Management in manufacturing has changed dramatically over the past 50 years, to become more efficient, more considerate of its employees and less bureaucratic. Yet there are still lessons to be learnt and investment to be made if manufacturing is to reclaim pride of place on the global stage.
When I started out in the 1960s, graduates were fortunate to be thrust onto the shop floor, which not only laid the foundation for a lifetime of being comfortable in dealing with shop floor matters but taught them so much about management. In contrast, senior managers seldom visited the shop floor. They regarded themselves as administrators of the people who reported to them. Rather than having a clear executive line of responsibility, all the support functions - personnel, production control, engineering, etc. - had direct responsibility, with the result that the foreman sat in his office with his bowler hat and was not actually responsible for anything. My generation reversed this by establishing a clear executive line from the managing director to the foreman, with guidelines on when to seek advice or assistance from support functions.
It is still important that this executive line is kept short. Even when I was responsible for 100 companies in 26 countries, I became uncomfortable if the machine operator in Australia was more than five levels down from me as CEO in London.
This problem still persists. In the NHS, the foreman (matron) was dismissed altogether, which often resulted in wards being managed by numerous support departments with no clear line of authority.
There is a balance to be struck between creating a slim, efficient organisation and having appropriate managerial structures to support and lead employees to provide excellent service.
In manufacturing, in the 1980s and 1990s, we realised we had to address the top-heavy layers of administration, turning companies that thought they were in a twilight industry into world leaders. Large increases in output volumes drove export revenues and profits which, in turn, supported the increase in the service sector and enabled us to maintain numbers of shop floor personnel. There is much talk currently regarding the 'cuts' and how this is going to reduce front-line capability. It is vital to understand that you can make substantial reductions in staffing and bureaucracy without affecting front-line operations. While we're at it, perhaps we could put the matron back.
While removing unnecessary bureaucracy is important, it should also be remembered that clear systems and processes are vital in manufacturing. As a young graduate apprentice in the early 1960s, I worked in a large plating shop in Staffordshire, with a stannous cyanide tinplating vat. I discovered that the life expectancy in the shop was 35. The personnel manager said: 'Yes, some of them live a little longer and some don't live as long as that.' This shocking state of affairs had to change. Two decades later, six to 12 months would elapse between lost time accidents, which were recorded and investigated thoroughly from the board downwards, with preventative actions taken for the future. However, the pendulum then swung too far and an army of lawyers became involved at huge cost.
Management is conscious of the importance of safety; but we have to find a way to swing the pendulum of health and safety back to somewhere more sensible.
Manufacturing also needs to address the issue of environmental responsibility. The heavy cost of renovating and decontaminating heritage industrial sites falls on the current incumbents. This discourages new arrivals, making them prefer to build factories on greenfield sites. We need to remove this discouragement so we can use our industrial wastelands effectively.
Some say that we don't need manufacturing any more, despite the fact that it provides employment and improves living standards. In 1997, Britain was producing more than it ever has. A slice of this has been lost during the past 14 years; some from companies moving manufacturing to supposedly cheaper parts of the world; some through owners selling UK companies to their overseas competitors which, come the recession, found Britain the cheapest place to close factories and cut back on capacity. We are becoming the only country in the world that would allow this to happen without batting an eyelid.
At Luxfer Group, where we have a leading global market share in aluminium and composite gas cylinders, we have built two advanced factories in Nottingham and Los Angeles. With the latest production technology, we have reduced the total man hours per cylinder to 20 minutes, making us globally competitive. By having development departments on site, we can keep ahead and, most importantly, control our intellectual property.
The crucial work of increasing productivity through developments in technology will continue. We can be globally competitive. We have the capability and the technology. With the right management and government support, we can once again be a global leader in manufacturing.
Peter Haslehurst is the chairman of Luxfer Holdings. He has been a managing director/chief executive and chairman in the international manufacturing industry for 42 years, involved in metals, chemicals, fluid technology, aircraft and defence. He was made Eisenhower fellow from Britain in 1980, an honorary doctor of science at Loughborough University in 2008 and is a Freeman of the City of London. He is chairman of the CMI review panel for manufacturing.