Fox calls for urgent action on skills to avoid tipping point

Posted on 22 Nov 2010 by The Manufacturer

Chairman of PP Electrical Systems accuses industrialists of inertia and complacency as UK manufacturing languishes in 17th place on the international skills league table.

David Fox of Walsall-based Power Panels Electrical Systems (PP) believes competitiveness is being damaged because companies are failing to invest in building fundamental workshop skills. “Each and every manufacturing operation is totally dependent on first rate technical skills on the factory floor,” he says. “Unless you train them, you will never have anything better than a second-rate business.”

“It is a sad truth that, despite years of effort by government, trade organisations and business, most of the generally available training programmes will never live up to expectations. And it is an even sadder truth that so many business leaders still expect the Government to pay to train their employees instead of realising that it is entirely their own responsibility.”

Fox is calling for business leaders to join him in halting this slide in UK skills. He says the evidence is irrefutable that, without urgent action, the UK’s future as a manufacturing nation is beyond recovery. As one example, Deloitte’s 2010 Global Manufacturing Competitiveness Index ranked the UK at 17th – below obvious contenders like China and USA but also below India, Brazil, Mexico, Thailand, Poland and the Czech Republic. In five years it expects the UK to have slipped further to 20th position.

This Deloitte report identifies that access to talented workers capable of supporting innovation is the key factor driving global competitiveness at manufacturing companies. This comes well ahead of more “classic” factors typically associated with competitive manufacturing, such as labour, materials and energy.

The UK Commission for Employment and Skills, established by the government, paints an equally dismal picture. Its report, Ambition 2020, says that 10 million people need to improve their skills if the UK is to achieve its ambition of being in the top eight countries in the world for skills, jobs and productivity by 2020, but predicts that the UK is likely to achieve just half that number. It ranks the UK at 16th worldwide.

“Manufacturers are relying on a chaotic mass of inadequate courses paid for out of the public begging bowl,” says Fox. “And they are living in a fool’s paradise if they believe they can train their employees this way and compete against the skills of countries like Brazil and India that are now beating them hands down.”

Raison d’etre
Mr Fox has severe doubts that any of the current initiatives by the advisory bodies are capable of addressing the problem. “They are in an invidious position: they exist to define general training needs and to channel government funds to meet it. If they encourage businesses to break loose and answer their own skills needs in their own workshops using their own money, half their reason for existence is gone. Yet this is exactly what is needed.”

He is calling for a totally fresh approach to skills training. “We still have the capability to be a great manufacturing nation and we need to enthuse British manufacturers to get off their backsides. We have to establish a system of mentoring and coaching between companies. In this country we have the mentality that if we just practice improvement disciplines such as Lean and Six Sigma, we are going to get good. It isn’t true.

“You need someone to guide you who’s done it before. We need to take a lesson from sport. You have to know how to use all the clubs in the golf bag to play a good game and you need to know how to use all the business tools to get a good result. Olympic gold medallists usually win because they have been coached by those who have stood on the podium before them. British manufacturers can go for gold as well – but it needs a radical change of attitude.”

Fox’s own company provides evidence that a strong, sustained focus on training is a successful strategy. PP makes complex electronic and electro-mechanical assemblies and is performing well despite the recession. It has doubled its turnover since 2008 and this year is exporting 20% of its output to Germany, the most quality-conscious market in the world. In 2000, it set up its own training school and every member of the workforce now spends an average of 200 hours per year on training and improvement projects.

PP recently opened its doors to other companies for similar training based on their own business needs. Many are from completely different industries. Fox makes the point that his call for action is not a covert request for more customers: “I am simply pointing out that coaching works. For example, we saved the MoD 17,500 man-hours through work we did with the Defence Support Group. If we extrapolate those kinds of improvements across British industry, we certainly wouldn’t be in 17th place.

“And it can be done if businesses square up to the fact that training is not a cost to the business. It is the investment capable of making a greater return than any other.”