UPFRONT Leaning toward greater productivity

New Zealand faces significant challenge – how do we boost productivity rate that is currently just 79 percent of the OECD average?
Past economic growth has relied on sopping up spare employment capacity and, as NZ Institute director David Skilling recently pointed out, that is not sustainable recipe for the future. Meanwhile the rapid growth in global development is two-edged sword – while consumers can enjoy cheaper imports, local manufacturers face more competition across wider range of sectors.
It’s no longer possible to compete on price when you have countries who pay people dollar day – you have to give quality and service. To ensure New Zealand business can successfully compete in international markets, we must look for ways to increase our productivity.
Productivity drivers identified by the Department of Labour in its Workplace Productivity Challenge report include building better leadership and management; organising work; networking/collaboration; investing in people and skills; encouraging innovation and using technology to get ahead; creating productive workplace culture; and, measuring what matters.
These need to be organised within workable, easy-to-implement framework focused on productivity. Lean manufacturing provides that – it is about delivering products and services better, cheaper and faster and is therefore the essence of productivity improvement. Its 20 ‘keys to workplace improvement’ provide measurable set of steps for organisations to follow.
These incorporate training opportunities for employers and employees and emphasise bottom-up approach that fully utilises workers’ knowledge and creativity. The keys improve business productivity while increasing performance across four key areas – quality, cost, delivery and flexibility.
Continuous Business Improvement is currently working with four New Zealand companies on pilot project introducing them to lean manufacturing. Run in partnership with NZ Trade and Enterprise, this aims to assist the companies double their productivity in two to three years using proven Japanese lean or competitive manufacturing techniques and philosophies (see www.nzte.govt.co.nz
A recent trip to Japan designed to show project participants how “lean” works in operation proved an eye opener to the company representatives and delivered unexpected benefits, according to Ken Gardiner, NZTE sector manager in specialised manufacturing and project co-manager.
“Along with building relationships with Japanese business, the New Zealand com-panies taking part are also identifying ways in which they can help each other compete more effectively offshore.”
The productivity challenge needs to be everyone’s concern. It is only through productivity growth that we will achieve the economic growth that will enable New Zealand to provide health and social benefits, as well as grow incomes and world class opportunities.
We need to set course that encourages everyone to understand the productivity imperative as well as provide practical approaches that will make difference.
• John Clements is director of Continuous Business Improvement.