ED 379 479

AUTHORTITLE

DOCUMENT RESUME

CE 068 303

Burns, Jim A.; King, RichardTraining in the Food and Beverages Sector in theUnited Kingdom. Report for the FORCE Programme. FirstEdition.

INSTITUTION European Centre for the Development of VocationalTraining, Berlin (Germany).

REPORT NO ISBN-92-826-8416-4PUB DATE 94

NOTE 87p.; For the report on Ireland, see CE 068 302.Cover title varies.

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DESCRIPTORS Case Studies; Corporate Education; EducationalImprovement; Educational Needs; Educational Trends;*Education Work Relationship; Employment Patterns;Employment Projections; Employment Qualifications;*Food Processing Occupations; Foreign Countries; *JobTraining; Labor Force Development; Labor Market;Manufacturing Industry; Personnel Management;Postsecondary Education; Private Sector;Productivity; Recruitment; Secondary Education;Tables (Data); *Training Methods; TrainingObjectives; Trend Analysis; *Vocational Education

IDENTIFIERS *Beverages; *United Kingdom

ABSTRACTAn international team of researchers studied the

following aspects of training in the United Kingdom's food andbeverage' sector: structure and characteristics, business and socialcontext, training and recruitment, and future training requirements.

Data were collected from an analysis of social and labor/employmentstatistics, literature review, and case studies of six foodmanufacturers ranging in size/type from a private family-ownedbusiness involved in food manufacture, retailing, and catering to the

parent company of a group spanning 19 countries and employing morethan 40,000 individuals. Included in each case study were a companyprofile, summary of its initial and continuing vocational trainingpolicies and practices, and analysis of training costs andeffectiveness. In all six companies studied, the primary objective oftraining was to improve business performance. Developing a flexiblework force was also deemed important. Most of the companies had

recently invested in new processing plants, and all supportedpersonnel development programs. Training was not a significant

feature of companies' dialogues with unions. Most trainingplars/programs were dictated by business objectives and the need tomeet production targets and legal requirements. In-house training by

externally trained trainers seemed preferred. (A glossary and 45

tables/figures are included. Contains 38 references.) (MN)

FORMATION CONTINUE EN EUROPEEuropean Commission

FOOD ANDBEVERAGES SECTOR

U SDEPARTMENT OF

EDUCATION

oecool EducationalResearch and ,a,Oven,ent

AedEDATIONAL RESOURCES

INFORMATION

CENTER (ERIC)

This documenthas been

reproduced as

received fromthe person or organization

originating it

Minor changeshave been made to

improvereproduction quality

-_ _

Points of view or opinionsstated in this

document do not necessarilyrepresent

official OERIposition orpolicy

"PERMISSION TOREKIODUCE THIS

MATERIAL HAS BEENGRANTED BY

00za I--wb.,z o.

TO THE EDUCATIONAL RESOURCES

INFORMATION CENTER (ERIC).-

FOOD AND BEVERAGES SECTOR

TRAINING IN THE FOODAND BEVERAGES SECTORIN THE UNITED KINGDOMREPORT FOR THE FORCE PROGRAMME

drawn up byJim A. Burns and Richard King

1993

First edition, Berlin 1994Published by:

CEDEFOP European Centre for the Development of Vocational Training,Jean Monnet House, Bundesallee 22, D-10717 Berlin

Fax 49-30 + 88 41 22 22Tel. 49-30 + 88 41 20 Telex 18 41 63 eucen d

The Centre was established by Regulation (EEC) No 337/75of the Council of the European Communities

3

Cataloguing data can be found at the end of this publication.

Luxembourg: Office for Official Publications of the European Communities, 1994

ISBN 92-826-8416-4

ECSC-EC-EAEC, Brussels Luxembourg, 1994

Reproduction is authorized, except for commercial purposes, provided the source isacknowledged.

Printed in the United Kingdom

FORCE

Formation continue en EuropeCommission of the European Communities

TASK FORCEHuman Resources, Education, Training and Youth

Rue de la Loi, 200; B-1049 Bruxelles

THE IDEA FORCEThe future economic strength and the potential for social progress of the European Community

depends on a consistent impovement in the competence and qualifications of its 132.000.000 labour

force. Better continuing vocational training is one of the essential conditions for the success of the

Single Market 1993.The European Commission is determined to support and give fresh impetus to the efforts which com-

panies throughout the Community are making to improve continuing training.FORCE is the European Community's action programme for the development of continuing vocational

training. It is focussed on companies,especially on small and medium-sized companies. It involves train-

ers and training bodies, employer and union representatives everyone concerned with improving the

competence of the labour force.

WHAT DOES FORCE OFFER?FORCE promotes working partnerships in continuing training between companies, training bodies,

public authorities and social partners.These will include: supporting continuing training innovation through a European transnational net-

work, an exchange programme, transnational and transfroniier pilot projects and projects concerned

with the evolution of qualifications; assuring closer policy co-operation between Member States by

evolving a common statistical means of analysing what is being done in terms of continuing training,

through regular analysis of relevant contractual policy and collective agreements, and through enquir-

ies into sectoral needs; supporting the establishment of regional consortia and transnational continuing

training partnerships which specialise in transferring exemplary good practice to economically weak

regions.

JOININGYou can take part in the FORCE network and apply for financial assistance to join its innovation and

transfer exchanges and prc;ects if you are:a large, medium-sized or small company, a training body working with industry orcommerce, an employer or trade union body, a training or human resource expert

or manager.Through FORCE you can help improve continuing training in your company, sector or local labour

market. At the same time you can help to contribute to the improvement and availability of continuing

training aid thus to shaping the European Community.

