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A Second Look At Productivity, Machinery and Skills in Britain and Germany

Published online by Cambridge University Press:  26 March 2020

Hilary Steedman  and
Karin Wagner
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Abstract

The overall aim of the National Institute's research programme in this field is to examine the relative contribution of physical and human capital to productivity with the help of site visits to samples of matched plants in Britain and Germany. A first study, carried out in 1983-4, was based on metalworking plants in Britain and Germany; it pointed to the overriding importance of skills at supervisory and shop floor levels in contributing to the better choice and utilisation of machinery and to a substantial German productivity advantage. The present study was carried out three years later, in 1986-7, and compares part of the wood furniture industry: the production of fitted kitchens. This branch is more standardised in its products—and hence easier to compare—than the more traditional branches of the furniture industry. It now accounts for over a quarter of the value of all furniture sales in both countries.

Type
Articles
Information
National Institute Economic Review , Volume 122 , November 1987 , pp. 84 - 108
Copyright
Copyright © 1987 National Institute of Economic and Social Research

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Footnotes

This study is the second in a series of comparative investigations of matched manufacturing plants in Britain and Germany carried out by the National Institute of Economic and Social Research into factors influencing productivity. A previous study examined products of the metalworking sector (National Institute Economic Review, no. 111, February 1985); the present study looks at a branch of the furniture industry.

References

(1) A.Daly, D.M.W.N. Hitchens and K. Wagner, ‘Productivity, machinery and skills in a sample of British and German manufacturing plants’, National Institute Economic Review, no.111, February 1985.

(2) Statistisches Bundesamt, Statistisches Jahrbuch, 1986, table 9.9: Betriebe, Beschäftigte und Umsatz im Bergbau und im verarbeitenden Gewerbe nach Beschäftigtengrössenklassen; Department of Trade and Industry, Business Statistics Office, Report on the Census of Production 1985, PA 467, Wooden and Upholstered Furniture and Shop and Office Fittings, table 4.

(3) The letter stated: ‘We are examining the production of fitted kitchen furniture in Britain and Germany, concentrating particularly upon the training and qualifications of the workforce at operator and foreman level and the way in which these may affect productivity, especially when new manufacturing technology is introduced’.

(4) OECD, Industrial Structure Statistics 1984, Paris 1986, tables GE1 and UK1; Furniture Industry Research Association (FIRA), The Furniture Industry in Western Europe: A Statistical Digest, 1983, tables 6.1 and 14.1.

(5) No statistics are compiled on the relative sizes of the flat-pack and rigid assembly sectors of kitchen furniture production; the estimate above was made by the marketing manager of a major producer as reported in Kitchen, Bedroom and Bathroom Review, February 1985.

(6) The situation for kitchen furniture is similar to that for furniture generally; some 20 per cent of domestic sales of all furniture is represented by imports, and Germany is the largest single source of those imports, accounting for 25 per cent of all furniture imports. Business Statistics Office, Business Monitor, PQ 4671, Wooden and Upholstered Furniture, fourth quarter, 1986; Statistisches Bundesamt, Fachserie 4, Reihe 3.1, 1980 to 1986; some unpublished figures for the furniture industry (1984) were kindly supplied by the National Economic Development Office.

(7) ‘Britain bounces back’, in Kitchen, Bedroom and Bathroom Review, November 1984.

(8) A.D. Smith, D.M.W.N. Hitchens and S.W. Davies, International Industrial Productivity: A comparison of Britain, America and Germany, Cambridge, 1982, p.78.

(9) Value added and employment, based on censuses of production, as shown by OECD, Industrial Structure Statistics 1984, Paris, 1986, pp.19 and 42; these have been converted with the help of PPP rates of exchange for 1980 from Eurostat, Comparison in Real Values of the Aggregates of ESA, Luxembourg, 1983, pp.259, 282, etc., extrapolated to 1983.

(10) Smith et al., op. cit., p.44, estimated 52 per cent higher productivity in German manufacturing as a whole in 1977.

(11) In some very advanced German companies, the trend is now towards computer controlled manufacturing (FMS) whereby a series of linked machines is controlled from a centrally programmed processor in order to cope effectively with increasing individualisation of pieces produced.

(12) See J.L. Oliver, The Development and Structure of the Furniture Industry, Pergamon, 1966.

(13) After the main work on this study had been completed, we learnt that some British firms in our original sample were making progress in the introduction of computerised production scheduling, but the systems had not reached the level of sophistication found in Germany. The shortage of technical expertise at supervisory and middle management level was further highlighted by these firms' progress, since engineering and maths graduates had had to be employed to carry out these tasks, which were performed in Germany by qualified Meister (foremen).

(14) About one in ten apprentices on day release courses have to be given remedial education, we were told by a leading British college of Further Education. The usual German requirement of a basic school leaving certificate (the Hauptschulabschluss) for apprenticed trades rules out this kind of occurrence there; similar steps need to be taken here if standards of vocational courses (YTS and others) are to be raised, and if college resources and the pupils' time are to be efficiently deployed.

(15) A similar question arose in a comparison of metalworking plants, where German managers were more concerned about a lack of qualified staff as a reason for not introducing CNC technology than were British managers (D.C. Gibbs and A.T. Thwaites, ‘The international diffusion of new technology in manufacturing industry: a comparative study of Great Britain, the USA and West Germany’, paper presented to the IBGI/CAG Symposium on ‘Technical change in industry—spatial policy and research implications’, University College Swansea, 22-6 August 1985).

(16) When CNC machines were installed in Britain often only one or two of the operative functions ('heads') would be used, although initially operators had been trained to use all the machine's functions. Machinery suppliers would often be contacted with requests for additional functions which had in fact been built into machinery already supplied and demonstrated to supervisors and operators when the machine had been commissioned.

(17) See the paper on British and German training of foremen by S.J. Prais (forthcoming).

(18) German woodworking machinery manufacturers reported that it was normal practice for production monitoring devices to be fitted to machines for German customers, but that these were rarely asked for by British customers. These devices allow the operator to feed in information about his machine's production and produce a computer printout recording quantities, running speeds, down-time and so on. In Germany these records are used as a basis for calculating piece-work or bonus payments. In Britain only one firm visited was installing such a device and British machine manufacturers also reported that these devices were not normally fitted in Britain. One of the reasons put forward was the widespread fear of computers and lack of confidence of operators in relation to computerised working. This would appear to be another outcome of low levels of initial training, since German operators had no such problems.