Production is an indicator, measured in the number of units of products that have been produced for a certain time or by one employee.
How production is determined
Production is a direct indicator of labor productivity. There are three main methods for determining it, namely: natural, monetary and labor.
The first option involves dividing the volume of products that have been manufactured or sold by the average number of employees directly involved in the production process. This technique is applicable only to those enterprises that produce products of the same name.
If the organization produces diverse products that cannot be reduced to a single unit of measurement, then it is advisable to use the cost method. In this case, production is the ratio of the cash equivalent of all manufactured goods to the number of workers.
As for the labor method of determining production, we note that it is used to assess the productivity of individual teams, jobs or units. The indicator is defined in standard hours. This takes into account not only finished products, but also work in progress. The value of this indicator is that it helps to evaluate the effectiveness of labor organization and the rational use of labor.
Production rate
Production is an indicator that is determined by the results of a certain period. However, there are also standards that determine the desired state of affairs. It is about normative development. To determine this indicator, it is necessary to multiply the length of the period by the number of workers involved in the production process. The result is divided by the time, which, according to the standards, is allocated to the production of a unit of production. Thus, the maximum result that can be achieved at the enterprise is determined.
Production analysis
Production is the most important indicator of the enterprise. In order to draw any conclusions based on it, a thorough analysis is necessary. It may be as follows:
- dynamics of the indicator over time (on the basis of data for several years, it is possible to determine trends in the operation of the enterprise, as well as make forecasts of the future situation);
- factor analysis (determines which factors most affect labor productivity and production, which makes it possible to adjust further work);
- determination of growth and growth rates (shows the ratio of the increase in production for different periods, which allows us to study in more detail intervals with unsatisfactory indicators).
Performance Indicators
Production, as an indicator of labor productivity, is regularly calculated to assess the functioning of the enterprise. In order to determine this value, it is necessary to collect the following information:
- the volume of production in physical or value terms (moreover, you can take the value of the indicator in fact, or you can take the planned one to calculate the standard output);
- the number of employees who are directly involved in the production process (this makes it possible to assess the effectiveness of their work, as well as determine the direction of rationalization of staff);
- the duration of the production units (indispensable in the event that you need to evaluate the output per unit time).
How is production accounting
Production is a quantitative expression of labor productivity. Since this indicator plays a rather important role in the analysis of the enterprise, it is necessary to somehow keep its record. This is especially true in cases where a piece-rate wage system is applied, which directly depends on the output indicator. Keeping such records gives the entrepreneur the following opportunities:
- the availability of data on the performance of each employee;
- fair distribution of wages in accordance with the production indicator (excluding defective products);
- ensuring control over the conformity of the quantity of manufactured products to materials and raw materials supplied to the workshop);
- definition of bottlenecks that impede the movement of semi-finished products between workshops and units.
With regard to modern accounting systems, the following are most widely used in relation to development:
- in accordance with the order for a certain amount of work;
- in accordance with the so-called "route map";
- assessment of the indicator based on the final results of the work.
Output level
Production is the amount of finished products (also, in some cases, units and semi-finished products are taken into account), which was produced by one unit of labor or per unit of time. In addition, they also distinguish between the concepts of indicators of the level of production:
- average production per hour - is determined by dividing the volume of products manufactured during the period by the number of man-hours of the workshop;
- average output per day - directly related to the previous indicator (determined by multiplying the value per hour by the length of the working day or shift);
- production of one worker - is determined by the ratio of products manufactured per month (or any other reporting period) to the average payroll number of production personnel.
What can affect production
Production is the amount of output produced per unit of time. It is worth noting that this indicator is not stable and can fluctuate depending on a number of factors:
- the introduction of new technologies or operations can work in two ways: on the one hand, this leads to a rationalization of the production process, and on the other, it can cause delays for the development period;
- the infusion of new employees into the team who need time to adapt and become familiar with the production process;
- the use of previously unused raw materials (here also production may decrease for some time);
- serial production leads to natural fluctuations of this indicator.
Conclusion
Development can be considered one of the key indicators, because it, in fact, is a reflection of labor productivity. This value makes it possible in physical or monetary terms to evaluate the results of the work. This indicator is especially important for enterprises where a piece-rate wage system is used, because it makes it possible to fairly distribute monetary resources among employees.
