Factory Physics, Inc.

New Study: For a More Productive Workforce, Scientific Know-How Helps

A Wall Street Journal article, For a More Productive Workforce, Scientific Know-How Helps,  Lauren Weber,  June 28, 2017, describes a new study from the National Bureau of Economic Research.  "Companies with a higher proportion of scientists and engineers are more productive than their peers, even when those workers aren’t directly involved in the research-and-development tasks that drive the most obvious forms of innovation...The authors studied manufacturing plants and found that, for example, a plant with 10 scientists and engineers among its 100-person workforce would be 4.4% more productive than a plant with the same number of employees but no scientists and engineers"

That has been our experience at Factory Physics Inc. and points to the need for very practical understanding of the relationships between capacity, inventory, response time and cost. Slogans like "Eliminate Waste" actually increase confusion because they are too general. Knowledge of operations science is easily attained and applied by workers and managers everywhere. Having the basic science at your command provides a distinct advantage.

"Some 80% of industrial scientists and engineers work in roles outside of formal R&D, such as information technology and operations. Their knowledge and training is critical to firms’ ability to improve processes, fix broken systems and implement new technologies, says Richard Freeman, a Harvard University economist and co-author of the paper."

"When organizations change their accounting or human-resources systems or adopt new production processes, “they can’t just wave a wand and say ‘now the workplace operates this way,’ ” says Mr. Freeman.

Our experience is that companies embark on improvement initiatives for good reasons: to improve performance and to motivate and engage workers. However many, many of these initiatives are conducted without much scientific support. As Mr. Freeman summarizes,“you need someone who knows ... the right equations to use and other well-established principles.”

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