CEDEFOP

European Centre for the Development of Vocational TrainingJean Monnet House, Bundesallee 22, D-10717 Berlin

Institutional status

CEDEFOP is an autonomous body, independent of the departments of the Commission of the EuropeanCommunities, but its task and activities are closely integrated with those of the Commission, to whichthe Centre contributes its technical and scientific expertise.

Working guidelines for the Centre are laid down by its Management Board, whose members repres-ent the EC Commission (3), trade unions (12) employers' organizations (12) and governments (12).The Management Board decides on the Work Programme, draws up and approves budgets andadopts the Annual Report.

The members of the Management Board are appointed by the organizations they represent andremain in office for two years. The chairmanship of the Board changes each year.

Institutional tasks

Information:In the field of vocational training, information is one of the Centre's vital tasks. Its documentation serviceand a constantly updated bibliographical database receive information from a network of nationalcorrespondents, and the information is then made available to a very wide audience, in part via highlysophisticated computerized channels. Its carefully planned publishing policy also ensures that theCentre's voice is heard on major issues in the field of vocational training. It produces its own regularpublications (»Vocational Training«, »CEDEFOP flash« and »CEDEFOP flash special«) and occasionalpublications such as research reports, monographs and manuals.

Research:CEDEFOP, as a centre for the promotion and coordination of iesearch with n the Community, providessupport in the form of information, expertise and encouragement for the pl Inning and implementationof vocational training initiatives in Member States. In so doing it serves as c focus for innovation.

Consultation:CEDEFOP, as an organization supporting the Commission, has the task of promoting a concertedapproach to vocational training problems. It takes every opportunity to promote and encourage train-ing.

5

ACKNOWLEDGEMENTS

This study was carried out for the European Commis-sion's Task Force Human Resources as part of aninvestigation into Continuous Vocational Training inthe European food and drink sector. The primarycontractor for the project was Crege Management,Paris. The central team, Francois De ly (Crege Man-agement), Jim Burns (University of Reading), RichardKing (University of Reading), Wilfried Kruse (Sozial-forschungsstelle, Dortmund), Louis Mallet (CN RS,Toulouse), Maurizio Sorcioni (Istituto Censis, Roma),worked in close association with Tina Bertzeletou,CEDEFOP (Berlin) and Judith Grieve, Task ForceHuman Resources (Brussels).

The UK team of Jim Burns, Richard King and Di Amor,would especially like to thank the companies whichagreed to take part as case studies. Without theirwhole-hearted cooperation the project could nothave been completed. We very much appreciatethe time and help they generously gave. We arealso indebted to all the companies that completedquestionnaires during the pre-selection of the casestudies.

Finally, we would like to express our thanks to all theemployers organizations, unions and industrialtraining organizations who, together with the ForceNational Coordination Unit at the Department ofEmployment, Sheffield, responded to our manyenquiries for information and for the helpful discus-sions we had with them.

September 1993

J. A. BurnsDepartment of Agricultural Economics& ManagementEarley GateWhiteknights RoadReading RG6 2ARUK

R. D. KingDepartment of Food Science &TechnologyWhiteknightsReading RG6 2APUK

77

CONTENTS

PAR? 1 - SECTORAL CONTEXT1. Introduction

1.1 Overview of the report

1.2 Choice of case studies

1.3 Methodology

2. UK food and drink sector 12

2.1 Nature of the food and drink sector

2.2 Business environment and social context of training ,19

2.3 Employment environment 22

2.4 Training and recruitment 23

2.5 Future training requirements 26

Appendix 1 "27

Appendix 2 29

References 30

PART 2 - CASE STUDIES1. MCVITIE'S BISCUITS -31

1.1 Company overview 31

1.2 UB group 31

1.3 McVitie's group 31

1.4 The Manclyister biscuit factory 32

1.5 Continuing vocational training practices 34

1.6 Training at McVitie's Manchester 35

'1.7 Assessment of training by management and workforce 38

1.8 Synthesis 39

Appendix 41

2. PP.OSPECT FOODS LTD .45

2.1 Description of Prospect Foods group 45

2.2 Markets and marketing strategy 45

2.3 Organization of Taylors Tea & Coffee 45

2.4 Workforc: 46

2.5 Continuing vocational training at Prospect Foods 46

2.6 Training in practice 48

2.7 Cost of training 54

2.8 Assessment of training 54

Appendix 55

3. DAVID A. HALL LTD 57

3.1 History and description of company 57

3.2 Markets and marketing strategy '57

3.3 Halls manufacturing and distribution operation 57

3.4 Workforce 58

3.5 Training policy .58

3.6 Training programmes 59

8

3.7 Assessment of training

Appendix

4. BIRDS EYE WALL'S LTD 63

4.1 Company overview 63-

4.2 Products and process 63

4.3 Markets -63

4.4 Humberside management structure and organization *'64

4.5 Training 65Appendix 70

5. CLIFFORD FOODS PLC 71

5.1 Company overview '71

5.2 Markets and marketing strategy 71

5.3 Factory organization Kidlington 73

5.4 Workforce 73

5.5 Continuing vocational training practices 74

5.6 Training programmes 75

5.7 Assessment of training 77

Appendix 78

6. TUNNEL REFINERIES LTD .79

6.1 Description of the company 79

6.2 Training policy 79

6.3 Evaluation 80

Appendix 80'

PART 3 -TRENDSCONCLUSIONS 81

1. Developments in the UK food industry 81

2. Development of CVT training policy 81

3. Social dialogue on training 82

4. Relationship of the educational system to continuing training 82

5. Planning and concept of training 83

1.. Target groups 83

7. Contents, methods and organization 83

8. Costs and financing 83

9. Developments 83

Glossary 85'

PART 1:

1. Introduction

2. UK food and drink sector

Appendix 1

Appendix 2

References

1. INTRODUCTION

1.1 Overview of the reportThe report has two main sections, a review of thesector (2. UK Food and Drink Sector); and the sixcase studies (Part 2). Part 3 gives a synthesis of the

main issues.

