Does UK manufacturing need more patriotism?

"Make it in Great Britain"  Credit: bisgovuk

At the EEF Manufacturing Conference in London today, Ed Miliband spoke about a need to be more patriotic about manufacturing in the UK.  Unfortunately for the Labour Party leader, protectionism isn’t as easy as it used to be – so how can we be more patriotic without violating our international trade agreements?

Suggestions from Mr Miliband and others include wider use of the “Made in the UK” mark, a greater effort to find acceptable ways for the government to give manufacturers more money (e.g. greater capital allowances), and even better education for the next generation’s workers.

The last suggestion holds considerable promise, though as it stands it is too simplistic.  Education focuses too often on learning what is already known.  Worse still, engineering is considered irrelevant to the country’s success by many, and anti-capitalist protests suggest that among the young, the whole idea of gaining personally by bringing innovation and growth to UK’s manufacturers and services is highly suspect.  By failing to educate young people effectively about the opportunities for social, cultural, and economic advancement for all (as well as individuals) that engineering, innovation, and enterprise bring, we are letting them down.

I recently visited a highly respected and academically league-topping independent school for girls whose syllabus in Design & Technology incorporated only cookery and sewing – not even covering food safety or textile engineering.  The idea that bright young people will somehow learn about innovation, engineering, and related subjects outside the curriculum is fanciful.  A few may be so lucky, but most will not stumble across the right sources of inspiration, and will presumably grow up considering technology to be wholly irrelevant to them.

What should we be doing?  First, young people need to learn about the mechanics of capitalism, and how money is used for investment, which can drive innovations and advancements that create jobs, better and cheaper products and services, and benefits of all kinds touching every part of our lives.  This sounds like a very basic lesson, but it is one that is clearly missing in the discourse of many young people today.

Second, young people – as early as possible in their education, i.e. primary school – should be introduced to innovation as something that they can get involved in, and where they can have impact.  First Lego League does this for children from the age of 9, involving them not only in Lego robotics (a good draw), but also in product and service innovation projects which have nothing to do with plastic bricks.  An engineer involved as a referee remarked to me recently that the youngest teams are often the best – and it’s important to capture their interest while they are still young enough to “think outside the box” relatively easily.

Third, and perhaps most difficult of all, we need to teach teachers about manufacturing and industry.  How can we expect them to impart an enthusiasm for an activity of which they have little or no direct experience?  How do we think they will answer their pupil’s questions?  They are no more likely to absorb this understanding by chance from their private reading and hobbies than their students are.

These days, many young people who go into manufacturing learn everything they know on the job, from their colleagues and superiors.  While this is an excellent way to learn, it is not adequate on its own – it ensures that firms carry on doing things exactly the same way they always have.  In order to innovate and compete effectively, manufacturers need employees who have a wider experience and understanding than they can get solely from studying traditional methods and practices.

What does this have to do with sustainable business, the subject of this blog?  For business to be sustainable, it must not rely on government support or protection.  It needs to be able to survive on its own, and to adapt to new conditions.  Ultimately survival depends on the ability to change.  Firms will not be able to do that if their staff think innovation is something other people do, growth is something legislated by governments, and that design and technology are about copying best practices that their elders pass down to them.  UK manufacturing has a proud tradition of radical innovation, risk-taking in investments, and visionary change.  If there is anything to be patriotic about it is this – as a cultural entity, UK manufacturing has led the world, and with capable people, can continue to do so.

Do more with less – and save £23 billion

That, at least, is the conclusion of a DEFRA study published in March.  It found that for very little cost, UK businesses could produce just as much as they do today, while saving £23 billion in costs.

Given our current economic troubles, it is surprising that this hasn’t been headline news.  The topic is called “resource efficiency.”  The UK government has been trying to encourage firms to improve their resource efficiency by providing advice and grants, and even the European Commission has urged firms on, claiming that “Increasing resource efficiency will be key to securing growth and jobs”.

These claims are entirely realistic.  There are multitudes of case studies available through government agencies and in business school texts, and of course many cases have never been documented.  Just tackling the production of waste products alone – without considering any other efficiency savings – could produce big savings to the bottom line.

The fact is that the funding interventions from the government have so far been very small – less than £100 million per year of the Business Resource Efficiency and Waste scheme.  However, they indicate big potential – every £1 spent by the government achieved an average £1.64 in additional sales and £3.20 in cost savings – and those are the benefits in just one year.  Unfortunately, the budgets for this work are now being cut.

