Quantitative versus qualitative measurements, Operation Management

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Quantitative Versus Qualitative Measurements

A variety of formulae can be used to determine productivity as illustrated. These are generally referred to as 'hard' or quantifiable measures. Another measure of productivity gaining importance are qualitative measures which highlight the increased importance placed on quality within the system. Quality in this case relates not only to final product quality, but also to the quality of workforce, raw materials and transformation facility quality, and also the perceived standard of the job which the worker carries out. The concept of productivity, especially as an American definition, has expanded to try to take into account of the impact that the workplace and the working environment (measured through such features as number of years service, staff turnover, days absence and number of days lost through disputes) have on productivity. Joseph Prokopenko - a senior consultant with the International Labour Organisations' management development branch - is the author of Productivity management - A practical handbook (1987), one of the very few texts available dealing with productivity issues in depth. He is one of a number of productivity authorities at pains to indicate that productivity should not be confused with intensity, especially labour intensity, since organisational (and transformation - of input to output) efficiency, rather than working faster or longer is the key to improvement. There are a number of other misconceptions of what productivity aims to do, mostly as a result of poor understanding of the systems approach, described in Chapter 1 of this unit, being unable to determine the true input to be measured against output or vice versa, confusion of efficiency (being expressed in terms of a speed of production and not efficiency of input transformation) or

confusion of the definition of profit and productivity. 

There are four main classes of input to the system: 

  • Labour
  • Capital
  • Raw materials
  • Services.

 

For measurement purposes, it is normal for these parameters to be expressed in terms of either market value or cash related to a base year (ie related by a discounting factor to a 'year zero' value). This can, however cause some difficulties: for example, whilst labour hours may be measured in terms of the total salary paid to production workers (one of the easier parameters to be measured) particular difficulty can be encountered in the separation and calculation of capital inputs. Outputs can usually be determined on the basis of the value of the goods and services that the organisation supplies to its customers.


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