This evidence is supported by the British Chamber of Commerce which has also revealed that engineering plants in the West Midlands are busy again, supplying the German car industry and export machine with specialist parts.

And we saw in the news at the end of last week that Nissan’s north-east plant is set to make a record number of vehicles this year with 22,500 new Juke models sold before the first one rolled off the production line. Juke production will safeguard 1,100 jobs and the plant will be creating 75 advanced apprenticeships in the next five years, as well as extending its educational outreach programme for schools until 2014.

With all these good news stories and the emphasis on manufacturing as a way out of the recession coming from the new coalition government, it seems somewhat churlish to wonder whether manufacturing is indeed the panacea that the coalition believe it to be. After all, BCC figures forecast expected growth in manufacturing of 3.3% in 2010, with only a 1.4% increase in the services sector. But it isn’t clear how much of this is a one-off and whether these levels can be sustained.

Writing in the Guardian on Monday, Jagdish Bhagwati, a professor of economics and law at Columbia University argues that there is no proof that economic health depends on manufacturing. He believes that in the wake of the financial crisis and the subsequent backlash against the financial services sector, politicians have inferred that manufacturing must therefore be beefed up, but, as he says: “this does not follow. Even if you wanted to curtail financial services, you could still focus on the multitude of non-financial services.”

Aside from this view, we also cannot get away from the fact that our workforce is paid far more than employees in Eastern Europe or the Far East, making it difficult for UK manufacturers to compete on cost. For manufacturing to continue to flourish in the UK, we must concentrate on adding value with a focus on invention and innovation to create high quality products and the government should support companies that are trying to pursue new avenues.

This is what makes the announcement of the withdrawal of government funding for projects such as Sheffield Forgemasters seem so counter-intuitive. The project aimed to support the business in expanding into the production of parts for new nuclear power stations. At the time, former Business Secretary Lord Mandelson said it would make the company one of two in the world able to make forgings large enough for the nuclear energy industry.

We are all well aware of the need to make cuts in public spending and the difficulty of doing so, but rarely has a decision seemed so counter-intuitive. We must support our manufacturers and their focus on innovation and continual improvement. The UK can and must compete on quality.

31 August

By Simon Feary, CQI CEO

It’s easy to be deflected from the real issues over these trivialities – and story hungry journalists during silly season have proved no exception – but we all, not least the government, have to be clear what can be gained, and what may be at stake, as a result of the Audit Commission’s planned closure and the drive to deliver efficiencies across our public services.

At the heart of this row and the often adversarial debate about what and where to cut is a need to deliver what the CQI and our accredited certification sister body, IRCA, exist to provide – confidence and assurance.

And this, of course, is what the Audit Commission has existed to do – provide confidence that public services are delivering outcomes efficiently and no matter where you sit in debate, whatever replaces the Audit Commission, will need to do exactly that.

How should this be achieved? Well, the process starts with government in setting policy and standards that are outcome driven. The coalition government has been at pains to claim that the targets driven approach adopted by the last government failed to deliver anything other than countless sets of statistics that fail to say anything about quality outcomes. It’s now beholden to them to set a different agenda and one where a culture of outcomes is the only acceptable measure of improvement.

And it’s through delivery that public, and private sector organisations (freed from the tyranny of targets and continual inspection), can turn central government requirements and stakeholder needs into reality by establishing quality management systems that deliver on the government and stakeholder set standards, policy and outcomes. This is where the quality profession comes in helping organizations to create appropriate processes and measures.

With the departure of the Audit Commission the question arises of how public service deliverers, central government and the tax payer will satisfy themselves that they are meeting needs and improving outcomes in terms of quality and cost. Third party assessment is an option and the UK possesses an infrastructure to deliver this through UKAS. There is also the argument for the extra confidence that such an independent assessment provides. Of course, another option is for public service providers to assure the public and themselves that they are delivering the outcomes required. For many this will be a leap of faith, but is achievable if public sector organisations have a robust and independent internal voice and transparent reporting. This is well established in many industries as the assurance function. Whichever mechanisms are used, confidence will only be achieved if those providing the independent view are competent in quality management and assurance and audit.

The final piece in the confidence puzzle is the improvement that must come from the process of measuring performance and dealing with risk, opportunity and deficiency. Again CQI quality professionals and are competent to facilitate improvement projects within organisations.

