Focus on Productivity: Part II

By Andrew Paparozzi
In August 22, 2008

Why is productivity important? Here’s one good reason: The need to restrain unit costs—both labor and non-labor. The latest data from the Bureau of Labor Statistics show that the upward pressure on non-labor costs continued to mount in July. Producer prices for finished goods, excluding foods, are up 10.1% over the past 12 months. Prices excluding foods and feeds for intermediate and crude materials over the past year spiked 16.3 and 70.6%, respectively suggest that the upward pressure on non-labor costs will continue for a while.

While cutting labor input can boost productivity and lower unit labor costs in the short-term, it is not the complete answer. Better management of labor input and workflow will provide more meaningful gains. Just upgrading equipment and software is not the complete answer either. Fully utilizing the capabilities of technology and equipment requires the proper staffing and training. It also requires sustained and stepped up marketing efforts to maintain and boost top line growth. This is especially true in a challenging economic environment, when growth is at a premium.

When you come down do it, there are no magic bullets to achieve meaningful and lasting improvements in productivity. These result from a combination of coordinated efforts that take labor, capital, and your company’s value proposition to keep and acquire clients all into consideration.

Joseph Vincenzino

Andrew Paparozzi

Epicomm's Andrew Paparozzi, Vice President/Chief Economist, is well-known for his accurate and thoughtful discussions on the economy and US commercial printing industry. A foremost author and speaker on economic business trends in the printing industry, Paparozzi heads Epicomm's Printing Economic Research Center.

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