As the ENDS Report has observed, “government will have to depend on businesses stepping up their own efforts independently, without relying on public funds for advice and support.”  Increasing landfill taxes are meant to encourage firms to address their inefficiencies, but waste handling costs represent only a tiny fraction of the true cost of waste.  Moreover, there are many more inefficiencies that have nothing to do with the waste stream.

When so many companies have tackled their waste stream, why have so few put the same energy into efficiencies – that is, into not producing the waste in the first place?  It’s often no one’s job – we assume our employees will identify and eliminate waste if they can, but no one is tasked or measured on this.  And why not?  Well – since the cost of producing waste, or working inefficiently, is almost never measured, those in charge don’t realise it deserves an explicit place in their management structure.

For those companies that grasp the opportunities in resource efficiency, the prize will be higher profits, greater security, and growth.  The government will no longer take the lead, though it is a wonder that it was ever necessary.  Given the size of the prize, it is time more firms put resource efficiency on the CEO’s agenda.

How do you escape the “domino effect”?

In the second episode of Michel Roux’s Service, the owner of an Indian restaurant in Birmingham describes the traffic jam in the kitchen as a “domino effect”. Diners have been seated late, and have placed their orders late, so a bunch of orders come into the kitchen at the same time. They’re readied as quickly as possible for the servers to take to the tables. The servers struggle to get them all out as quickly as possible. But the net result is that a lot of people get their food later than intended, and the problems carry on through the rest of the evening.

The domino effect is familiar enough to all of us, but how does it work? It is in fact a potential problem in all systems. On the programme, the problem seemed to occur at “the pass” – the point where orders were coordinated between front and back of house. In fact, the problem started when a party was mis-seated. When the people who should have had their table turned up, this had a knock-on effect on another groups – a total of three groups were re-seated. This in turn affected the timing of the orders, which all came into the kitchen at once. This meant the orders were ready to serve too close together for the servers to get them out promptly. As the service backed up, more and more orders were being delivered late, affecting far more parties than those originally involved. This expanding ripple of service problems is what we call the “domino effect”, because one problem has a knock-on effect on every process step “downstream” of where the problem occurred. Often, the most visible effects of the problem are at this downstream end, and it’s not necessarily clear to those affected just how far back in the processes the dominos had started to fall.

I saw a beautiful demonstration of it at a coffee shop recently, and it will show you how this famous effect actually takes place, and what you can do to change it.

In the coffee shop in question, a branch of a major chain, I observed people being served coffee between 10-11am. They queued at a counter, where a member of staff took their order, gave them any food part of their order, and took their payment. They then moved on to the end of the counter, when they collected their coffee from the barista. The barista got her cue about what to make from the staff member at the till as the order was taken.

The barista could make a coffee in an average of just over a minute. In the course of 40 minutes, 29 orders were taken, so she had enough “capacity” in terms of time to make all those orders, with time left over.

Had the customers come in like clockwork every minute or so, and had all the coffees taken an equal time to prepare, she’d have probably done fine. However, clients don’t come in like clockwork – they come in bunches, with pauses in between. And some coffees are complicated, or get spilled. Also, there were small disruptions – from customers wanting to ask a question, from a member of staff who came through to do some cleaning, and from the staff member on the till having a complicated food order to attend to, so that she had to rush to catch up taking orders, and give a bunch of orders to the barista at once.

This is why the domino effect comes into being. When things work like clockwork, with very little variation, you don’t see it much. Where you see it is in naturally chaotic systems – for instance, those that rely on human behaviour and on chance. The natural variation in these systems puts pressure on the links in the service chain, and if capacity is tight for even a short period, it can have a knock-on effect (a domino effect) on the chain long after the initial cause is gone.

Here’s how my observations went. In the first 15 minutes, only three people came in, and all were served within three minutes of walking into the shop. Then, at 10:16, two people came in – separately, but within a minute. The first was served within a minute, and the second within two minutes, so they went away happy. Then at 10:18, just as the second was getting her coffee, three more people arrived. Unfortunately the first person’s coffee was complicated, taking a full two minutes. The second was normal, but the third one took 2 minutes as well, so this last person wasn’t served until six minutes after she walked into the shop.

