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Global Competitiveness in Manufacturing: New Survey Finds Labor Productivity is the Number One Factor

August 9th, 2012 at 10:59 am

FuelGlobalEconomyCHELMSFORD, Mass., July 30, 2012 — A new global survey commissioned by Kronos Incorporated and conducted by IDC Manufacturing Insights revealed that labor productivity ranked the highest  among all 11 countries surveyed as the most important factor for achieving manufacturing success. Factors such as modern infrastructure, government support, and foreign direct investment ranked in varying degrees after labor productivity.

News Facts

  • Manufacturing managers, directors, and executives from sectors including automotive, food and beverage, machinery and equipment, and textiles across Australia, Brazil, Canada, China, France, Germany, India, Mexico, Spain, the U.K., and U.S. were surveyed for current trends in global manufacturing. Respondents from developed economies fared similar to emerging nations when rating manufacturing’s importance, with 70 percent of all respondents citing manufacturing as the single most important industry for their country’s economic health.
  • 74.7 percent of all respondents agreed that a high level of labor productivity is very or extremely important for achieving manufacturing success. While emerging nations rated the need for modern infrastructure higher than mature economies, labor productivity still topped as the main driver of success among all countries. Brazil, Mexico, and Spain scored the highest regarding labor productivity, with 82 percent in all three countries noting it to be very or extremely important. China, France, India, and Germany scored relatively low, with 66, 66, 68, and 68 percent.
  • Brazil respondents ranked the need for modern infrastructure the highest, with 88 percent rating it as very or extremely important. China, India, Mexico, and Spain followed with 82 percent in all four countries, and 66 percent in the U.S. agreed about modern infrastructure’s importance.
  • Brazil, India, Mexico, and Spain respondents rated access to foreign investment the highest, with 50, 50, 70, and 62 percent respectively citing it as very or extremely important. Canada, Germany, and the U.S. ranked the lowest, with only 12, 16, and 18 percent respectively.
  • China ranked government support for the manufacturing industry the highest, with 82 percent rating it as very or extremely important, and 48 percent of U.S. respondents agreed to the same.
  • When asked about factors that can improve workforce productivity, training and continuous improvement of the existing workforce was the top choice, with 68.2 percent of all respondents noting it as effective. Investment in technology followed next, with 63.3 percent.
  • And what are some of the issues impacting productivity? The survey found that absences can get in the way. When asked if absenteeism was not a problem, Australia, Canada, U.K., and U.S. respondents agreed the most, with 42, 48, 46, and 44 percent respectively, demonstrating absenteeism to be a smaller issue. Brazil, France, and Mexico cited absenteeism as a bigger problem in manufacturing, with 24, 26, and 22 percent respectively agreeing.
  • The survey also showed that both developed and emerging economies are impacted by a shortage of skilled production employees, with 68 percent in Brazil, 36 percent in China, 22 percent in Germany, 44 percent in Mexico, and 26 percent in the U.S. agreeing to a shortage.
  • How does the future of manufacturing look as a career option for the next generation? 88.2 percent of all respondents were very or somewhat positive about encouraging younger relatives to consider manufacturing as a practical career option. In the U.S., 90 percent agreed and other nations fared similar. Australia and China ranked the lowest, with 74 and 70 percent respectively.
  • The respondents were also asked about one strategy that they would recommend for global competitiveness. The winning recommendation, at a combined 45.5 percent, was that manufacturing companies should keep existing facilities as is and invest in workforce operational excellence methodologies, which comprise of strategies for more effective labor cost control, minimized labor law compliance risk, and improved workforce productivity.

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