This Focused Performance Weblog is a "business management blog" containing links and commentary related primarily to organizational effectiveness with a "Theory of Constraints" perspective. TOC is noted for its applications in Project Management and Multi-Project Management (Critical Chain) and Operations Management (Drum-Buffer-Rope), as well as in Marketing, Strategic Planning and Change Management (TOC Thinking Processes). If you are on an archive page, current postings are found here.
Thursday, August 22, 2002
Total System Productivity I've been mulling over a recent NY Times article (free registration required to access link that might not be there due to the Times' practice of archiving stories for paid access after a period of time). Here's a few quotes from it...
"By cutting back the hours of workers without reducing the workload, employers pushed up the nation's annual growth rate of productivity by 1.1 percent in the second quarter..."
"Rather than keep idle employees on the payroll, companies now lay them off and cut overtime so quickly that output per hour in the second quarter continued to rise despite almost no increase in production."
"It is easy in the United States," said Robert J. Gordon, an economist at Northwestern University, "to get sharp and sudden declines in hours by laying off workers..., and this contributes to healthy productivity growth in hard times."
What it got me thinking about was that this "productivity growth" number, which is usually interpreted as the productivity of the nation is really only the productivity of the working part of the nation. Taking a bigger picture, whole system view would require factoring in the layoffs of the thousands of creative, potentially productive people. I wonder what the real change in the nation's productivity is? Total output versus total resouce looks a lot different than total output versus utilized resource.
Being New Jersey based, near the home of AT&T, Lucent, Avaya, Telcordia, and as a former employee of that industry, I've watched local business headlines full of layoffs. The lost opportunities associated with the idling of 10's of thousands of creative, potentially productive is staggering. (I almost said "criminal.")
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