While many will argue that the abolition of the Audit Commission will free public service organizations from an expensive distraction, we as a society must recognise that public services will only deliver better with less if everyone involved in the whole process operates cohesively and understands systems, processes, measurement and outcomes. Playing with the audit function structure may save money, but it won’t in itself provide improvement.

The CQI will be making representations to government on the nature of this challenge and the ability of our members to deliver the necessary solutions. We’d be delighted to hear your ideas and views about how we might convince them.

By Simon Feary, CQI CEO

25 August 2010

The company, that supplies the Bank of England, has been experiencing production problems relating to the testing of paper quality at its Hampshire plant which raised fears about security and the impact on orders. The company produces bank notes for more than 150 countries and there has been speculation that an announcement by the Indian government that it would consider cutting its imports of paper used for rupee notes was linked to the company’s difficulties.

The CEO, James Hussey, paid the ultimate price when acknowledging that the buck must stop with him. Sadly, and ironically, he had worked for De La Rue for 25 years, including four years as head of the security paper and print division at the centre of the current quality problems. However, the fallout extends well beyond his role. The reputational damage for the company is even more costly and the announcement last week resulted in a more than 13 per cent fall in its share value.

Clearly quality products and the management of risk is vital, whoever you are but when your business is the printing of money, passports, driving licences, the holograms on credit cards and cash counting systems, then assuring quality must be your number one aim.

Another bruising lesson in the cost of failing to integrate quality as a necessary component of commerce. When will they take ‘note’!?

By Simon Feary, CQI CEO

18 August 2010

Last week Ladbrokes’ new chief executive delivered a withering assessment of the business’s performance which he said had “too much brand over-reliance, too much wasted investment, too little strategic focus, too many sub-optimal supply terms, too many priorities and too many excuses.”

He continued: “As a direct consequence we have lost touch with our customers; we have fallen behind…We have made expensive and visible mistakes. We have operated inefficiently and perhaps lost brand resonance.”

His comments follow the company’s disastrous foray into European markets and the poor performance of its online development. Now, as a result of acknowledging the company’s failures, shares in the bookmaker have actually risen in value.

Consider too the woes of Toyota. A recent interview with the group’s chief quality officer, Steve St Angelo, demonstrates that the company understands it has more to fix than faulty accelerator pedals and engines. It’s the defects with the company that could really prove fatal. Like the new head of Ladbrokes, Mr St Angelo has immersed himself in Toyota’s inner workings to understand the reasons for its product failures.

And there is also little consolation for those millions of people who paid hundreds of pounds for the new iPhone4 only to face antennae problems. News came this week that the man in charge of Apple’s hardware has left the company. Something seemingly went wrong with the quality development of the new product and the resulting bad publicity threatens to tarnish the reputation of one of the world’s most sought after products and, arguably, biggest brands.

These companies are learning the hard way that quality matters and that the defects they’ve identified, although challenging, are more easily remedied than their respective companies’ cultural failures. As Mr St Angelo says of his job at Toyota, his early efforts are already bearing fruit but the job is by no means done.

The wider business world take note.

By Simon Feary, CQI CEO

12 August 2010

Unexpectedly for the head of the body responsible for university admissions, this week the chief executive of the University and Colleges Admissions Service (UCAS), said the squeeze on university places should prompt sixth formers to look at alternative options.

Forecast cuts in university funding, alongside comments such as these from key figures in academia, could signal a shift in policy to a system with fewer university places and an increased focus on skills-based training for school leavers. And it’s a shift that already has significant industry support.

The CBI is among the business groups that has, over many years, called for a more vocational focus in education and in the last week Lord Digby Jones, former leader of the CBI, has lent his weight to the argument and called for a radical rethink in universities focus. Urging higher education courses to deal with “the challenges of today”, he too has said that universities must consider awarding more vocational qualifications and address the skills that graduates will need for the workplace.

Lord Jones said: “A lot of them should look again and say, ‘Could I link in earlier with people? Could I link in with schools better? Could I get local businesses in better? And then can I produce something where someone is better skilled to face the challenges of today which might not necessarily end with the word “degree?’”

Others in the field disagree. Sally Hunt, the general secretary of the University and College Union, said the number of people with degrees is a key factor in the UK’s future economic success and that to compete with other major economies and those in the developing world where the number of young people with degrees is rising, we need to keep pace.

