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Lord Sainsbury of TurvilleQ2002 |
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On behalf of the Government can I extend my welcome to Q2002 and to the many overseas delegates visiting the UK. I would like to add my congratulations to the European Organisation for Quality and the Institute of Quality Assurance for bringing such an important event to the UK. The expertise on quality from around the world assembled here today is extremely impressive. May I also congratulate Frank Steer, Director General of the IQA on his appointment as the first ever British President of EOQ. This event is essentially about sharing best practice, which is why, through the "Fit for the Future" national best practice campaign, my Department is pleased to be one of the major supporters of this conference. Quality is also high on the agenda of the British Government, which is why I would like to stress the welcome from the UK Government to you all. Government's focus on quality, innovation and design to increase productivity In the UK we know that we will not be able to compete in today's global economy on the basis of cheap material or cheap labour. We can only compete on the basis of our knowledge, skills and creativity, and this means that quality, innovation and design must be central to the strategies of our companies. In the UK we have put in place the conditions of macro-economic stability essential to enable wealth creation and entrepreneurship to flourish. The UK is now enjoying the longest period of sustained low inflation since the 1960s with employment rising by 1.5 million since 1997. Despite the current uncertainties, our economy is in good shape compared to many other economies worldwide. We have also substantially increased investment in science and technology. In this Spending Review, funding for the Research Councils will increase 10% per annum in real terms. We are also seeing a cultural change in our universities with more spin-off companies – 199 new spin-offs were created in 1999/2000 compared with 70 per year on average for the previous five years. But we know that we need to do more to improve our productivity. We must be a moving target for the newly industrialised countries, and this means that we must continuously improve the quality, innovation and design of our products and services. What should the role of the Government be? We believe that Government's job is to create the best possible climate for businesses to improve the quality of their products and services. The current climate of economic stability and low inflation provides the framework for business excellence. The Government can also help by ensuring that there is a robust quality infrastructure that supports business excellence. More specifically, we want to ensure that businesses have the right tools to help them achieve excellence. We don't believe there is a universal solution - individual businesses need to decide for themselves how they can best achieve excellence. That's why a key part of our manufacturing strategy - published last May - is to promote and spread best practice, helping firms to learn from each other's experiences and providing access to sources of advice, help and support from a variety of organisations. In this way, companies are better able to identify specific issues for attention and gain access to help to address them. That's why we are working with the CBI and other key stakeholders to support the business-led campaign "Fit for the Future"– a "business to business" activity aimed at raising awareness of the value of adopting best practice. The Campaign is providing access to help, support and advice from a variety of organisations through the process of business learning from business. The Campaign has a clear focus on quality, and the benefits to performance and productivity that successful and sustained adoption of "quality regimes" can bring. Business has the opportunity to see and understand proven techniques in action. Visits to excellent firms is one approach; others are in-depth help and guidance on continuous improvement - using for example the EFQM Excellence Model and benchmarking, and techniques such as Statistical Process Control and the emerging Six Sigma methodology, all of which are featured in the conference programme. The Campaign is playing a major role in demonstrating the impact that the transfer of best practice can have on business performance and the economy as a whole. Times are tough for business around the world and this gives a greater urgency to applying best practice, in particular through the supply chain, and to sharing experience, knowledge and ways of working, so that companies can find new ways of improving their competitiveness and becoming stronger as a result. Another of our important activities is the Industry Forum programme, supported by the Fit for the Future campaign. Industry Forums are specific business-led initiatives designed to transfer world-class skills into the workplace using proven best practice tools, techniques and processes that deliver improvements in Quality, Cost and "right first time" performance. Building on the pioneering work undertaken in the automotive industry, DTI is supporting Industry Forums across a range of UK sectors including Aerospace, Oil and Gas, Textiles and Clothing, Ceramics, Metals, Process Industries, Tourism and Hospitality, and Food processing. Significant productivity gains are being delivered. We are looking to extend the Forum approach to other sectors such as the construction, healthcare and printing industries. Participating companies have seen huge improvements. In one Industry Forum alone, tool changeover times have been reduced in one case by 85%; in another production capacity has been increased by up to 25% and stock levels reduced by 40 %. A recently completed pilot programme in the construction equipment sector has seen bottom line savings of over £1.6 million. Standards Development The UK continues to be a major driver for quality standards. ISO 9000 started life in the UK as a defence standard. It was then taken forward by the British Standards Institution as BS 5750 and is now established worldwide as the leading quality management