Why the Germans win, by Jim Anderton

In a world where manufacturing activity is stagnant or slow-growing globally, Germany is a very unusual case. It’s the leading nation in a European economic basket case and continues to lead in productivity and output.

Why? Many commentators have weighed in on this issue and most clearly have never been to a German manufacturing plant to investigate first hand.

I had the opportunity recently to visit several factories in south western Germany over the summer and what I saw showed clearly why the nation is a global leader.

Almost as importantly, it also dispelled several myths we stubbornly cling to on our side of the Atlantic. Here are a few:

It’s about excessive wages and unions:

Major German manufacturers offer high wages, extensive company-funded benefits and have unions and worker councils that are hardly passive.

In North America we regard worker organizations as impediments to productivity, but in Germany the atmosphere is much more cooperative, often extending to worker representation on the board of directors. Nothing eliminates the mistrust and bitter acrimony like opening the books to your labour force.

When workers know what the firm can afford, negotiations start on a sensible footing and common sense can prevail over politics.

They work harder than we do:

Nowhere did I see workers rushing or running on the job. There was no evidence of any industrial activity, from welding and machining to materials handling and sweeping the floors, operating at a faster pace than any comparable North American plant.

Morale appeared similar too, with a similar spectrum of worker attitudes on the shop floor. There was no evidence of faster pace to operations compared to our well-run plants.

It’s a cultural thing unique to Germany:

Again, no evidence supports this old stereotype. The German white lab coat, steel-rimmed glasses manager-with-a-clipboard is strictly Hollywood.

I observed workers smoking cigarettes, talking sports and cracking jokes like every industrial workforce in any modern Western nation. A pint of excellent beer is a common part of the lunch meal, served in a comfortable cafeteria where management can be frequently seen dining along with production personnel. And a large percentage of shop floor workers are foreign-born and are as productive as everyone else.

So how do they do it?

One answer is organization. The primary reason that no one rushes in an A-list German plant is because they don’t have to. Tools, supplies and parts are readily at hand, and simple, effective tracking quickly identifies production bottlenecks.

Much of the tracking is surprisingly, paper-based, mainly because it’s cheap and effective. Everywhere technology was applied where it made sense, without automation for tasks better done by human hands.

Similarly, shop-floor metrology was extensive with workers empowered to stop processes where quality issues appear.

Another explanation for their success is cultural. Engineering personnel seem to communicate well with the shop floor and the management pyramid is notably flat.

A surprising number of key executives and engineers have trade backgrounds, a key factor in smooth, trouble free management. In North America, it’s easy to see where the “us versus them” floor attitude originates.

When accountants and lawyers set manufacturing policy and engineers who have never ventured past their CAD/CAM software determine production and assembly procedures, bad things happen to both quality and productivity.

Put simply, in Germany I saw first-hand how they implement true teamwork. We talk about it, but are unwilling to make the structural changes in government policy, education and management to match their success.

Changing our industrial culture to match the German experience may not be the only way forward, but there’s a lot to learn from their obvious success.

Jim Anderton is Editor, Canadian Metalworking Magazine