Published by:
Harvard Business Publishing
Length: 9 pages
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Abstract
Before managers can take meaningful steps to boost factory performance, they need an accurate way to judge what good performance is and to compare performance among facilities. The measurement systems in place at many factories fail to tell managers what they really need to know. To clarify the variables that affect productivity, 12 factories in 3 companies were studied over time. A new measuring system called total factor productivity (TFP) was devised to gauge each plant''s overall efficiency. Then, the managerial practices that, when done right, make a difference were identified: investing in new equipment, reducing waste, and cutting work-in-process inventories by solving the problems that produced them in the first place.
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Abstract
Before managers can take meaningful steps to boost factory performance, they need an accurate way to judge what good performance is and to compare performance among facilities. The measurement systems in place at many factories fail to tell managers what they really need to know. To clarify the variables that affect productivity, 12 factories in 3 companies were studied over time. A new measuring system called total factor productivity (TFP) was devised to gauge each plant''s overall efficiency. Then, the managerial practices that, when done right, make a difference were identified: investing in new equipment, reducing waste, and cutting work-in-process inventories by solving the problems that produced them in the first place.