Keys to im­prove re­source pro­duc­tiv­ity

DEMM Engineering & Manufacturing - - ENERGY EFFICIENCY - By Rob Stum­mer

Abril­liant McKin­sey Quar­terly ar­ti­cle I read re­cently, ‘Are you ready for the re­source revo­lu­tion?’ talks about many of the same sort of pro­duc­tiv­ity im­prove­ments that IFS is work­ing with its cus­tomers to achieve.

The ar­ti­cle, by Ste­fan Heck and Matt Rogers, is based on their new book, Re­source Revo­lu­tion: How to Cap­ture the Big­gest Busi­ness Op­por­tu­nity in a Century.

It ex­trap­o­lates out from trends we are al­ready start­ing to see to a near fu­ture where the rate of an­nual pro­duc­tiv­ity im­prove­ments is far higher than to­day.

It’s not just that new tech­nol­ogy – such as IT and nan­otech­nol­ogy – will en­able higher rates of pro­duc­tiv­ity im­prove­ments. The ar­ti­cle points out there are a num­ber of re­sources whose con­sump­tion can­not be sus­tained to meet global de­mand that’s fu­elled by the grow­ing mid­dle class in places such as China and In­dia.

An­nual pro­duc­tiv­ity im­prove­ments in en­ergy, for ex­am­ple, will have to rise from the 1.7 per cent recorded from 1990-2010 to 3.2 per cent from 2010-2030 to meet global de­mand.

Im­prove­ments in wa­ter pro­duc­tiv­ity will need to rise from 2.5 per cent to 3.7 per cent. Even ma­te­rial pro­duc­tiv­ity, which only in­creased at 0.8 per cent per an­num from 1990-2010, will need to trend up­wards to 1.3 per cent.

Op­por­tu­ni­ties abound to cre­ate these sort of above trend pro­duc­tiv­ity im­prove­ments given cur­rent lev­els of re­source in­ef­fi­ciency and waste. Cars, for ex­am­ple, are no­to­ri­ously un­der­used and in­ef­fi­cient. They spend 96 per cent of their time parked and 86 per cent of the fuel they use never reaches their wheels.

In our ex­pe­ri­ence, there are two key tech­nolo­gies that al­most all or­gan­i­sa­tions can ben­e­fit from right now. Com­bine both of them and you will also lay the foun­da­tions for fu­ture pro­duc­tiv­ity im­prove­ments and re­duce the risk of be­ing left be­hind by com­peti­tors.

One is the ca­pa­bil­ity of mod­ern en­ter­prise soft­ware to cap­ture, an­a­lyse and re­port on all as­pects of an or­gan­i­sa­tion’s op­er­a­tions – to run the whole busi­ness. The other is the abil­ity of mo­bile com­put­ing de­vices to fill in the in­for­ma­tion gaps that ex­ist in al­most all or­gan­i­sa­tions and which ham­per them in achiev­ing a global view of their op­er­a­tions and mak­ing use of the in­for­ma­tion they have to make de­ci­sions.

Real-time com­mu­ni­ca­tions im­prove de­ci­sion mak­ing around when as­sets need to be re­paired or re­placed, for ex­am­ple, or whether there are too many people on site.

Smart­phones can be used to cre­ate in­ci­dent re­ports, in­clud­ing pho­tos, geospa­tial data and other in­for­ma­tion and au­to­mat­i­cally sent to a cen­tralised en­ter­prise sys­tem to co­or­di­nate a re­sponse.

In the oil & gas in­dus­try, for ex­am­ple, work­ers in re­mote lo­ca­tions reg­u­larly use rugged com­put­ing de­vices such as tablets to ac­cess cen­tralised in­for­ma­tion stores and feed up­dated in­for­ma­tion back to head of­fice so de­ci­sions can be made in real time.

The f lip­side to all of this, how­ever, is that or­gan­i­sa­tions that are not work­ing to­wards achiev­ing a sin­gle view of their op­er­a­tions and ex­ploit­ing mo­bil­ity will be threat­ened by the in­evitable trend to­wards re­source pro­duc­tiv­ity.

It’s not just that such or­gan­i­sa­tions will lack the agility to be at the leading edge of the re­source revo­lu­tion and drive in­creased prof­its. They will also lack the agility to adapt to the in­creas­ing rate of change in the busi­ness en­vi­ron­ment.

If an en­tire in­dus­try moves over to lo­calised 3D print­ing of spare parts, for ex­am­ple, what hap­pens to com­pa­nies that don’t have vis­i­bil­ity into what spare parts they con­sume and where they are lo­cated?

Or if an in­dus­try rapidly moves to cre­ate a mar­ket that makes the spare ca­pac­ity of idle equip­ment avail­able for rent to third par­ties, what does this mean for or­gan­i­sa­tions that do not have pre­cise vis­i­bil­ity of their equip­ment – in­clud­ing which units are em­ployed and which ones are not at any given point in time?

Or­gan­i­sa­tions that have fallen be­hind the pace of mo­bile de­vice adop­tion will also find them­selves with a work­force that is poorly equipped to adapt to rapid change. It’s not just the abil­ity of mo­bile de­vices to ex­change in­for­ma­tion with en­ter­prise sys­tems that is im­por­tant. It will be in­creas­ingly vi­tal for an or­gan­i­sa­tion’s work­force to be able to use mo­bile de­vices on the job and adapt to the cul­tural change that goes along with that.

In the end, it re­ally doesn’t mat­ter whether your or­gan­i­sa­tion in­tends to drive prof­its from in­creased re­source pro­duc­tiv­ity or just seeks to be ag­ile enough to sur­vive and pros­per in the new busi­ness en­vi­ron­ment. Ei­ther way, max­imis­ing the po­ten­tial of your en­ter­prise soft­ware and get­ting the most out of mo­bile tech­nol­ogy will put you on the right path.

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