Asset Productivity

In Productivity culture, Public sector, UK productivity, Uncategorized on October 21, 2010 by Tim Aikens

Much of the time we think of productivity in human terms. How much can we get out of a manhour?  In the car industry this translates into how many cars are produced per man year of effort.  In other industries – often very capital intensive, there is a focus on the productivity or utilisation of the assets.  In the airline industry for example there is always great pressure to keep planes in the air. When they sit on the ground they don’t earn revenue (and usually incur some fairly expensive parking costs)!  In retail stores, businesses look at revenue per square foot of space.  It’s all about asset utilisation or productivity.  So what can other sectors learn from this?

Well, I believe there are quite a few areas where asset productivity has not yet been fully appreciated.  Here are a few examples.  London is very expensive when it comes to office space (and a lot of other things!), so quite naturally planning space is important and architects find ways of cramming the workers in, but still providing a modicum of comfort.  Move  further out, space becomes cheaper and the allocation of space per head grows.  I’m not suggesting that everyone should operate at London densities, but there is probably a lot of money wasted because the productivity of the available space is lower than it needs to be!  How good is your space planning?

Here is another example.  One of the major costs in large construction projects is plant hire.  How often do you go past a big site and see expensive diggers, cranes and the like sitting idle?  How much might this be costing?  If you rent expensive kit by the day, but only work one shift, the kit sits idle overnight. In some cases it may well be more cost-effective and productive to run a night shift to make the best use of the equipment (recognising that night shifts are usually more expensive than a day shift).

Perhaps one area where poor asset productivity affects many of us is in major (or even minor) road works. The concept of lane rental for motorway works helps to  drive up productivity. The idea is that the contractor has to ‘rent’ the lane(s) they are working on.  The longer they take to do the work, the more ‘rent’ they pay and less profit they make.  Yet in many cases you see swathes of motorway work with little if anything happening. In urban areas, big holes in the ground sit there for weeks with little or no activity. As well as costing the council money the cost in terms of lost time to the traveling public is huge!  Both councils and contractors need to raise their game to increase the asset productivity of both the roads and the equipment being used.  Plan the work and work the plan!  The final ‘insult’ to the road works ‘injury’ is where successive utilities organisations dig up the same piece of road in quick succession. Sadly it still happens all too often.

So how much do you really think about asset productivity as well as people productivity?  In the process industries, planning to minimise downtime of an asset for repair or maintenance is second nature.  There is a lot of scope for other industries, businesses and indeed the public sector to learn from this!


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