Productivity: how do you measure it?

"Second only to profitability (but not always), productivity is the most sought after measurement for any operation. Whether it is in mining, manufacturing, construction, etc. managers always strive to know how productive various plants are. Even the Federal Government publishes, on a monthly basis, the nation's factory productivity.Just what is productivity and how is it measured? This is an important topic that needs definition. There could be as many definitions as there are people who use it. In the mining industry, the problems of defining productivity would be analogous to the definition of equipment availability. Each mine uses its own definition to suit its needs. Webster's Dictionary primary definition for productivity is ""the quality or state of being productive,"" with productive defined as ""yielding or furnishing results"". This is a definition open to a broad spectrum of interpretation. A discussion of how productivity is currently used in the mining industry and an introduction to a potentially different approach to its measurement and meaning is outlined in this paper.Defining ProductivityTypically, mining companies track several productivity measurements. These are partial measurements and can include the following: tons per specific equipment class per hour, tons per man-hour, and tons per shift. None of these, however, track the over -all performance of an operation, that is, a unit of output per unit of input.For a mining operation, output can be defined as the ore for mill processing. Input includes the required components of production to get to the first step of processing.The Wesbter's Dictionary definition exposes a major fault with the popular conception of productivity. The critical issue of accountability is not addressed. Anyone can produce, but how effectively and efficiently are resources used? Quantifying an inclusive measurement is difficult. Statistics referring to an increase in productivity are often published. For example, the statement, ""gold productivity has increased by 10%"" has many potentially dangerous interpretations. One must ask, what does this statistic really mean? Did gold companies produce 10%” more gold? Were less manpower or equipment required to produce an equivalent amount of gold? Did ore grades increase resulting in more ounces of gold produced, etc. Obviously, production and productivity can have similar implied applications and meanings, but also two different, distinct meanings.To mitigate a problem like this, a standard needs to be developed within the mining industry. Because of varying ore grade, changing waste to ore ratios, different mining methods, etc. all of which have a direct impact on mining, development of a standard is difficult. Kendrick(1) discusses the use of Total Factor Productivity as a productivity measurement. Summarized, the total factor productivity measure is an indication of the change in efficiency in the use of basic labour and capital factors associated with an operation.This measurement has little meaning when calculated at a given point in time. It should be an on-going calculation, tracking an operation over a period of time, to evaluate trends. These trends can be used to determine if an operation's productivity is what it should be, and alert management to potential problems before they become major and adversely affect an operation."