Meanwhile, another three people had come in. Although their coffees were quick to prepare, the barista was already behind, so they too had to wait six minutes for their coffee. While their coffee was being made, another three people came in. And while their coffee was being made, three more people arrived. These people all had to wait 3-4 minutes for their coffee. The service times were also lengthened very slightly by the cleaning staff passing through, and a customer asking a question.

At this point things got really busy. Between 10.31 and 10:40, 13 orders were taken. This was more than the barista could deal with at the speeds she’d shown up to now. Three came in at 10:31 alone – and of course the barista had started out a few minutes behind. The first was served in 4 minutes, but all the rest took 6-7 minutes from walking in to getting their coffee.

As long as people don’t mind the wait, this would have been fine - but now the domino effect began. Some of these customers had small children who quickly got bored and started acting up. Some people were so keen to sit down that they went and put their stuff on chairs, before rejoining the queue, to reserve a place – which annoyed customers ahead of them who weren’t doing it. The seating process was becoming disrupted, and that was making clients unhappy.

The biggest problem with the domino effect is that it's most likely to cause service failures at the times when you have the most customers, so even if it happens rarely, it affects a disproportionate number of your clients.  Moreover, it affects people who had no idea what originally happened - to them, it just looks as if bad service is a normal part of your business.

If there is a domino, does this mean the service system is bad? No – but it does show that the domino problems have not been planned for. Every system with more than one process step will get domino effects when demand is high and there is a disruption to the regular working of the system. A good service team understands this, forsees what the domino effects may be, and plans what to do to stop the domino effect in its tracks.

Preventing the problem is not just about throwing capacity at it – that just eats up all your profits. Instead, the plan for preventing domino effects will be to focus on the spots where capacity is a problem, and change them to make it easy to stop the domino effect before it damages your business.

One approach is to tackle the bottleneck resource that has caused the problem. In the case of the coffee shop, the barista was the key to the speed of service. Once the coffee-making got really behind, the whole system was stuck until customers stopped coming. And no one wants customers to stop coming. So what could have happened was to expand the coffee-making capacity:

• Batch processing: The espresso machine could make three coffees at once, and in some coffee shops, you will observe the barista taking advantage of this, setting up and running three espressos at the same time if there is a queue. While they are dribbling out, she can work on the other steps of the coffee preparation.
• Multi-tasking: In other coffee shops, you will see more than one person working the espresso machine. Typically one person will be full time on it, and someone else will be full on the till, but there will be floating capacity – someone who can pitch in to whatever part of the service chain has got backed up, and relieve the pressure, while doing other things (like cleaning) when the pressure is off. Where there are several different services on offer – filter coffee as well as espresso, tea, hot chocolate and so on – this may be particularly effective.
• Personal service: Still other shops will have one individual dealing with each customer – taking their order, getting their coffee, and so on. That way, if one customer is taking a very long time, the queue will keep moving because other servers will be dealing with the next customers. This is typically not an efficient way of working, because people will get more done if they are just doing one part of the process, rather than the whole thing. However, it may well be appropriate where there is very little in common between one order and the next, and where self-service is an option, for example in fashion stores.
• Productivity: Finally, rather than dealing with the systems, many coffee shops would address the underlying problem first: the slow speed of coffee production. The barista in this shop was slow compared to some of those I’ve seen in busy urban cafes. Experience and an effort to make her motions speedier and more accurate will no doubt help this barista serve customers more quickly over time. 

Another approach is to deal with the effects rather than the cause. Here, the principle problem for customers was the combined wait in the queue and risk of not getting seated. Some shops deal with this by avoiding counter service altogether and seating customers before they are served. But even with a counter service, some coffee shops will start taking orders right through the queue, and telling customers to have a seat, and that they will be called when their order is ready.

Each approach will be better suited to some contexts than to others. The point is that the service team needs to have a well thought out plan that suits their business and their customers. They need to know in advance what to do, so that when a disruption occurs, they can take action straight away.

How could the young people in Michel Roux’s care have dealt with their own domino effect? The problem was in serving, so as with coffee shops, they had some obvious options:

1. Used the order-taking process to even out the flow of orders going to the kitchen
2. Move people temporarily from other roles to serving food to the domino tables
3. Batched the serving, for instance by getting a trolley that would hold the orders for many more people than a server’s arms can deal with

Each of these options has advantages and risks. They didn’t spot the problem early enough for option 1 to be useful, and option 3 may also not have been possible given the equipment the restaurant supplied. In the event, the young people chose option 2 – they took their receptionist off the door once the restaurant was full. However, their biggest problem was that they appeared not to have a plan. They did not know what the knock-on effects of their actions would be, and the whole of the evening was spent in crisis management. With a plan, they may have made better decisions, and could also have told customers what to expect.

