Brian Holliday: "The link between change and productivity"
Published: 20 June, 2016
Addressing the NMBS All-Industry Conference, Brian Holliday, managing director for Siemens Digital Factory, examined how changing technology can help the supply chain react faster to market changes and boost productivity.
While the industry is well on the way to recovering from the economic recession, there is still one area where the UK hasn't yet bounced back: productivity.
People are working harder than ever before, with businesses managing increased workloads with fewer staff, and yet the UK's productivity levels are now 16% below where the pre-2008 trend forecasts said it would be, largely as a result of the recession.
According to Brian Holliday, who started his career working for merchant Gibbs & Dandy, a country's economic size is driven by the number of its people who are able and eligible to work, and their collective productivity. Former Labour shadow business secretary Chuka Umunna noted that France is 20% more productive than the UK workforce which, Mr Holliday pointed out, means France could implement a four-day working week and still match the UK in terms of productivity.
Improving the UK's overall productivity would boost taxes and the country's financial situation, but is just as important - if not more so - for individual companies as well.
The manufacturing sector, which accounted for 30% of the UK economy in the 1970s, has since declined to just 9.6% of the economy today and yet, in terms of its productivity, recovered from the recession 2.5% faster than other sectors after the credit crunch.
Some of this can be attributed to the drive for digitisation and the advance of robotics and other new technologies, he said, which often make mass production easier and faster, in turn making those companies more productive.
In the 1970s, Mr Holliday said, Mini produced 250,000 cars at its factory in Cowley, Oxford. In 2016 the same number is produced from the site, but with a fraction of the people.
Siemens' Congleton manufacturing facility aims to increase productivity by between 5% and 8% every year, in order to stay ahead of its competition and its sister plants across the globe, and Mr Holliday believes the pace of change is only going to increase and that the supply chain must work hard to keep up.
"Business models from the 1970s wouldn't work today and you have to keep adapting," he said. "It's crucial that you can get what you make out to the customers who want it."
Mr Holliday highlighted three key drivers that are changing the manufacturing process:
- The shortening time companies have to get new products to market
- The need to increase flexibility to meet the customers' demand for more choice
- The need to boost efficiency, as customers want individualised, bespoke products but aren't prepared to pay more for them.
Mr Holliday believes we are currently on the edge of what he described as the fourth 'Industrial Revolution', as new technology enables a significant productivity leap in the manufacturing process and what is possible.
The key drivers of this vision of Industry 4.0, he said, are:
- Individualisation at mass production prices
- Flexible manufacturing with 50% productivity and with 50% less resources
- The dynamic design of business and engineering processes
- A good work/life balance for the workforce.
Mr Holliday was keen to point out that this drive for productivity is not about replacing people with robots, but that robotics should be used to make the completion of repetitive tasks faster, enabling the human workforce to be trained and upskilled to complete more complex tasks.
"The degrees of complexity in manufacturing are changing," he said. "We are creating the necessary standards now that will provide the manufacturing processes for post 2025, giving us smart products, smart factories and smart supply chains, but we need efficiency and effectiveness in manufacturing today."
As digital technology develops, the pace of change is now so fast that it's difficult to visualise exactly what this change will be and how it will be able to help with product planning and engineering in the future.
One thing is clear to Mr Holliday, however; that new technology is giving manufacturers an impressive amount of data they can then use for research and development.
"We can use technology to build models and simulations to test-drive what we're designing, to gather data and solve production issues faster, helping us to bring new products to market much faster," he said.
Mr Holliday concluded by highlighting three ways in which companies of all kinds can boost their productivity:
- People - When people are engaged they are much more productive, which in turn will boost the company's customer satisfaction rates
- Process - Streamline wastage, get employees together to discuss any issues and get their input on how things can be improved
- Technology - Examine how you can better use technology to give sales people more tools and better access to data both internally and externally. Exploit the many data analytics tools already available.