Combining investment in technology and investment in people is key to determining the productivity of individual firms. Nestlé’s experience shows how important it is to consider these two forms of investment as closely linked – and in many respects highly interdependent.
In most advanced manufacturing there is no such thing as automation: at Nestlé’s UK sites skilled people become more important to productivity performance as higher value machinery is introduced. This is partly related to the key productivity measure of ‘Asset Intensity’, which measures the production rates of complex and often high speed machinery. This puts a premium on fast diagnosis and remedy of problems, and on workers being ready to get the most out of new machines from the day they are installed.
A further contribution to productivity for Nestlé sites has been the ability of technically-literate operators to feed back suggested improvements to the original suppliers of machinery. This can then be reflected in future expansions of production and lead to further step changes in the output of individual lines as superfluous features and stages of production are eliminated.
The impact of technology on business models and the world of work will be a key theme for the UK in the years ahead and Nestlé participates actively in the ‘Industrie 4.0’* agenda in Germany, where many of these insights into the relationship between technological complexity and human skills are well understood.
One important insight from the manufacturing sector in this regard relates to the way that technology can make workforces more flexible, but also impose strict limits on flexibility. Nestlé’s skilled operators oversee complex processes running to tightly defined schedules. While Nestlé works hard to give operators as much flexibility as possible across a year of work, on shorter timeframes they work to strict shift patterns with consistent handover procedures between different teams. The ‘gig economy’ is only part of the picture of technology and the future UK workplace.