In response to competition from abroad many manufacturers have moved from low wage, low-value manufacturing to higher-value-added production as a means for improving their competitiveness. As manufacturing continues its evolution away from labor-intensive processes toward knowledge-based skills requiring technological problem solving, the way an organization regards its workforce must evolve as well. Companies must recognize that not only new skills, but also new combinations of skills are required of a manufacturing employee. Cost reduction initiatives adopted by large manufacturers and have been forced down the supply chain, pushing small companies to move past the position of low-value, low-wage supplier.
Prior to the Industrial Revolution over 200 years ago, gains in human productivity were slow and immeasurable. With the use of moving water and then steam, followed by internal combustion engines to drive mechanical devices used for milling, farming, manufacturing, transportation, etc. productivity began growing exponentially. These advances, as well as advances in communication and electrical networks significantly increased the output of each individual worker and the companies they worked for. Advances in industrial technology and improvements in productivity continued nearly unabated and, in the 1950’s and 60’s, they were bolstered by a new paradigm of technological evolution – the computer revolution, which was a byproduct and extension of previous advances. In the 70’s and 80’s the Internet and the World Wide Web came into fashion and another explosion of productivity began.
Today, technology like mobile applications, the cloud, collaboration, social networking, automated decision support systems, ubiquitous connectivity, and other modern trends and innovations provide ample opportunity for individual enterprises to continue to drive worker productivity higher to combat low wage competitors.
The best way to drive worker productivity growth is to increase investment in workers (through education and training), technology, and capital equipment. To do this however, organizations must do much more than merely implement these technologies with a hope for productivity improvement. Any justified technology purchase should be part of a strategic productivity improvement plan that helps create a “culture” of productivity within an organization.
Here are some considerations when developing a plan:
- Begin creating a culture of productivity within the organization from the top down with management
- Evaluate existing process automation, technology and applications to identify constraints and productivity obstacles
- Avoid continuing to do things because “that’s the way they have always been done”
- Document repeatable work flows, work instructions and ensure strict adherence to them
- Weave related workflows together whenever possible to consolidate worker tasks
- Generate worker tasks through software automation
- Create or re-energize a strategic core workforce training and cross-training program
- Encourage manufacturing employees to help identify process innovations
Faster growth in labor productivity allows a workforce to produce more and to earn increased wages, which helps with employee attraction and retention. Building a plan around productivity delivers great benefits to firms that need to make every dollar of investment count. It’s an ongoing effort that requires hard work, vigilance and continuous improvement and is a key component to the longer term health of a manufacturer and its workforce.
Written by Radley Corporation