Wednesday, 24 August 2016

Food Recalls - as certain as death, referendums and taxes

 There are 4 things you can count on in 21st Century from a UK perspective death, taxes, referendums and food product recalls.

Product recalls appear to be a recurring theme in the UK food industry - a total of 159 recalls in 2015 a 78% rise on the previous year. The Food Standards Agency has consistently reported increased food safety incidents since annually since 2009 despite a decrease in 2013 the year of the infamous Horsemeat Scandal (figure 1).


Recently in August 2016 there has been another major food product recall in this instance yogurt produced by Yeo Valley for major high street supermarkets such as the Co-operative, ASDA, Tesco, Sainsbury’s and Waitrose was considered to possibly contain rubber particles.
It is estimated that in the first week of February 2016 that foreign objects e.g. plastic and glass accounted for 2 out of 8 food product recalls.

In addition to foreign objects product recalls arising from the presence of bacteria e.g. salmonella, listeria and product labelling omissions or unlisted ingredients has led to retailers demanding reimbursement from manufacturers for any administrative cost or loss incurred as a result of rectifying these anomalies. Seemingly avoidable non-conformances such as unlisted ingredient omissions accounted for 59% of food product recalls in 2015.

Despite the alarming increase in food product recalls UK Government officials and regulators shroud these non-conformances under the umbrella of food “safety” rather than food “quality”. Proposals for an industry wide steering committee may yield limited results if quality management issues arising from poor process management, weak inspection and testing regimes are not addressed. Misplaced emphasis on effective food recall systems rather that robust quality management systems will only maintain the status quo – a continued escalation in food product recalls and reduced stakeholder satisfaction.

To learn how to embed sustainability/CSR into your business strategy visit our site www.sustainabilitycsr.com 

Thursday, 11 February 2016

Back draught - the need for continuous improvement in the Wind Energy Industry



Renewable energy and in particular wind energy has seen a rapid increase in deployment within the past decade to meet the UK’s renewable energy targets. Within Scotland there has an exponential increase in renewable energy projects accounting for 61% of proposed and installed UK onshore wind farms. Onshore wind farms have also contributed to economic prosperity providing 8,600 jobs yielding £548 million in GVA. However critics claim that wind farms are not labour intensive and jobs are subsidised at a cost of £100,000 per job created. Therefore economic benefits can appear to be illusory are in spite of reductions in fossil use in the energy supply grid. The question can be asked is the wind energy revolution truly sustainable.

Although the economic costs are readily disclosed and debated in the public however the hidden cost of wind energy accidents is suppressed by the industry and externalised at times by environmental champions. Caithness Wind Farm Information Forum  an advocacy group that campaigns against wind turbines categorise wind sector accidents as Fatal accidents, Human injury, Human health, Blade failure, Fire, Structural accidents, Ice throw, Transport, Environmental damage and other miscellaneous events e.g. lightning strikes, electrical failure.
During the period 2009 – 2011 over 1500 accidents were admitted to have occurred within the wind energy sector highlighting the need for improved non-financial risk management.

Aside from the rapid expansion of the industry into offshore areas one of the root causes of the increase in accidents is the absence of industry wide standards for quality, safety and environmental management and a desire by the wind industry to value the guarantee confidentiality in regards to incident and accident reporting above organisational transparency (Fig 1). 

The UK’s Health and Safety Executive has been reticent to impose a minimum safe distance between wind turbine developments and occupied buildings and presently does not maintain a database of wind turbine failures making accident trend analysis nearly impossible. At an operational level fire brigades are at times ill-equipped to deal with wind turbine fires as working heights can be more than 80 metres. Wind farms have also accounted for the deaths of endangered birds and bats exacting an environmental toll despite the carbon friendliness of wind energy.
Within this context the Wind Industry must begin the process of standards development in consultation with all stakeholders i.e. government, NGOs and businesses to ensure that environmental claims can be substantiated and more importantly continuous improvement is embedded within the sector.

