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Resource productivity measures the output or income produced by a specific resource, such as individuals, machines, or entire factories. It is used to identify areas of low productivity and areas that may require improvement to continue operating at current or higher productivity levels. It can also be used to assess the impact of a work unit on the environment.
Resource productivity refers to the amount of output or income produced by a specific resource. That resource could be an individual or group of individuals, a machine or an entire factory, depending on the frame of reference. Resource productivity has long been used in traditional business models to identify areas of low productivity and areas that may require improvement to continue operating at current or higher productivity levels.
When used in general business practice, determining resource productivity is a multifaceted process. It takes into account the amount of work each unit of work does and compares that number to minimum acceptable and average production levels to ensure that the worker is generating enough output to justify the cost of employing him. It also measures worker output to ensure that no employee is producing more than can reasonably be produced without bypassing quality controls or safety processes. This methodology can be applied to a group of workers, such as a department, to ensure that the group as a whole meets productivity standards without risking injury or mistakes.
The same process is applied to machines. For example, if a company has three printing machines, it will monitor the productivity of each machine. If there is just enough work to keep each machine running half the time, the company might consider selling one printer because the other two will be adequate to meet current needs and still have time for additional work. On the other hand, if each machine is running 22 hours a day and the manufacturer recommends running a maximum of 18 hours a day, it might be time to buy another printer.
Similar methodology can be used to assess the resource productivity of entire plants or operations. If a manufacturer has three plants and two of them do not produce enough goods to cover operating expenses, the company may choose to close one plant and consolidate operations. Although the company has only two factories, it is doing the same amount of business, but at about two-thirds of its previous level of spending.
When used in relation to environmental and sustainability efforts, resource productivity takes on another meaning. The concern now is not only to meet product quantities, but also to assess the impact of a work unit, be it a person or a machine, on the environment. This can be measured in terms of energy use and production of by-products, hazardous waste or other pollutants.
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