UK: Heller on management - Anachronistic attitudes. (1 of 2)

UK: Heller on management - Anachronistic attitudes. (1 of 2) - There is little hope of a renaissance in manufacturing when only lip service is paid to issues like quality, says Robert Heller.

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Last Updated: 31 Aug 2010

There is little hope of a renaissance in manufacturing when only lip service is paid to issues like quality, says Robert Heller.

Great Britain Manufacturing Ltd has promised a turnaround, even made a comeback, several times post war. The revivals have proved mere blips in a general process of relative and in some cases (cars, motorcycles, textiles, shipbuilding, steel, etc.) absolute decline. It goes against the grain to believe that the process is inevitable and irreversible. But are there any original sins that condemn British manufacturing management to perpetual underperformance?

In the past this was certainly true: the fragmentation of car plants, shipyards and steelworks, many in the wrong locations for modern logistics, tied managers' hands behind their backs. Old industries like shipbuilding and textiles were in the front line facing new competition that has proved heavily damaging even to western suppliers based in far more successful economies. The latter, however, owe their success in part to better play of their strongest manufacturing hands. Britain's weak cards have naturally lost, while, with few exceptions, the stronger hands, unnaturally, have been weakly played.

In consequence, today's UK manufacturers face a grave disability. In war, it is said, you need a three-to-one superiority to win a frontal assault. Whether or not that is true in business, you certainly do not want a three-to-one inferiority - and in many major industries (electronics, electrical equipment, chemicals, cars, etc.) that is roughly the British position vis-a-vis Germany, let alone the United States and Japan. This undersizing has a snowball effect: not only do the lead manufacturers have an inadequate home base - so do all their suppliers. And in world competition the bigger they are, the harder they can rise.

Take the example of Robert Bosch, the world's 59th largest company: not only is Bosch bigger, at $16.3 billion of sales, than British Aerospace (of which the UK-owned car industry is now a mere part) but it is also larger than BMW, one of its prime local customers for automotive parts. But the quantity of a top downstream manufacturer reflects its quality: and here another snowball effect applies. Demanding customers lay down exacting standards for suppliers: weak UK customers get weak suppliers, and the two feed off each other.

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