Practical approach to riding the tiger

Manufacturing: a fresh initiative aims to develop `best practice' for global competitiveness

THE Department of Trade and Industry is backing a "practical development programme" in an effort to help British manufacturers combat the threat from and exploit the opportunities provided by the rapidly growing Asian tiger economies.

The programme, which will be launched later this year, is to be headed by Chris Voss of London Business School. Leading industrialists will attend a series of workshops designed to develop the key best practices set out in a report published last Monday by the DTI, the Foundation for Manufacturing and Industry and IBM Consulting Group.

This document, titled Tomorrow's Best Practice, brings together the thinking of several internationally noted academics and 80 British business leaders, led by Tony Hales, chief executive of Allied Domecq, who attended a symposium in Birmingham last September. The event examined the globalisation of world trade and the growing importance of such countries as Singapore. In particular, it looked at the effect of the considerably lower labour costs and longer working hours, by comparison with the West, in such countries.

Among the best practices identified as essential for combating this threat are: the development of appropriate performance measures, including non-financial as well as financial indicators; realising the full potential of employees; determining the factors that give companies control of their markets; and defining the leadership traits of middle managers. The results of the workshops based on these and other issues will be spread around as many manufacturing sites as possible.

The initiative was born out of the recognition that however important today's best practice and techniques are to current competitiveness, they cannot guarantee the future in an increasingly dynamic global environment. It backs up the statement in last year's competitiveness White Paper that "in an increasingly global market there is no hiding place, no comfortable backwater, change will not stop and others will not rest."

Mr Hales said: "Tomorrow's Best Practice is about forecasting the way ahead, so that we can lead our competitors rather than follow them into the next century.

"Innovation is critical to improved business performance, and Tomorrow's Best Practice is innovation in practice. It is about creating the way forward rather than following the leader."

Noting that even the Japanese are coming under threat from the likes of South Korea, Malaysia, Hong Kong and Singapore, as well as from India and China, the report suggests that British companies need to look further than Europe.

Although UK manufacturing exports are growing, at the end of 1993 more than half of our manufacturers' output went to the European Union, while only 10 per cent went to the Asian tigers.

A combined focus on short- and long-term strategies and on mass customisation as a successor to mass production, and a heightened emphasis on customer satisfaction as a competitive weapon, were among the techniques used by the Japanese that should be adopted by British companies wanting to survive on the world stage, the report says.

Professor Voss said: "American and Japanese businesses are able to manage the short and long term simultaneously. This is a skill that British managers urgently need to master. The willingness of other countries to go for the long term - rather than just for a quick fix - is paying dividends."