07 Analyse reasons why higher productivity is important for a manufacturing business. [8]

[Sir Afzal Shad]

07 Analyse reasons why higher productivity is important for a manufacturing business. [8]

[KN] Higher productivity means producing more units per unit of input, reducing average costs and improving competitiveness.
[KN] Increased productivity enhances a firm’s ability to meet rising customer demand without proportional increases in inputs (scarce resources), ensuring timely deliveries in competitive industries.

Possible Structure:
KN >> APP >> AN >> AN+
KN >> APP >> AN >> AN+

[Tuqwa]

KN: Higher productivity means producing more units per unit of input.
APP:forexample a car factory that produces more vehicles with the same amount of labor and materials reduces the average cost per car.
AN:this allows the business to offer competitive prices compared to rivals.
AN+:as a result the company can attract more customers and increase market share.

KN: Increased productivity enables a firm to meet higher customer demand without proportionally increasing inputs.
APP:forinstance a smartphone manufacturer can produce more phones during peak seasons without hiring many extra workers.
AN:this ensures orders are fulfilled on time maintaining customer satisfaction.
AN+:consequently the business can retain loyal customers and strengthen its reputation.

[Ayaan Fayaaz]

KN: Higher productivity allows a business to make more products with the same resources, increasing revenue while controlling costs.
APP: For instance a car manufacturer producing more vehicles per day without hiring extra staff can sell more cars.
AN: This increases profit margins because the business earns more from the same level of input.
AN+: Consequently, the business can reinvest profits into research expansion or improving employee benefits, supporting long-term growth.

KN: Increased productivity generates extra resources and efficiency that can be reinvested into the business.
APP: For instance a factory that produces more smartphones per shift can use the savings to develop new models or adopt advanced technology.
AN: This helps the business stay competitive and adapt to changing market demands.
AN+: As a result higher productivity not only improves current performance but also supports innovation and long-term sustainability.

[Mamoona Hussain]

KN: If the production rate is higher then their are more chances of higher sales.
APP: For example if a furniture factory is manufacturing 40 chairs per week then their are chances of 30 being sold.
AN: Due to this they would be able to achieve economics of sale , therefore after lower prices to the customers, which increases their customer base, they will be able to earn more revenue .
AN+: Therefore the final profit will also increase.
KN2: More productivity leads to more sales, therefore higher market share is achieved.
APP: If the factory is selling 40 chairs out of 100 every week their market share will increase.
AN: Due to this their brand image may improve and they may become market leaders, which will grant them a competitive edge, making them the price setters of that market. Therefore, they may charge higher prices from the customers.
AN+: The revenue generated from this can be reinvested in the business the expand/grow like opening up a new factory.

[Fatima ibtehaj]

[KN]Higher productivity leads towards lower average costs of production.
[APP]For example, in a car manufacturing company like toyota, using advanced technology allows more cars to be produced with fewer workers.
[AN]This can increase profits for the business by keeping prices the same or lower to attract customers while maintaining profit margins. This improves its competitiveness in the market,
[AN+]Overtime, these cost savings can be reinvested into research, staff training etc which can further boost efficiency and innovation. This can also help the business to maintain a strong market position which can result in a higher market share.
[KN]Higher productivity also enables a business to meet customer demand more effectively.
[APP]For example, a furniture manufacturer that improves worker efficiency can produce and deliver orders faster, hence satisfying customers.
[AN]This can lead towards repeat purchases hence building a strong reputation of reliability and a positive word of mouth promotion hence higher sales.
[AN+]In the long term, consistent customer loyalty and a strong brand image can help the business expand its market share and achieve steady growth, giving it an advantages over competitors who struggle to meet deadlines or maintain quality.

[shamaim shakeel]

Point 1: Higher productivity reduces cost per unit

(KN)
Higher productivity means producing more goods using the same amount of resources. This helps reduce the cost per unit, as the total production cost is spread over more items.

(APP)
For example, in a car manufacturing company like Toyota, if workers and machines become more efficient, they can produce more cars in less time without adding extra costs like wages or materials.

(AN)
Firstly, this means each car becomes cheaper to make.
Secondly, the business can earn more profit on every unit sold or offer lower prices to attract more customers.
Thirdly, higher profits give Toyota extra money to invest in better technology or training, which can further improve efficiency.

(AN+)
As a result, Toyota can stay competitive in the global car market, increase its profit margins, and maintain stable growth over time because it is producing at a lower cost while keeping quality consistent.

Point 2: Higher productivity helps meet demand faster and maintain product quality

(KN)
Another reason higher productivity is important is that it allows the business to meet growing customer demand quickly while keeping product quality high.

(APP)
For instance, when Toyota faces high demand for a new car model, increased productivity ensures cars are made quickly and efficiently without lowering standards. The company can use automated machinery and skilled labour to speed up production while checking quality at each stage.

(AN)
Firstly, this helps Toyota avoid product shortages and delays in delivery.
Secondly, maintaining quality keeps customers satisfied and protects the company’s reputation.
Thirdly, quick delivery and consistent quality encourage customer loyalty and repeat purchases.

(AN+)
In the long run, this allows Toyota to build a strong brand image, meet global demand efficiently, and keep a loyal customer base. Meeting demand on time while maintaining high standards ensures steady sales and longterm success.

[Arham Qadri]

[KN]] Because it reduces cost per unit.
[APP] For example at car factory each worker makes more car per shift so the firm can produce extra vehicles to sell without hiring more staff.
[AN] Hence this increases sales which results in generating more profit. It improves brands image.
[AN+] Furthermore it would create customer loyalty.

[KN] Because it improves worker skills and efficiency.
[APP] For example, if workers are trained to use machines properly, they can make cars faster and with fewer mistakes.
[AN] Hence this reduces waste, improves quality, and increases the number of cars produced per shift.
[AN+] As a result, the business can sell more vehicles, strengthen its reputation, and gain customer loyalty.

[Abdullah Mohsin]

[KN] High productivity leads to lower COP per unit.
[APP] For example, a toy manufacturer produces more units per hour, enabling it to reduce the prices of its products as the COP falls.
[AN] This makes the business more competitive, as lower prices will attract more customers, increasing sales of the business.
[AN+] Furthermore, lower prices and sustained quality lead to good word of mouth, increasing the consumer base of the business and its brand image.

[KN] Higher productivity allows timely deliveries.
[APP] This helps the toy manufacturer deliver orders to customers on time, increasing customer satisfaction.
[AN] A rise in customer satisfaction leads to repeat purchases, making customers loyal to the business in the long run.
[AN+] This helps increase the market share of the business as competitors may fail to attract customers, helping the business achieve its objective of high market shares.