Operational productivity is the measure of how effectively and efficiently inputs, such as labor, materials, equipment, and other resources, are used to produce a given output of goods or services. It’s a crucial factor in determining a company’s profitability and its competitive advantage within its industry. The higher the operational productivity, the greater the profits generated from a given set of inputs. It takes into account utilization rates and cost per output in order to relevantly compare multiple processes and/or organizations for improvement opportunities. Companies must take a comprehensive view at their operations to ensure that all resources are effectively utilized in order to maximize operational productivity.