1.2 Choice of case studiesCompanies for the case studies were initiallyselected from recommendations of the social part-ners. To these selections were added companiesthat, from external indicators such as winningNational Training Awards or reaching Investor inPeople Standard, we believed had demonstratedan exemplary record in training. Other criteria usedwere: geographical location within the United King-dom; sub-sector within which companies operated;company size. From the resulting group the mostrepresentative sample possible. was selected forconsideration and agreement by the social part-ners. These .sere then submitted to the centralresearch team for the project, who selected six com-panies ,m the ten nominations for study.

The businesses in the final sample are all medium orlarge in size. Small and other medium-sized enter-prises were eliminated as those in the prior selectionhad concentrated on Youth Training or similar initialtraining schemes which are not within the scope ofthis project. The six companies selected are opera-tive in major areas of production, encompassing arange of sub-sectors across the food and drinkindustry, and their activities cover a wide geo-graphical distribution within the UK.

By the very nature of the selection process the sur-vey concentrates on enterprises where training isworking well for the social partners. It is impossiblewith this sample to extrapolate the conclusions ofthe study across the sector as a whole.

1.3 MethodologyThe case studies were constructed on the basis ofinterviews with personnel and training managerswithin the companies selected. Except for one study,

where only one short interview was possible, two orthree lengthy visits were made to the companies.The views and opinions of the widest possible cross'-ection of employees, including union representa-tives, on the training policy of the company werealso sought. Again in one case it was not possible tointerview a cross section of staff or union repre-sentatives.

The central team established an interview guidecovering the following topics:

Company overviewBackground and organizationProducts and marketsIndustrial and internal organizationStaff structure

Vocational Training PolicyAimsOrganization and fundingTraining provisionOriginal or noteworthy features

A report on a specific programme

Assessment of the training practices by the variousactorsManagementHuman Resources and Training DivisionUnion representativesEmployees

The essential questions to be addressed were:Why do businesses adopt a particular trainingpolicy, and how is this shaped by the characteris-tics of the business?

How is the training policy linked to the nationalinstitutional and sectoral context?

How do the social partners assess the policy and inwhat way do they individually determine the poli-cy?

12

2. UK FOOD AND DRINK SECTOR

2.1 Nature of the food and drink sector

2.1.2 Food and drink industries in thenational economyThe f. nd and drink manufacturing industry occu-pies u central place in the marketing chain whichtransforms the output of UK and overseas agricul-ture into food products and distributes them to con-sumers. In aggregate during the 1980s, UK consum-ers spent more on the processing and distribution ofof food (excluding alcoholic drinks) than on basicfoodstuffs from agriculture at home or abroad(Central Statistical Office, 1993). The proportiontotal final UK consumers food expenditureaccounted for by processing and the distribution offood rose from under 50% in 1977 to almost 60% in1987. The main elements of the food chain (exclud-ing alcoholic drinks) are shown in Table 2.1.

Table 2.1 - '1K Food Chain 1988£bn and as percentages of consumers' foodexpenditure plus exports

Imports Food from farms(£8.6bn, 15.4%) (£9.2bn, 16.5%)

Manufacturers Wholesalers Value AddedValue Added (£4.1bn, 7.4%)(£14.4bn, 25.9%)

Retailers Value Added(£9.5bn, 17.0%)

Caterers (Non-Residential)Value Added(£9.9bn, 17.8 %)

Consumers foodexpenditure(£52.9bn)

Exports

(£2.8bn)

Source: Ministry of Agriculture Fisheries and Food, 1991

In comparison with previous estimates (e.g. Slater,1988, Mordue, 1983) these figures show significantfalls for the contributions of the output of UK farm-ing and of imports while the importance of cateringand wholesaling has grown markedly. By contrast,the proportion of consumers' expenditure (plusexports) going to food manufacturing has shownsmaller increases while retailing has remained fairlyconstant.

Recent data on the importance of the food sector ingross domestic product (GDP) terms in 1989 hasbeen provided by the Ministry of Agriculture, Fish-eries and Food (MAFF), and in Table 2.2 this, alongwith employment data for the same year, is com-pared to the figures for 1985 found in Slater (1988).

The contribution of the sector to GDP decreasedslightly over the four years, but the downturn in eco-nomic activity since 1989 has been more severe inother industrial sectors to the relative advantage ofthose industries in the food chain. Hence while, in1989, food and drink manufacturing accounted fora smaller prop xtion of total UK GDP than previ-ously, the industry improved its position from 9.1%to just under 10% of all production industries'contri-button betweun 1985 and 1989. Employment in

12

food and drink manufacturing initially declined dur-ing the 1980s, but rose slightly over the latter half ofthe decade. However, the most recent statistics sug-gest a significant reduction in labour during 1991and 1992. Food retailing, on the other hand,appears to have increased its contribution to GDPand its labour force over the period.

