The Four Swans of Sustainability and more...

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European Sustainable Development week 30 May - 5 June 2018

To celebrate European Sustainable Development Week #ESDW we are sharing strategic resources for business growth such as our 10 #sustainability megaforces (10MF) toolbox. 

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#CSR #environment

#quality

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 

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!

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

We often take it for granted in the 21^st 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 

Download a free chapter from my new book Sustainability Footprints in SMEs

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AMEC/ Robert Gordon University World Quality Day 2014

Yesterday I enjoyed facilitating the World Quality Day Seminar 2014 at Robert Gordon University with the support of my colleagues at RGU and AMEC.

Excellent presentations were delivered from both our guest speakers Steve Wright, CEO Benncon Limited and Dr Natalia Alvarez, CEO PhD Transition.

I am grateful for the support of Chartered Quality Institute members specifically Hilary Smith-Milne and Jessica Horne. 

To celebrate our 3rd year of our event, exclusive access to the AMEC/ Robert Gordon University World Quality Day 2014 presentations are now available by clicking the following link http://bit.ly/1sMIoDF

National Air Traffic Control Service - the need to pursue "Absolute Zero"

The National Air Traffic Control Service (NATS) traces its history back to the early days of commercial aviation in the United Kingdom in its pioneering role utilising a rudimentary form of air traffic control based on flag signals. Modern commercial aviation however demands both the use of complex information management systems and highly skilled human labour with the NATS employing just over 2000 air traffic controllers handling 2.2 million flights annually.  To meet this challenge the organisation is “committed to delivering exemplary service performance and, through consultation with our customers, identifying and implementing new standards in service quality”.

National Air Traffic Control Service £623M Swanwick site which serves as the nerve centre for the management of UK airspace has seen its share of teething problems at its inception and software issues during the summer but the 7^th December 2013 witnessed a catastrophic failure of its management systems which Eurocontrol, Europe’s air traffic control monitor, reported "Around 130,000 minutes of delay are currently expected with approximately 1,300 flights (almost 8% of the European traffic today) being severely delayed".

An investigation into the incident revealed that there was a breakdown in the IT systems with "more than a million lines of software" compromised significantly affecting the internal phone network that not only supports interaction between air traffic controllers within the same room but also with regional air traffic control authorities on the European continent. This seemingly straight forward technical issue was blamed on the "difficulty switching from night time to daytime operation" thereby making it impossible to reconfigure voice communication systems which is organised into sectors to cope with the demands of daytime UK airspace traffic.

The inability of NATS to meet its service plan objectives contributed to poor service performance levels with 20% of departures at Gatwick Airport hit by delays and 50% of flights at London City Airport faced disruption.

A cursory review of NATS 10 year business plan reveals a limited emphasis on contingency planning with quality issues shrouded by terms such as efficiency and innovation despite having a quality management system. Unfortunately there has not been a balanced strategic approach to the management of non-financial risk with effort being expounded on safety and emissions reduction to the detriment of the reliability of mission critical information management systems. This was compounded by a failure to test contingency measures or effectively mobilise contingency plans in the event of catastrophic failure.

Increasingly in our technological age firms and nation states are exposed to information risk either through limited access to information, loss of information and inaccurate information that affects not only competiveness but also safety and security. In essence sustainability is now a four legged stool consisting of the economic, ecological, social and information.  Sustainable organisations must combine the goals of "zero errors” and “zero emissions” into the pursuit of the strategic goal of "Absolute Zero" the point at which no more adverse risk can be removed from a system which is a benchmark upon which sustained customer satisfaction can be achieved.

Eurocopter - When Puma's fly

The tragic loss of life arising from the recent crash of a Eurocopter Super Puma AS332 L2 on the 23 August 2013 brings into sharp focus the dangers of North Sea Oil and Gas. This tragedy is personally poignant to me as I served in a Royal Navy search and rescue (SAR) unit based in Scotland that was resourced with ageing but superbly maintained Sea King helicopters.

Herein lies the case for quality – Ageing Design: the original design of the Super Puma came into production in 1981 with a series of product extensions in areas such as avionics, engine and gearbox power to meet the demands of the expanding commercial market. A focus on incremental improvement not continual improvement, to compete Eurocopter must invest an estimated €500m into research and development of a helicopter for civilian transport and search and rescue operations. This ageing theme extends to the Eurocopter helicopter product portfolio with new versions stymied by delays and cost overruns for potential replacements for the Super Puma in the form of the NH90 and Tiger military version helicopters.

Design issues aside the Eurocopter Super Puma and its variants have been involved in five accidents in the North Sea since 2009.

Specifically the Eurocopter Super Puma AS332 L2 has accounted for 20 fatalities in the North Sea over the past five years the worst being an accident occurring in waters off the coast of Peterhead, Scotland in April 2009 resulting in 16 fatalities. The investigation into the accident conducted by the UK Air Accidents Investigation Branch (AAIB) concluded gearbox failure that may have been diagnosed if the “metallic particle discovered on the epicyclic chip detector during maintenance on 25 March 2009, some 36 flying hours as an indication of second stage planet gear” failure.