But surely the issue is one of quality not quantity – not simply churning out more graduates but more young people with the right skills?

It is the quality, both of graduates and our vocationally qualified young people, and their collective abilities to understand and contribute to the world of work that will be the key determinant of our future success.

Forward-thinking companies are already taking matters into their own hands. For example, Microsoft has recently launched an IT apprenticeship scheme and hopes to have 3,000 signatories within three years. The company will also give its apprentices the chance to develop their skills further, going on to study foundation degrees and possibly degrees if they want to continue to study.

Could a taste of work and work-based development be the answer for both employers looking for better ‘quality’ candidates and students considering embarking on expensive courses without any work-based experience or the promise of a job at the end?

Simon Feary
CQI CEO

Against the backdrop of huge spending cuts in the public sector, a survey of NHS health trusts has revealed that the NHS is missing out on millions of pounds for the reimbursement of cancer drugs because of onerous paperwork.

Schemes for the NHS to share the cost of expensive new drugs with pharmaceutical companies have become increasingly common but a survey of 31 English health trusts published this week revealed that up to 50% of the costs had not been recovered due to the bureaucratic complexity of the process.

One consultant pharmacist demonstrated the system’s failure most succinctly by welcoming the wider access to new cancer drugs but adding that the reimbursement procedures were so onerous as to make the whole scheme unworkable.

Although benefitting from budget ring-fencing for the moment at least, the NHS, like all other parts of the public sector, is coming under pressure to both innovate and save costs so what does this say about its ability to do both?

When questioned about how the system could be devised to work better, users say that only relatively small changes need to be made, citing the need for form templates and greater flexibility on timescales. Yet, because process users presumably weren’t consulted about the process in the first place, the future of this ground-breaking government and private sector partnership is being threatened.

As the survey author says, the implications are enormous, not only in terms of potentially unclaimed assets for the NHS but the misuse of staff time and the threat to the future access of patients to the best drugs on the market. 

In response to the survey, a Department of Health spokesman said it continued to work with the pharmaceutical industry to make the schemes as easy as possible to implement but put the onus back on the primary care trusts to make individual arrangements on how to deal with the issue of reimbursement.

The difference between those that will succeed and those that will fail will of course be down to their willingness and ability to deploy basic quality management approaches and techniques such as those identified in Deming’s PDSA. It will be interesting to see how many of them can rise to the quality challenge.

Simon Feary
Chief Executive Officer

28 July 2010

Both the coalition and the previous administration had committed to huge expenditure in the area of green technology to deliver a high value economy and create thousands of highly skilled ‘quality’ jobs. Recent days however have witnessed a certain amount of backtracking on the vision to put the UK at the forefront of a green industrial revolution.

Now Cameron is launching his vision of the “Big Society”, funding for the Green Investment Bank that environment bodies were preparing to welcome now looks to have been diverted to other schemes. The latest news is that the Sustainable Development Commission is going to be axed.

The UK’s current funding levels for green technology at £550m per year are far below those of other developed economies and nowhere near high enough to keep up with others’ development.

And it’s not just developed countries that threaten to overtake us in this area. According to Tim Yeo, chairman of the commons energy and climate change select committee, China is investing “furiously” in low carbon technology and could be the economy best placed to profit from carbon reduction targets.

Even in the context of unprecedented public sector cuts, the UK is potentially missing a huge trick here. Green technology is a relatively new industry with enormous growth potential and we may be passing up the opportunity to cash in. And government, as well as industry investment, is key.

A recent report from the Committee on Climate Change predicts that without government support, green technology development could fall into the “valley of death” and never reach the market. So business, which is also facing difficult times, requires greater certainty to invest itself. This impasse endangers our longer-term economic recovery.

But economy aside, cutting our investment in green technology will, as the Committee on Climate Change maintains, also be a disaster for our target to cut greenhouse gas emissions by 80% over the next 40 years. Business has a significant role in this process and it is quality professionals who will work to reduce the environmental impact of their organisations and make them truly sustainable in both senses of the word.

After all, what sort of a “Big Society” will we have in the future if we don’t protect our environment?

