What is needed to calculate machine/employee productivity?

To calculate machine or employee productivity, specific data on total output and value added is essential. Productivity measures the efficiency of production and is typically expressed as the ratio of outputs to inputs. In this context, output refers to the total amount produced, while value added refers to the worth that this output represents in terms of income or revenue generated after accounting for costs of inputs.

By focusing on total output, organizations can quantify how much is being produced, and by considering the value added, they can determine how effectively the resources (both human and machine) are being utilized to generate economic value. This combination provides a clear insight into not just how much is produced, but how valuable that production is, which is crucial for assessing efficiency and making informed decisions about improvements or changes in operations.

Historical data, benchmarks from other companies, and estimates or assumptions can be supportive in providing context or comparative insights, but they cannot replace the need for specific, direct metrics of output and value. Without accurate and relevant data on these elements, calculating productivity would lack precision and could lead to misguided strategies or evaluations.