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New joint initiative aims to improve manufacturing productivity
10/16/2017

A new joint initiative from economic development groups in Wisconsin aims to improve productivity in the state’s small and midsize manufacturers.

The Transformational Productivity Initiative is an effort from WEDC, Wisconsin Manufacturing Extension Partnership and the Milwaukee 7.

The initiative identifies five factors closely tied to productivity: leadership and strategy, enterprise excellence, human capital management, technology, and growth and innovation.

Each of these factors is broken down into subcategories like organizational culture, employee turnover, management principles, and how open leadership is to new ideas, according to Kelly Armstrong, the project lead for WEDC.

She says this initiative is different from what other states are doing in this area as it takes a exhaustive approach, looking at how related performance areas tie together to influence productivity growth.

“That’s what makes this so unique,” she told WisBusiness.com. “Some look at labor productivity, but won’t look at leadership… It’s different because it’s comprehensive.”

Armstrong said addressing productivity in the state is instrumental for staying globally competitive, and noted that improving productivity adds to wage growth.

“It improves the living and lifestyle for employees, and increases the bottom line for manufacturers,” she said. “But it takes investment; it takes time.”

Each of the five factors tied to productivity has a team of experts that is designing “a user-friendly set of diagnostic and assessment tools” that will be used to assess companies on an individual basis. They’re being developed by WMEP, UW-Stout’s Manufacturing Outreach Center, the Erdman Center for Operations and Technology Management at UW-Madison, UW-Milwaukee and some manufacturers.

Armstrong said the tools are nearly complete, and WMEP representatives will begin assessing about 10 manufacturers in the next three to six months. They will compare scores on these factors, as well as labor and capital, to make suggestions for how to get the biggest return on investment, Anderson said.

Pat O’Brien, executive director for M7, says TPI will be critical for the Milwaukee region and the state overall.

“Boosting business productivity, especially in our manufacturing sector, through TPI can make Wisconsin a national leader in productivity growth and position us for a prosperous future,” O’Brien said.

Armstrong added the time to launch the initiative on a larger scale could be as soon as 18 months.

“Manufacturing is responsible for 19 percent of state GDP, so there’s no time like the present,” she said. “A piece of this is looking at declining population growth -- that’s putting pressure on businesses across the board.”

She said TPI will be part of the solution to that problem.

“Ultimately, we are trying to get as much adoption as possible,” she said.

One of the metrics for TPI will be the percentage of productivity growth once suggested changes have been made. Armstrong said it’s aiming for 20 to 30 percent growth at the company level.

“If you aggregate that to a large number of companies, that’s a large impact,” she said.

Scott Lucas, president and COO of Racine Metal-Fab, agrees that level of growth is possible “with changes that bring the various company departments together to work as one efficient operation.”

Though he says RMF is not one of the first TPI businesses, the company has often utilized WMEP services for employee training and improvement projects.

To improve productivity, he suggests consolidating and eliminating redundant or simple steps through automation. But, he adds, manufacturers “need to look beyond just the plant floor to find ways to improve company-wide performance.”

“Sales, marketing, accounting, IT, HR, etc. have many actions and steps that offer large improvement opportunities,” he said.

--By Alex Moe
WisBusiness.com

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