As a result the UK Air Accidents Investigation Branch (AAIB) recommended that “Eurocopter, with the European Aviation Safety Agency (EASA), develop and implement an inspection of the internal components of the main rotor gearbox epicyclic module for all AS332 L2 and EC225LP helicopters as a matter of urgency to ensure the continued airworthiness of the main rotor gearbox”.

This recommendation contributed to the introduction of safety Directives by the European Aviation Safety Agency (EASA) and new pertinent maintenance guidance by Eurocopter. Surprisingly AAIB investigators highlighted parallels with an earlier accident in 1980 involving a SA330J Puma helicopter indicating a clear absence of a factual approach to decision making – an organisational failure to learn from past events that unfortunately led to deadly consequences. Subsequent two forced landings of albeit variants of the Super Puma led to a UK ban on sea flights which was only lifted in July 2013

Eurocopter the world’s largest commercial helicopter manufacturer saddled with excess inventory, poor cash position and under pressure from agile competitors such as Bell Helicopters, Augusta Westland who are keen to acquire a piece of its market share as energy operators opt for transport firms that use alternative helicopter supplier, may yet face Darwinian extinction if it does not evolve and focus on quality.

Findus - Strategy that lacks beef

Living in the UK I have always ridiculed my North American relatives for living in countries with a perceived "less than stringent" food supply chain. I guess now the "chickens have come home to roost" more aptly put "the horses have bolted out of the stable".

Its no laughing matter for Findus a company that in 2012 was rescued by a £60m purchase of its junior debt by  its shareholder Lion Capital as well as later debt restructuring of £220m that injected £20m in cash on the balance sheet and provided a cushion of a £70m overdraft facility. Analysts speculate that Findus is a victim of the markets with high raw material prices, demands buy its customers for lower prices and evil Eastern European criminal gangs trading in Romanian horse meat all conspiring against its success.

The facts reveal a different story - Findus was purchased by Lion Capital a private equity firm in 2008 for £1.1bn from its rival CapVest with the long term goal to divest at a premium after expanding the business which is currently second in Europe to Birds Eye Iglo. In 2011 under the watch of CEO Chris Britton a former Diageo Group Marketing Director the firm and its shareholder Lion Capital requested that the restrictive covenants preventing the firm's ability to raise capital be relaxed. The financial markets acquiesced, this enabled Findus to raise 1.1bn from lenders which was used to go on an acquisition spree acquiring continental food brands such as Frudesa and Salto a  from the french firm Bonduelle. Yet Chris Britton also aimed to focus the company on its core competencies.

Quality is a competency that has been overlooked in the company's pursuit of growth. In documents disclosed to their supermarket customers the firm admits since August 2012 horse meat may have been used in the production of its frozen Beef Lasagne product. Eagerly blaming suppliers like Comigel for product non conformance. Findus failed to accept its responsibility as a corporate entity to build mutually beneficial supplier arrangements within its supply chain. Also by its own admission the company had not been conducting inspection and testing of incoming products which is indicative of overall poor process management. As a result customer confidence is lost and with it potential market share, saddled by a burden of debt Findus may yet face the lash of fines from UK regulators which will be less severe than the backlash of angry consumers.

This scenario was avoidable if Findus had pursued its a strategy of quality and continuous improvement as own its corporate website states  "you’ll find the most consistent Findus ingredient is quality. A strong commitment to quality has long underpinned the continuing success of the Group and its brands in both the retail and foodservice sectors".
 Its time for Findus and the Food Sector to find the virtue of quality a key ingredient for strategic success...

To learn more about quality, safety and environmental management visit www.sustainabilitycsr.com 

An uncommon thing about common safety

During the past few months the safety profession in the UK has been challenged to adopt a “common sense approach” to the management of health and safety. Lord Young’s report “Common Sense, Common Safety” focussed mainly in his view on “non hazardous” businesses and occupations such as offices and shops. The interpretation of administrative and point of sale occupations as being “non hazardous” is myopic and fails to grasp the effects of stress on individual well being – the much neglected health side of the health and safety equation. The report sadly has created a perception that safety has spawned its own unique form of bureaucracy which is stifling economic growth and productivity.

Philosophically common sense is defined as “the basic level of practical knowledge and judgment that we all need to help us live in a reasonable and safe way”. This attempt to encapsulate our understanding of this catch all phrase leaves the concept of what is “reasonable and safe” open to interpretation which raises the following key issue:

The understanding of what is “reasonable and safe” is not homogenous within any society.

The inability of ”reasonable” people to unanimously agree on what is safe or even right makes law and best practice a requirement to ensure the safety of individuals civil society. The challenge of the health and safety profession is to expound the uncommon nature of safety by focusing on the need for a careful understanding and management of risk in traditional high risk occupations and sectors such as oil & gas but also in new “green“ jobs such as recycling, an ageing workforce and the rise in obesity giving due regard to the impact of stress on the working, family and social lives of individuals in “non hazardous” occupations. It is this holistic view that practitioners must adopt if the profession is to help its stakeholders make the connection between a healthy, sustainable lifestyles and safety at work which will hopefully cynical myths of ‘elf n safety’.

To learn more about quality, safety and environmental management visit www.sustainabiliycsr.com