Should we move back to manufacturing?

Most countries go through a development cycle from Agriculture to Manufacturing and then on to Services.

However many services are labour intensive … and therefore dramatic productivity gains are difficult

Productivity in manufacturing industry can be transformed using technology and automation.

Does,this mean that those countries that have moved through manufacturing to services (UK?) are at a disadvantage in the productivity race?

Productivity Conundrum

The Guardian (UK newspaper) this week raised the question of how the UK has managed to create jobs whilst GDP is falling.

It suggests that the answer must be that the productivity of the workforce is falling … so we need more of them.

However, employment figures often lead or lag on economic performance.

An equally valid reason is that firms have confidence in the future and are hiring now to create future output.

Only time will tell which explanation is right.

Its a Learning Problem

Behind many productivity problems is a learning problem. It is astonishing how often employees are poorly trained … and in many cases, completely untrained, to do the job they are supposed to do.

We then blame ‘poor performance’ … and of course it is poor performance … on behalf of the management team who should have provided the training … and refreshed the skills when necessary.

Small is beautiful

In 2007, the state of Iowa in the USA hired Mike Rohlf, a black belt in Six Sigma, to apply ‘Lean’ to the various processes and procedures of state government.

Mike is still there … appropriately as a ‘one man band’ (very lean). For each project, Mike works with volunteers from different areas within the agency in question, as well as ‘correctives’ – non-biased independents from an unrelated department.

They map what goes on … and set about trying to improve on it. The state has carried out 180 such projects and is convinced of its success … though this is difficult to measure because of the ‘softer’, qualitative improvements (like better service) that come alongside any cost savings.

One example – last year’s overhaul of the vocational rehabilitation office that assists with Social Security reimbursements is on pace to net about 20 percent more federal reimbursement money, or roughly $100,000 annually.

As ever, changes are often very simple … in this case, moving from a paper to an electronic claims process.

Productivity improvement can be both ‘big’ and small’ … and ,as we all know, small is often beautiful.

Spend wisely

A recent report from IDC Manufacturing Insights suggests that the IT spend in Indian manufacturing organisations will double by 2016.

Will this give them a rise in productivity?

Almost certainly.  Not necessarily as a direct result …. but anyone making big investments in IT is likely to be looking at other aspects of the business.  Focusing on a business – for any reason – tends to show up what is wrong.

Of course Indian manufacturers could just expect IT to do their job for them. If they do, they will be very disappointed with the results.

They’re not to blame

I’m writing this in Pakistan … whilst taking a look at some aspects of Pakistan’s horticultural sector.

If you take a look at ‘the figures’ they suggest that this sector is quite ‘inefficient’, yet when I walk round farms, farmers and their labourers are working very hard.

Of course – I hear you shout – these observations are not incompatible. We should not confuse hard work with effectiveness.

Often people have to work (over) hard because what they do is badly organised. But don’t blame the people .. blame ‘the system’ (and, especially, the lack of training).

… and Jerk

Did you see what I did there.  Possibly too clever for my own good but I carried on the title of this post from the title of my last one.

How often have you felt like a jerk … in your professional life I mean.

If you reply ‘never’, then firstly I probably wouldn’t believe you … and secondly I would probably ask you why not … because it might mean you are not taking enough risks.

So, you are allowed to look like a jerk occasionally … but never twice on the same issue or with the same customer!


Anyone who has practiced 5S will know the value of tidiness and cleanliness.

Yet, all too often we see dirty, untidy workplaces … creating inefficiency.

Wherever you see untidiness, think “This is costing me money” and you might start to think differently.

Are You Listening, Government

The Australian Productivity Commission has made some recommendations for a National Disability Insurance Scheme.

The government is (probably) going to partially meet the funding requirements.

This process is fairly typical. A government funded body makes recommendations to government who accept the recommendations in principle but fail to implement or fund them completely.

I understand that governments have many calls on their funds and have to make difficult discussions on priorities … but this does seem at best an imperfect process.

Any suggestions for improvement?

Where are you?

Imagine for a moment that you are in charge of the country.

Your country needs you to increase its competitiveness… you know the best way to do this is to improve its productivity.

Of course, what you might do will depend very much on the country you are in charge of … its current economy, its current industrial strengths, the skill levels of the workforce, the nature of the infrastructure, etc.

So what you do depends on where you are.

The same is obviously true when improving organisational productivity. You need to know where the organisation is in terms of its development, in terms of its aspirations and aims, in terms of its progress towards meeting those aims, etc.

So, whenever you need to move forward, you first need to know where you are.