Table 2.2 Contribution to GDP and employment1989 (1985)

Contribution employmentto GDP % 000

Agriculture 1.4 (1.8) 279 (315) 1.2 (1.3)Food and drinkmanufacturing 2.5 (2.9) 544 (545) 2.4 (2.2)

Food wholesaling 0.5 (0.7) 241 (235) 1.1 (1.0)

Catering 1.9 (1.9) 748 (770) 3.2 (3.1)Food retailing 2.5 (1.8) 781 (720) 3.4 (2.9)

Total food sector 8.8 (9.1) 2378 (2585) 11.4 (10.5)

Source: Slater, 1988; Business Statistical Office, 1993;Ministry of Agriculture, Fisheries and Food, PersonalCommunication, 1992

In this report, our main focus is the food and drinkindustry as such, but this represents a very hetero-geneous collection of activities, structures and meth-ods of operation. Some process farm products intogoods that play an intermediate function by form-ing the raw-material basis for more highly proces-sed foods. Such activities, called first-stage proces-sing, include grain milling, sugar refining, meatslaughtering, manufacturing of dairy products andof vegetable and animal fats. Others focus on pro-ducing food in a form that consumers purchase:these activities involve manufacturing bread, bis-cuits, chocolate and sugar confectionery, soft drinks,snack foods, etc. and are called second-stage pro-cessing. Of course the distinction is not clear cut, andmany sections of the food and drink industry fall intoboth camps, but the contrasting agricultural- andconsumer-oi ientation of these two broad parts ofthe food sector serves to highlight the main influ-ences on them. The first stage sector is particularlyaffected by farm matters, including agricultural poli-cy, and largely produces standard commodities. Bycontrast, the fortunes of second stage manufactur-ers more closely relate to their meeting consumerneeds and requirements, with particular emphasison marketing and new product development.

2.1.3 AgricultureIn general terms, while agriculture has become rela-tively less significant in the economies of EC, it hasproduced more than sufficient basic foodstuffs tomeet the needs of consumers. In part, it may beargued that this expansion has come from techno-logical change which has improved farm yields andoutput. However the operation of EC Common Agri-cultural Policy (CAP) also has expanded EC output,often leading to the replacement of previouslyimported supplies which have been particularly dis-advantaged by the operation of import levies andother policies. For example, UK farms currently sup-ply a far larger proportion of wheat and sugar

requirements than before joining the Community,and since access to raw materials remains the domi-nant factor in location, and a significant determinant of scale, there have been consequent changeswithin the milling and refining industries. Under theCAP, supplies in excess of EC consumer require-ments may be purchased by intervention agencies,and/or exported with subsidies which enable sur-pluses to be sold at lower than EC internal prices onworld markets. Since it is typically at the first stageprocessing rather than farm level that interventionpolicy operates, manufacturers may be encour-aged to expand by policies that artificially supportmarkets. However these sectors are particularly vul-nerable to contraction as a result of policy changessuch as those brought about by EC budget restraint,agricultural reform and international trade agree-ments. For example, UK production of butter, the"sink" product in milk usage, rose from supplying lessthan one-fifth of home requirements before mem-bership of the EC, to more than self-sufficiency in1987, but fell back to 60% in 1992 (Ministry of Agri-culture, Fisheries and Food, 1993).

2.1.4 Consumption of food and drinkUK food consumption grew only slowly from 1980-1991 with a total rise of 9.8% in household foodspending in real terms (constant 1985 prices), or lessthan 1% per year (Central Statistical Office, 1993).

Over the same period (1980-91) alcoholic drinkexpenditure increased by 2.7%, having fallen backfrom its peak in 1988, but that on tobacco slumpedby 25.4% in almost continuing decline. Py compari-son, consumers total spending on all goods andservices rose by 37.4% between 1980 and 1991, or3% per year on average. These figures confirmEngel's Law that in an economy such as the UK, withrelative affluence and continuing growth in realincomes, in general, food represents a smaller pro-portion of total expenditure as the latter rises in realterms.

In 1992 under a quarter of UK consumers' totalexpenditure was on food (household and meals out)and drink, almost five percentage points lower thana decade before, as shown in Table 2.3. In recentyears this total declined only marginally, since ashousehold food and alcohol consumption remain-ed static in proportionate terms, spending on restau-rant and other meals out was a source of growth.

However this latter area of expenditure is typicallymore volatile than purchases for eating in the homewith a much higher positive income elasticity' ofdemand'. While data for 1991 show the trend ofenhanced .pending on meals out continuing, theeffects of recession in the economy are the likelycause of the reduction in 1992.Trading down to less

expensive food types and brands occurs duringtimes of reduced consumer real incomes, just as trad-ing up to higher rice, improved quality products,results when real incomes rise.

Table 2.3 Consumers' expenditure on food and drink

(as a proportion of total consumers' expencl;,:ire)

1980 1985 1990 1991 1992

% of totalconsumer'sexpenditure

28.4 25.5 23.8 24.1 23.7

of which:

Household food 16.9 14.1 12.0 12.0 11.7

Meals out 4.3 4.2 5.6 5.7 5.5

Alcoholic drink 7.2 7.2 6.2 6.4 6.5

Source: Ministry of Agriculture, Fisheries and Food,

1993

A further factor accounting for the decline in theimportance of food spending by consumers is therelatively slc Ner rise in food prices over the 1980scompared to prices in general (Ministry of Agricul-ture, Fisheries and Food, 1992). Nevertheless aggre-gate food spending has remained a relatively sta-ble item, particularly in comparison with post-ponable "lumpy" expenditure on consumer du-rables, furniture or even clothes. However, given thelow rate of population growth in the UK in recentyears, and limited response to real income rises,developments in the sector consist largely of growthin one market at the expense of another. In these cir-cumstances competition is enhanced, and may beby price, promotion or new product development.The latter may be facilitated by production develop-ments and by the widespread use of consumer du-rables such as freezers and microwave ovens. Inturn these developments, along with changes in con-sumer lifestyles, have encouraged the trendtowards more informal eating. Other tendencies,such as continuing demand for convenience foods,greater variety and foods with healthy images,have been significant over the decade, althoughdeclining prosperity in the early 1990s appearsto have refocussed consumers' attention on foodprices.

