Labor productivity in our companies is in a poor state. This has been the case for a long time, even before the economic crisis. At the beginning of the 1990s, labor productivity was still rising by 2% per year. In recent years, the figure was only 0.6%. Initial figures from 2018 and 2019 even indicate a decline. Irrespective of coronavirus, large parts of the German economy are struggling with productivity problems; the crisis has made things worse for some, while for the other, fortunate ones, it has concealed productivity deficits by increasing demand. After the crisis, the basic problem of low labor productivity will once again come to the fore.
The low increase in labor productivity is due to the fact that the majority of employees in our companies, including production companies, now work in administrative areas. Productivity in the administrative areas has increased only slightly after initial significant successes. Routine tasks were quickly automated, then things got tough.
In this context, I am particularly interested in the planning and control processes in supply chain management. The picture here looks very bleak for the vast majority of companies. In recent years, the company has upgraded with ERP systems, add-on systems and other great software ideas. Even small companies have long since switched from the rickshaw of manual scheduling to the 26-speed truck of modern scheduling and add-on systems. But instead of the old rickshaw, users today pull the dispatch truck; too much planning and dispatching is still done by hand. We will only be able to increase labor productivity in supply chain management if we finally achieve more automation and less manual intervention in the planning and control processes.
We are facing a new phase of rationalization in the economy. In order to keep up with global competition, we need to do more with fewer administrative staff and rationalization is also necessary to counter demographic change. Some companies still lack the digital prerequisites for this, others just lack the courage to dare more. In all cases, there is a lack of mindset and a spirit of optimism. Perhaps the coronavirus crisis came just in time to shake us out of our lethargy…
Best regards and stay healthy
Yours, Andreas Kemmner
Image: pixabay/ © by Gerd Altmann
