Low levels of productivity is “killing” Jamaica, how do we fix it ?

Productivity is a ratio of output /input and is very easy to measure particularity in the manufacturing sector.

A high output to input ratio gives a high productivity ratio, similarly a  low output to high input ratio gives a low productivity ratio.

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What are the factors affecting productivity . This can be broken down into 5 main areas

  1. Man – the workers being used to produce a desired output/product.
  2. Method – the process that is being used to produce a desired output/product
  3. Machine – the equipment/technology being employed to give a desired out
  4. Material – the  raw materials being used to give a desired output
  5. Environment- the climate within which the product or output is subjected to.

Man

The factors affecting man are wide and varied and are the most difficult to predict and to address. However there are some fundamental things that must exist

  1. Man should be educated , literate and should be able to understand written instructions
  2. Training is yet another critical component for a productive workers
  3. Health; Worker should be healthy, unhealthy people cannot be productive
  4. Motivated; A motivated worker is an unstoppable force, similarly a demotivated worker can kill all hopes of a productive environment.

Methodology

Automation is changing the way manufacturing is being done throughout the world. In addition before getting into automation many companies have sought to engage the workers to find bew methodologies to produce product more efficiently and at lower cost, but reducing waste through techniques like Kaizen, Smed, Lean Manufacturing, Six Sigma etc, but here is the problem.

The methods employed in Lean Manufacturing, which incidentally covers most of the others invariable leads to workers being “given” up by the process. It is what that comes next that determines if more gains are made in the future by these companies.

Lets’ think about it, of what value is it to the workers, if they come up with an idea that uses less people to make a product, it that method results in job loss for the very worker.

Lean Manufacturing process improvement should never lead to job losses and this tend to happens in companies where the management is lazy and not creative. What is supposed to take place is where workers are “given” up by the process, these are then utilized in other areas of the operations eg.

If I have a plant and use 10 people to 100 widgets in 8 hrs and a new method is found to make the same 100 widgets with 8 people in 8 hrs, what happens to the two extra people.

In a creative work environment these people can be utilized as follows :

  1. Trained in other areas of the operations eg Maintenance, Sales, Quality etc.
  2. Used to provide training for other employees ( eg cross training)
  3. Used as project improvement team, to create other productivity improvement in other areas of the operations, where they can add value.

There is not enough companies utilizing the above methods and so workers are not willing to help provide ideas for productivity improvement, because they know that all that will happen is they or there colleagues will be made redundant.

Productivity Incentive schemes that make a direct like between production output, low spoilage, improved quality, improved delivery, should form part of any productivity improvement thrust.

The program must be easy to understand, must be transparent and equitable ie workers should see the benefits from such a program.

I would also suggest that these schemes should be reviewed by the Jamaica Productivity Center , which in turn should make representation to the Minister to have the earnings generated from these schemes tax free for the workers

Machine 

During the global financial meltdown, many companies in the developed countries closed their operations and in doing so left thousands of technological advanced manufacturing equipment shuttered. These equipment could have been had at bargain prices and brought into this country, where these is presently no tax on capital equipment for manufacturing.

We dropped the ball back then, but if we are serious, we must replace some of our 1965 slow speed and energy hog equipment, with technologically advanced equipment that are super efficient.

Its amazing how our cars in our car park changes as technology improves, but not the equipment being used to generate the profits to make those purchases.

This is something that must change if we intend to become more productive and more competitive.

Of course we need to ensure our people are trained to deal with the technology and not expended huge sums of foreign exchange to bring in the technical expertise from outside of Jamaica.

Materials

The more local input we can use in manufacturing the better it is for the economy. It is nonsense when you can import a finished product form anywhere in the world , especially Caricom, and pay no taxes, but if you import the raw material to make the product its taxed.

The economist, technocrats and consultants employed to the government needs to ensure that the GOJ knows that this is nonsense and move to change this as a matter or urgency.

We must move to improve the standards of materials used for packaging and the presentation of such. It cannot be because its for local consumption then it must look like crap. There is no loyalty when it comes unto purchasing, the major factors are price and looks.

The GOJ must make it easier to manufacture goods in Jamaica vs supporting and creating jobs in other countries, we have done that for far too long.

Environment

There are 24 hrs in a day, but we barely used 8 to produce goods and services in this country, why.

Major factors here are as follows

  1. Security issues, crime and violence . Most factories are in the crime ridden areas of Jamaica
  2. Public transportation system. The none existence of a mass transit system is a problem
  3. Energy cost and security. High energy cost is a major issue even after 12 years of plans for LNG for electricity generation
  4. Constant devaluation of the local currency
  5. High Interest rate
  6. High inflation rate
  7. High level of taxes and equitable tax structure
  8. Frequent adjustment to the economic policy/direction
  9. Lack of stable economy and no clear economic program
  10. Culture of corruption
  11. Constant red tape, which facilitates corruption
  12. Excessive waste in the public sector
  13. Long  time to get things done. If worker needs time off to get something done, you lose no less than 2 hrs of production time.
  14. The relationship between the workers, the union and  management .

As one can see there are a multiplicity of factors at play a role in productivity improvement. The question becomes where do we begin.

The answer is just begin at the start, ie work on the things you can control and lobby the government for the things that impact you but are outside of your control.

Bless

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