Productivity Trends in the Photographic Equipment and Supplies Industry

productivity txnds in the photomhic equipment and supplies industry The introduction of computers and automated equipment, along with modifications in corporate strategy, inventory control, and employee training, was a significant factor in productivity growth during the 1980’s Stuart Kipnis rior to World War II, the photographic between 1967 and 1987, compared with 2.7 and equipment and supplies industry primarily percent for all manufacturing.1 Over this period, Clyde Huffstutler P manufactured cameras, film, and projec- output rose 4.9 percent a year while employee tors. In the postwar years and especially since the hours rose 0.6 percent. Average annual growth late 1950’s, the industry has helped to develop rates between the two subperiods defined below and refine several products that have had a sub- differ markedly with regard to output and em- stantial impact on our lives. Photocopiers, which ployee hours: have become the largest item produced in the Output per industry during the last 20 years, have greatly employee Employee boosted office productivity. Advances in x-ray Period hour output hours technology have led to significant improvements in health care. Micrographics, “instant” photog- 1967-87. 4.3 4.9 0.6 1967-79....... 5.5 7.5 2.0 raphy, and audiovisual communications are other 1979-87....... 3.8 1.0 -2.7 examples of important product developments. By responding to user demands for new and Between 1967 and 1979, output per employee innovative products, the industry experienced hour increased at an average annual rate of 5.5 strong growth throughout the 1960’s and 1970’s. percent, more than double the 2.6~percent rate for However, as in the case of other advanced elec- all manufacturing. Strong demand for such prod- tronic industries, intense competition from for- ucts as plain paper copiers, cartridge-loading cam- eign manufacturers dampened output growth eras, and photographic film caused output to rise during the 1980’s. To regain a competitive edge, 7.5 percent a year. This strong demand was fueled a number of the major U.S. manufacturers of by favorable demographic trends, increases in per- photographic products have recently implement- sonal disposable income and leisure time, and a ed broad, corporate-wide restructuring plans. diverse market for photographic equipment and This study introduces a new Bureau of Labor supplies. To meet this demand, manufacturers Statistics measure of productivity in this indus- added production capacity and increased the num- try. It seeks to capture the dynamics of an in- ber of production workers by 1.4 percent a year. dustry that has gone from a period of strong By contrast, in the 1979-87 period, output Stuart Kipnis and Clyde output growth to one of slower growth and is per employee hour rose 3.8 percent a year, equal Huffstutler are economists currently attempting to recover. to the rate for all manufacturing. With strong in the Division of Industry Output per employee hour in the photo- competition from imports of photographic prod- Productivity and Technology Studies, Bu- graphic equipment and supplies industry in- ucts, industry output rose only moderately. The reau of Labor Statistics. creased at an average annual rate of 4.3 percent dominant factor behind this growth in produc- Monthly Labor Review June 1990 39 Productivity in Photographic Equipment and Supplies tivity was a decline in employee hours. This this period, the industry was successful in mak- reduction in employee hours was part of a re- ing photography appealing to the mass market structuring that a number of the major manufac- with the introduction of inexpensive and easy to turers undertook in the 1980’s to become more operate cameras. This greatly expanded the base productive and cost effective. Along with a re- of camera owners, leading to an increase in duction in employment, these manufacturers demand for photographic supplies such as film adopted the latest automation and manufactur- and paper.4 ing techniques, improved inventory methods Photocopying equipment was the fastest and supplier relations, and streamlined their cor- growing product in this industry during the pe- porate structures to expedite decisionmaking. riod 1967-79. The demand for copiers, and in These changes, though not yet fully im- particular plain paper copiers (PPC’S), was fed plemented, have led to a substantial decline in by the need for quick, inexpensive, and high- the manufacturing cost and development time quality reproductions of documents. A major for a number of new products. problem that photocopier manufacturers faced in capturing the enormous market for their prod- output ucts was the prohibitive cost of the equipment. This was overcome by liberal rental policies. Employment curs The