A joint survey by Technical University of Munich (TUM) and BearingPoint in China offers a structured view and approach on how to overcome productivity challenges
Shanghai / Frankfurt, September 29, 2016 – China's “New Normal” of lower economic growth rates in combination with a transformation process that shifts to stronger domestic consumption models presents new challenges for foreign-invested manufacturing companies in the country. According to a new study by Technical University of Munich (TUM) and BearingPoint in China, improving production productivity is of high or very high importance to a vast majority (86%) of these companies. 64 companies participated in the survey, and an analysis of the results has led to the development of a structured approach to measure productivity and overcome the challenges that these companies face.
The study, “China Productivity Snapshot 2016,” found that the majority of companies surveyed engage in regular improvement projects, but only 39% consider their efforts to be sufficient. The performance of the workforce proved to be vital to increasing productivity, and participating companies mentioned the lack of commitment, motivation and adherence to process standards as the main barriers to transforming their organizations. The majority confirmed ongoing efforts in finding effective incentives to strengthen the performance of their workforce. Interviewees also pointed out how cultural differences and language made them struggle to communicate, enforce and achieve objectives.
While 37% of companies are satisfied with their current productivity levels, 63% remain unsatisfied or undecided. A cross-analysis between these groups also revealed that they face different challenges. While insufficient workforce skills were the biggest productivity barrier for the unsatisfied participants, satisfied participants struggle most with unreliable demand planning.
The conclusion drawn from the study is that when a company has a clear understanding of its weak spots, these challenges can be approached with a targeted action plan and appropriate decisions to quickly improve their productivity.
Yvon Donval, Partner at BearingPoint
Six Essential Factors
The survey results and further analysis by TUM and BearingPoint revealed that productivity challenges in the production environment of companies in the manufacturing sector can be met by addressing these six factors:
- Employee motivation
- Cultural alignment
- Internal and external collaboration
- Standardized processes and activities
TUM and BearingPoint call these factors Productivity Essentials, and they developed an approach to measure the maturity of each factor through a structured approach known as the China Productivity Assessment. In three steps, the China Productivity Assessment helps companies evaluate their productivity and guide the formulation of suitable improvement measures.
During the interviews, our consultants cover 15 focus topics across eight functions related to the production environment and assess the results against the elements of our six productivity essentials. Based on this comprehensive approach, we are able to specify the current and desired maturity levels for each of the productivity essentials and can develop an implementation plan that best reflects our client’s needs.
Jan Bernstorf, Director at BearingPoint
Study participants confirmed a significant productivity improvement potential of 25% on average if their most pressing productivity barriers could be tackled successfully.
For more information on China Productivity Snapshot 2016, please visit https://www.bearingpoint.com/en/our-expertise/insights/china-productivity-snapshot/ .
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