Dr. David J. Sumanth developed a Total Productivity Model in 1979 that considers five key inputs: human, material, capital, energy, and other expenses. The model defines Total Productivity as Total Tangible Output divided by Total Tangible Input. Total tangible output includes the value of finished units produced, partial units produced, dividends, interests, and other incomes. Total tangible inputs include human, capital, materials, energy, and other expenses. Sumanth's model provides a structure for calculating productivity at the product level and aggregating to the firm level, as well as partial productivities at the product level. It defines productivity ratios that consider both outputs and inputs.
3. INTRODUCTION
About Dr. Sumanth’s
Dr. David J. Sumanth’s in Miami, Florida, offers information and
lectures on productivity management, job creation, and technology
management. He founded the International Conference series on
Productivity & Quality Research, and chaired the first 5 conferences
from 1987 to 1995. He also founded the International Society for
Productivity and Quality Research in 1993, and serves as chairman
of its board.
Dr. David J. Sumanth is professor and founding director (since
1979) of the Productivity Research Group at the University of Miami.
Dr. Sumanth's book, "Productivity Engineering and Management,"
published by McGraw-Hill (New York, 1984; Singapore, 1985;
Mexico, 1990; India, 1990, New York, 1994) has become a "classic,"
having influenced "productivity engineering" thinking in 25 countries,
and has helped initiate new courses on the subject.
4. ‘
Productivity’ is a concept of production system and
measures its success. It is the standard that indicates
measures how efficiently the material, the labour, the
capital and the energy can be utilized. Analysis and
measurement of ‘Productivity’ can help to know the
areas for taking corrective actions towards planning of
business firm.
Simply, Productivity is known as the relationship between
output and all employed inputs measured in real terms.
It refers to a comparison between what comes out of
production and what goes into production that is the
arithmetical ratio between the amount produced and the
amount of all resources used in terms of manufacture. It
may be measured for manufacturing organizations or
their departments for which separate records are
maintained.
5. What is Productivity?
The least controversial definition of productivity is
that it is a quantitative relationship between output
and input. This definition enjoys general
acceptability because of two related
considerations.
first of all, both the output of the firm as well as the
inputs must be stated in a common measurement
unit, usuallly in monetary values.
Secondly, in order to compare the productivity
indexes between different periods, each index
must be adjusted to a base period value. this kind
of deflation is used because different monetary
values ,such as wages and prices, vary
significantly from year to year.
6. The success of an industrial organization is determined
by the level of efficiency in reducing cost and providing
consumer services. Analysis and Measurement of
Productivity can help to find out the areas where the
corrective steps will have been
taken in the way of planning of business firm. So far the
manufacturing process is
concerned, all inputs are important but the greatest
interest has always centered in the relationship between
production and labour , because it is the only input,
which belongs to live human beings.
7. TOTAL PRODUCTIVITY MODEL
Total Productivity Model developed by David J. Sumanth in 1979
considered 5 items as inputs.
These are Human, Material, Capital, Energy and other expenses.
This model can be applied in any manufacturing or service
organization.
Total Productivity= Total Tangible Output÷ Total Tangible Input.
Total tangible output= Value of finished units produced + partial
units produced + Dividends from securities + Interests from bonds
+Other incomes.
Total tangible inputs= Value of human inputs+ capital inputs+
materials purchased+ energy inputs + other expenses (taxes,
transport, office expenses etc.)
8. Sumanth’s provided a structure for finding productivity at
product level and summing product level productivities
to total firm level productivity. The model also has the
structure for finding partial productivities at the product
level and aggregating them to product level
productivities.
Total Productivity= Total Tangible Output÷ Total Tangible
Input
= O1+O2+O3+O4+O5 /
H+M+FC+WC+E+X
Where ,O1 is value of finished units of output.O2 value of
partially completed units of output ,O3 dividend
income, O4 interest income ,O5 other income.
H human input, M material input ,FC fixed capital
input , WC working capital input, E energy input , and
x other expense.