By Simon Feary, CQI CEO

21 July 2010

Cutting a body such as the Food Standards Agency does not have to be a catastrophe for the UK, as long as its safeguarding role is preserved and a viable alternative is presented. Saving money is something that we are all striving to achieve, and while it may be that some organisations need to be axed, this should not be to the detriment of the public’s welfare.

It is suggested that the FSA will be split into two: the regulatory aspects will fall under the Department for Environment, Food and Rural Affairs and the nutrition and public health aspects will fall under the Department of Health. This seems to be counter productive – by dividing an adequate organisation in two, aspects of food quality will fall between. Food safety and healthy food are two parts of the same orange and, given that obesity is a growing global concern, the two are inextricably linked.

Health groups are claiming that the health secretary is bowing to pressure from big businesses, allowing them a more permissive environment to sell food that is considered unhealthy and bad for the nation. Whether this is the case or not, standards will certainly be harder to maintain without a single body working to maintain our health.

The FSA was established in 2000 after a series of food scares and deaths from food-borne illnesses throughout the UK, such as the BSE crisis. Since then it has achieved a number of successes, including improved food labelling on processed food and, according to Defra, public trust in food safety has risen significantly. Also, in 2007 there were an estimated 23% fewer cases of salmonella than in 2000.

Compare this to the US where the approach to food quality is more fragmented. Food safety scares are much more commonly in the news, from salmonella in tomatoes to E.coli in bison meat. According to a poll by Deloitte Consulting, 76% of Americans are more concerned about food safety than five years ago.

Given these statistics, should we really be axing a department that has made a lot of headway? To be convinced that scrapping the FSA is a good idea and that the UK can continue to maintain its high standards of food quality, we need to be presented with a clear rationale and an alternative that will work.

By Simon Feary, CQI CEO

14 July 2010

But these quotes only give weight to the misconceived public opinion that health and safety measures are something to be laughed at. By playing down the vital work of health and safety professionals in this way, we are in serious danger of trivialising the practice of preventing hundreds of deaths each year.

In the past three decades the number of workplace deaths in the UK has fallen dramatically. In 1974, 651 fatalities were reported but in 2009, after 30-plus years of the Health and Safety at Work Act, this number had dropped to 180. This is still a huge number of lives to lose, but without the sterling work of those that set the standards for health and safety, many more would have been lost.

Another aspect of health and safety that is often breezed over is the “health” part. While statistics focus on the number of deaths in the workplace, this accounts for only about four or five per cent of deaths caused by work. The rest are testimony to our failure to look after the health of our employees over the longer term. In a world where stress levels are increasingly high, surely we shouldn’t be making a joke of so-called “elf and safety”, but taking the matter seriously and doing all we can to protect people going about their job?

And if we look at this from a productivity viewpoint, there is an equally strong argument. According to the Health and Safety Executive, last year 29.3 million working days were lost due to work-related ill health and injury. Apart from the human cost, this is not something that the UK is in a position to laugh at given the current state of the economy.

There are certainly many examples of health and safety legislation being ”over interpreted”, but we just might be forgetting the countless times that health and safety measures have made the all-important difference between life and death.

By Simon Feary, CQI CEO

8 July 2010

The first step is better leadership of this process. With all due respect to the prime minister and the chancellor, however dire public finances are, that was lousy leadership and not calculated to engage anyone. The whole subject needs to be reframed as a challenge and one that will not necessarily mean massive redundancies – if done properly.

My experience working with public sector organisations is that the top-down approach guarantees that frontline services will suffer. It doesn’t have to be that way.

The recent book Visual Transformation by Dave Gaster shows scores of examples of the huge savings possible when the focus is on improving the service to customers. Standard continual improvement approaches that are already widely known about can accomplish huge savings if initiated in a positive way.

Add to conventional improvement methods what is called a solutions-focused approach working back from the frontline services to customers that we all want protected. A solutions-focus does more of what is working for those people, in that place, at that time. Use the knowledge, passion and creativity of the people in the frontline. They can do it.

In summary, first, the politicians need to provide inspiring visionary leadership. Second, they need to encourage frontline staff to use the improvement methods already available. Third, they need to insist that all this work starts with the aim of improving service to the users/customers. Finally, they must take a solutions-focused approach to doing more of what works. It can be done! Provided that is, they don’t cherry-pick; all four must be done. This systemic approach requires all of the elements to be in place.

By Alan Clark, ACQI

5 July 2010