Resource productivity measures the output or income produced by an individual, group, machine, or facility. It is used to identify areas of low productivity and can be applied to evaluate entire operations. In terms of sustainability, it also assesses the impact on the environment.
Resource productivity refers to the amount of output or income produced by a specific resource. This resource can be an individual or a group of individuals, a machine or an entire manufacturing facility, depending on your frame of reference. Resource productivity has long been used in traditional business models to identify areas of low productivity and areas that may require an increase 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 that each unit of labor performs and compares that number with minimum acceptable and average levels of output to ensure that the worker generates enough output to justify the cost of hiring. It also measures worker output to ensure that no employee is producing more output than can reasonably be produced without overriding quality controls or safety processes. This methodology can then 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 error.
The same process applies to machinery. For example, if a company has three printing presses, it will monitor the productivity of each machine. If there is enough work to keep each machine running half the time, the company may consider selling one press because the other two will be adequate to meet current needs and it will still have time left for more work. Conversely, if each machine runs 22 hours a day and the manufacturer recommends running a maximum of 18 hours a day, it may be time to buy another press.
A similar methodology can be used to evaluate the resource productivity of entire plants or operations. If a manufacturer has three plants and two of them don’t produce enough goods to cover operating expenses, the company might choose to close one plant and consolidate operations. While the company thus only has two factories, it is doing the same amount of business, but at about two-thirds of its previous level of spending.
When used in connection with environmental and sustainability efforts, resource productivity takes on another meaning. The concern now concerns not only compliance with the quantities produced, but also the assessment of 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, as well as the production of by-products, hazardous wastes or other pollutants.
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