Productivity

US Productivity is increasing at 1%. Inflation is 2% and Wages are increases average 3%.  A Productivity increase to 2% will allow wages to increase to 4%.  Productivity requires more through-put that typically requires increases in sales and process improvements that allow increased production.

After we automated frozen Tony’s and Red Baron pizza production, sales went from $150 million in 1975 to $650 million in 1979.  Productivity increased 333% and jobs were redefined to free pizza assemblers to fill higher paying jobs. There were no layoffs for this group of 1400 non-union employees. This was accomplished by enabling sales increases to match production capability. This provided working capital to build bulk handling of sauce and labor-saving automation of material movement.

Productivity increases at Huggies Diaper were accomplished by redesigning a highly automated, high speed production system.  High volume production of many other items had the same effect.  These process changes in all companies were driven by capital investment in automation.

Productivity increases in machined parts at Electromagnetic Sciences resulted from adopting computer integrated manufacturing, where the milling machines were allowed to operate from CAD drawings. 

Meggett Training Systems saw productivity increases by purchasing a laser reading Dimensional Measuring Machine that inspected 3D parts in 30 seconds reading from CAD drawings. It replaced manual dimensional inspection and completely eliminated bad part problems in simulator weapons assembly.

Manufacturing companies need to concentrate on process improvements to support productivity growth.  It is the strategy that allows companies to lower costs and prices, while increasing product reliability and value.

Norb Leahy, Dunwoody GA Tea Party Leader