This snapshot taken on 26/07/2008, shows web content selected for preservation by The National Archives. External links, forms and search boxes may not work in archived websites.
Rt. Hon. John Battle - Former Minister of Energy and Industry (May 1997 - Jul 1999)The ACTIVE Conference |
|
I am here to really support you, encourage you and underline that our Government is behind the work that you are doing. Not least because I think the word ACTIVE itself can capture the imagination and drive an agenda forward into the 21st Century. I come from Leeds, where we were told on the television, on Question Time just two weeks ago, it is ?an old textile town?. I have to emphasise that the city I come from has been engaged in engineering for the whole of the 20th Century and will remain in engineering as we engineer the solutions for the challenges that we face in the 21st Century. When I protested to the BBC, someone at the other end of the line said to me "well, there is no need for engineering and the old manufacturing skills now is there?" I was tempted to suggest without bridges, machines etc. the future is hard to envisage. The following programme that night was a kind of a keep fit class. It was saying the thing we have got to do is to keep ourselves "active", particularly when we got over 40 so you don?t seize up. A bit later, I flicked across the television channel again and saw a science programme which stated that we only use 13% of our brains in our lifetime. It struck me that, perhaps, we need some exercises which stimulate the use of brains and imagination and build in systems which quickly push our thinking and ideas further forward. ACTIVE is not just a slogan or acronym - you are engineering new solutions to the need to drive the agenda forward, achieving competitiveness through innovation. I think that it ought to be really a banner of how we address the challenge of global competitiveness. The challenge that we all face as we face the 21st Century is to find new and better ways of doing things to help us achieve that competitive edge. We have to do it in an age where the pace of change around us is relentless and will increase. Recently, I was informed that a web year is equivalent to something like three months, after which the information becomes dated. We are in an age of transition as we move from the physical age into the new digital and information age. The way we meet the challenge of competitiveness is through creativity, innovation, new ideas, new products and processes. Our Government is committed to help companies here in Britain compete in world markets on these terms. Peter Mandelson the Secretary of State will be shortly publishing our DTI White Paper on Competitiveness to draw these themes together. This will set out the Government?s policies towards support for business in the long term, highlighting the role of Government in supporting what would now perhaps be described as the move towards that knowledge based economy. These days, all companies have to operate globally and in opening world markets. In this economic environment, obviously, competitive advantage lies with knowledge. I want to suggest that that applies to traditional sectors as much as new sectors, to manufacturing, however defined, as well as services. It applies to the management, design and the build of plant as much as it does to the retail stores in the high streets. The notion that the knowledge driven economy is just about a few new high tech industries is actually false because knowledge globalisation already affects production and marketing development processes right across the whole range of our work and commerce. In the UK we have a strong heritage of engineering excellence, expertise and knowledge, which we sometimes understate. We are known for our technical inventiveness world-wide. We can build on that and carry it forward into the new Century. In other words, we have strengths, we have world class potential with world class science base, we have the talent and the creativity here within industry, strong global links. What we need to do to ensure that we keep orders is to keep our skill levels up to cope with the changes in the knowledge base. We need to ensure that we upskill all the work force to match the requirements of the fast moving global economy. Some of the issues that we want to address in the Competitiveness White Paper therefore naturally read across into education and skills training. The onshore process engineering industries cover the vast spectrum of activities from oil and gas, petro chemicals and electricity generation, water supplies, food and drink processing. Industry figures show that its annual turnover runs into teens of billions of pounds. On expenditure by the industry on process plant alone, some independent reports indicate that it has been the region of £4bn a year with chemicals, oil and gas and food and drink among the highest spenders. The theme of today?s conference is about improving the supply chain relationships in process engineering. It is obviously essential in responding to today?s challenging market conditions, that we actually look to see how we can develop new ways of responding. And, it has been suggested, that perhaps the two key concepts of the 21st Century for all of us will be competition and co-operation. The challenge will be to know when and where to compete and when and where to co-operate. In supply chains, we think we know where we can blend our activities together to enjoy mutual benefits and it seems to me that is what ACTIVE is all about. It is about changing cultures and mindsets. To move from confrontation to consultation, redesigning business practices in order to build new alliances that make commercial sense. And at the same time actually developing that financial competitive edge for businesses. For example the Elementis Chromium project, I think that that will be covered later in the conference, shows the vital importance of early co-operation. The very early stages in defining concepts to the project definition stage are crucial in designing new ways of doing things, built in early on. Addressing issues such as education, quality management, innovation, research and development. That, I think, will determine the strength of the companies, the ability to compete on price and quality driven by their capacity to innovate and to experiment and develop new ways of doing things. Continuous improvement in productivity but also in quality is absolutely vital. Because, what we all know is that in the face of relentless change we cannot stand still. If we don?t move forward, we fall back. That is why the Department of Trade and Industry is giving backing to ACTIVE because we see it as a role model, a new template for our development into the 21st Century. Enhancing the performance of the supply chain in the onshore processing engineering industry is crucial. There is a small grant provided by the DTI to help smaller firms participate when otherwise they might not have the resources to join in, to encourage them to take part in the initiative. ACTIVE is a response to the demanding requirements of an international industry. I understand it is seeking to reduce costs by up to 30% but without reducing profit margins of either contractors or suppliers. In other words, raising quality and reliability performance, improving relationships up and down the supply chain, but without actually prejudicing the bottom line. And, I think you will know better than I, the vital role of new and developed strong supply chain links now cannot be underestimated. I really would like to see the benefits of ACTIVE, the concept of ACTIVE