After writing this month's feature on the automotive industry, I got to thinking about how car buyers tend to feed their wants while industrial equipment buyers lust after need fulfillment. Car buyers obviously need measurable fuel efficiency, but they also crave compliments for driving a “cool” car.

Industrial vehicle buyers have two primary needs from their equipment: that it meets their service/product delivery demands and that its performance contributes to their organization's bottom line.

Wouldn't it be nice if there were a gauge to measure how these two simple needs were being met? Well, manufacturers of industrial trucks have taken a first step. Some are starting to equip their products with standard remote asset management systems. These systems help equipment managers collect data such as hours of operation, quantities moved, locations traveled and safety rule adherence. This information, applied to maintenance scheduling, operator training, movement routing, utilization planning and other initiatives, gives managers the tools to begin gauging that elusive prize known as “productivity.”

Ron Giuntini, executive director of the OEM Product-Services Institute (OPI)—and one of Modern's advisory board members—told me that productivity, measured as (output)/(input), actually calculates both a process' effectiveness (quality-of-performance) and its efficiency (throughput quantity). Productivity is one of the least understood concepts in U.S. industry, he says, yet our economic system is driven by it.

Even the Bureau of Labor Statistics is fairly narrow in its measure of productivity. It divides output of the production process by only one input: direct labor. This is just a fraction of the picture, Giuntini says. If productivity were more accurately measured, our economic policy makers might better gauge the state of the economy.

In my article, I mention the Automotive Industry Action Group's Materials Management Operations Guideline/Logistics Evaluation (MMOG/LE). This is a tool the automotive industry developed to help suppliers gain control of their materials management processes so they can reduce the costs of owning inventory, moving freight at premium rates, rework, line stoppages and long lead times. It's a self-assessment gauge that helps suppliers apply some objectivity to things that were always more subjective—things like supply chain inventory visibility and risk. Where inventory is concerned, it even gets down to obsolescence in raw materials, WIP and finished goods.

It would be great if a productivity gauge became standard issue on the U.S. economy. Just getting a better handle on inventory would improve productivity performance. Even the Federal Reserve uses an inventory gauge (the Institute of Supply Management's customer inventories index) to see if there's too much inventory in supply chains that could hamper productivity. So you see, materials handling performance measurements play a big part in gauging U.S. productivity. Let's hope the 2008 model year gives us a sweet ride.