The launch of the Productivity Leadership group earlier this month indicates that improving productivity has now become a critical business imperative as Brexit begins to bite in a tougher economic environment. This is according to quality management organisation Infinity QS, who stresses the importance of technology in cutting waste and boosting productivity.
The Productivity Leadership Group is a business campaign aimed at improving the UK’s enduring productivity problems by making measurement more easily accessible and establishing best practise. It has gained active support and involvement from a wide range of British business leaders, including the Chairman of John Lewis, Sir Charlie Mayfield, the Chief Executive of Channel 4, the UK Country Manager of Amazon, and the Chairman of BAE Systems.
InfinityQS global strategic account manager Jason Chester (pictured) commented that the context of Brexit has made the productivity question even more urgent: “I don’t believe that the timing of the launch of the Productivity Leadership Group is entirely a coincidence. Whilst Britain has been suffering from low productivity for several years when compared to its European cousins, the decision to leave the EU has shone a harsh light on the country’s economic fitness.
“The potential consequences of Brexit include a shallower talent and low-cost labour pool to draw from, increased export tariffs decreasing the attractiveness of UK products and services on the European market, and domestic prices coming under pressure from import tariffs that increase the cost of EU-imported raw materials and services. Not to mention the cost of red-tape while performing bilateral trade with the EU and individual EU countries.
“These issues will compound the productivity problem much further, leaving UK companies desperate to find ways to shore up profitability and prevent margins from being significantly eroded. Productivity, in essence, is about achieving the maximum output, in the form of product or services, from a given set of inputs, whether those are capital assets or labour. It therefore lies at the heart of any businesses’ viability. Whilst British businesses have been able to survive and even thrive with comparatively low levels of productivity, the cold realities of potential business conditions post-Brexit will mean that those who are not operating in the most efficient manner to bring their product or services to market will be severely impacted, if not fail completely.
Chester concluded by stressing the importance of information technology in addressing the issue of productivity: “Technology has historically been the key driver of productivity, magnifying human capabilities by bringing efficient automation to rote tasks. Yet, too many businesses are still not taking full advantage of the latest information technologies where it matters most - on the shop floor – in order to bring a greatly enhanced level of productivity to the table.
“In manufacturing, for example, automatically collecting information in real-time from across a production line, an entire plant, or multiple facilities in order to identify problem areas and inefficiencies, can help to pinpoint significant performance improvement areas. However, many manufacturers are at best populating spreadsheets by hand and at worst are still relying on inefficient and labour intensive pen and paper processes. Either way if the issue of productivity is going to be successfully addressed so that UK businesses can thrive in a post-Brexit environment, then manufacturing business leaders need to wake up to the negative impact that these arcane practices will have on them in the not too distant future.
“Whilst many organisations appear to be spending time worrying about macroeconomic indicators such as GDP or net migration, the key to post-Brexit prosperity is to focus on adapting to the incoming economic realities. Brexit will affect each industry - indeed each business - in different ways, and each business needs to accordingly conduct a strategic review of their own risks and opportunities.”