All the talk at present is about productivity and how we can’t, as a nation, afford to pay ourselves more as productivity has not improved. The productivity being talked about is the value we create per individual. Within a production environment we can define value add as the new margin (sales value minus direct costs – raw materials, utilities and direct labour). Dividing this by the number of direct hours gives us a ‘value add per man hour’ productivity measure.
The first stage in trying to improve anything is being able to measure it reliably. Establishing a regular and reliable dataset will provide a good starting point.
From here, there are 3 key activities that will improve productivity:
1. Establish standard processes using standard inputs
Often manufacturing processes evolve with time and as sales people try to sell products they often demand changes and modifications that create diversification in the methods of manufacture and materials required. Each additional material or product variant risks reducing productivity through increasing complexity.
Reversing this so products follow standard processes using standard materials is one route to improving productivity. Even for make to order environments that can be achieved.
2. Ensure information and manufacturing flows
Improving back office and shop floor processes to minimise wasted materials and time is fundamental to improving productivity. It reduces the risk of errors and rework and it reduces the man hours required. There are many tools and techniques to help companies achieve from approaches such as Lean and Six Sigma.
3. Automate or Autonomate
Machinery and robotics in many cases significantly improve productivity whist potentially creating more interesting and rewarding jobs for staff. In order to introduce automation, it is essential that processes have both been standardised and streamlined. It is also important to consider product quality and ensure machinery is stopped when things are not correct (autonomation). This prevents quantities of incorrect product being made which are costly to rework or scrap.