How The UK Is Fixing Their Own Manufacturing Problem

The studies were carried out by the EEF manufacturers’ organisation and the University of Sheffield’s Institute of Work Psychology. They indicate that manufacturers are increasing the resources they put into design and development of new products, while also doing more to train their shop-floor workers. The aim is to ensure they can make their own decisions about how to boost output and do not need detailed instructions from supervisers. “It seems manufacturers in the UK are now in a better position to withstand problems such as weaknesses in key markets or a strong pound,” said Stephen Radley, head of economics at the EEF. Asked by the EEF which ingredients they thought most crucial to increasing global competitiveness, a quarter of the companies said that in the next few years they would place most emphasis on designing new products, with 23 per cent saying improving production and assembly was most important. More than 20 per cent of the businesses said they would focus most resources on adding service operations to manufacturing – for example, through trying to win maintenance contracts that would keep their products in peak condition for customers. These efforts appear to be paying off. Manufacturing productivity, expressed as output per person per hour, rose between 2000 and 2005 by nearly 4 per cent, below the US at 5.5 per cent, but above the average increases in Germany, France, Italy and Spain. However, employment in UK manufacturing has fallen by more than 20 per cent in the past six years. Dennis Kent, managing direct of Leicester-based Carlton Laser Services, a sheet metal fabricator, said the productivity of his employees, particularly design staff, had soared in the past few years as the company had put fresh emphasis on new ideas that would make its products more useful to customers. “By re-designing products such as metal cabinets for machinery, we have won orders for contracts that would otherwise have gone to China,” said Mr Kent. Gravatom, a specialist in making equipment that handles nuclear waste, is one company that has defied the trend by increasing its staff in the past three years from 60 to 100 by diversifying. “We have used our design expertise to move into equipment used to make radio­active markers, which are injected into the body for medical diagnosis,” said Dave Barker, managing director. The medical sector will make up 60 per cent of this year’s forecast £10m sales. The report from the University of Sheffield – based on an academic paper to be published next year – shows that more UK manufacturers are placing their faith in teamwork in factories. These companies divide their employees into small groups charged with devising their own solutions to challenges such as how to improve quality or cut waste. According to Professor Stephen Wood, one of a team of workplace psychologists who supervised a study of the training methods of more than 300 companies, these efforts to empower workers are by far the most important of the various ways in which companies have sought to boost productivity. “We found that companies which devolved more decision-making responsibility to frontline employees showed an average 7 per cent increase in value added per employee [a year],” said Prof Wood. Prof Wood said such moves to empower workers appeared to hold the key to consistent rises in productivity. “It seems that if companies introduce initiatives to improve quality or productivity, but without employing teamwork or similar processes, then the new ideas can be too much for the employees to handle, and productivity actually falls.” http://www.ft.com/cms/s/0/3b88726a-9b77-11dc-8aad-0000779fd2ac.html

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