Return On Investment (ROI) and productivity

By Dr. Alin Posteucă

Basicly, Return On Investment (ROI) is an indicator that investigates the profit value of an investment. Normally, the higher productivity is and consequently the lower costs are, the higher ROI is as a percentage. However, many managers are obsessively watching this indicator and they often exaggerate the short-term productivity (especially the productivity of people and equipment).

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Dr. Alin Posteucă is the founder and CEO of Exegens®, a global consulting firm specializing in operational excellence, cost improvement and business performance improvement. He helps his customers create and implement profitable strategies and cost improvement programs that ensure a unit cost improvement of at least 6% per year for each of the next 5 years by maximizing the efficiency and effectiveness of operations.

He is the author of the Manufacturing Cost Policy Deployment (MCPD) concept published in three books at Productivity Press - Routledge/CRC. The latest, Manufacturing Cost Policy Deployment (MCPD) Profitability Scenarios, centers on his core belief that annual and multiannual target profit can be achieved regardless of the evolution of sales volumes, increasing or decreasing.