+44 (0)7583 149243

Why Lean is one of the missing pieces to Britain’s Productivity Puzzle

productivity

June 10, 2016

Britain’s so-called Productivity Puzzle is nothing new.  It’s a long-term struggle which was exacerbated by the financial crash in 2007/8. Today we continue to lag significantly behind the rest of the G7, starkly illustrated by the fact that it takes a UK worker five days to achieve the same output as a German worker produces in four days. Furthermore, weak performance on the manufacturing and production side of things is thought to be what is holding the UK back. So how could Lean make a difference?

Almost a year ago Business Secretary Sajid Javid MP declared, “Boosting productivity is the economic challenge of our time,” when he launched Fixing the Foundations¸ the Government’s plan to address the Productivity Puzzle. Not once does this 88-page document refer to Lean.

To my mind, this is a significant omission. Productivity is all about efficiency.  To cite Goldman Sachs, “Economists use the term productivity to measure how effectively businesses use labour and capital to generate products and services.” It is recognised that – particularly in manufacturing – increasing output, reducing waste, innovating, improving quality and identifying value all contribute significantly to boosting productivity. These are also core elements of Lean.

Back in 2013 Dr Patrick McLaughlin wrote a report entitled Manufacturing Best Practice and UK Productivity, commissioned as part of the Government’s Foresight Future of Manufacturing Project.  He saw Lean manufacturing as a key part of improving productivity, along with strategies such as Six Sigma and Total Quality Management. In his view (and mine), these examples of best practice in manufacturing today are the bedrock upon which future best practice will be built. “By setting a target of meeting and improving on best-in-class levels of productivity an improvement in performance of 30% is realisable [and] the UK is particularly well-placed with flexible employment legislation and scope for significant improvement. A 30% improvement in GDP per hour worked would deliver an additional £100 billion per year to manufacturing companies’ sales. Such an action would support rebalancing the economy.”

As you might expect, I am particularly interested in the human aspect of the Productivity Puzzle. People – whether workers on the factory floor or members of the board – are crucial to making Britain more productive. Happy, fulfilled workers, who feel valued and are recognised for the contribution they make are naturally more productive.  The Lean model of empowering workers at every level of an organisation to make a difference is an extremely effective way of boosting productivity.

What’s more, studies have shown that this can be achieved by actually working fewer hours.  As part of an experiment funded by the Swedish government, nurses at a retirement home have worked six-hour days on an eight-hour salary for the past year.  The result was increased productivity, higher quality of care and happier workers. Even bosses believe that a shorter working day would be beneficial for business, with four in 10 saying in a recent survey that they believed their staff would be just as productive in six hours as in eight– twice as many as the number of respondents who thought the move would decrease productivity.

We’re not going to solve the Productivity Puzzle overnight, but by applying Lean methodology and focusing on both people and production, I believe we could significantly close the gap and have a happier, healthier workforce. And that’s why our recruitment, consultancy and coaching services are designed to help you find and retain the best.

Share This

Share this post with your friends!