Linking Productivity and Quality in a Virtuous Cycle

Transcription

1 Linking Productivity and Quality in a Virtuous Cycle A practical and strategic overview of European Productivity and Competitiveness Finn Jackson EOQ May

2 Today s Agenda Why Competitiveness matters Where competitiveness comes from How to increase productivity & quality Implications for industry level overview Macro-level example: emergence of China Micro-level examples: Toyota & Tesco Closing remarks

3 Why competitiveness matters The Lisbon European Council of 2000 adopted the objective of making Europe by 2010 the most competitive and dynamic knowledge based economy in the world. Competitiveness means a sustained rise in the standards of living of a nation or region and a level of involuntary unemployment as low as possible

4 Productivity per worker, USA 100% EU-25 73% Japan 71% Mexico 30% India 9% China 13%

5 Productivity Growth The world economy has moved into a higher gear over the past decade with productivity growth almost doubling compared with the previous five years. Annual productivity grew by 2 per cent between 1995 and 2003, a rise from a growth rate of 1.1 per cent between 1990 and Only in Europe and Latin America has productivity growth slowed. Financial Times, May

6 Productivity Growth - detail GDP per hour worked: EU % 1.3% USA Japan Mexico India China

7 Competitiveness comes from 1. Quality: Delivering what the customer wants 2. Productivity: Delivering at low cost

8 Improving Quality, Productivity For individual processes: Plan Do Check Act Deming Cycle For products, companies: Awareness AUDIO Cycle

9 Industry Overview Niche / Luxury Distinctiveness Mass Market Ferrari, Lamborghini UnderstandBMW, Design Lexus, Implement Mercedes Ford, GM, Toyota Other Firms

10 Strategic Competitiveness Map Niche / Luxury Distinctiveness Mass Market Ferrari, Lamborghini BMW, Practical, Lexus, operational Mercedes Quality and Productivity at these Ford, key processes/activities GM, Toyota is what determines strategic competitiveness Other Firms

11 Which matters more? Niche / Luxury Distinctiveness Mass Market Ferrari, Lamborghini BMW, Lexus, Mercedes Quality Balance of both Balance of both Ford, GM, Toyota Other Firms Productivity

12 Driving the rate of improvement Niche / Luxury Distinctiveness Mass Market Ferrari, Lamborghini BMW, Lexus, Mercedes Quality Balance of both Ford, GM, Toyota The Escher Cycle Balance of both Other Firms Productivity

13 Macro-level Example: The rise of China

14 The (re-)emergence of China Niche / Luxury Distinctiveness Mass Market Ferrari, Lamborghini BMW, Lexus, Mercedes Quality Balance of both Ford, GM, Toyota The Progress Escher Cycle Balance of both Other Firms Productivity

15 Micro-level Examples: Toyota, Tesco

16 Toyota, Tesco, Niche / Luxury Distinctiveness Mass Market Ferrari, Lamborghini BMW, Lexus, Mercedes Quality Balance of both Ford, GM, Toyota The Escher Cycle Balance of both Other Firms Productivity

17 In closing Competitiveness matters Competitiveness comes from Quality and Productivity Focus on absolute levels of productivity and quality is no longer enough sustainable competitiveness comes from focus on rates of improvement Rates of improvement can be accelerated by copying Progress : putting a system or processes in place that automatically connects Productivity and Quality in a virtuous, self-reinforcing circle The Escher Cycle

18 Linking Productivity and Quality in a Virtuous Cycle A practical and strategic overview of European Productivity and Competitiveness Finn Jackson EOQ May