Productivity in the United States has been declining relative to that of many other industrial countries.
1973 View of Martin K. Starr, Professor of Production Management at the Graduate School of Business at Columbia University.
Productivity in the United States has been declining relative to that of many other industrial countries. An examination of relative measures of the rates of productivity changes shows that, its yearly growth rate is lower than other industrial countries. This slowdown in relative growth has been observable for about twenty years; but in the last five years the effect has been dramatic. Apart from, Japan, number of other countries also exhibited similar large relative advantages.
Causes of Decreasing Relative Productivity
In the Frederick W. Taylor era, the efficiency of operations determined productivity. Productivity change has now become a systems problem with major interactions between the operations (facilities & processes), the product line and the marketplace response. In the U.S., societal indifference and even antagonism have developed for science and technology and engineering managers were relegated to the background. These attitudes reflect managerial behaviors that have been extant for at least twenty years. Financial managers have occupied the pivot position in major companies and they have not recognized the gradual deterioration of plant and facility competitiveness compared to competing international companies. Production managers regressed to positions exercising minimal organizational influence.
Suggestions - Solution Approaches
Flow Shop Design
Essential :in achieving improved productivity is shifting production configurations from project systems and job shops to flow shops. (Flow shop production lines perform repetitive activities providing relatively continuous outputs.) Flow production systems have high fixed costs, but permit significantly lower variable costs than those of low volume, job shop processes. Japanese and German competing companies have improved the productivity of large, fixed cost flow systems, thereby have reduced their variable costs of producing consistently over the past two decades and derived competitive advantage over US companies.
Integration Between Product and Process Design Increases Productivity
Integrating the product line development and the development of requisite processes into an integrated system increases productivity, Distinct production and competitive advantages occur when this is done. Because of management traditions in the U.S., such integration of product and process is rarely found. The coordination of R & D and marketing management with production management is not systematized in US companies and takes place in an informal and sporadic fashion.
Top managers, at their corporate headquarters throughout the U.S., seldom visit the production facilities of their companies. Many corporate officers know almost nothing about the production processes required to make the product line. If little is known about their own production facilities, there is even less knowledge of competitive production systems.
Related Knowledge:
Product Industrial Engineering - Process Industrial Engineering
Foundations for Change
Formerly, the U.S. exported production and industrial engineering knowledge. The methods and techniques shared with the world included: the methods of work simplification, synthetic time standards statistical quality control, sequenced assembly and operations research.
Now, America stands to gain by importing knowledge about what is being done abroad to increase productivity. Studies by industry groups should be encouraged. Government and industry can help by instituting national planning for productivity and by investigating the methods available for increased productivity now based on successful methods developed in high productive companies in other countries.
It is not too late to begin the Renaissance of the U.S.'s industrial system, but there is no time for delay.
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