Archive for January, 2010

Rebirth of French Industry

January 27th, 2010 admin No comments

The title is a tongue-in-cheek reference to Bill Waddell’s excellent book which he could have called something like ‘Industrial Common Sense’, but it’s a good thing he didn’t as I wouldn’t have been able to adapt the title of my blog.

Where Bill is performing solo heroics to try and get the U.S. up and running, it is the French government over here that have realised that industry has been slumbering into the doldrums for a number of years now, and needs a wake-up call before it is too late.

A nationwide consultation programme was launched back in October.  Each of the 20 or French regions was asked to bring in its captains (and also deckhands) of industry and come up with recommendations on how to revive French industry. The regional analyses have to be fed back up the line by the end of January, and at the end of February, the government will take ‘la crème de la crème’ and outline what it is going to do to make the country more competitive.

However, as always, those in the know already know probably 80% of what is going to be announced (in this country, ‘rumours’ are ‘leaked’ before any important announcement just to test public reaction in order to make any necessary last-minute adjustments). Two of the major measures to be announced will be in the areas of,  firstly, sustainable development (helping drive competitivity through making industrial processes and products more ‘green’ and secondly, relocalisations.

Now, Bill Waddell and others have been very vociferous in highlighting the plight of a number of companies who have decided to take the low-cost route only to find that the disadvantages far outweigh the cost of labour. Obviously, this school of thought has not yet reached the ears of the French government, who intend to encourage relocalisations by providing loans to get companies back here. It has to said that this has already been tried back in 2004, and fell like a stone as companies were simply not interested. It remains to be seen whether the response to the ‘leaked rumours’ on this one will see it withdrawn or not in a month’s time.

Another area rumoured for measures to be taken is the relationship between the bigger customers and the smaller contractors, which has swayed much too far in favour of the former. Again, any actions taken will be financial.

Relocalisation and the extended Lean Supply Chain. Two areas where Lean thinking could be far less expensive can the policies currently being decided by the government.

Categories: It's Happening in France Tags:

You said Customer Service? Starbucks in the news.

January 21st, 2010 admin No comments

There’s been a fabulous study reported on today, carried out by an independant consultancy and which classifies 200 leading firms in France on the quality of their customer service (based on the switchboard, the hotline, emails and the internet site).

For those of you who just love measures, this is your lucky day. Just read on.

1) 11% of companies tested simply hang up when an English-speaker rings in. Can you imagine that? You’re already limited to doing business potentially of 89% of French firms.

2) 24% of people who man the switchboard… don’t speak English. Now, these are big firms we are talking about, not the local mom and pop shop. Down to 76% left (on the basis that there was overlap in the first two categories).

3) 21% of companies have no switchboard operator or even an answering machine outside of normal office hours. So basically if you’re ringing in from Asia or the States, get up very early or go to bed very late to do so (and hope that the switchboard operator speaks English).

4) It gets better. 47% (no, that’s not a typing mistake) do not reply to complaints. So there’s no point writing that the non-speaking sleeping switchboard operator hung up on you.

5) 43% of companies when called refused to communicate the number of their companies help line.

Now, putting all of that together is possibly a little too much for my fading maths memories, but I reckon that somewhere along the line, we’re probably at between 1 in 3 and 1 in 5 who actually deal with customers properly.

The interesting thing is that there is a league table. Bottom of the list  i.e. they must be hundreds of times worse as  the averages listed above. Poweo, an electricity generating company. And just before them in 199th position out of 200?

Starbucks!! How can they not speak English!!

The 1-2-3-4 goes to the luxury and fashion houses. Moet and Chandon (champagne), Fauchon (fine foods), Chanel and Louis Vuitton in that order. All good companies making a lot of money.

Can you see any link between customer service and profitability in these figures?

