Last month we talked about why productivity is so important to our success. Sometimes people use the terms Production and Productivity interchangeably when there really is a difference. So what’s the difference?
Production is the simplest of all measures. It tells us how many of something was completed. How many orders were processed, how many parts were headed or maybe how many home runs a baseball player hits. Production is an output and is usually expressed as a number.
Productivity adds the dimension of inputs. It compares resources used (input) to production (output). It is usually expressed in a ratio of some kind.
Let’s use our baseball example: Last year Mark Tiexeira and Carlos Pena each hit 39 home runs. So we can say that their home run production was the same. But was their home run productivity the same?
Back to our explanation. Productivity compares the input to the output. In this case the output is home runs and the input is times at bat. Mark Tiexeira went to bat 609 times and Carlos Pena 471 times.
Carlos Pena’s productivity was better as he hit one home run every 12 times at bat compared to one every 15.6 for Mark Tiexeira. That’s why looking at raw production numbers alone can’t tell you the whole story. If you don’t take into account what resources were required to achieve that production you only have half of the picture.