photographic equipment and supplies in- PPC’S became standard equipment for medium- were part of the dustry manufactures products which may be and large-size offices during the 1960’s and industry classified into two categories: equipment and sensitized materials. Photographic equipment 1970’s, while either PPC’S or the less-expensive restructuring but poorer quality coated paper copiers were during the 1980’s. consists of such items as still and motion picture cameras and accessories, audiovisual projectors found in an increasing number of small offices.5 and screens, and photocopying and micro- Growth in output slowed considerably after graphic equipment. Sensitized materials include 1979 to an average annual rate of 1 .O percent, still and motion picture film, photographic paper only one-third of the rate for all manufacturing. and chemicals, and x-ray film. The past success of the industry played a role in With its array of products, this industry this slower growth. With so many high-quality, serves a wide range of markets. The consumer long-lasting products already in circulation, it market for equipment and sensitized materials- was difficult to persuade businesses and con- mainly still cameras and tilm-is enormous, as sumers that new purchases were necessary. more than 85 percent of all families own at least Against this market saturation, new product in- one camera.’ Likewise, demand from the more troduction was less effective than in the previ- than 100,000 professional photographers for still ous decade.6 and motion picture equipment, and for film, Output growth was further limited by the paper, and chemicals, is substantial.3 Photocopy- intensification of competition from a number of ing equipment, once considered a luxury pur- sources. Certain consumer electronics products chase, is found in virtually every office. Other not included in the industry served as substitutes business and industrial uses include storage and for photographic products. The most notable retrieval of documents by micrographics and example of this trend was the 50-percent decline medical and dental diagnostics by x-ray. in motion picture cameras produced from 1979 Output in the industry rose at an average to 1987 due to the popularity of the new video annual rate of 4.9 percent between 1967 and cameras.’ Furthermore, foreign manufacturers 1987, compared with 2.4 percent for all manu- were able to capture a significant share of the facturing. This single rate, however, masks the domestic market in a number of product lines. substantial difference in growth rates between Shipments of 35mm cameras, virtually all im- the subperiods 1967-79 and 1979-87. Further- ported, rose from 2.6 million units in 1979 to more, year-to-year rates vary considerably due 7.7 million in 1987.8 This was a major factor in to cyclical swings in the economy and new the nearly 30percent decline in still cameras man- product introductions. ufactured domestically over this period. This same From 1967 to 1979, output in the photographic dominance by foreign manufacturers was evi- industry rose at an annual average rate of 7.5 dent in new photocopier placements (sales and percent, nearly triple that of all manufacturing. rentals), especially in the low-cost, low-volume There were a number of factors behind this segment of the market where the majority of strong growth. An increase in the percent of the new placements have taken place since 1979. population ages 25 to 44, the most active picture Year-to-year movements in output fluctuated takers, along with a rise in real disposable per- considerably throughout the 1979-87 period. In sonal income, contributed to the high demand 4 of the years studied, output declined; in 6 of for amateur camera equipment and film. During the years, output increased by double-digit per- 40 Monthly Labor Review June I990 Table 1. Indexes of output per employee hour, output, and employee hours in the photographic equipment and supplies industry, 1967-67 1 [1977=100] Output per employee hour Employee hours I I Year Non- output Non- All Production All Production production production employees workers employees workers workers workers 1967..... 63.6 58.5 70.2 51.2 80.5 87.5 72.9 1968..... 65.7 62.0 70.2 54.5 83.0 87.9 77.6 1969..... 70.0 67.1 73.4 60.7 86.7 90.4 82.7 1970..... 67.6 66.8 68.4 59.4 87.9 88.9 86.8 1971 72.3 73.8 70.6 62.4 86.3 84.5 88.4 1972 82.9 83.3 82.5 75.2 90.7 90.3 91.1 1973 89.8 87.2 92.8 86.5 96.3 99.2 93.2 1974 95.6 92.7 98.8 94.5 98.9 101.9 95.6 1975 92.9 95.7 89.9 84.6 91.1 88.4 94.1 1976 99.4 98.9 99.9 95.0 95.6 96.1 95.1 1977 100.0 100.0 100.0 100.0 100.0 100.0 100.0 1978 110.6 110.2 111.2 112.6 101.8 102.2 101.3 1979 120.6 122.3 118.8 124.7 103.4 102.0 105.0 1980 112.7 117.0 108.4 115.2 102.2 98.5 106.3 1961....

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