization there is always a resistance offered by

the employees who may be both managers and workers.

 Apart from this, many organizational changes occur in an

organization which renders the productivity measurement
procedure more difficult
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 Lesson 04
Work System Design
Productivity Measures

Dr. Inderdeep Singh

Department of Mechanical and Industrial Engineering

1
 Productivity Measures

 Partial Productivity Measures (PPM)

 Total Productivity Measures (TPM)

 Total Factor Productivity Measures (TFP)

 Multi Factor Productivity (MFP)

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 Partial Productivity Measures (PPM)
Depending upon the individual input, partial productivity measures
are expressed as :
output
 Partial productivity =
Indidual input
output
 Labour productivity =
Labour input
output
 Capital productivity =
Capital input
output
 Material productivity =
Material input

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 Partial Productivity Measures (PPM)

• Energy productivity = Output / Energy input

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 Partial Productivity Measures(PPM)

 Major disadvantage of PPM is that, there is an over emphasis on

one input factor to the extent that other inputs are
underestimated.

 PPM cannot represent the overall productivity of the firm

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 Partial Productivity Measures: Examples
 Company X produces 5000 scooters in a shift employing 200 workers,
whereas company Y manufactures 9000 scooters employing 300 workers.
The partial productivity in relation to manpower of company Y is higher
compared to company X.

 X petroleum sells its petrol at Rs.30000 with the help of three pumps in an
area of 1000sq ft. whereas Y petroleum sells its petrol worth Rs.40000 with
the same parameters.

 Partial productivity in relation to space of Y petroleum is better than X

because of better layout and an appropriate entry and exit system.

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 Total Productivity Measures (TPM)
 Based on all the inputs.

 This model can be applied to any manufacturing organisation or

service company.

Total Tangible Output

 Total productivity =
Total Tangible Input

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 Total Productivity Measures (TPM)
 𝐓𝐨𝐭𝐚𝐥 𝐓𝐚𝐧𝐠𝐢𝐛𝐥𝐞 𝐎𝐮𝐭𝐩𝐮𝐭
= Value of finished goods produced + value of partial units produced + dividends
from securities + interest+ other income

 𝐓𝐨𝐭𝐚𝐥 𝐓𝐚𝐧𝐠𝐢𝐛𝐥𝐞 𝐈𝐧𝐩𝐮𝐭

= value of human + material +capital + energy + other inputs

Note: Tangible here refers to measurable

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 Features of TPM
 Gives both firm level and detailed unit level index.

 Helps to find out the performance and productivity of the

operational unit.

 Help to plan, evaluate and control.

 An important information to strategic planners regarding

expansion or phasing out decisions .
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 Total Factor Productivity Measures (TFP)
 Labour and capital are always considered important contributors
to the process of production.
 Data is easy to obtain in TFP
 It does not consider the impact of material and energy input, even
though materials constitute 60% of the cost.

Net output
 Total Factor Productivity =
Labour+Capital input

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 Total Factor Productivity Measures (TFP)
Example:
Production worth Rs 80 lakhs was manufactured and sold in a
month. It consumed labour hours worth Rs12 lakhs and capital
worth Rs 48 lakhs

Solution:
Net output 80
TFP = = = 1.33
Labour+Capital input 12+48

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 Multi Factor Productivity (MFP)
 MFP model considers labour, material and energy as major
inputs.
 Capital was left out since it is very difficult to estimate how
much capital is being consumed in a unit of time.

Net output
 MFP =
Inputs (labour + energy + material)

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 Advantages and Limitations of Productivity
Measures
Advantage Limitations
Partial productivity measures
1. Easy to understand and calculate 1. Misleading if used alone
2. A tool to pin-point improvement 2. No consideration of overall impact
Total productivity measures
1. Easy and more accurate representation 1. Difficulty in obtaining the data
of total picture of the company 2. Requirement of special data
2. Easily related to total cost collection system

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 Advantages and Limitations of Productivity
Measures
Advantage Limitations
Total factor productivity measures
1. Data from company records is 1. No consideration for material and
relatively easy to obtain. energy input
2. Value added approach 2. Difficulty to relate to the value
added approach

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 Lesson 05
Work System Design
Productivity Measurement Models

Dr. Inderdeep Singh

Department of Mechanical and Industrial Engineering

1
 Productivity Measurement Models Depends
Upon the Following Factors:

 The purpose of productivity measurement

 The resources available for the productivity measurement

 Capabilities of the people involved in productivity measurement

2
 Productivity Measurement Models Depends
Upon the Following Factors:

 Organizational set up

 Types of product and composition of market segments

 Available data

3
 Productivity Measurement Models
 Craig and Harris Model

 Taylor-Davis Model

 American Productivity Centre (APC) Model

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 Craig and Harris Model

 This model points out inadequacy of partial productivity

measure.

 It is also called “service flow model” because physical inputs

are converted into currency, for example Rupees, that are
payments for services provided by inputs.

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Craig and Harris Model

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 Craig and Harris Model
 Craig and Harris model is particularly useful for medium size
organizations. There are some deficiencies in this model, like,
it does not consider any technological change or change in
the human resource skill.

 There are some intangible gains for every organization and

surprisingly no model considers the intangible factors.

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 Craig and Harris Model
 Every brand has its value. Furthermore, this value is based
upon the productivity, performance and effectiveness of the
organization. This is in fact an outcome of all inputs.

 This model is the most suitable among all the available

models to assess productivity of a small organization.

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 Taylor-Davis Model
 In this model, raw material was not considered as input on the
basis that raw material is the result of some other labour and
effort.

 Contrary to Craig and Harris total productivity model, they

defined a Total Factor Productivity (TFP) model

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Taylor-Davis Model

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 Taylor-Davis Model

E = Exclusions (Materials and services purchased from outside +

depreciation of buildings+ plant + equipment + renters )
W = Wages and salary
B = Benefits
KW = Working capital
KF = Fixed capital
Fb = Investors contribution
df = Price deflator

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 American Productivity Centre (APC) Model
 This model distinguishes among profitability, price recovery and
productivity.

 It can be utilised to measure productivity changes in labour, material,

energy and capital.

 APC model is based on the premise that profitability is a function of

productivity and price recovery.

 Productivity relates to quantities of output and quantities of inputs

while price recovery relates to price of output and cost of inputs.
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APC Model

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 APC Model

 Profitability = Productivity X Price recovery

 This model compares data from one period (base period) with
the data from the current period.

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 APC Model

 This is the most suitable model for the managers who are
interested to know about the profits of the organization rather
than productivity.
 This model is most suitable for the investors of the
organization. Due to its comprehensive approach it is much
applicable and most commonly used.
 This model also helps in reducing the resistance created by
the managers in Productivity Measurement

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