systems standard. The adoption of ISO 9000 is still increasing in this country and worldwide. There are now almost 70,000 certificates issued in the UK out of the total of some 500,000 worldwide. But in many ways ISO 9000 is still maturing. The advent of ISO 9000:2000 has brought its own challenges. Businesses will need to adopt a more process driven approach and will need to give much greater consideration to aspects such as customer satisfaction and continuous improvement. Benefits are not achieved by simply ticking off against formalised procedures. The application of ISO 9000 should be an integral part of the business culture to sustain product and service quality that is visible to both internal and external customers and suppliers. I hope that UK businesses in particular will see the new standard as a valuable aid to improving the quality of their products and services and not just as a certificate they need to have on the wall. The main purpose of a quality management system should always be to improve business performance even though there are clear benefits from having independent and authoritative reassurance that your system really does comply with the standard. There are inevitably regular debates about the integrity of any certification system. We in the UK recognised the need to have confidence in certification some years ago and established accreditation as the means to be sure that certification can be relied upon. Now the United Kingdom Accreditation Service is highly regarded in this country and around the world and is seen as a template for accreditation bodies elsewhere. My department is happy to support the UKAS awareness campaign which aims to ensure that the benefits of accredited certification are more widely appreciated. ISO 9000 is a key standard, but only one of many which make a major contribution to the quality framework. Our standards-making body – the British Standards Institution – celebrated its centenary earlier this year and is one of the leading standards bodies worldwide. It may have a long history, but it is among the first to tackle the impact of the electronic age on business requirements. Standards help to raise the quality of products and services. By this and other means, they can have a dramatic effect on productivity and competitiveness. But this only happens when their role is recognised, and they are used effectively. This is where the quality of management and leadership comes in – too many companies fail to see the strategic potential of standards, losing out to those that do. My Department – together with the CBI and BSI – have recognised this as an issue. Collectively, we have started work on developing a national standardisation strategic framework. Some discussion papers are already on the BSI website for public consultation and further information will be released later in the year. The aim is that a properly developed framework will increase the use and effectiveness of standards and be another contributor to business competitiveness. We also recognise the role of the professional institutions, like the IQA and EOQ and their global networks that support the continuing development of professional competences and standards of practitioners. These efforts are fundamental to the growth and development of business excellence and quality management systems in particular. Benchmarking Benchmarking your company against the best in the world or in your sector is another valuable tool in the battle for improved business performance. My Department's Small Business Service (SBS) has achieved a pre-eminent position in the field of performance improvement through its Benchmark Index service, which has business excellence as one of its key components. The Benchmark Index enables companies to build on their strengths and address their weaknesses and bring about the necessary improvements to achieve competitive advantage. Over 7000 benchmarks have been carried out using the service since its inception in 1996, making it the biggest service of its kind in the world. The European Commission, in recognition of the success of the Index, invited the DTI to take the lead in an ambitious project to benchmark up to 1500 SMEs in 9 member states as part of the wider drive to improve the competitive performance of companies across the EU. At the completion of the project, all the participants had in place the capability and resources to provide the benchmarking service, and they continue to compare performance as part of a proactive benchmarking network. The global marketplace I have spoken mainly about the quality framework in the UK but this is an international conference and we live in a global economy. Maintaining a reputation for quality is one of the greatest challenges we all have before us today. It is my Department's continued belief that shared quality management practices are fundamental to improving overall business performance and productivity. As an example of this, I am very pleased to see that the European Centre for Total Quality Management based at the University of Bradford School of Management has recently signed three Memorandums of Understanding with the Malaysian Industry-Government Group for High Technology, the Electronic Total Quality Management College of the Dubai police and the Hong Kong Quality Management Association. This is an excellent demonstration of international networks exchanging best quality management practices. I hope that over the next few days you will be able to exchange ideas to strengthen the quality community, which in turn will strengthen the world economy to the benefit of us all. It is the responsibility of everyone to drive quality through the organisation whether in the public or private sector. Quality should run through the whole business experience from product and/or service concept to customer delivery and through the lifecycle to disposal. I, therefore, hope that this conference will be a great success, and that it proves to be a valuable experience on the sustained journey we are all undertaking to improve the quality of all our products and services. |
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Other speeches by Lord Sainsbury of Turville
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