You are viewing a free preview of this lesson.
Subscribe to unlock all 10 lessons in this course and every other course on LearningBro.
Improving efficiency and labour productivity is one of the primary goals of operations management. In competitive markets, businesses that produce more output per unit of input — whether that input is labour, capital, or raw materials — can offer lower prices, achieve higher profit margins, or both. This lesson explores strategies for improving productivity, the obstacles businesses face, and the role of technology.
Key Definition: Efficiency is the ability to produce the maximum output from a given set of inputs, minimising waste of resources. Labour productivity is the output per worker in a given period: Total Output ÷ Number of Workers.
Labour costs are typically one of the largest cost categories for businesses, particularly in service industries where labour may account for 50–70% of total costs. Improving labour productivity — getting more output from each worker — has a direct and powerful impact on unit costs and profitability.
Consider two rival call centres:
Subscribe to continue reading
Get full access to this lesson and all 10 lessons in this course.