People's Productivity is the Key to Indian Manufacturing Competitiveness: BCG

VARINDIA- INDIA'S FRONTLINE IT MAGAZINE

According to the BCG report on ‘People’s Productivity ‘ the global people productivity of Indian manufacturing sector lags developed nations such as US and Japan, as well as  in most manufacturing sectors to China. While earlier, many explained this to differences in technology, level of automation, etc.; such differences are not only rapidly shrinking, but they do not fully explain the significant gaps in productivity that exists.

Skill Gap and Engagement Gap are the two critical factors that indicate towards lower people productivity. Indian manufacturing sector faces significant challenges in attracting quality manpower that is 'right' skilled prior to entering the workforce. In addition, continuous skill development efforts are required for the work force, throughout their careers, as processes and technologies evolve. This applies to contract workers, unionized work force, as well as lower levels of managerial work force.

Many manufacturing studies have indicated a direct correlation between workforce engagement and productivity. For most Indian manufacturing companies, the level of engagement and alignment with corporate vision, amongst their union work force and contract labors is extremely low, when compared to their global peers. The typical difference between a best-in-class engaged organization to an average organization, is at least a 10% productivity difference.

With slowdown in Western economic countries and China, as well as cost increases in China, Indian Manufacturing sector stands at the cusp of a tremendous opportunity. Western country productivity growth rates have slowed down....See More