As the UK prepares to go it alone, looking ahead to its future outside of the EU, there is still one area in which we are significantly behind our European counterparts. The UK’s productivity – the amount of work produced per working hour – remains below the rate of 2% achieved before the 2008 financial crisis. In 2018, UK productivity flatlined, with the annual pace of productivity growth sitting at 1.5%.
To put that into context, the UK’s output per hour is around a quarter behind European neighbours like France and Germany, meaning it takes British workers five days to produce what they achieve in four.
Boosting productivity is high on the government’s agenda and core to the UK’s Industrial Strategy. So much so that earlier this year it undertook a business productivity review of the actions that could be most effective in improving the productivity and growth of small and medium-sized businesses (SMEs).
With Brexit looming ever closer, this has never been more crucial. SMEs are under pressure from every corner, with fears of a shortage of EU workers, import tariffs, customs duties, border delays and currency devaluation making even the most optimistic CEO nervous.
But one company is ahead of the curve. SME technical trade moulder Broanmain Plastics has been on an efficiency drive over the past year and is now starting to reap the benefits; putting it in a strong position to withstand whatever challenges Brexit brings.
Waging war on waste
“We’ve enjoyed a significant period of growth, with turnover increasing by 12.9% in just two years, and have expanded our workforce as a result,” explains Jo Davis, Operations Director of Broanmain, which employs 25 people. “When measuring these improvements we also observed areas of waste. Not just materials, but also time and our employees’ talents. Using this information, we stepped back and assessed our entire operations, making efficiency overhauls to become a leaner, more streamlined and ultimately more profitable business, with more motivated staff.”
Small steps, big results
Broanmain’s senior managers devised a new productivity strategy and gave each department at least one efficiency project for which they were responsible. By making lots of small changes, they’ve seen some big improvements.
“One of the projects was to review how we pack parts for a particular customer,” explains Jo. “The existing method was to stack 20 boxes of components onto each pallet. It sounds like a lot but they were not heavy, and the team felt they could increase efficiency by using bigger boxes. During the trial, they discovered that this meant they needed to build fewer boxes and could load a pallet more quickly. This saved us money in boxes and because we weren’t repeating unnecessary jobs, it freed up our employees’ time to work on other, more profitable tasks.”
Another project saw a team assess operations on an assembly and production line. “After reviewing the process, they realised that one of the sorting operations was unnecessary,” outlines Jo. “By taking this out, we’ve managed to remove one person from this line. They are now working in another part of the business, on a more challenging task.”
Investing in the future
As well as numerous small steps, Broanmain is also taking a big leap in a bid to increase its productivity even further. “A lot of our business involves small production runs; these aren’t always the most efficient as they can create lots of waste material, and are energy and staff-intensive,” says Jo. “In a bid to attract larger projects in preparation for Brexit and the trend towards reshoring of plastic production, we decided to scale up our moulding business and have developed a brand-new plastics mass manufacturing facility.”
Comprising a fleet of precision injection moulding machines and a dedicated in-house tooling maintenance and assembly workshop, it has the capacity to produce in excess of 200,000 components a week and will enable Broanmain to fulfil customers’ just-in-time component production and shipment lead times.
A new dawn
Despite the uncertain political climate, Jo is confident that Broanmain is well-placed to ride the Brexit storm. “Manufacturing has come of age. Gone are the days of ‘Fred-in-a-shed’. To survive today, companies need to be lean, efficient and forward thinking. We measure our efficiency by the ratio of staff costs to sales turnover, and we’re sitting at 37%, which we’re very happy with.”
The industry also measures productivity by value-add (benchmarking the volume of material consumed per annum, calculating the cost paid for the material and comparing with the overall turnover of the plastics industry). Here the UK continues to perform well compared to other western economies and countries.
“By the end of 2019, Broanmain will have finished our reorganisation, be even more efficient and in a position to springboard towards further growth, while keeping our staff motivated and our costs stable,” adds Jo.