Manufacturing productivity at the firm level in the US defense industry

Abstract

This thesis will develop measures of labor productivity for a Government-owned and operated manufacturing facility that produced military products to unique customer orders. The methodology used to calculate labor productivity is the recently revised Bureau of Labor Statistics (BLS) labor productivity program. The revised BLS program incorporates changes to the techniques for constructing the output measures which are used in conjunction with input measures to derive output per hour measures. The motivation of this research is to explore the labor productivity of a particular Government-owned and operated firm through a detailed examination of historical labor input data, manufacturing cost data, the firm’s cost structure, and annual output. To date, no productivity analyses at the firm level have been published by the BLS in the Monthly Labor Review magazine due in part to a lack of required factor input data. These data are often proprietary in nature and do not lend themselves readily to public scrutiny. In order to maintain the confidentiality of the proprietary data used herein, neither the firm nor its products are identified. Generic labels, such as product 1, product 2, etc., are used as placeholders in lieu of actual product names. Nevertheless, all mathematical derivations employed in the construction of the output and input index series used to calculate labor productivity are explicitly identified, as are the specific equations that comprise the BLS technique.