Managing Productivity

We are operating in the era of global competition. Event in one country may have impact over the other country of the world. Due to liberalization of trade, the whole world has emerged as one single market. This has been further influenced by the fast development in the field of computer and its application. Communication has become quite affordable, reliable and fast. By sitting in one corner of the world one can have access of the other part of world. In such fast changing situations with open boundaries, the fittest will only survive due to stiff competition. Fittest or strongest attribute can be acquired only by increasing profits.

Profit has mainly three components. They are reduction in cost, increase in sale and value addition. Arithmetically, profit is the difference of sale price and cost.The profit and its influencing components as expressed here are the final stage measurement, but the result is the sum of several individual small unit operations or steps starting from the initial stage of material procurement to ultimate sale of product or service. Each stage has resource utilization and outcome. In these stages there would be sale or no sale, but the corresponding resource utilization and outcome shall have influence over the profit. Therefore, in order to ascertain overall profit, we have to assess the stages involved. The efficiency of these stages is measured in terms of productivity. The productivity, in general, refers to the ratio of outcome to input. Therefore, enhancing productivity can be considered as reduction in resource use and /or increase in the outcome.

In this way, we see that it is very important for management systems to have better productivity. Various management principles would be applied to get better result. In dairy industry, which has highly perishable raw material as resource, the task of improved productivity is highly challenging. Use of operational research techniques like linear programming (LP) for optimizing product mix, product composition, procurement and market distribution transport routes have been very popular. Sensitive analysis using computers helps in right decision making.Other areas where modern technologies including use of computers have been possible in dairy industry include management information system. Timely capturing of procurement, operational, accounting and market data help in providing information timely and accurately. This has made it possible to give timely payment to suppliers including milk producers. Computer application has also made it feasible to reduce inventory and working capital requirement of dairy and its retail network.