PRODUCTION EFFICIENCY
by Antonio C. Antonio
November 25, 2013
Production efficiency occurs when a good and/or a service is produced
and/or provided at the lowest cost using cost efficient production methods and
technology. From the purely business standpoint, the primordial reason
why people go into business is profits, which is the result of the application
of sound management practices (or PODC [planning, organizing, directing and
controlling]). Although the application
of sound management practices should be the standard, there are peculiar
situations especially in the upland where out-of-the-box practices also work.
In the case of timber production which is a traditional upland business
activity, sound management practices will still apply but with an additional
purpose and objective which is goodwill. Doing business in the upland for
profits alone will get you nowhere without building goodwill among the upland
dwellers. We should not lose sight of the fact that upland dwellers are
the poorest of the poor, are less educated, and are ruled by traditions and
customs which may not conform well to modern business practices, have a
defensive dislike or distrust for other people especially lowlanders, and have
been exploited for so long. These peculiarities make upland management
and governance fairly different. A workable and applicable CSR (corporate
social responsibility) program should be an accompanying plan to the regular
harvesting, reforestation and silvi-cultural plans.
Production efficiency also plays a critical role in the profitability of
timber production. Labor, fuel and equipment and road maintenance are the
bigger items in the budget. Equipment availability is also a crucial
factor since the predominant weather in tropical rain forest areas (where most
timber harvesting activities are found) is rainy. In fact, like in the
Caraga Region, there are only four dry months in a typical year where
harvesting activities could be maximized. Harvesting plans geared towards
production efficiency should be made to conform to weather conditions.
The primary objective of production efficiency in the uplands is the
maximizing the utilization of harvested forest and timber products. Maximum utilization will certainly increase
profitability which should translate to more benefits to a greater number of
people particularly the key stakeholders… the upland dwellers themselves. The presence of other aims and purposes will
not be ideal; equitable distribution of wealth should be the main concern of production
efficiency.
Just my little thoughts…
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