It was budget day on Wednesday, as if you needed reminding. Don’t worry, this isn’t going to be a 3000 word essay on my thoughts on the 2017 Budget, I’ll pick that apart in later posts!
This post was actually inspired by something said by the Chancellor nearer the beginning of his speech. It was his mention of productivity, and the OBR reports that productivity in this country was worse than to be expected and worse than their predictions. Productivity is the key to growth. You can unveil all sorts of policies and ideas, but if the UK workforce isn’t making or doing as much as they can per hour, then growth slows.
Lets look at Germany for example. A report in the Independent back in the Summer said that Germany was 27% more productive than the UK. That means they can get down in four days what it takes for us to do in five. That isn’t great. In fact it’s one of the huge barriers to growth facing this country. Add into the mix that they work 35 hour weeks (5 hours less per week than in the UK) and they have 24 days of paid vacation days. It’s embarrassing.
As you may know, GDP growth forecasts for the next few years have been downgraded. We’re nowhere near recession territory, but we are slowing down. There is a growing argument that part of this is cyclical in the economy, but you cannot deny Brexit uncertainty is playing it’s part too. These are the forecasts for the next few years:
- 2017: 1.5% – down from 2%
- 2018: 1.4%
- 2019: 1.3%
- 2020: 1.5%
- 2021: 1.6%
I wouldn’t pay too much attention to the 2019, 2020 and 2021 figures. These are estimates based on assumptions by the OBR and do not yet take into account any certainties after the UK leaves the EU.
Here’s the thing, if we could get ourselves into gear, adopt a more German approach to work, perhaps we can defy these new forecasts and turn things around a little.
I also think that our very own window industry could look at it’s own levels of productivity. We’re due our own slow down, but it is within our power to turn that around.
Efficiency and cutting out the mistakes
We all know that our industry has been struggling for at least the past year when it comes to product quality and service. During this stage of diversification we are all striving to be as good as we can be. But we’re making mistakes. Product quality is on the decline, customer service is suffering too. We’re understaffed as an industry and we’re lacking a lot of skilled people in all areas.
Not only is this cost the industry money, especially at installer and fabrication level, but it’s one of the major reasons where we fall down on productivity. Every time there is a problem, this is time people spend putting that right instead of doing what they should be doing.
For example, if an installer is fitting a house full of windows and doors and they find that some of the products are damaged and there are items missing, this doesn’t allow them to complete the job. If the job isn’t finished it’s highly likely that the installer won’t get paid their balance, or the home owner will keep some back until whatever issues are sorted. Then, that installer has to spend time putting the problems right, including waiting delivery of new products and the ones that are missing. They are spending time on rectifying this problem instead of focusing on what installers do, which is to sell, fit windows and doors and collect the final balance. At any moment they are not doing that, they are wasting time, money and future orders because of time delays. Ergo, loss of productivity.
These problems are more acute the smaller you are. At our place for example we’re all hands on in most departments. We don’t have an army of staff. So when issues arise, we all muck in to get it sorted. Good that we have that connection between us all. But it is frustrating. And for those of us that sell at our place, we know that every minute not spent working out prices or delivering quotes means a potential loss of business. So I know that for us to be more productive, we need to be spending less time putting out fires and more time doing our jobs.
For most of this year, that has been the general commentary from many I have spoken to, both installers and fabricators. I would hate to actually find out what we lose in revenues due to wasted time.
As much as many would like to point the blame at Government, any increase in productivity has to come from window and door companies, in fact the whole of the private sector in general. Theresa May cannot stand over your shoulder and tell you to make more, or price more, or make more leads. It is up to companies to get creative and think of new ways to make things more efficient, cut back on mistakes and implement incentives to encourage their staff to get more done during the work day.
For the window industry, I think we have to do a number of things. Firstly, fabricators and syscos need to hire more staff. We’re asking a lot more of our workers than even just a few years ago. There is only so much so many people can do. It’s time those in the production parts of the industry hired more to relieve the logjams, up the training and spread the workload. They might even find they might be able to take on even more new business if there are more hands on deck.
Secondly, as a whole industry we need to have a deep and forensic look at how we operate. Some companies have got it right in the way they deal with their customers, but much of the industry as far as I can see remains extremely disjointed, dysfunctional and highly unorganised. All this leads to product errors, delayed installation and time and money spent putting problems right. You’ll never completely eradicate any sort of mistake so long as humans are involved in this industry, but I do think we could all be working harder to cut some of the errors out.
Third is tackling inefficiencies, and again this is at all levels of our supply chain. Can more of your business be done online or on the cloud? Can communications be improved? Can general business processes be cleaned up to make things quicker and less wasteful? One of the biggest drains on any company is inefficiency, so this would make a good place to start.
Although the outlook for the window industry has looked better, I do wholeheartedly believe that we can prove the negative forecasts and predictions wrong. We’re an innovative bunch when we want to be. We have a lot of talent in a lot of companies, and plenty of unsung heroes. It will probably take something nothing short of revolutionary to get to German levels of productivity, but we decide to get our heads down, ignore the media hype and spin and focus on the job at hand, there is still plenty of progress to be had out there.
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