4.3b Labour Productivity Flashcards Preview

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Flashcards in 4.3b Labour Productivity Deck (12):

Labour productivity definition

Measure of the output per worker in a given time period


Labour productivity formula

Labour productivity = output per period ÷ number of employees at work


Ways to improve labour productivity

- Measure performance and set targets
- Improved working practices
- Streamline production processes


Advantages of high labour productivity and efficiency

- Maximise production
- Reduces unit costs
- Improved quality


Efficiency can be improved by

- Training of the workforce
- Investment in capital equipment
- Renewable or recyclable resources


Economies of scale definition

Advantages that an organisation gains due to an increase in size


Examples of economies

- Purchasing economies
- Technical economies
- Marketing economies


Lean production definition

An approach to management that focuses on cutting out waste, whilst ensuring quality


What is the aim of just-in-time production?

To ensure that inputs into the production process only arrive when they are needed


Advantages of JIT production

- Lower stock holding = reduction in storage space = saves rent
- Less working capital is tied up in stock
- Less likelihood of stock perishing


Disadvantages of JIT production

- Little room for mistakes
- Production is highly reliant on suppliers
- Fewer opportunities for bulk buying


'Honda' JIT example:

Swindon assembly plant retained just an hours worth of parts at the Swindon production line
Required 350 trucks’ worth of components to be delivered everyday

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