Wednesday, February 12, 2014

Foreign levies link to productivity again

Recently I've been reading certain individuals linking foreign levies with productivity and that the increase of foreign levies help decrease productivity.

Yes, productivity is talking about total output / total input. However, input doesn't only look at manpower cost. There are always methods of improving the output without constantly trying to lower the manpower cost.

The foreign levies itself does increase the manpower cost but that's because some companies are still addicted to cheap manpower with no concern on the quality of the product/service. In the long run, over reliance on cheap manpower will affect your business in the long run because of a simple rule, quality costs.

If the quality is high, the cost of producing it is definitely higher, be it due to the machinery invested or the manpower costs used to deliver the product/service.

Cheap cost and good quality doesn't really come together. One should always look at productivity and quality of product/service together. In the end, it affects your profits. 

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