Productivity assessment is a vital instrument for the contemporary business decision-making. Current manufacturing systems are challenged by constraints associated with productivity measurement that integrate the production process’s key performance indicators. This paper aims to assess and analyze the productivity measurement approaches, productivity factors, and productivity measurement challenges. To achieve this objective, a systematic literature review was carried out, which mainly consisted of productivity measurement approaches, factors, and challenges to flow shop manufacturing systems. Different productivity measurement approaches, factors, and productivity challenges have been forwarded in the last 40 years, classified into six categories. Though different productivity measurement approaches were developed, most of the developed measurement approaches were profit-oriented, ignoring the manufacturing system’s key performance indicators. Incorporating manufacturing system’s key performance indicators in the productivity measurement process is critical to solving major problems of a manufacturing system. A new productivity measurement model is developed using key performance indicators. It is advisable that the key performance metrics of the manufacturing system be integrated into the direct productivity assessment framework for prospective measurement.