Thursday, 24 September 2015

Volkswagen quality - lots of smoke and mirrors?

Organisations and individuals strive for telos or purpose for their existence. This manifests itself in the business context in terms of values, mission statements and policy. The tragedy for Volkswagen is that its foundations was based on nefarious purpose that cannot be divorced from its present context.

Volkswagen was established by the Deutsche Arbeitsfront "German Labour Front" or DAF by the Nazi Party as part of its Kraft durch Freude "Strength through Joy" as free trade unions were banned under Hitler's leadership. The strength through joy program was meant to appease workers by providing affordable cruises, holidays, an affordable automobile and social activities once the domain
of the upper classes.

Along with Schönheit der Arbeit "Beauty of Work" the improvement of factories and work spaces the emphasis being "somke free" environments. Volkswagen "Peoples car" and its iconic "beetle" design was produced in 1938 with the intention to provide German workers with an affordable automobile at the price of a German motorcycle through a payment plan. Many German workers opted for this payment approach with the onset of war some prospective car owners lost their deposits. This led to protest regarding the leadership of the DAF under Dr Robert Ley who boasted that he controlled workers' lives from the 'cradle to the grave'. Subsequent Volkswagen automobiles for both domestic and military use prior to 1945 were made by an estimated 15000 slave labour victims from concentration camps comprising 80% of the company's wartime workforce. Volkswagen in 1998 accepted corporate responsibility for their actions and has set up a fund to compensate victims.

In its post-war reincarnation Volkswagen develop a renewed purpose as the car "Das Auto" built around a fun, friendly image of the "Beetle" shape embellished with the pictures of flowers and bright colours as well as popularised in Disney movies such as "Herbie goes bananas" along way from the militarised look of the original models. The whimsical nature of the "Herbie" film genre had a lasting impression on my childhood as one of my elementary school teachers owned a Volkswagen which some of my classmates described as a "dustbin on wheels". This analogy was not unfounded when compared with Japanese brands such as Datsun not only provided economy but were quieter due to the use of coolant rather than air to reduce engine temperature. The company continued its focus on volume rather than quality as its strategy for success. Consecutive Volkswagen executives have pursued this expansion acquiring 18% market share in China, 22% in Brazilian market coupled with a ruthless search for cost savings through component sharing between production models. The effects of this strategy is evident in Volkswagen's wind noise issue in 2011 and prior power train non conformity although a decade old contributing to a crisis in reliability has not been forgotten by consumers in key markets such as the U.S. where sales fell by 22% in summer 2014. J.D. Power Initial Quality Study has consistently rated Volkswagen brand near the bottom for every year except 2009.

The engineered rigging of emissions test and data arguably is symptomatic of an organisational culture with a misaligned purpose on "the car" rather than the customer/stakeholder i.e. global society. As a result over 1M tons of pollution in the form of emissions to air e.g. nitrogen dioxide (NO2)  from approximately 11M vehicles containing rigged components which is equivalent to the combined emissions from all power stations, vehicles, industry and agriculture. Pollutants such as nitrogen oxide (NO) and specifically NO2 pose a  respiratory threat to humans and animals by inflaming the breathing passages. The EU is disproportionately at risk due to the higher level of diesel vehicles when compared to the US where 3% of automobiles use diesel.

Volkswagen quality ethos is focused on "reliability, visual appeal and service" with  the absence of sustainability.
Sustainability can be achieved by cultural acceptance within the organisation that it has a duty to global society due to the lifecycle impacts of its products and services. Sustainability Footprints which is defined as "methodologies for assessing the social and environmental impact of the economic investment in a specific strategic option in relation to other strategic alternatives and their potential risk to the survival of future generations" e.g. carbon footprint can assist Volkswagen in monitoring and measuring its business performance leading to culture of innovation instead of deception.

Volkswagen by adopting a sustainable business practices can finally transform the company from being Das Auto "the car" but rather truly being the "People's car" putting individuals and society at the core of its corporate strategy and adopting a "cradle to the cradle" approach to managing its processes.

