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This paper attempts to highlight the importance of productivity and efficiency in creating wealth or value added, particularly in manufacturing. The essential element is the measuring of "labour productivity" in selected manufacturing sectors in the economy. In essence, the approach is the calculation of labour coefficients as rough estimates of labour productivity. Hypothetical examples of a number of selected manufacturing sectors in three ASEAN countries are presented. This enables one tc make a comparison between labour coefficients of different sectors or of the same sectors in different countries. Since labour productivity can also relate to efficiency and technological usage, it is prudent that this approach will at least show an indication of a country's competitive advantage vis-a-vis other countries. Finally, it helps leaders of large organisations to make investment decisions particularly with respect to plant location.IntroductionThe globalisation agenda of the WTO (World Trade Organisation) and the liberalisation movement of goods and services among countries create a strong competitive spirit within the globe. Various business strategies had to be applied in generating wealth in most organisations. The essence is the knowledge-based economy where competitive advantage can be maintained through "high productivity" and efficiency.Although the service sector plays a major role in this ICT-era, manufacturing still plays a dominant part in creating value added in most countries. Its contribution to the aggregate economy is still significant to emulate growth. Thus production processes in manufacturing should be the most productive as well as efficient in order to maintain the highest standard of quality.
Relationship between productivity and quality
In general, productivity has always been defined as the relationship between at least two variables, i.e. the relationship between the system's output and its input. It can be represented simply as:
Productivity = Output/Input
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