Categories: It's Happening in France Tags:

Experiencing Change…. Personally

January 18th, 2010 admin 1 comment

Now we can all theorize about how best to manage change – although I wonder just how many change theories are applicable in Haiti just now – but there is nothing like going through a real change experience yourself to pull out the lessons for the future.

Now, I hold my head in shame in regards to what is going on elsewhere in the world. However, there was a fairly momentous occasion in my insignificant and relatively meaningless life which took place on January 1st.

In one sentence, I changed my heart rate monitor. Early readers may have caught onto the fact that I run marathons (not every week like, but enough to make it my most time-consuming pastime) and, having a psychological dependance on owning the best material (it can only make you run faster, can’t it) I chose the beginning of the year to change from.. and just read this – the Forerunner 305 to the Forerunner 405. One character difference, and my whole world has changed.

Initially, for the worse.

You see, when you become a techno freak such as myself, having the latest stuff is one priority, but ensuring that it works is another. And, at least in my own naive and initiated opinion, it didn’t. It took me until the 3rd to go out for the first time to try and melt down some of the 4kg of chocolate (at least, that’s what it felt like) ingurged over the festive period.

The marathon runners fanatics of the 305 amongst you (!!) obviously appreciate it for its large screen, touch button controls and flexible screen parameters. In no way would you change it for a child’s watch with a friction-based menu system which has no chance of working when you’ve sweaty fingers. And that’s just what the 405 seemed like at the beginning. Impossible to smoothly glide my fingers around the silver dial to bring up the various menu options. And it only started recording intermediate time every kilometer when for the past seven years I’d been pressing a red button to do so.

And worse was to come. In land not renowned for its dependable Internet connections, with the 405 you need one to transfer data from the monitor to a Pc-based analysis tool. With the 305 it was direct, monitor to PC.  And you can no longer charge the monitor through the USB port of the PC – can you imagine, you actually have to plug it in to the mains.

By the evening of the 3rd, I was therefore panicking. And putting the day’s very slow pace down to the faulty equipment!

Two weeks later, I’m a changed man. My 405 is my new best friend (we’re not sleeping together just yet however), I look forward to every outing, after which I get a mass of information I wouldn’t have any idea on how to use properly. And I’m even starting to run a little quicker. Thanks to my 405, of course.

What happened? Three things :

1) Training : As a first step, I read the instructions. Then I practiced, wrote things down. And revised.

2) Secondly, I got help. There are hundreds of forums out there with people who seem to have nothing else to do with their lives than help you out.

3) Finally I took on a positive attitude. There was no going back, this had to work, and I was going to make it do so.

Training, Teamwork and Trying. The 3 Ts of change management, at least as far as Forerunners are concerned.

So now that I have the most recent technology and am sure to be running faster, the marathon dates for 2010 have been added in red highlighter to the diary : 9th May in Mont St Michel, and 10th October (10/10/10!!) in Chicago!!

I’ll be keeping you informed of how things go!!

Categories: Lean Business France Tags:

Insourcing 1 Outsourcing 0

January 12th, 2010 admin No comments

Interesting article in this morning’s paper which could have a big effect on the Swiss watch-making industry, dominated by the Swatch Group. The group makes not only Swatch watches, but also Omega, Longines and a whole set of other labels, to such an extent that it has a fairly monopolistic position in the market. In its infinite wisdom, some year ago the Swiss equivalent of the Monopolies Commission forced the Swatch Group to provide components to other companies for assembly. Now, we can all probably guess that this was not implemented with the greatest of enthusiasm, and it seems that there have over the years been a number of law suits and court cases against the Swatch Group for not complying with the orders.

I mentioned the ‘infinite’ wisdom of the Monopolies Commission, but maybe their wisdom is not that unconstrained. For the order they made was imposable through to the end of this year only. And surprise, surprise, the Swatch Group is threatening to stop supplying its competitors. As outlined by its president, Nicolas Hayek,

we have invested almost 2 billion Swiss francs into our production capability while others invest in marketing while using us as a supermarket…. Who, apart from ourselves, takes on the risks, makes the investments, absorbs the costs and trains the personnel?”.