Of the major food categories, growth areas havebeen soft drinks, fruit (especially fresh fruit and fruitjuices), fresh and processed vegetables, and cereals(see Appendix 1). The latter group includes a con-tinuing if broadly slower decline in bread consump-tion, stability in cake and biscuit eating, and a long-term steady rise in the consumption of breakfastcereals. The sugar and confectionery category alsocontains counteracting trends, for while consump-tion of sugar as sugar fell by half over the decade,total sugar use, including that in soft drinks, confec-tionery, ice cream, cereals, etc., declined by a mere10%. Again the fall in potato consumption has notbeen paralleled in other vegetables, and snackproducts (including those based on potatoes)remain buoyant. butter consumption in 1990 was

Slater (1992, p 25) says that "food as a whole tends to be very income inelastic and hence unresponsive to rises or falls

in living standards" (but) "catering is sensitive to movements in consumers' income; a crude estimate of income elas-

ticity suggests that for every 1% increase in disposable incomes, expenditure on catering rises by 2 %."

13

13

14

only 40% of its 1980 level, and the same, in terms ofounces per week, as that for low-fat spreads, aproduct only appearing in the statistics over the lastfew years. Milk consumption has fallen, but with thenoticeable switch to low-fat milks, which in 1992made up almost one-half of total liquid milk con-sumed by households. Like low-fat milks, the healthyimage of yogurt helps explain its marked rise in con-sumption over the decade, reaching twice its 1980level in 1990. A combination of convenience andhealth factors may explain the growth in the readymeals market, especially those based on vegetarianor non-red meats, and ethnic mt. al types. Soft drinkconsumption has continued to increase as has thatof bottled mineral water. This may account for thelong term decline in tea, and the more recent down-turn in coffee drinking.

These changes in consumer preferences and devel-opments in lifestyles bring dynamism into the mar-kets which make up the food and drink sector. Giventhe static overall market, and the relatively slowgrowth in exports (see 2.1.6.1), manufacturers needto anticipate or quickly respond to changing con-sumer requirements in order to survive. This flexibil-ity and adaptability of production to the demandsof market forces has significant implications fortraining, both in terms of skills and attitudes. More-over +he cost pressures imposed by the competitiveretail market mean that unit costs need to be con-tained, despite the increased requirements forenhanced capabilities inhuman resources.

2.1.5 Food and drink industry structure

2.1.5.1 General characteristicsWe have noted above the heterogeneous nature ofthe food and drink industries in the UK. This is dem-

onstrated in its structural characteristics: some sec-tions of the industry are capital intensive, with largescale production dominated by few firms; othersremain small scale, craft industries, with many enter-prises. Many areas exhibit both characteristics simul-taneously, with large oligopolistic firms surroundedby a fringe of numerous smaller competitors.

In 1990 there were 9267 businesses in the UK's food,drink and tobacco manufacturing (FDT), but thelargest 10% of them, with 100 or more employees,accounted for 82% of employment in the industry(Business Statistical Office, 1993). The average sizein employment terms of these larger FDT manufac-turing businesses at 503 employees in 1990appears greater than for UK manufacturing as awhole with 411. This situation was also indicated inprevious studies (e.g. Ashby, 1978; Mordue, 1983)2.

The largest groups within the UK Standard IndustrialClassification FDT Asian are bread, biscuits andflour confectionery (SIC 419) and meat slaughteringand processing (SIC 412) as measured by the pro-portion industry employment (the two groupstogether making up almost half the FDT total), pro-portion of gross value added and number of enter-prises, Table 2.4. Both groups are amongst the leastconcentrated (in terms of five-firm concentrationratios (CR5))3, and spend above average for theindustry on labour and below average on capital(both as a proportion of gross value added). Whenproportion of sales becomes the criteria othergroups such as milk and milk products (SIC 413), mis-cellaneous foods (SIC 418/423) and brewing andmalting (SIC 427) assume greater importance, morethan comparable to that of bread, biscuits and flourconfectionery, although still behind meat slaughter-ing and processing.

Table 2.4 - Relative proportion of employment, sales and gross value added (GVA) in UK food and drinkindustry (1990)

SIC Industry Employ- Sales GVA

group ment

1980

411 Organic oils and fats 0.9 2.6 1.3

412 Slaughtering & meat products 20.2 17.1 14.3

413 Milk & milk products 6.9 12.0 8.6

414 Fruit & vegetable processing 3.2 2.4 2.6

415 Fish processing 3.6 2.3 2.0

416 Grain milling 1.0 2.4 1.9

419 Bread, biscuits & flour confectionery 27.3 10.3 15.9

420 Sugar & sugar by-products 1.0 2.5 2.3

421 Ice-cream, cocoa, chocolate & sugar confectionery 9.5 7.8 10.1

422 Animal feeds 3 7.7 5.1

418/423 Starch & miscellaneous foods 10.6 11.3 14.6

424 Spirit distilling 2.4 4.2 5.8

426 Wines, cider & perry 0.6 1.1 1.2

427 Brewing & malting 5.3 10.6 8.6

428 Soft drinks 3.7 5.4 5.5

Source: Business Statistical Office, 1993

7 Unfortunately changes in statistical methods make direct comparisons with these previous studies inaccurate.

Five-firm concentration ratio gives the proportion of market sales, or employment, value added, etc., accounted forby the five largest firms.

4

The FDT value added at 25% of gross output is gen-erally low compared to the all manufacturing indus-try level of 35%, but significant differences occurbetween sub-sectors. Some first stage processors,such as grain milling and sugar refining are typifiedby low value added and low wage costs, reflectingthe standard products and capital intensity of pro-cesses. Raw material costs may be considered moresignificant than wage levels in these industries' prof-itability (Table 2.5). By contrast, such second stagemanufacturers as those in bread, biscuits and flourconfectionery and cocoa, chocolate and sugar con-fectionery have a higher proportion of labour costsin value added. However classifications within theFDT sector are too broad to draw firm conclusionsand many intermediate cases apply.

