Skills and performance improvement

In 2004 Mark Warschauer (University of California) published research that focussed less on infrastructure and more on the ability to use equipment. There are many other examples of this area of research and these insights open up a major debate on the skills within the labour pool of any economy and given the scale of the workforce in any emerging economy skills becomes a major issue in all business connectivity and, logistics.

With increasing sophistication (and cost) of equipment, functional literacy and skills are becoming a massive issue – the UK has 5 million workers who are considered functionally illiterate and productivity suffers as a direct consequence. And yet, all too often businesses in sectors all along the supply chain do not focus training as much more than basic induction followed by on-the-job experience. There is a case to move from basic training to performance improvement and continuous assessment. For example, the use of simulators rather than actual equipment is a case in point. This entry seeks to trigger that debate as a key element of Transformational Logistics in emerging markets.

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7 Responses to Skills and performance improvement

  1. Ben Dunn says:

    I think the issue is everyone wants to hire the ready trained worker. On-the-job experience takes a while and is rarely thorough. The challenge is how to use modern technology and channels to train workers without the workers or the businesses noticing !

  2. robjbell says:

    In many sectors the notion of “hiring the ready trained worker” translates into poaching from competitors. In the short run this is a fact of life and, is one of the reasons that industries “cluster” together. However, in many sectors along the supply chain this is triggering serious wage inflation. For example, in Ports key roles such as Quayside crane operators. In a global economy such poaching can become … global. And this can have a direct impact upon productivity in one port versus another. The solution has to be viewed in a wider context – supply. Are emerging economies generating enough skilled workers? If not, why not? How can this be addressed?

  3. tom says:

    In markets where there are pressure on key people, its always a question who takes the “cost” of training them. I do believe that companies that invest in their people, create a better loyalty. Look at Maersk for example, do not pay the highest wages in the industry, but offers a huge career and education opportunity investing in its people. Even thou you will loose a few, the over all ROI on your investment in people will by far be exceeded by improved performance, strong growth and higher margins. Does this also apply for emerging economies? I do believe it does, since skilled people are one of the factors that attracts foreign investments. In order to make a climate for foreign investments, lower taxes, improved infrastructure is not sufficient, if you lack the skilled people.
    The main issue is how do one systematize this into model or a tool-box in order to execute?

  4. Qusai Qudah says:

    In the Middle East their are huge investments in the infrastrucrure development spicialy in ports, airports and rail. If we take Jordan as an example, the Jordan government has signed a deal to develop the Aqaba port, the project will cost US$5 billion, create around 15,000 jobs.
    Considering that the Jordan labour market already suffers from a lack in skilled labour in the ports and maritime sectors. How can the performance improvement and continuous assessment work in the case of such markets?

  5. robjbell says:

    This is a useful question. The whole skills area is key to the performance of Marine, Ports and general Logistics. A few thoughts:

    1. Integrated supply chains. Frankly, far too much is written about Marine and Ports and Logistics as if they were totally separate entities. It is time to move on and look at the whole logistics story (wet and dry) in a holistic way / end-to-end. After all, you add value when things move effectively and efficiently end to end and you lose out when you stop / start along the chain. The silo effect does not help.

    2. Base line statistics. What is the actual performance of a specific Port? We need to understand to assess training requirements.

    The ususal metric is moves per hour of the quayside cranes. And this measure does demnostrate huge disparities between ports. Take Santos, Brasil pre privatisation at 6 moves per hour climbing to 15 and up to 20+ after privatisation. Chinese ports move higher than 35 per hour and so on. However, the metrics have to be more complete. For example, are we comparing like with like? What were the weather conditions? Ballast on the boat? And then, how efficient is the whole port operation? How do we know?

    These variables and challenges suggest the need to have a standard measure of performance that levels the playing field. This means a move to give ALL crane operators an industry standard test. The best way of achieveing this is not on actual equipment but on fast improving simulator technology. Perhaps someone can detail this in another entry???

    3. From training to performance improvement. Many people feel that we need to push the agenda to performance improvement and a direct link to tangible benefits. We need to ensure that operators are effective (doing the right things) as well as efficient (doing the right things right). This may mean that, say, a crane operator would have to complete a standard assessment test as above and then, work on an understanding of the equipment. If an operator understands basic maintenance routines some downtime will be eradicated.

    Another area would be to consider physical and psychometric testing to establish whether a candidate for the job has the attributes, is physically capable and, that their behaviours are appropriate. For example, that they do not have phobias about heights; that they are fine with routine and, that they will respond in a certain way under pressure.

    4. Competency schemes. This is well developed in the US, Canada and the UK. Each operator – especially in Construction – carries a log book that indicates the vele of competency attained. This has many uses. It is a real time CV; a security control and, can play a serious role in an environment where (a) assets are VERY expensive, often with long replacement lead times and, complex to use. (b). Safety to be linked explicitly to productivity. Huna error is the root cause of >70% insurance payouts and often this is down to poor appreciation of health and safety. (c). Insurance premiums could be reduced if competency levels were attained. This is a massive area …

    5. Raise the profile of vocational skills. Far too few countries and companies value vocational skills. This is a major challenge that needs to be tackled urgently. It is a sobering thought to consider that the UK has up to 5 million workers who are classed as functionally illiterate. Just look at the operating manuals of any materials handling equipment to appreciate the need for skilled operators. Again, a major subject area.

    This question raises an agenda that is pressing all over the globe. There is much to be done and, real progress is being made.

    Consider this. We all know that economic conditions are tough. Usually, this means reduced training budgets.

    How often do we consider what a poorly trained operator can do to an expensive piece of equipment? Does your equipment reach lifetime expectations or, is it damaged before its time? We are talking assets and ROA.

    With the value of assets increasing; the lead times on equipment climbing and, insurance premiums rocketing and, turnaround of ships becoming key – performance improvement for operators is key. Learn on the job? Some hope.

    Any City Port that is serious about its image as a place to invest has to offer an effective and efficient port that is seamlessly integrated with the rest of the supply chain… A purpose built performance improvement focussed on establishing and raising performance standards is key. Let things happen piecemeal could be an expensive mistake.

    In rapidly expanding or emerging economies and those regions recovering from disasters the need to rely on skilled labour is key. As such, skilled labour is a key success factor in transforming performance.

  6. njwyo says:

    The other problem is that governments (in one form or another) get involved as they recognise the issue. They then start to do what governments do for most problems which is to throw money at it. Unfortunately, most governmental organisations find it easier to measure quantity than quality, so you get an awful lot of relatively untrained people, thinking they are fully trained. This causes problems as the governmental organisations get upset about trained people not getting jobs, and businesses get very cynical about training and revert to type – poaching staff from other businesses.

  7. robjbell says:

    You raise a MASSIVE point. In key skill areas all over the world companies poach. It seems quicker than developing career paths for your own people. The impact of this is wage inflation.

    We know of one example where ports have poached and in so doing set up a cycle where skilled labour moves to the highest bidder. Soon enough, a lack of continuity compounds the problem. It is as if the workforce will be on constant induction.

    We will be developing a section on skills and, the impact upon costs and productivity. Any thoughts?

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