On the face of it, current labour productivity levels in the UK are pretty dire to say the least. Last month’s Office of National Statistics (ONS) figures show that hourly output fell 0.5% in Q1 of this year, pushing productivity below levels recorded before the financial crash.
With UK productivity now 0.4% below its pre- and post-downturn peaks (in Q4 2007 and Q4 2016 respectively), the UK is well behind its main trading partners such as the US, France and Germany. The decline however, has been driven by the service industries, which saw a fall of 0.6% in the quarter, rather than manufacturing which in fact achieved productivity growth of 0.2%. Within that figure the wood, paper and printing sector, of which printing makes up more than 50%, improved productivity by 1.7% on quarter and an impressive 10.2% rise year-on-year.
Growth, however, is still being stifled, and while manufacturing generally fares better than services due to its industries’ more capital intensive and innovative characteristics, as well as a boost in exporting due to the weaker pound, chief economist for manufacturing body EEF, Lee Hopley, says it is a complex picture requiring action on numerous levels.
Echoing the assertions of the recently published Taylor Review of Modern Working Practices in the UK, Hopley identifies the adoption of new technology and managing and meeting the pace of innovation as key to productivity growth in manufacturing. “Allocation of capital to companies that have the potential to grow fast is also a factor,” she adds.
Indeed the Taylor review warns that with automation surging ahead “at an unprecedented rate” care must be taken to ensure that it doesn’t come at the expense of UK jobs and worker living standards.
And the review goes on to state that government should be mindful that in developing its new industrial strategy, for which a Green Paper was launched in January this year, the emphasis “should be linked to the importance of human factors in driving productivity and enabling more rewarding working lives”.
The EEF’s Hopley says that alongside technology, education and training represent another issue and that getting the right management and leadership skills is perhaps something that hasn’t been explored as much within the manufacturing industries as other areas.
Skills and education is an area identified by the BPIF’s Gary Mellor as vital to improving productivity. He says that automation is all well and good, but that machines “will only ever do what you buy them to do – you need human intervention to adapt, to innovate and to change.”
As the BPIF’s senior process improvement engineer Mellor sees first hand the inner workings of many of the industry’s print businesses, small to large, and he says that although some do skimp on investment for process improvement, because they don’t understand the value of it, things have improved.
“It’s good to see that people are taking it seriously – but it is mostly the medium and large businesses. Smaller ones struggle with it because it’s hard to justify spending money on the softer side of business like culture and training on data analysis and productivity improvement,” he explains.
Often companies simply expect their ops managers to automatically understand data analysis and that’s not always the case, Mellor adds.
In fact, a valid and indeed vital question to answer before attempting to collate and decipher the reams of production stats that can now be at every print businesses fingers is ‘how do we define productivity?’
The ONS calculates labour productivity by dividing output by labour input. Output refers to gross value added (GVA), which is an estimate of the volume of goods and services produced by an industry, while labour input refers to a measure of workers, jobs and hours worked.
Heidelberg’s global Prinect workflow manager Anthony Thirlby believes that print businesses should measure things differently.
“Productivity is such an interesting term,” he says. “A lot of people in the print industry believe it’s about having as many machines as possible. It’s not. It’s about end-to-end process control and it starts with customer engagement.
“If we can make the on-boarding process as transparent as possible it will enhance all elements of productivity,” he explains.
Thirlby says the industry shouldn’t just focus on press output as a measure of productivity when pre- and post-press have significant room for improvement. “The pre-production processes from receipt of enquiry to printing sheets on an output device is generally the longest part of the process in the whole lifecycle of a job and it has a huge downstream impact on the productivity of a business.”
Thirlby firmly believes that a machine’s capability is not the issue on its own, but rather a business fully understanding a machine’s capabilities and maximising the relevant operating costs inside the company.
“That’s what the definition of productivity is evolving into,” he says.
He says the size of a business shouldn’t matter but rather how it perceives and processes its customer engagement. “It’s a case of understanding the benefits to your organisation and understanding the industry as a whole and starting to deploy and utilise different technologies to increase their customer engagement and also drive down internal costs,” he explains.
Getting the right tools in place across the business is exactly what Art Systems marketing manager John Draycott insists is crucial to achieving optimum productivity.
He explains: “Often print businesses are under so much pressure just to fix things quickly when they go wrong, they don’t look at the bigger picture. Some businesses don’t want to disrupt their technology if they feel is already working for them.”
Draycott believes the onus is on the resellers and manufacturers to prove there is a real benefit to changing things.
Perhaps then, while the government ponders how to boost national productivity, the print industry should take the baton, get its collective head together and blaze a trail.
Performance is poor but the future could be brighter
Charles Jarrold, chief executive, BPIF
The UK’s track record on productivity is, to be polite, indifferent. Output per hour is 19% below the G7 average, and a dismal rate of improvement. This matters, because it’s productivity improvements that have underpinned a (now stalled) improvement in UK living standards that mean that since the industrial revolution, each generation has been 25% better off than the previous one.
So why is UK productivity performance so poor? Firstly, the lack of improvement appears to be due to a high proportion of stagnating companies, versus a very small number of fast improving organisations. Secondly, smaller firms (fewer than 50 employees) have on average 7% lower productivity than larger firms. There is encouraging news however: smaller firms demonstrate faster rates of productivity improvement once they take action, firms investing in new products and processes have productivity 20% above the average, and the quality of an organisation’s management processes and practices robustly correlates with its productivity.
For our sector, this provides food for thought (and action). The structure of UK print, namely investing heavily in technology and equipment, being represented by a ‘long tail’ of smaller companies, and characterised by ongoing innovation in products and processes, suggests opportunities for improvement. The infrastructure to develop skills is in place with both trade and higher level leadership and management apprenticeship programmes well developed. The BPIF’s Vision in Print initiative, now well established, has also helped the sector break out of an inward focus, adapting and using experiences from other sectors.
These are great initiatives, able to support and underpin improved performance broadly across our industry, and organisations that relentlessly focus on products, markets, processes and skills will be well placed to compete successfully.
How do you seek to boost productivity in your business?
Andy Barber, managing director, iMail
“Achieving great productivity in our digital print operation is essential to ensure waste is driven out of the business allowing us to reflect this in our value proposition. This ongoing activity requires robust business planning, the best plant/software in-town and a culture of continuous improvement. Everyone from our print operators to software teams appreciate they are part of the ‘sales’ process, empowered to find the best solutions for our clients no matter what their business area.”
Jack Clifford, senior ops manager, Solopress
“Working in a fast-paced print company requires flexibility and dedication from every employee. To achieve this, we warmly welcome all staff into our family-like environment. A balanced workflow is organised and clear goals are set for each employee, encouraging them to thrive and develop. Throughout the year we engage staff in various morale-boosting incentives and events. Solopress understands that consistently investing in the care and development of our staff is key to maintaining positive levels of productivity and efficiency.”
Gareth Roberts, managing director, Bishops Printers
“The only way we can afford to keep investing is if staff can achieve what we are paying for in the equipment and we find different ways to engage with them so that they see the benefits of increased productivity. It’s not a management tool with which to beat someone with a stick. There are areas where we could automate things more, like pre-press, but we like to apply a lot of personal care to a job. It’s about working profitably, not about getting more machines so I can have fewer people doing the same amount of work.”