Table 2.5 Relative proportional value added and costs

dency towards an increase in concentration forthose groups with lower CR5 in 1985, while in higherCR5 sectors concentration appears to haveremained constant or declined.The SIC group defini-tions are very broad and frequently do not corre-spond to meaningful markets in any commercialsense. More narrow delineations into product mar-kets will naturally show greater concentrations, butofficial calculations of concentration ratios at thislevel are not available for recent years in the UK.Market research estimates vary considerablydepending on source, and those given in Table 2.7can only be seen as approximate guides. The mar-kets indicated are still relatively broad, and sinceconcentration will normally be higher the more nar-row a market definition is employed, leading pro-

in FDT (1990)

Industrygroup1980

GVA%of grossoutput

Wages &salaries as% GVA

Net capitalexpenditureas % of GVA

411 Organic oils and fats 13 55 24

412 Slaughtering & meat products 22 57 14

413 Milk & milk products 19 43 13

414 Fruit & vegetable processing 28 54 19

415 Fish processing 23 60 16

416 Grain milling 21 33 17

419 Bread, biscuits, flour confectionery 40 60 11

420 Sugar & sugar by-products 25 31 11

421 Ice-cream, cocoa, chocolate & sugar confectionery 34 46 17

422 Animal feeds 17 45 15

418/ 423 Starch & miscellaneous foods 34 40 15

424 Spirit distilling 33 25 12

426 Wines, cider & perry 27 35 20

427 Brewing & malting 21 37 25

428 Soft drinks 27 37 18

Total FDT 25 44 14

Source: Business Statistical Office, 1991

2.1.5.2 ConcentrationOver the past thirty years the industry has becomemore concentrated in general, with large firms gain-ing greater significance in total industry activity. Inthe early 1980s, ten companies were thought toaccount for one-third of all UK food sales (ACARD,1982), and most commentators would not suggestthat the proportion has decreased. The 100 largestmanufacturers in the UK produce half the net outputof the food industry and employ 43% of its work-force (Business Statistical Office, 1993). This 100includes 24 enterprises classified to FDT, with somespecialized in particular sectors, and others diversi-fied across several related food, drink and cateringareas. Further enterprises whose activities areincluded in the total output a id employment areconglomerates of food and nol.-food interests.

Considering the industry by SIC classification (Table2.6) again there is diversity but with a general ten-

ducers will tend to hold more of the finer segmentedmarkets in which they trade.

A further general tendency is that larger marketswill be less concentrated than smaller ones, giventechnology and hence the level of economies ofscale. However Sutton (1991) has pointed out thisrelationship breaks down in the food industry whensignificant endogenous sunk costs' are involved,and in these circumstances large markets may behighly concentrated.

The process of concentration has been neither con-tinuous nor universal in all sectors of the food anddrink sector. Typically industries experience phasesof concentration activity, such as during the 1960sand in the mid-1980s, and certain sectors may beespecially prone to change. In the former periodlarge numbers of firms were involved in mergersand takeovers, many of them in the bread industry,

Endogenous sunk costs derive from advertising expenditures and product development (R & D), e.g. in breakfast ce-

reals; exog sous sunk costs derive from technology and economies of scale, e.g. in sugar refining.

ti 15

16

Table 2.6 FDT five-firm concentration ratios and enterprise numbers by SIC group (1990)

SIC

group.080

Industry Sales/employment

1985 1990

No. ofenterprises1990

411 Organic oils and fats 68 68 64 70 53

412 Slaughtering & meat products 17 22 22 26 1362

413 Milk & milk products 55 46 60 52 333

414 Fruit & vegetable processing 32 30 48 43 242

415 Fish processing 67 68 53 58 277

416 Grain milling 71 62 67 58 90419 Bread, biscuits & flour confectionery 55 48 48 40 3926420 Sugar & sugar by-products 100 100 90+ 90+ 4

421 Ice-cream, cocoa, chocolate & sugarconfectionery 62 59 59 62 527

422 Animal feeds 44 40 48 41 461

418/423 Starch & miscellaneous foods 28 31 30 33 935424 Spirit distilling 56 57 55 64 46426 Wines, cider & perry 91 89 93 91 54427 Brewing & malting 50 41 46 42 128

428 Soft drinks 45 44 55 51 207

Source: Business Statistical Office, 1993; Business Statistical Office, 1987

Table 2.7 - Food product market shares

Market Year Leading Largest 2/3firm % firms %

Bread 1992 38 60 (2)

Breakfast cereals 1988 49 73 (3)Flour 1990 30 50 (2)

Biscuits 1989 40 52 (3)

Packaged cakes 1990 40 59 (2)

Canned fish 1990 38 63 (2)

Margarine 1986 50 60 (2)

Yogurt 1988 27 47 (3)

Ice cream 1988 42 52 (2)

Sugar 1989 64 98 (2)

Chocolate confectionery 1988 30 80 (3)

Sugar confectionery 1; 69 27 45 (3)Preserves 1989 17 33 (2)

Potato crisps 1991 40 63 (3)

Savoury snacks 1991 38 77 (3)

Baked beans 1987 40 55 (3)

Canned tomato 1989 33 43 (2)

Instant coffee 1987 50 79 (3)

Tea 1987 33 68 (3)

Canned soup 1989 63 74 (2)

Baby food 1990 30 63 (3)

Notes: Figures include manufacturers brands only,and not production for retailers/distributors own-label goods. Normally inclusion of these wouldenhance leading producers' market shares. Top twoor three firms' market shares include that of the lead-ing firm.

