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271
Correspondence to: Dr. Jen-Gwo Chen, Department of Industrial Engineering, The University of Houston, Houston, TX
77204-4812, USA.
1. Introduction
Most companies or organizations, regardless of
their sizes, all face the common problem of the
supply of resources (e.g, capital, materials, energy, and labor) being limited and competitive. In
order to attain the end goal of profit, a business
unit typically has multiple objectives. Problems
arise when allocating scarce resources to the variety of alternative purposes competing for their
use. Matching objectives with resources to attain
end results is not an easy task. Only those organizations that manage productivity as an ongoing
activity and have expertise or supporting systems
will be able to deal with these problems. Furthermore, most companies emphasize only on productivity measurement and improvement but ignore productivity planning and evaluation stages.
To establish a successful productivity management program, productivity planning, measurement, evaluation, and improvement programs
must be integrated organizationally and functionally.
The objective of this paper is to develop a
Computerized Productivity Management System
(CPMS) in the PC to support engineers or managers in productivity management. This system
includes three modules: productivity planning,
productivity measurement, and productivity evaluation. Using the productivity planning module,
the manager can either arbitrarily set the produc-
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Computers in Industry
3. System development
In general, a productivity management program shall include three stages: planning, measurement, and evaluation and improvement.
These three stages are operated as a cycle and
should be continued to plan, measure, and evaluate as long as the productivity management program is operational. A system entitled Computerized Productivity Measurement Systems (CPMS) is
developed to support manufacturing engineers to
conduct the effective productivity management
program. This system contains three modules: the
productivity planning module, the productivity
measurement module, and the productivity evaluation module.
273
- . . + a l n X n <~b 1,
+ a 2 n X n <~ b 2,
a m l X I + a m 2 X 2 + . . . + a m n X n <~b m,
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ManagementInformation Systems
where Total tangible output is the value for finished units produced + the value of partial units
produced + dividends from securities + interests
from bonds + other income, and Total tangible
input is the value of (human + material + capital
+ energy + other expense) inputs used.
The word "tangible" is used in the sense that
it can be directly measured. The outputs are
represented in monetary terms. The term "operational unit" is used to indicate an operational
unit or service unit of the organization. An operational unit, for example, could be a product group,
department, or could mean a division in a corporation.
Similarly, the partial productivity index is defined as the ratio of the total tangible output over
the specific resource input:
Partial Productivity Index
Total tangible output
Specific resource i n p u t '
where Specific resource input is one of the five
resource inputs (human, material, capital, energy,
or other expense).
The productivities can give us a picture about
the company's condition. However, they do not
tell us about the exact amount of cost. Therefore,
the standard cost method serves as an auxiliary
Computers in Industry
Computers in Industry
30'
29.09
25.
--&--
20.
HumanProductivity
TotalProductivity
19.40
14.55
11.64
r~
10,
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8.31
7.27
Appendix.
5-
Ao
4. System configuration
.ho
Gene~ Users
UserInterface I
Quick Basic Environment
Product Mix
Productivity~
Planning
Module
Method
FullCostAllocation
Method
~MProductivity ~
easurement
Module
TotalProductivity
Method
StandardCost
Method
SensitivityAnalysis
Method
Productivity~
Evaluation ~
Module
dBASE IV Environment
Fig.2. CPMSsystemconfiguration.
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~Ms
DATABASE
Computers in Industry
DRIVE
COPY
EVALUATION
PI.ANNING i MEASUREMENT
CREATE
COMPANY
APPEND
DIVISION
EDIT
DEPARTMENT
DELETE
COMPANY
DIVISION
DEPARTMENT
PRODUCT
PRODUCT
IP~uctivi[yi~[]agem~ntDa~ab~ I
I
,l
Ip I
1
Units Produced)
---Finished
-Workers
- Clerical Staff
-
Engineers
Managers
,
---~Dividends fromSecurities)
--(
- Water
- Elec~city
i
/
Othen
Other Expenses
- Travel
- Local Taxes
-Sutte Taxes
- Federal Taxes
- Office Supplies
---~
"C~
- Markeling
- Consulting
- Information
Processing
-R&D
- Administration
- Others
Fig. 4. Productivity
management
database
structure.
