Alec Daly Deputy director general, Confederation of British Industry and companion of the IM 'Work already carried out out by IBM and the LBS showed that the UK and Germany had an equal proportion of world-class companies (around 2%) and that we were not too far adrift on 'contenders' for world-class. Where we compare badly with the Germans, however, is in our percentage of 'punch bag' companies, those that have very low standards of practice and equally low performance levels'
Put yourself in the boxing ring and do a few rounds with the CBI PROBE benchmarking tool. Discover whether you are a world-class manufacturing company, a contender, or a punch bag.
PROBE, Promoting Business Excellence, was launched by deputy prime minister Michael Heseltine at the CBI National Conference last year. Its aim is to help the UK manufacturing base realise where it is and where it should be. To deliver PROBE the CBI has developed a partnership with IBM Consulting Group and the London Business School (LBS), and together we are working to raise the competitiveness of UK manufacturing industry. Work already carried out by IBM and the LBS showed that the UK and Germany had an equal proportion of world-class companies (around 2%) and that we were not too far adrift on 'contenders' for world-class. Where we compare badly with the Germans, however, is in our percentage of 'punch bag' companies, those that have very low standards of practice and equally low performance levels. In this region our numbers are almost double that of Germany. This is an issue that must be addressed if we are to compete successfully in global markets.
Within the world-class companies that have been surveyed are large, medium and small players, operating in different sectors of manufacturing. Since our business environment is relatively benign - our exchange rates are competitive, interest rates are reasonable and inflation is at an historical low - why, when we have such world-class performances across a broad spectrum of our industry, are we not all world-class?
What is it that allows certain companies to solve problems, succeed, prosper and grow while others struggle? PROBE helps you analyse and answer these questions.
Following a trip to Japan - a country that is now piloting PROBE - I found some disturbing indicators of what the Japanese are now planning in terms of remaining near the top of the competitiveness tree.They are gearing themselves up for another step change to reduce costs substantially.
They believe that through new approaches to engineering and to production and distribution, costs can be cut by as much as two thirds. They are also attacking lead time performance and intend to deliver products in one tenth of the time of the West. This is what UK manufacturers must address in the effort to be world-class.
PROBE helps a company address its practice and performance and identify where it is in the spectrum of manufacturing competitiveness. It looks at all aspects of a manufacturing organisation, concentrating on areas such as organisation and culture, the logistics chain, how manufacturing systems are managed, what quality control exists and the effectiveness of new product development processes. It also analyses how the business performs and what sort of customer satisfaction levels are in place. We have recently added some questions to analyse investment performance, and we have taken 12 questions from the CBI benchmark on environment, health and safety, to build up a profile of how UK manufacturers address this important area.
There are over 1,000 company sites currently in our database. They include sites within the UK and mainland Europe - in particular, France, Finland, Germany, Holland, Spain, and Switzerland. IBM is working to expand the database internationally, and was closely involved when the CBI started its pilot in India with the Confederation of Indian Industry in August. Strategically we hope to encompass most of the major industrial nations worldwide. It is against this background that we are able to compare and contrast international experiences.
The process starts with the formation of a multi-functional, multi-level team, a great strength of this programme. The team gathers together and discusses the 70-plus questions. The questionnaire is facilitated by a trained expert in manufacturing best practice who at the end of the day feeds the results into a laptop computer. The analysis is fed back to the company there and then. This analysis not only identifies the company's position through examining its practices and resulting performance, it also identifies areas where the company needs to concentrate and improve, in order to move closer to the world-class zone.
Companies which have low practice and performance levels usually need to put control and predictability into their business. They have to know where to start, and this begins with executive vision and the recognition of what needs to be done. Employees are key in this particular area; their involvement is paramount to moving change forward. Companies where practice leads performance are classified as 'inhibited'. They must focus on ensuring that the practices that have been installed deliver the required performance.
Typical areas to address are those of skills and training, team-working, benchmarking and reducing hierarchical structure. There are also are those companies where performance leads practice. They get results but at a high cost. What they need to concentrate on is putting effectiveness and efficiency into their business, looking for cost elimination and business process ownership.
Companies where good practice equals good performance are en route to world-class status but still need to look at service excellence. This will include adopting either the Baldridge or the European Foundation for Quality excellence models. These sites also need to look at development of their environmental and social responsibilities.
World-class companies need to stay ahead. They have to find new ways to delight the customer and this is the approach the Japanese are now taking. They have to look for step changes in their costs, identify how to take time out of new product development processes. A 'key conclusion' analysis highlighting greatest weaknesses acts as a signpost towards prioritising corrective action and here the CBI's Competitiveness Forum Group can be very helpful.
So wherever you perceive yourself to be in the world class stakes, PROBE is useful. Its methodology is hugely enjoyable for the teams taking part and tellingly accurate in the results it produces.