A lesson maybe for those companies that have developed foreign sources of low-cost components rather than using local sources or even insourcing. What guarantee do they have that those sources will always want to carry on supplying? In the same paper, confirmation that the Chinese automotive market is now the world’s biggest. For how long will some of the more ‘exotic’ Asian low-cost sources want or even have the capacity to export their products?

Categories: It's Happening Worldwide Tags:

Getting closer to the customer (now that he’s gone).

January 8th, 2010 admin No comments

I feel that I owe it to the thousands (OK, maybe I’m exagerating a little – there’s at least my mother!) who have been following the swine flu saga in France to provide updates as soon as they happen.

So I’m afraid that I’m a little late, as the news came out yesterday that our Health Minister had finally given in to the lobbying and would be allowing General Practitioners to carry out vaccinations. If you remember, the entire French population up until now has had to queue outside with their five kids in the freezing snow to finally get access to the commandeered gymnasium where a totally overworked commandeered medic would pierce your skin with malice such is the poor rate of pay he’s getting for working Sundays….

OK, maybe a little over-the-top again, I’m sorry.

So from next Tuesday (now, I’ve not been able to find what is the reason why, for example, they can’t start on Monday), if you’ve not yet been vaccinated, you can hop on down to your local friendly family doctor and have a bit of a chinwag while he lovingly eases a tiny little needle into your duaghter’s arm while distracting her with jokes, sweets and, if you’re lucky, a bit of a singsong. That’s unless the waiting room is already full of people who’ve been standing out in the cold for three hours and have now all got common colds….

There’s just one problem however. Two in fact.

Firstly (and read this carefully), the doctor is going to have to go out and fetch his own vaccines. Normally, the patient would go down to the local pharmacy, pick up a dose and take it in for use by the professionnal. However, because the pharmaceutical companies famously managed to negociate a batch size of 10, and government logistics haven’t yet invented milk runs to drop off a bow at each surgery, the doctor himself is going to have to drop in at the local chemists in the morning in his pickup and load a day’s supply.

And what is he going to get for his pains? 6 euros 60 (the normal consultancy rate is around 22 euros for a 10-15 minute visit) and this needs to cover the time necessary for all of the paperwork that will need to be filled in (traceability, it seems, is highly important in this business).

Hopefully he’s not advancing the money to buy the vaccines. In all probability, he won’t have a lot of work, people now being totally disinterested. But if my maths are right, 94m ordered, 50m cancelled, 5m used means that there are still just under 40m to be gotten rid of.

So we’ve got to look as if we’re doing something.

Please don’t hesitate to use as an example of the advantages of a batch size of one!!

Categories: It's Happening in France Tags:

Who needs competitors when you have customers like this?

January 5th, 2010 admin No comments

Following last month’s post on Swine Flu Lean the situation reached an unprecedented peak of ridicule last night, with the French Health Minister announcing on French television at the height of the audience that :

“I have cancelled our orders for 50m vaccine doses. They have not been delivered, they have not been paid for. So I have cancelled them”.

Well that seems pretty fair, doesn’t it. Sounds like a really healthy supplier-customer collaboration and the type of customer we would all love to have a handful of (just to spread the risk).

It’s true that the figures are alarming. 94m doses purchased, 5m used with the flu outbreak slowly dying away. Admittedly, they’ve tried selling them on the open market – Qatar are taking 300 000 (you get flu in Qatar?), Egypt might take a couple of boxes, but the problem is that the Germans are trying to sell theirs, the Swiss also… Anyone want any cheap vaccines, only one previous owner!!

We are also seeing the same hospital professors who advised the government that it was going to need two doses per patient (revised down to one a couple of months later after the order had been placed) now appearing on television with warnings that “the outbreak is not over, it could be back in February – quick, get out and get vaccinated”. Of course, nobody believes anything anymore, and all of these claims may even be having a negative effect on the readiness of your average Frenchman to go out and queue in the freezing conditions at the local gymnasium to get a jab against something that already belongs to the past.