Source: Various market research reports.

while in the latter period some very high value bidswere successful, especially amongst drinks compa-nies. More recently government decisions based onthe findings of the Monopolies and Mergers Com-

mission report on beer (Monopolies and MergersCommission, 1989) have precipitated major struc-tural change and increased concentration in thatindustry.

These periods of merger, particularly when involv-ing diversified target companies, may be followedby rationalization as the enlarged group focuses oncore areas of strategy. It has also been clear thatsome diversified companies, particularly withstrong brand names, have been more valuablewhen operating divisions are split up than whencombined into one group, at least in stock marketterms. Corporate raiding has involved the take overand subsequent break up of some very large com-panies in the UK food industry, Imperial group beingthe obvious e' _.nple in the latter half of the 1980s.Other companies have fractured due to financialstresses, such as those following the nighly lever-aged buy-out of RJR/ Nabisco, or the fall fromarace of Polly Peck.

The UK achieved a relatively strong position in termsof the leading food and drink firms in Europe by1990, with about 13 of the top 20 firms (Cooke,1991). This position resulted in part from historicalfactors such as the British firms' links with overseassuppliers and the importance of US investment inthe UK food industry, but was enhanced during themerger boom of the second half of the 1980s. A fea-ture of this period 'as that as the completion of theEC internal market became the focus of attention socross-border mergers grew in frequency, especiallyas major companies tried to establish positionswithin neighbouring Community countries. Theseincluded third country multinationals, with giantssuch as Kraft/ General Foods (Philip Morris), Nestleand Pepsico consolidating or expanding their foodinterests. Financial and economic difficulties havesomewhat reduced the level of merger activity inmore recent years.

2.1.5.3 Productivity and technologicalchangeProductivity in industry is measured in terms of com-paring output produced with inputs used. Inputs areusually classified into broad groups labour and capi-tal, but if they are taken together a total factor prod-uctivity may be obtained, as for example for f'DT byMordue and Marshall (1979) and Watts (1982)5.The two studies show that, for a given change in out-put, UK food manufacturing tended to lose labourmore slowly and use capital more quickly than UKmanufacturing as a whole during the 1960s and1970s. More recent data, e.g. Blackaby and Hunt(1990), suggests that the same situation still appliesfor labour. They show that between 1979 and 1988,output in FDT increased by 0.6% p.a., and employ-ment fell by 2.8% p.a., while in total manufacturingthe output rise was greater at 0.8% p.a. and theemployment fall larger at 3.6% p.a.

International comparisons of productivity have indi-cated a relatively modest position for UK manufac-turing as a whole and for FDT (see, for example,Preis, 1981; van Ark, 19900 and 1990b; andMason, van Ark and Wagner, 1993). A study by theFood and Drink Economic Development Committee(1982) found that in the 1970s the UK FDT hcd alower value added per head and slower growth,lower investment per head, a higher proportion ofvalue added devoted to investment but a lowerdegree of capital efficiency than in rival major indus-trial countries. Although the data and methodologyof this study can be questioned, the general conclu-sions have been boy .te out in more recent andmethodologically sounder work, despite significantproductivity improvements in the UK industry duringthe 1980s. Research by van Ark (1990b), for exam-ple, indicates that gross value added per person-hour in FDT in France was over 50% higher than inthe UK in 1979, although by 1.989 this differencehad reduced to 35%. Mason, van Ark and Wagner(1993) showed that, when "quality adjustments" inthe end-product were taken into account, the Ger-man biscuit companies in their study had 40%higher output per employee-hour than their UKequivalents.

The relationship between capital investment- andemployment has also been subject of debate. Astudy by the Food and Drink Manufacturing Sectorgroup (1990) considered the way in which job lossesin UK FDT result from new technology. It concludedthat while this factor was not insignificant in somesectors, in general the losses due to technologywere less severe than those brought about by down-turns in economic cycles, and by rationalizationbrought about through demand changes and/orcompetitive pressures. Labour changes took placeover the period of capital investment, and, even inareas such as applications of microelectronicswhere uptake had been very rapid in FDT, stillenabled natural wastage and reduced recruitmentto be the main form of labour reduction. Qualitativechanges included the tendency for the unskilled

workforce to shrink in importance, with a corre-sponding rise in the proportion of skilled workers.However the report concluded that training needswere increased by changes to quality managementschemes, introduction of IT, and job developmentssuch as multi-skilling and flexibility, rather than newtechnology as such. Recent surveys by the Instituteof Grocery Distribution 1990, 1991) indicate thatfood manufacturers considered business acquisi-tions and plant closures to be the two main causes oflabour loss, with technolog"-.al advances significantin far fewer cases. The changes in labour force sizeand structure in firms brought about by the mergers,and rationalizations, and the introduction of moretechnically advanced machinery are all likely tohave impacts on training.

2.1.6 CompetitionMarket behaviour by firms may be competitive, col-lusive or involve cooperative (or joint) ventures.Competition occurs in many ways; but a convenientdistinction is often made between price competitionand non-price rivalry. Despite the generally oli-gopolistic structure of the UK food industry, pricecompetition may be induced where competitors arerelatively evenly matched, where products arehomogeneous with little brand loyalty and lowadvertising expenditure, and where powerful retail-ers or users have effective bargaining power. In

such circumstances a firm is likely to be more success-ful through reducing costs by efficient use of capitaland labour. By contrast, firms in stronger marketpositions with differentiated products, supported byadvertising, may use product development to seekout market segments and be able to charge pre-mium prices.