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277
Table 1
The productivity report for the whole company
Productivities
Total productivity
Partial productivity
Human
Material
Capital
Energy
Other Expense
Actual productivity
from real data
Expected productivity
suggested by CPMS
Expected/actual
ratio
1.39
1.52
1.09
11.64
4.50
5.03
11.45
7.90
13.11
5.05
5.46
12.18
8.57
1.14
1.12
1.09
1.06
1.08
Under the DATABASEoption, the user can create the productivity management database, append a new record, edit an existing record, delete
an unwanted record, and print a record. In each
record, the system will ask for the output data,
human input, material input, capital input, energy input and other expense input, respectively.
The productivity management database structure
is shown in Fig. 4. After the PLANNINGoption is
chosen, the user must enter the required data
according to the instructions, otherwise, the resuits may be wrong. Once all the necessary data is
entered, the total and partial productivities, and
the standard cost are computed.
Under the MEASUREMENToption, the system
will ask the user to choose an operational unit
which could be whole company, division, department, or product. Then, the system will display or
print the total and partial productivity report,
standard cost report, and summary report for that
operational unit. The evaluation option will display the actual and expected productivities for
the specific operational unit graphically. It will
also provide a chart that tells the user the percentage of a resource (e.g., human input) that has
been used by comparing to the total output. The
user will also be allowed to conduct a sensitivity
analysis. The sensitivity analysis chart can help
the user to adjust the resource levels for attaining
a target level of total productivity and profit.
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ManagementInformation Systems
Table 2
The standard cost report for the whole company
Workers
Clerical Staff
Engineers
Managers
Iron
Carbon
Zinc
Oil
G as
Coal
Water
Electricity
Actual/expected
ratio
3,281,709.21
2,729,088.02
4,439,649.92
941,188.88
26,997,493.62
1,927,241.45
532,319.02
509,103.47
1,123,812.01
7,618,385.63
1,040,188.85
1,323,705.00
2,828,073.60
2,306,352.80
3,716,263.75
764,074.50
22,827,631.50
1,302,230.28
401,259.35
476,135.99
978,686.51
6,825,484.80
932,764.61
1,182,533.77
1.16
1.18
1.19
1.23
1.18
1.48
1.33
1.07
1.15
1.12
1.12
1.12
6. Conclusion
Computers in Industry
[9] D.J. Sumanth, "A micro computer decision support system for total productivity model (TPM)', Comput. Ind.
Eng. Vol. 11, 1987, pp. 32-35.
[10] F. Banks, IBM PC Application for the Industrial Engineers
and Manager, Banks Spuete, Collinks, 1986, pp. 165-192.
[11] F.C. Jelen, Cost and Optimization Engineering, McGrawHill, New York, 1970.
[12] J.R. Canada and J.A. White, Capital Investment Decision
Analysis for Management and Engineering, Prentice-Hall,
Englewood Cliffs, NJ, 1980.
[13] F.S. Hillier and G.J. Lieberman, Introduction to Operations Research, Holden-Day, San Francisco, CA, 1980.
[14] R.H. Garrison, Managerial Accounting Concepts for Planning, Control, Design, Decision Making, Irwin, Inc.,
Homewood, IL, 1988.
Appendix
The company is a producer of carbon, electrical and stainless steel products and a variety of
construction products. It also produces oilfield
machinery and equipment. Here, our concentration is focused on the steel product.
Record for producing alloy
Name of the division--Special
Name of the department--OHIO
Name of the product--ALLOY
Percent completed--56.00%
Selling price per unit--S1,650.00
Dividend from securities--S387,000
Interest from securities--S478,000
Other income--S750,000
Quantity of the final product--12,090 units
Quantity of the partial product--l,670 units
Human resource input
Workers~working time, 45,200 h; idle time, 3,840
h, average wage per hour $7
Clerical staff--working time, 24,500 h; idle time,
2,300 h; average wage per hour, $11
Engineers--working time, 34,500 h; idle time,
4,300 h; average wage per hour, $13
Managers--working time, 3,890 h; idle time, 560
h; average wage per hour, $20
Materials resource input
Iron--15,000 units with unit price at $220.00
Carbon--2,800 units with unit price at $80.00
Zinc--450 units with unit price at $162.00
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