How has simplicity increased your productivity

Increased productivity in mechanical engineering - we'll show you how

 

 

Although the German mechanical engineering sector is posting one sales record after the other, the current study by the VDMA “Productivity Paradox in Mechanical Engineering” shows a surprising result: since the financial and economic crisis of 2008/2009, the measured productivity has fallen instead of increased, although profits rose with record employment .

Despite this development, the VDMA comes to the following conclusion: “The advancing digitization in German mechanical engineering will help the industry to achieve productivity gains in the medium to long term.” And it is precisely this trend that was fueled by the Corona crisis. In this article, you can find out which factors and influences lead to an increase in productivity in mechanical engineering.

 

Why is the productivity figure important in mechanical engineering?

The productivity of a company is subject to various influencing factors such as the vertical range of manufacture, employee qualifications or export quota. An increase in productivity can only be achieved if all business processes are constantly optimized so that the output is consistently greater than the input. If this relationship is no longer intact, your company is threatened with imbalance. The productivity figure helps you to take targeted action and initiate measures to increase productivity - so keep an eye on them at all times.

Productivity itself is calculated as follows: Productivity = output / input.

 

It depends on the sum of the partial productivity

Of course, every company wants to work as productively as possible and make the best possible use of the available resources. Because the more productive a company is, the higher the profits and the more that can be invested in the further development of the company. But for this, the productivity (parts productivity) has to be right in each individual area of ​​the company, so that overall a satisfactory productivity is achieved.

Examples of part productivity in individual areas are:

  • Labor productivity
  • Resource productivity
  • Material activity
  • Energy productivity

If you want to increase the overall productivity of the company, you should increase productivity in every single area.

The following 2 examples from the area of ​​labor productivity show important fields of action in industrial production in mechanical engineering. If you optimize these levers, it will have a major impact on productivity in your company.

 

Labor productivity in assembly line production and sales

By deploying the employees in the ideal workplace and optimizing the manufacturing processes, you automatically achieve an increase in productivity.

Here are 2 examples of daily work productivity:

Labor productivity in assembly line production

An employee produces 5,000 pieces of a product during an 8-hour working day.

Labor productivity = 5,000 products / 8 hours = 625 pieces per hour.

Labor productivity in sales

Within one month, 4 sales employees generate a turnover of one million euros.

Labor productivity = 1 million euros / 4 employees = 250,000 euros per employee.

 

Which factors have an impact on productivity in the company?

In every mechanical engineering company, the increase in productivity depends on various factors. The 5 most important influencing factors include the following:

Vertical integration

A communication from the Fraunhofer Institute for Systems and Innovation Research on modernization proves that vertical integration is a major lever for increasing productivity in the company. Because companies that outsource value-adding processes have to meet transaction costs and logistics costs as well as supply margins that reduce productivity. You therefore recommend pushing insourcing in order to realize productivity gains. In addition, companies with a higher level of vertical integration can optimize their internal processes and generate further productivity gains.

Employee qualification

Successful companies have long known: the better qualified employees are, the better, more error-free and more efficiently they can do their work. When companies invest in employee qualification, this automatically leads to an increase in productivity. In addition, employees become more innovative and find better solutions because they best know the potential hidden in the company.

Targeted use of technology

In most cases, the targeted use of technology leads to an increase in productivity. For example, imagine using supply chain management techniques to exchange disposition data with suppliers. These ensure harmonization of production control and, as a result, higher productivity. However, you have to keep in mind that a higher use of technology initially leads to higher costs and thus decreases productivity.

Export quota

It turns out that companies with a high export quota are significantly more productive than companies that mainly find their goods domestically. This is due to the fact that the competition on the international markets is much stronger and companies are forced to exhaust their productivity reserves more systematically. This is also evidence that more productive companies can more easily penetrate international markets.

Production type

Basically, companies that produce according to customer orders cannot be by far as productive as companies that manufacture in series independently of customer orders. This, in turn, is due to the fact that the manufacturing process with on-demand production can only be optimized to a limited extent due to the changing numbers and lot sizes.

 

The 6 most effective measures to increase productivity in mechanical engineering

An increase in productivity is usually the result of many small tweaks across the company. We'll show you 6 top measures how you can increase productivity in your company:

1. Simple structures increase productivity

According to a report by ITO (Society for Industrial Technology and Organization), mechanical engineering companies with high productivity are mainly characterized by simple structures and processes - this increases productivity.

2. Personnel costs reduce productivity

In mechanical engineering, up to 40 percent of manufacturing costs can amount to personnel costs. This proportion can be reduced by analyzing the production times. In this way, idle times are recognized and employees can be deployed more productively.

3. Gain synergies by networking the designers

Networking designers and their CAD data can increase productivity, as processes are accelerated in this way. In addition, the network eliminates the need for double data sharing.

4. Make working hours more flexible

Employees have been shown to be more productive when they have flexible hours. Employees can schedule their working hours in the area where they are most productive.

5. Reduction of downtimes

Production downtimes have a negative impact on the productivity of a company, since there is no production during a downtime. For this reason, machine downtimes should be prevented as far as possible through measures such as preventive maintenance.

6. Digitization as a productivity boost

Not least because of the Corona crisis, leading companies have recognized that they can achieve an increase in productivity in the medium to long term through the possibilities of digitization. Possible measures to optimize production are the networking of machines and the evaluation of production data.

 

Conclusion: an increase in productivity is always possible

Your company always has the option of compensating for a potential decline in sales by increasing productivity. There are various factors that you can influence in order to improve productivity. The factors with a major influence are the vertical range of manufacture, the qualifications of the employees or the export quota. Digitization measures are also an important aspect that can increase productivity. Basically, a company should always focus on high productivity. Because the higher the productivity, the higher the possible profits.

 

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