not simply locked into that acronym but spelt out and spread as widely as possible across the full extent of process engineering. To be really effective, any work to improve business processes and practices has got to involve all those in the supply chain in order to have that maximum impact on deliveries to the customer. It is wholly inclusive to build everyone in, to capture their imaginations and to command their commitment, to ensure that they understand and work even closer together to deliver the benefits for all right through the whole interlocking chain. The work that ACTIVE has done already, the strides that have been made over the last two years in helping the process engineering industries address major issues, identifying more efficient business methods, codifying to improve practices, setting out a template for us to drive that development forward, I think has been immensely helpful and far sighted. I understand the initiative is now moving onto apply these factors to exemplar projects with appropriate training and use of IT to get the message across, seeking to change attitudes and behaviour - the hardest task of all - to change behavioural practices and achieving them as a result of hard work, patient effort, working groups within the industry, themselves a good example of best business practices. ACTIVE has also been closely associated with the CRINE initiative. It has been able to learn a little bit from CRINE?s success but also from the mistakes that CRINE has made. As many of you know, CRINE was established back in 1992 as a cost reduction initiative focusing solely on the offshore oil and gas industries. It has succeeded in reducing the cost of oil production for fields under development from some £13.50 in the late 1980?s down to £7.00 a barrel by the end of 1997. No mean achievement. There is still much work to be done and CRINE has moved on to turn its attention to competitiveness in a wider sense than simply cost reduction, concentrating on developing more efficient, more effective and innovative business relationships and I underline that word relationships. I will be addressing a CRINE conference in Aberdeen next week exploring how management practices in other industries can actually be borrowed to good effect in the oil and gas industry. I think the message from CRINE, and indeed your work in ACTIVE, is that improvement is possible. More work can be done but it is necessary to be able to learn and listen from others, borrow good practices, develop new ways of doing things. Today, ACTIVE reaches a watershed on its journey. It has developed eight guiding principles that will be spelt out throughout today ranging from project concept and definition phrase, right through to the project execution of performance measurement. With the example of today?s launch of ACTIVE?s own new website. I think the key task now is to communicate ACTIVE principles right across the entire of process engineering, securing their implementation of new projects, measuring the effects of actually applying those ACTIVE principles to projects using the new technology. Not just seeing the website, as it were, as a new kind of faddish operation, but understanding when a billion are linked through the website within the next five years, it has become a rather important tool of communication that many will learn to use well and effectively. Regular benchmarking with objective data is essential in measuring actual rather than perceived performance, measuring constantly to see if we?re moving further forward. We know benchmarking can be a powerful measurement tool in encouraging companies particularly the smaller and medium sized enterprises that may not have much experience of it, to adopt good practices as part of that progress to improve competitiveness. Suggesting that the way they have always done things may not always be the best way and that others have managed to break through to new ways can add real value and advantage. Benchmarking shows ways of appraising performance, assessing strengths and weaknesses. But also it enables those companies to develop what I would describe as appropriate practices so that they make the appropriate changes and implement the changes that they see as necessary to take them a little further forward. I think the Brown and Root case today will provide one example of how benchmarking actually can practically improve performance. I actually hope to see further examples of ACTIVE?s work in measuring that competitive advantage. Change, of course, is never easy to accept. Most of us, if we are deadly honest, would rather it went away or hope that the transition would end tomorrow. However ACTIVE is showing the way in terms of giving positive responses and they will be spelt out in today?s presentations. I believe, for example, the Foster Wheeler project demonstrates how effective management of information during the project can actually enhance communication, the key word of the 21st Century. Shell UK will highlight the need to achieve top quality project team management in all aspects of engineering procurement and construction as demonstrated in their White Oil Docks refurbishment. In addition, ICI will show their completed Petrus project. An alliance approach between contractor and principal sub contractor, to produce real and major benefits. That approach meant that the project was completed, yes, under budget, ahead of completion time but without accident to the workforce as well as without health or environment incidents. In other words, really adding quality as well as value in the best possible sense. There are also projects that are coming up, signing up to ACTIVE principles, getting as it were into the template with Rigblast?s repainting of the Forth rail bridge, a civil engineering project, again showing that ACTIVE principles can be applied outside process engineering as well. If the template can be got right here, it can be read across elsewhere. I think the key thing is to keep the pressure with the force for change moving, keep the momentum maintained to show that more projects from across the spectrum of engineering actually adopt the ACTIVE principles. Team work and partnership are hold-all words, that we use a little bit glibly. I think all our experience, partnership actually means real effort, real worth, attention to the details but at the same time retaining the vision that is it worthwhile moving together towards the future. That, may I add, applies to Government in its relationships with business as well; that we keep conversation open so that Government can be there as a catalyst sometimes calling people together. Yes, encouraging and exhorting, yes, working hard to get the macro framework right to ensure that we can move positively and in a stable context into the long term future. I do apologise that I cannot stay to hear the conversations of today. It is really one of the great regrets of a Minister that your diary is filled in for you. I have asked my officials to ensure I receive all the notes from today, which I am looking forward to reading. I believe that today is vitally important, because it can help increase confidence and faith in the future. This kind of work can help encourage people to be positive and enthusiastic, to help them believe in themselves and that they can be part of shaping change, to believe literally that we can engineer a better future. I really believe that we can make it a success. I believe ACTIVE will be contributing in that context. |
|
|
|
|
Other speeches by Rt. Hon. John Battle - Former Minister of Energy and Industry (May 1997 - Jul 1999)
(the following are available from the archive) |
|
