Fundamentals of Management, 8th ed

Productivity Growth*

Total

Service

Manufacturing

* Nonfarm

Index: 1982 = 100

F I G U R E 1 5 . 4

Manufacturing and Service Productivity Growth Trends

Both manufacturing productivity and service productivity in the United States

continue to grow, although manufacturing productivity is growing at a faster pace.

Total productivity, therefore, also continues to grow.

Source: U.S. Bureau of Labor Statistics.

Chapter 15: Managing Operations, Quality, and Productivity

4 8 1

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apparent that its major competitors were almost a year ahead of Bausch & Lomb in

developing the new lenses, management made R&D a top-priority concern. As a result,

the company made several scientific breakthroughs, shortened the time needed to intro-

duce new products, and greatly enhanced both total sales and profits—and all with a

smaller workforce than the company used to employ. Even though other countries are

greatly increasing their R&D spending, the United States continues to be the world

leader in this area.

Another way that firms can boost productivity through operations is by reassessing

and revamping their transformation facilities. We noted earlier how one of GE’s mod-

ernized plants does a better job than six antiquated ones. Just building a new factory is

no guarantee of success, but Ford, Caterpillar, Whirlpool, and many other businesses

have achieved dramatic productivity gains by revamping their production facilities. Facil-

ities refinements are not limited to manufacturers. Most McDonald’s restaurants now

have drive-through windows, and many have moved soft-drink dispensers out to the res-

taurant floor so that customers can get their own drinks. Each of these moves is an

attempt to increase the speed with which customers can be served, and thus to increase

productivity.