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To address two key problems facing the production department at the government pharmaceutical organization (GPO). They were a lack of productivity and performance measurement at the operational level, and a need to assess the functional readiness to undertake its own performance‐analysis work.

The decision was made to apply the multi‐factor productivity measurement model (MFPMM). This was due to its ability to link with existing data that had been generated by the accounting department, its explicit integration between productivity and financial performance (i.e. profitability) at the operational level, and its major features such as information on opportunity gain/loss.

For the GPO, it was quite clear that productivity improvement would represent the critical direction for the production department in the future. Based on its initial deployment at the Section 3 unit, the MFPMM was generally viewed as a suitable tool for measuring and providing necessary productivity/performance information.

The database management needed to be improved in order to ensure timely provision of data into the MFPMM. Furthermore, better performance‐analysis capability by the staffs was required. In other words, both technical and managerial aspects must be recognized in order to ensure the MFPMM success and sustainability.

This study generated insightful information into operational performance at the GPO. It was clear that productivity represented the basis for formulating future policy initiatives.