A Productivity Paradox –Dickeson

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.

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