A Short Guide to Manufacturing Productivity

What Is Manufacturing Productivity?

Simply put, productivity is how much you get compared to how much you put in. Productivity improves as more output is generated for the same inputs or improves when the same output is generated from less inputs. Productivity can relate to any simple process (a machine or production line), something more complex such as a manufacturing cell, entities of considerable complexity such as a manufacturing plant, or even the entire country.

Why Productivity?

National governments rely on improving the country’s productivity as the principal approach to improving living standards. Considerable effort is made to monitor and measure national output, its inputs, and hence the nation’s productivity. There is detailed analysis of business sectors, geographic regions, international comparisons that provide insights as to what activities are highly productive and those that afford opportunities for improvement.

In manufacturing, the underlying force driving productivity improvement is more financial profit compared to the overall financial investment made in that business. On occasions, government judges the need to become involved, with measures such as business support schemes and investment in manufacturing catapults. Productivity is, or should be, a concern for businesses of every size: Sir Charlie Mayfield, Chairman, John Lewis Partnership - “Getting the economy match fit for the decade ahead [the 2020’s] requires business leaders to work smarter, not harder.”

The intention here is to boost productivity of most business, in particular the SME, it is their aggregate improvement that is deemed so important to the economy.

What’s To Be Done?

At a business level, leaders attempt to steer their activities towards providing goods and services to meet the requirements of customers in such a way that productivity is improving. More sales at higher margins, more effective manufacturing that is improving quality.

Business strategy and objectives define which sort of products should be available to what sort of customers at what must be a competitive price and level of service. Business strategy needs to be sound if productivity is to be improved, review, develop and maintain plans to be successful in its chosen markets.

A strategy that is not sound can lead to production resources that have inadequate demand for what can be produced. Or adequate demand of production capacity but with delivery at an inadequate profit. Identifying these causes, and doing something about it, is the fundamental nature of Productivity Improvement.

The strategic objective is always the same, to achieve more with less, get it right first time, and be more productive.

BPF Members wishing to take part in Productivity Committee meetings and activities should contact Graeme Craig.