The domino effect is unusually damaging because it takes a small problem, such as a complicated cup of coffee, and turns it into a service failure for many more people who should never have been involved. Because its effects last far beyond the original incident, it is often hard for staff to remember what the original cause of the problem was, and the rush of dealing with its effects makes it hard to stop and think the issue through. However, by planning in advance with a system that will lessen the effects of a domino incident, businesses can help improve their service to all customers, and deal better with the variability that is natural to customer-facing businesses.

Why Michel Roux Jr won’t help you improve your service

Michel Roux’s new TV series, Service, tells the story of his efforts to train eight young people to serve customers to the highest standard.  The first episode recounts their introduction to the basics, especially presentation and attitude.   While they are reasonably well turned out, attitude is an obstacle for many of them.  Naturally their first effort at service shows their inexperience and youth, as well as their struggles to work as a team at this early stage in their training.  This makes for entertaining reality TV.

Yet while the commentators will no doubt focus on the more shocking spectacles in the show – the young man who swears, the underconfident teens in tears, the desperate failures of their first service efforts – there is a related issue that is not front-of-show: the use of systems to deliver great service.

A system is a deliberately designed set of procedures or operations to produce a planned outcome.  There is no doubt that Roux knows all about systems – his maitre d’ says to the trainees at the end of the programme “I gave you my system, and you didn’t use it”.  Roux describes the performance of his waiting staff at la Gavroche as “like ballerinas” – in other words, working in a choreographed way, to a plan.  He also describes the outcomes – the service times and standards – but it would be intriguing to know what system he uses to achieve them.

Roux may never let us in on the real secret of his current system.  However, this is not necessarily an impediment to those who want to produce service like his, because each customer environment will need a specific system designed for their particular resources and their intended customer experience.  The ideal system will produce the standard of service intended – in terms of service times and accuracy – virtually every time.  Errors and failures against the standard should ideally be measured in terms of times per million interactions.  However, in the worst service environments it is unfortunately more meaningful to talk about errors for every dozen interactions.  A well designed system would change this.

If this ideal sounds unrealistic, consider the dabbawala, a food delivery service in India where around 5000 “dabbawalas” carry around 200,000 lunches per day from the homes where they are made to the correct recipients at their work places.  They have been found to make fewer than one mistake per six million deliveries.  Moreover this is done without the benefit of IT systems or complicated management structures.  Instead, the service relies on a very simple but effective system of codings and procedures to provide their service.  For more about this exemplary business, see http://www.mumbaidabbawala.org/index.html.

Of course, the specific procedures – how to load and unload trays in the 20 second window while a train stops at a station, for example – are not going to be relevant to most businesses.  What is very relevant is this – the dabbawallahs have discovered ways of working that allow them – within the considerable constraints of their environment – to deliver and collect lunch tiffins with the utmost accuracy and timeliness over an enormous geographical area at very low cost.

So how can you design a service process that delivers to such a high standard?  The design process itself is in fact a cycle of continual learning and improvement.  It works like this:

1. Decide on the standard you will aim to achieve – for the dabbawallahs, this is 100% accuracy of delivery during the lunch timeframe, but yours will depend on your customers’ expectations and desires
2. Map out your current process and measure the standard it delivers in practice
3. Experiment with changes to these procedures – one at a time – and repeatedly observe and measure to find those that bring you closer to your standard
4. Decide which new procedural steps you want to adopt permanently
5. Train everyone involved to the new procedures
6. Go back to step 2 and keep going through the cycle until you have achieved your standard consistently through the system you have designed.  At that point, consider whether you want a new standard.

Figure 1: The Process Improvement Cycle

This sounds simple – but it has very significant consequences for management.  What this approach requires is a change of managerial approach from the bureaucratic (making sure everyone follows procedures) to a more holistic, scientific style.  Management responsibility expands to include all those steps that lead up to the agreement of procedures, as well as ensuring they are then followed.

Will Michel Roux reveal to us how he developed his world class restaurant service to the standard he achieves today?  Of course not – it probably counts as a trade secret, and in any case the antics of the young people make for much more entertaining viewing.  But if he did, it would probably do more to change the levels of service that our businesses achieve than any number of prime time reality TV shows.