Meaning of Production And Productivity

Meaning of Production And Productivity

-Dr Olaniyi Opanuga,FNIPM

Many people think production is the menial jobs people do in the factory, on construction sites or agricultural farms cultvating plants and livestock. They think those who wear suits and ties in the banks and other service business offices couldn’t be production production people. They think production is not happening in the public sector or government offices and non profit organisations. They forget or probably don’t know that the radio and television programmes they listen to or watch, the home videos or films they enjoy, the entertainment shows and sporting events, the schools through which they pass, the hospitals and healthcare providers, the canteens,restaurants or eateries, the saloons, auto shops etc. are all prodution centres. As an individual you are a product of a production process. Everything…living and non-living is about production.

Production is the creation of value or utility- things that satisfy human needs and wants, be they goods or services or goodwill and prestige. Production is the process of transforming resources into finished goods and services. Production is an organised means of utilizing inputs or resources to create wealth and economic well being in furtherance of human needs and wants satisfaction.
So, wherever such things happen is what we call a production environment. In production we often clamour for volume, that is quality volume. But we also need to bring the cost down in other to be able to compete well and maximize profits. This is where productivity comes in. Public sector productivity is equally important because the government and public servants need to utilize the taxes of the citizens or the resources of the Nation optimally. The essence is to minimize waste and maximize the value of public or private goods.

Now, what is productivity? Productivity is a measure of efficiency of production. Productivity is a test or a metric. It describes various measures of efficiency. It is the relationship between resources used in a business, an industry or an economy and the value or wealth generated..
It measures how efficiently managers have used resources (inputs) (the factors of production) such as land, labour, materials, machines, finance, technology, knowledge, information etc.)to produce (outputs) goods and services.
. This may be calculated as the ratio of total output to total input or in percentage terms, as the total units of output divided by the units of inputs multiplied by 100 percent.

Therefore, you cannot talk about productivity anywhere, whether in public service or private business without production. Production forms the bedrock of productivity.

If you relate productivity to people ( labour or workforce productivity) they must be producing in the first place. Here you are referring to a single factor. Relate it to materials or purchasing, land, building, equipment, plant, finance, supply chain, logistics, engineering, marketing, sales and just about any resources or assets or anything human beings do and the ratio of input to output will continue to resonate. You can measure productivity by aggregating or using multifactor eg, manufacturing productivity, agricultural productivity, public sector productivity, national productivity etc.

Production is the reason the entire world exists. Production makes coping with life possible and the advancement of living conceivable. World production volume and value are ever increasing but only the nation and organisations that produce the most in terms of volume and value will be gaining the most. The more a nation produces the higher the Gross Domestic Product (GDP) and if properly utilized the higher the economic growth rate and the higher the standards of living of the people. These benefits increase in direct proportion to the levels of productivity of the Nations and organisations concerned. Therefore, they seek to maximize productivity.

Dr. Olaniyi Opanuga is the President/ Chairman of Council, Nigerian Institute of Production Management ( NIPM)

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