Who’s going to come out of this very well? Nobody? Who is going to have egg on their faces? The Health Minister, certainly. Her advisors, definitely. What the about the pharmaceutical companies, who have been working 10-day 30-hour weeks (I worked in the industry for 15 years, I know very well how it works) over the past few months to make the 50m that they can now keep in their warehouses until expiry?

I would suggest that they are not going to get too much sympathy. Already accused of making millions of the back of people’s suffering, and having had to endure a couple of recalls (internationally, not in France), they are seen to be tied up with the government on this. Although I would hope that the risk management processes will have foreseen this type of eventuality, and that a great majority of the 50m cancelled doses have not even been manufactured yet. Only the next few days will tell.

Categories: It's Happening in France Tags:

Reflections on 2009

January 2nd, 2010 admin No comments

As usually happens at the end of the year, we are not only looking forward optimistically to the year ahead, but also looking back over the past one to try and learn any lessons which may be useful for the future.

As far as the social economy in France is concerned, let’s just say that it has been difficult, but that it could have been a lot worse! 420000 more people are out of work than 12 months ago… but at one time, they were predicting 600000. Trade unions were very active, especially during the first half of the year, and actually managed to agree with each other on priorities…. but have been fairly quiet since the summer. There has a spate of suicides at work, specificially at France Telecom, but things have calmed over the past few months, and the unfortunate events will at least have had the merit of making public opinion and the government sensitive to the psychological risks of the workplace, and the objectives is for all of the major companies (1000+) to have workplace agreements in place on this subject by February.

In terms of output, again, not brilliant, but it could have been worse. GNP was down 2,3%, in line with the use, but far better than the major European neighbours. And some sectors have done well. For example, registrations of new cars were up by over 10% compared with the previous years, and total registrations up by 40%, due mainly to government incentives (and even the announcement that these incentives would be lower in 2010 had the effect of increasing sales by 40% in November and December). However, with the majority of sales being made on the smaller versions of cars manufactured overseas, there has not been a corresponding increase in activity for French manufacturers, and subcontracting business has dropped by a total of 20%.

France is also looking back to 10 years ago, when the 35-hour working week was introduced (it was previously 39). At the time, its introduction kicked off a major debate, which has continued to this day. The average working year has indeed dropped, from 1637 hours in 1998 to 1542 in 2008. But look at the other developed nations. Over the same period, the working year has dropped in the US from 1847 to 1792, Japan from 1842 to 1772, and Germany from 1503 to 1432. Even the poor Italians, World Soccer Champions but also World Working Champions, have dropped from 1880 to 1802, with no fuss at all. Why is everything so complicated in France.

So what can we learn from 2009 that may be useful for 2010?

Firstly, don’t necessarily believe the predictions, whether they be optimistic or pessimistic. Play it by ear, remain flexible and alert, and in all cases, keep the chin up.

Secondly, the influence of government policy is here to stay. The “poor but could have been worse” results would have been far worse without government intervention, in France as in many other countries. So instead of criticising so often (as they tend to do in France), we could all be putting our efforts into making policy work. These are fairly intelligent people, aren’t they?

Thirdly, we should all accept that change is inevitable and acceptable. Reading the newspaper accounts of 2009, it is amazing just how many things have changed in just twelve short months. We all have a role of change agents, working both for ourselves and our immediate entourage.

And finally, although it was a bad year, things are beginning to look up. We need to consolidate on the learnings to come out of the past twelve months : the importance of the individual in the workplace, the fact that we are globally better off than ten years ago and should appreciate it, and the risks in outsourcing to low-cost countries to obtain short-term gains.

I wish all readers a happy and successful 2010.

Categories: It's Happening in France Tags:
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