Dynamics of manufacturing
productivity: lesson learnt from
labor intensive industries
M.I. Shahidul and S.T. Syed Shazali
Department of Mechanical and Manufacturing Engineering,
Universiti Malaysia Sarawak, Samarahan, Malaysia
Abstract
Purpose – This study is designed to examine the impact of favorable working environment (FWE)
and R&D on manufacturing productivity of labor intensive industries. More specifically, the purpose
of this study is to generate quantitative evidence of the effect of FWE and R&D-based manufacturing
process on outputs and productivity.
Design/methodology/approach – Convenience sampling method has been used to conduct this
study. This method provides the opportunity for selecting those manufacturing industries that are
convenient to get access for collecting relevant information. Three categories of labor intensive
manufacturing industries such as category A, B and C have been chosen to perform this research.
Industrial category A represents the manufacturing operations which are based on skill of labor.
Category B is a group of industries which provides the FWE the ability to utilize the potential of skill
in the manufacturing process. However, category C is a specialized group of industries and its
manufacturing process is dependent on R&D. The operating data of inputs cost and the revenue of
corresponding outputs have been gathered from audited documents of the relevant sample industries
and the data have been analyzed by using standard statistical techniques in order to establish the
relationship between dependent and independent variables.
Findings – It is found that the industrial category B has spent about 1 percent of revenue on FWE
and gained 9.5 percent higher productivity compare to industrial category A. However, the result has
shown that the expenditure on FWE is positively associated with productivity (r , 0.5). Whereas, the
study has revealed that industrial category C has spent about 1.5 percent of revenue on R&D activities
for improving manufacturing process and gained 20 higher productivity compare to industrial
category A. Nevertheless, the expenditure on R&D is strongly correlated with productivity (r . 0.7).
The study concludes that FWE as proxy of job satisfaction of workforce and R&D on manufacturing
process are value-added inputs for labor intensive industries and it is positively associated with
manufacturing productivity.
Originality/value – This paper presents three original case studies on labor intensive
manufacturing industries. This study has addressed an important issue of labor intensive
manufacturing industries and generated quantitative evidence of the impact of FWE and R&D
activities on productivity. These issues have been well researched in developed and many developing
countries in capital-intensive industries, but no dedicated study is available that has addressed this
issue from the perspective of the highly labor intensive industries such as the garment industry. The
findings of this research would enrich the present knowledge stock of manufacturing systems.
Eventually, the findings would be the basis for further research on manufacturing process for
enhancing performance. Based on this concept, this study would be valuable to policy makers,
academics and government agencies.
Keywords Manufacturing systems, Productivity capacity, Working conditions,
Research and development, Skills
Paper type Research paper
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1741-038X.htm
JMTM
22,5
664
Received June 2010
Revised November 2010
Accepted November 2010
Journal of Manufacturing Technology
Management
Vol. 22 No. 5, 2011
pp. 664-678
q Emerald Group Publishing Limited
1741-038X
DOI 10.1108/17410381111134491