Getting The Most From Measuring Productivity

At the operations level, productivity is a principle key to profitability. If you are competing with other mines that are paying roughly the same wage rate and the same prices for capital, materials, and energy, the only way your profit can be greater is by producing more output per unit of input. Mines with higher productivity have higher profit margins. Higher profit margins lead to greater operating cash flow, and cash flow is what distinguishes a dog from a cash cow. The turnaround in U.S. metals during the 1980s was in large part due to incredible improvements in productivity. According to statistics compiled by Kaufmann, 1991, labor productivity, measured as tonnes of primary production/manhour, increased 64% in steel, 94% in copper, 75% in lead, 143% in zinc, 132% in molybdenum, and 75% in gold. These improvements were hard won. However, with most modernization programs now complete, measuring and monitoring productivity becomes even more important as producers strive to maintain the gains they have achieved.