Monday, 10 August 2015

IEMA Approved Certificate in Sustainability Strategy

This course gives candidates a practical insight into the application of sustainability practices to business.
Climate change, energy and fuel consumption, the scarcity of water and material resources, population growth, wealth, urbanization, food security, the decline of the eco system and deforestation - the emergence of these sustainability mega forces within the 21st century business context have created both risks and opportunities for businesses.

The IEMA Approved Certificate in Sustainability Strategy will provide the knowledge and skills necessary to assist managers with designing strategies that will mitigate the effects of sustainability risks and enhance organisational potential to exploit opportunities.
You will study the development of effective business plans that incorporate sustainable development goals using the Sustainable Strategic Model Analysis Tool.
Subjects include:
  • Sustainability and Corporate Social Responsibility – Context and Definition
  • Sustainability and Corporate Social Responsibility Dilemma
  • Sustainable Strategic Growth Model - a solution to the Sustainability and CSR dilemma
  • Sustainability Footprints – tools for growth
  • The Politics of Sustainability
  • Case studies
This qualification would benefit senior management, company directors, Quality Managers, Safety Managers, Environmental Managers, CSR/Sustainability Managers, Marketing and early career professionals who are involved in Sustainability/CSR implementation and reporting. 
The approach used in the course assumes no prior awareness by providing the knowledge and strategic tools to deploy sustainable development utilising best practice case studies.
For further information on our upcoming course dates and online program view our website www.sustainabilitycsr.com 

Tuesday, 7 July 2015

The deadly cost of product recalls

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With all the news of the recent Takata air bag recall becoming one of the biggest recalls in US history, my colleague Scott Huntington put together a study of some of the most deadly and costly product recalls to find out just how big of a deal they are. He found that over 2000 recalls happen a year, including more than 6 a day!



Thursday, 26 February 2015

Takata recall - Quality more than just an airbag of hot air



We often take it for granted in the 21st century that if a product is presented in a “new box” or a service at “new location” quality is inherent or explicit. The case of Takata airbag recall refutes this premise.
Takata supplies automotive safety systems controlling 22% of the global automotive airbag market. The company’s mission statement emphasises their commitment to quality which is to “Develop innovative products and provide superlative quality and services to achieve total customer satisfaction”.
 
This emphasis on quality is reinforced by an organisational approach the “Takata Way” that supports open effective communication openly and effectively and an adherence to Sangen-shugi the exploration of three “realities” which is comprised of Gen-ba or going to the location of the activity/problem e.g. the factory floor, Gen-butsu looking at problem first hand and Gen-jitsu gathering the facts to make a decision - realitybased decision making.

Despite this organisational philosophy Takata finds itself asleep at the wheel. Its flagship automotive airbag has allegedly been linked with the deaths of at least five motorists and over 139 injuries. The problem being a product defect that is only realised during the deployment of the airbag resulting in the rupturing of the inflator, sending metal fragments that have fatally injured unsuspecting users it was intended to protect. Potential causes for the airbag defects range from poor product handling, incorrect gas specifications, humid conditions, faulty welding to malfunctioning manufacturing equipment. 

The company was fully aware of the potential for the airbag to rupture during deployment 10 years prior to the recall but opted not to face the “reality” subsequently requesting the destruction of in-house test results and disposal of any evidence in essence creating a climate of fear amongst employees. Top management rather than implementing corrective action chose a default strategy of “do nothing” focusing on the bottom line not the triple bottom-line.

This strategic decision has resulted in the recall of over 14 million airbags from 11 different automakers and the allocation of over $655 million for quality costs. The reputational damage suffered by Takata is contributing to investor unease arising from reduced profit outlook and customer dissatisfaction with market share set to decline to 11% by 2020. Fortunately Takata has decided to “wake up to reality” taking steps to refocus the organisation efforts on quality by constituting an expert panel to examine the quality and safety issues. Quality not perception is reality.

To learn more visit our website www.sustainabilitycsr.com