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A Productivity Paradox --Dickeson

August 2003
Productivity begets a paradox. It's ugly, but it's wonderful. It liberates us while it demeans us. Love and hate are all mixed up in the paradox. When we increase productivity we increase throughput per hour of human time. We need fewer hours of labor to produce the same production units. Great! We need fewer people so we reduce headcount. Bad! Layoffs disrupt careers and families.

It's said that Gutenberg and movable type displaced 10,000 monks producing books by hand. The Age of Enlightenment dawned. Great universities were fostered. But what happened to the careers, the hopes and plans of those 10,000 trained monks?

In Belgium, workers threw their sabots (shoes) into new machines to disrupt devices that increased productivity. English textile workers rebelled as machine looms took weaving jobs. Trade unions in printing plants now bargain to maintain jobs despite increasing productivity of presses and binders. The half-section family farm disappeared with the coming of tractors. Love/hate is the paradox of productivity.

Human Factors

Globally, increasing productivity frees humanity from drudgery. Locally, increasing productivity displaces family tranquility. It isn't, however, a linear relationship. It's constantly out of balance. Productivity creeps steadily upward but headcount doesn't creep downward at the same rate. In an industry like printing where improving technology is a given, capacity, in terms of human labor, is constantly out-of-balance.

As we increase the productivity of presses we decrease the need for press labor, for example. But, at the same time, we increase the need for bindery and finishing personnel to handle increased press output. We find ourselves with too many press people and too few in finishing. We can't just move people from press to bindery. Skills and rates of compensation are different. People's lives, family lives, are disrupted.

Do we let our skilled press people go—our buddies—to find other work? Where have all our typesetting, composition and prep people gone? How have they, and their families, coped with change?

The glib answer of economists is: "Retain your personnel and increase sales and marketing." Yeah! Easy for the economists to say, but they haven't had to hit the pavement and find other work, have they?

So what is the honest answer to increasing productivity? Throw shoes in the machines? No, that didn't work and won't work. Human capacity will continue to increase. The need for certain skills will continue to decrease. We'll continuously be in an over-capacity condition. We can't eliminate people as quickly as we can eliminate the need for people.

Can we just call a halt to improvement? Stop generating the over-capacity? No. In an economy where price is competitive we must constantly improve or die. If we don't continuously improve our efficiency, our competitor will, and we'll be lost in the dust.

Those who guess right on the demand for certain products, buy the appropriate equipment and constantly reduce prices win the survival race. At the same time, those winners constantly and carefully trim away at staffing and fight to increase market share. That's the winning path. It takes good information, keen intuition and lots of luck.

Unfortunately we're not all equally gifted, positioned or lucky enough to make it into that winner's circle. All men (and women) are NOT created equal in talent, position or good fortune.

Our choice of information has been deceptive. We know that Budgeted Hourly Rates (BHRs) are false and misleading. Yet everyone in the plant sort of believes in them. "Drink the Kool-Aid," says the preacher, "and we'll meet in Heaven." "Buy the new machine," says the sales rep, "and it'll reduce your costs 40 percent." What the rep didn't say was, "Buy the new machine and you can fire three people," even though that was what he meant. We expect suppliers to deceive us because they use the same words to create a never-never-land that we use to deceive ourselves.

It's not deceit, really; it's telling half the story. We're telling the Abbot of the monastery that if he installs this new press it will cut the per copy cost of books 80 percent. We didn't say that if he installs the new Gutenberg he must fire all of his manuscript illuminati monks.

No Bad News, Please

The management system supplier doesn't tell us that if we install the new server we can discharge all of our data processing staff. No, we only want to hear good news—the good stuff. We hate to let people go and upset families, keep kids from college. We avoid it with every excuse we can think of. We look at falling job costs and say, "WOW!" Now we can cut our prices." That's half the story. The other half is to call in Joe and Sally and say, "Hey, that new gizmo you fought for and worked so hard to get going has made you obsolete. Write when you find jobs."

It even hurts to write this down. We just don't find people saying this kind of thing aloud, do we? But it's true. We know it's true. We just don't want to hear about it. Let's go look at our job costs and BHRs and make like fat, dumb and happy. But just remember: increasing productivity is both a blessing and a curse. It'll sneak up and bite you before you know what happened.

Funny, isn't it, how the whole scene changes when we look at people payments as defining "capacity" rather than machine speeds? That's what we did a few months ago when we found that for the past 10 years the top group of printers actually paid out 10 percent less of their manufactured value-added as people payments.

We have to increase efficiency—productivity—or fail. We must also struggle to lower our prices. If possible, increased marketing efforts and sales will help. Much as it hurts, capacity must be reduced. Every task and person not required for saleable results must be eliminated.

—Roger V. Dickeson

About the Author

Roger Dickeson is a printing productivity consultant based in Tucson, AZ. He can be reached via e-mail: rogervd2@cox.net.
 

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