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Why is reliability important?
According to an article in The
Wall Street Journal, corporations have for years focused aggressively on improving the productivity of their human capital.
Now the focus is turning as much to the productivity of their machinery and equipment. The Journal article, which appeared
in The Outlook section of The Wall Street Journal (Monday, September 26, 2005), summarized the situation very well.
"Weathering the Storm: Reductions in Nonlabor Expenses Help Companies Shore
Up Profits".
According to James Paulsen,
chief investment strategist for Wells Capital Management, "two important and overlooked factors" related to productivity
enhancement "are interest costs and depreciation expenses, the amount companies write off to account for wear and tear
on equipment".
According to Mr. Paulsen,
"When people think about productivity, or they think about margins, the only thing they think about is labor. A
lot of corporations have squeezed labor down to the nubs, and now they're squeezing capital."
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