Manufacturing Efficiency: The state of play

Manufacturing Efficiency in small

As we roll on through the very last month of 2018, there’s no better time to look back and see how and where we could have triumphed, especially in the challenging and often, relentless manufacturing industry. The UK’s manufacturing industry in particular, saw rather uninspiring performance during the summer months. With manufacturers, vendors and suppliers up in arms, output and new orders tapered off and we witnessed the first slowdown in the export sector since 2016, according to IHS’s latest PMI report. The findings also suggested that manufacturing production rose at the slowest pace in 17 months during August of this year. Regrettably, this slowdown was not a result of all of the UK’s shop floor and machine operators vacationing with their families in Mallorca.

The numbers are staggering and they do speak volumes, but despite the lull, is the UK perhaps suffering from a perception problem on efficiency in the manufacturing sector? Productivity is the main driver of long-term economic growth and higher living standards, and yet, according to recent research, there’s a sizable gap between perceived and actual productivity.

Research shows that among senior decision-makers in the manufacturing sector, over 80% rate stock checking, collaborating on cross-departmental projects and submitting expenses as efficient, yet 85% also admit to wasting up to a startling 10 hours per week on admin tasks. So, what’s driving these misconceptions – and if everyone’s so busy, then who’s running our companies?

Reality: It’s only our perception of things

Identifying the source of the manufacturing efficiency & productivity slump is the first obvious hurdle. We need to know for certain whether the slump is a manufacturing-specific problem, or part of a broader UK slowdown. According to the Chartered Institute for Personnel and Development, the UK-wide decline in efficiency is driven by poor management practices, and insufficient investment in upskilling the workforce. In lay terms, not enough attention is paid to the worker, nor to enhancing their skill set to boost productivity from the #1 resource – the human resource.

There’s research that appears to support these claims, making a B-line to the manufacturing industry. When we surveyed senior decision makers in the UK, we found that 33% of business leaders in manufacturing would spend more time on personal training if they could, whereas only 24% would spend more time on training their team. Similarly, 41% would spend more time on strategy and planning, and only 28% on team-building exercises. This suggests that business leaders are forgetting the importance of attending to their workforce.

This could be because there’s a disconnect between business leaders’ perception of productivity, and the perception of their employees, which perhaps more closely reflects the reality of the situation. After all, employees are likely to have a more accurate idea of how productive they are, and whether they have the right tools to get the job done. Business leaders need to look to their employees for guidance on how to boost their productivity and ensure they address their real needs, and start cultivating a productive (oh yes, and happy) workforce.

Legacy Systems

Let’s talk legacy systems. Let’s also talk about those that are outdated and downright scary, like spreadsheets. By not updating their technological arsenal with the latest cloud-based ERP and business management solutions, manufacturers are missing out on a real-time view of what’s happening, alerts on bottlenecks and other preventive measures, and a secure architecture to house their data. Take the popular Internet of Things (IoT), for example. For manufacturers, IoT is heaven-sent, whereby connected devices are generating and sharing vast amounts of data that legacy systems aren’t equipped to store and analyze.

Today’s technologies are bridging the communications gap between the shop floor, back-end, and planning and control systems, by creating a somewhat omniscient route where information can travel seamlessly between the links of the supply chain. Manufacturers looking to take advantage of these benefits need to have the right business management software systems in place if they plan to step up to the plate – and get into the game.

So, why are manufacturers not upgrading? Some common concerns are – the cost of digital transformation and profit loss during transition downtime, fears surrounding the transition from on-site data servers to cloud-based storage, and uncertainty about maintaining business continuity when working from mobile devices. In short, many of us are downright scared of taking the proverbial leap.

Our stats found that these attitudes must change, and the sooner, the better. 70% of C-level execs in manufacturing spend 5-10 hours a week on admin tasks, a number which could be reduced by having the right technology in place. UK manufacturers must put aside their fears and say goodbye to their beloved (yet defunct) spreadsheets. Today’s advanced business management solutions will drive productivity and streamline inefficient admin processes. It’s no longer fiction, it’s fact.

End Game

Evidence suggests that managers are simply overestimating productivity and neglecting the importance of upskilling their workforce. It goes without say that in a somewhat ‘chilly’ climate, with the UK just ahead of an exit from the EU, parity must be achieved between perceived and actual productivity.

It’s time to update, upload and be… upfront about our outdated legacy software. Today’s decision makers would be wise to seek advice from an IT consultant on how to best implement a modern cloud-based solution which affords real-time analytics and flexibility.

To really shake the current productivity slump, manufacturers must embrace new technologies, but also ensure that they’re backed by a commitment to breed and support a work culture where transparent communications up and down the supply chain, takes precedence over everything else.

It’s not a secret anymore. These are the pillars of a strong and viable manufacturing organization.

The Author
Efrat Nakibly
Director of Consulting, Priority Software U.S.

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