A Study on the Quality-Productivity Relationship and its Verification in Manufacturing Industries

Although many researchers believe that quality and productivity should be positively related, it is not uncommon for managers in manufacturing environments to doubt that this positive relationship exists. Most of the researchers who address quality and productivity base their assertions on logical reasoning and not on empirical mathematical models. The reason may be due to the small number of models that relate these two concepts. Another reason may be that the models that do exist have major deficiencies that cause them to be inapplicable in the real world. This article investigates the mathematical relationship between quality and productivity. A new mathematical model of the quality-productivity relationship is presented. Unlike existing models, this new model was designed not only to be descriptive but to also be applicable in industry. A field study involving two manufacturing industries was conducted to confirm applicability and validity of this model. Given that the model is based on profit, the results of this study substantiate the belief that quality and productivity improvement can produce increases in profit and are thus worthy of emphasis by engineers and managers as well as engineering economics researchers.