A guru to many adherents of lean manufacturing, Peter Drucker once said “Nothing is less productive than to make more efficient what should not be done at all.”
Delegates at this year’s National Manufacturing Debate (NMD), hosted at Cranfield University, might do well to bear these words in mind as they gather to tackle this year’s topic, UK manufacturing productivity.
This focus comes as the NMD enters its fifth year. Previous events have discussed the need for a national industrial strategy, the requirements of the manufacturing supply chain for economic growth, the effectiveness of incentives for investment and innovation and the importance of manufacturing to economic recovery.
Now, with that recovery building momentum the event’s organisers felt the moment was right to address the very pragmatic issue of productivity in enabling competitiveness in a global marketplace.
Confusion and conflict
As Professor Rajkumar Roy, head of manufacturing and materials at Cranfield points out, productivity is a somewhat thorny issue for the UK. “There is conflicting information on the productivity of manufacturing,” he told TM in the run up to the debate.
“There are multiple sources of data about it. Each one of them uses a slightly different basis and sometimes the duration of the data is also different. This often creates ambiguity in observations about sector performance and productivity.”
To resolve confusion about productivity trends in the sector in the UK, how these compare to global competitors and what can be done to improve productivity, Prof Roy says this year’s debate will “explore patterns in the last 25 years of UK manufacturing productivity data,” guiding delegates through recent research before allowing them to bat questions back and forth with a panel of experts from industry and supporting stakeholder groups.
These experts will also give presentations prior to the main debate, laying out their experiences of what influences manufacturing productivity. With representation from union leader Ian Waddell, Toyota UK’s Richard Kenworthy, Sheffield Hallam University’s food manufacturing expert Dr Martin Howarth and more, standpoints on the key challenges to increasing productivity in UK manufacturing should be diverse. But will the proposed solutions be equally varied? Or are similar actions needed in all sectors and across the workforce to boost output and effectiveness?
Lord Alec Broers, chair of the ERA Foundation will chair the morning presentations at NMD 2014 while Jane Gray, editor of The Manufacturer magazine will chair the afternoon debate. Delegates can submit questions for the panel in advance by emailing [email protected]eld. ac.uk. Full speaker and panellist details can be found here.
‘Starters for 10’ – Provoking the productivity debate
Undoubtedly the impact of skills levels on manufacturing productivity will resonate across manufacturing sectors. But the route to increasing skills, and which skills should be improved is less easy to agree upon.
EngineeringUK’s 2014 report on the state of engineering in the UK cited economic analysis which shows “that a 1% increase in the share of the workforce with a university degree raises the level of long-term productivity by 0.2-0.5%”.
Between 1994 and 2005 the number of people in the UK workforce with a university qualification rose by 54% – yet it would be controversial in industry circles, where a decline in vocationally educated employees has recently been loudly bemoaned, to praise this trend as a wholly good thing for British industry.
Can we similarly measure the probable impact of a 1% rise in engineering apprentices on UK manufacturing productivity? Research by the Centre for Economics and Business Research shows that completing an engineering apprenticeship will increase an individual’s productivity by £414 per week – a rise which compares favourably with apprentices in business administration and retail where the added productivity value is £268 and £83 respectively.
But of course the productivity of the UK manufacturing sector no longer solely relies on increasing physical output.
As more manufacturing firms develop service-based business models, the skills sets and technologies required to bring productivity benefits to the sector will alter too. Focussing on technology, Prime Minister David Cameron recently announced £45m of government investment in the Internet of Things, an industrial advance which is essential to the delivery of advanced service systems and which Cameron said, in his speech on March 10 (p72), will also increase productivity.
But to hone in on this relatively blue-skies technology-based productivity enabler is to leap frog more fundamental changes to UK manufacturing kit and IT infrastructure which could transform competitiveness. It is widely recognised that investment in automation, in production and business processes, leads almost inevitably to productivity gains – it is also now commonly refuted by economists that the same investments lead to net job losses.
And yet the UK has become a laggard in its investment in manufacturing automation technologies when compared to other industrialised nations – 2012 saw a big uptick in investment, but from a low base and money was largely being spent by automotive suppliers clamouring to meet the demands April 2014 | Issue 3 | Volume 17 | www.themanufacturer.com49 of rebounding OEMs. What about other sectors with rapidly increasing demand – like food and drink for instance? How else can the industry hope to meet the challenges of global population expansion and urbanisation if not through increased automation for increased productivity?
These thoughts on skills, service growth and technology offer some taster ideas on the influences and actions that could alter Britain’s productivity and competitive profile in a world of change and challenge for industry.
What other factors would you call to debate? Join your peers at Cranfield University on May 21 and let us know.