COVER STORY FEBRUARY 2020
“Too many companies see
technology as the answer
to boosting productivity”
Chas Moloney, director, Ricoh UK & Ireland
www.manufacturingmanagement.co.uk
20
continued to grow because
they’re in the middle of 20- or
30-year investment cycles.”
Four pillars of productivity
Often, when pondering what
can be done to improve
productivity, people
automatically assume that
technology is the answer.
However, says Moloney, Ricoh’s
report found the opposite was
often the case. “Technology
and the data it produces are
actually some of the drivers for
us having negative productivity
growth,” he explains. “What we
found in the Economy of People
research was that too many
organisations are focusing on
technology or data as a solution.
Actually, the focus should be
on empowering people. In our
view, tackling productivity
comes down to four pillars:
people, place, process and
technology, and it’s very
important that they are looked
at in that order.”
Starting with the fi rst on
that list, Moloney says that the
changing workforce, especially
the increasing numbers of
millennial workers, will need
companies to be more fl exible
certainly diff erent to what we
are used to.”
The next, place, refl ects
how the workplace itself has
changed. While the remote
working environment of
an offi ce job may not apply
to life on the factory fl oor,
Rob Sinfi eld, VP of product
at Sage (inset, above), says
that managers should still
be prepared to change. “The
reality is that, for the fi rst
time ever, manufacturers
now have fi ve generations in
the workforce – from baby
boomers to digital natives,”
the UK found itself falling behind its rivals in the
1960s and ‘70s.
Between 1980 and 2008, the UK made up some
of the lost ground with a more effi cient economy,
notably after reforms introduced by Margaret
Thatcher and other changes stemming from
British membership of the EU. Indeed, during
the Thatcher government, productivity was the
highest in the G7. Subsequent to the recession,
however, we’ve seen relative productivity
plummet. While it grew in the most recent
statistics, in real terms the UK actually went
backwards compared to the rest of the G7.
The fi nancial crash of the late 2000s is
often seen as the beginning of the end for UK
productivity. However, says Stephen Phipson,
chief executive of Make UK, the groundwork for
the crisis was laid decades ago. “There are some
philosophical diff erences between us and Europe
when it comes to productivity,” he says. “If you
look back over the last 30 years, the UK has
historically had a high cost of capital, compared
to elsewhere. We’ve also got very high labour
fl exibility. In Europe it’s the opposite – they’ve got
very low fl exibility. You can’t just fi re people in a
German factory: the government will sustain the
factory rather than let people
go. That, plus the low cost of
capital, means that they have
invested in both the latest kit
and their people.
“Here, by contrast,
we outsourced
lots of our
manufacturing
to China. In
eff ect, we
maintained our
productivity by
and reaping the
fl exible labour. It’s cheaper
than investing in capital
equipment because we’ve got
such high cost of capital. Post
the fi nancial crisis, we started
onshoring again, but we hadn’t
invested in the skills or the kit,
so productivity went down.
Elsewhere, productivity has
£40bn
boost to the UK
economy by solving
the productivity crisis
to allow staff to be at their
most productive. “In
a decade, between
60 and 65% of
your workforce
will come from
the millennial
generation,”
he explains.
“Millennials work
in diff erent ways
– not necessarily in
better or worse ways, but
we’ve had massive labour
fl exibility. Before
the fi nancial crisis
sending it off shore
benefi t of low-cost,
/www.manufacturingmanagement.co.uk