Where structural change through external acquisi-tion appears disadvantageous to companies, jointventures may be attempted in the hope of reapingeconomies of scale in production, marketing anddistribution. Frequently large companies engage injoint ventures in their minor areas of interest, and inmarkets where they are relatively weak but wherethey wish to compete with established dominantfirms. An example in the food sector is tint Nestle-General Mills breakfast cereals joint venture CerealPartners. Other cooperative features include fran-chising, which has developed particularly in the fast-food catering business, but is now seen extensivelyin the UK milk doorstep delivery service. Interna-tional licensing arrangements are increasingly sig-nificant, particularly in the soft drinks and brewingindustries, where market imperfections along withhigh bulk/ volume relative to value, makes marketentry via trade a less profitable competitive optionthan the returns from licensing (Sheldon and Hen-derson, 1992).

2.1.6.1 TradeSince joining the EC, the UK has generally increasedits self-sufficiency in food, feed and drink, althoughmuch of the extra output from UK farms has beenexported rather than supplying home consumers.

5 Generally difficulties in measuring capital mean estimates are rarely done for particular industries [but see

Balasubramanyam and Nguyen (1991) for c recent FDT attempt].17

GS

18

Table 2.8 - Import penetration and export sales ratios: FDT and all manufacturing

1979 1985 1989

FDT Allmanuf.

FDT Allmanuf.

FDT Allmanuf.

Imports/home demand 18 27 18 34 18 37

Imports/home demand+exports 16 22 17 27 16 29

Exports/manufacturers' sales 10 25 11 30 12 30Exports/manufacturers' sales+imports 9 20 9 L2 10 21

Source: Central Statistical Office, 1992

Nevertheless, self-sufficiency in indigenous foodshas generally been between 70 and 75% during the1980s6, with overall self-sufficiency standingbetween 55 and 60% over the same period. Importsof food, feed and drink make up some 10% of totalUK imports, while exports of the same groupaccount for around 6% of total UK exports. Alco-holic drink is especially important in exports, makingup almost 50% of the food, feed and drink total in1990 (Ministry of Agriculture, Fisheries and Food,1991).

Import penetration/ sales export ratios for food,drink and tobacco manufacturing focus on pro-cessed food as such and show FDT to be generallyless involved in trade than other UK manufacturingindustries. Table 2.8 indicates that import penetra-tion has remained constant in FDT, while showingmarked increases for other industries, and exportsales ratios have moved up only slowly in bothgroups.

2.1.6.2 EC Internal MarketThe Single European Act was designed to create, by31 December 1992, a market 'without internal fron-tiers in which the free movement of goods, persons,services and capital is ensured' (Article 8A). Theremoval of remaining identifiable non-tariff barri-ers aims to bring about a more competitive, inte-grated market, with more efficient industries, result-ing in faster economic growth and lower consumerprices. If we accept that all barriers have been suc-cessfully removed, many of the gains are still relianton changing business attitudes towards trade withinthe EC, where the Community is seen as the market,rather than simply the individual Member State.Whether there is a European market for food anddrink, or a number of distinct, segmf nted markets,separated by tastes and traditions, is less easy todetermine.

While it has not proved possible to put figures onthe likely effects of the restructuring of the foodindustry and the creation of truly European scat..'industrial groups" (Emerson, 1988, p70), it is recog-nized that some, albeit limited, production econo-mies may result, e.g. in chocolate confectionery,breakfast cereals and potato crisps. In certain areas,e.g. sugar refining, significant rationalization of pro-duction has already resulted from a European

6 Self-sufficiency includes indigenous food exports.

18

approach (Noble, 1990). Large firms may gain frombranding, market research and segmentation on oEC dimension (Pratten, 1988).

The EC Commission reported (1990) that the foodindustry was engaged in intensive preparations forthe completion of the internal market, withincreased concentration involving large EC andthird country firms.This may have stemmed from thepreviously limited European dimension to theiractivities. Emerson (1988) indicated that in the mid-1980s "of the largest 46 food and drink companies,44% operate in only one EC country in addition totheir country of origin. Only 10% of these majorcompanies operate in at least four of the largestCommunity countries." Even in the UK, with itswealth of multinationals in food and drink, an analy-sis of seventeen of the largest food companies(excluding Unilever) estimated that less than 10% oftheir profits were derived from their Europeanactivities (Institute of Grocery Distribution, 1990). Bycontrast, 18% of profits arose from their activities inthe USA.

2.1.7 ConclusionsThis section of the report has indicated the nature ofthe food and drink sector and its overall importancein the UK's industry. While a stable sector in total, itcombines sub-sectors of much more widely varyingfortunes, as consumer requirements and prefer-ences change and product development bringsabout new possibilities and competition. The slowoverall market growth relative to the whole econo-my puts pressure on the industry to increase labourproductivity if comparative wage levels and profitsare to be maintained. Further pressures come fromthe concentrated and powerful retail trades, fromconsumer expectations and legislation that empha-sizes food quality and safety, and from the interna-tional trade and pan-European competition whichis developing in the sector.

Training is seen as one method of achieving the busi-ness objectives of the firm, providing opportunitiesfor firms to gain a competitive edge over rivals andmore exactly and consistently meet customerrequirements. Cost savings can arise from improvedlabour productivity, and the level and consistency ofproduct quality be enhanced from better teamwork.Improved labour productivity may result from new

investment or organization methods, both of whichrequire training. With a smaller labour force operat-ing more complex sophisticated machinery, greaterlevels of ability and responsibility are needed. Per-haps more significantly still, training ploys a vitalrole in labour flexibility and motivation, in problemsolving, and in developing and applying improvedmethods and systems of operation. A widespreadexample is the application of systematic teamworkto achieve quality assurance rather than quality con-trol. Many of these aspects are discussed in detailbelow, where firms' training reactions to the busi-ness environment are analyzed further, althoughwe consider first the legal framework in which train-ing operates.

2.2 Business environment and socialcontext of training

2.2.1 Legislation

2.2.1.1 Training legislationThe government's policy is not to legislate for con-tinuous vocational training, but to provide an envi-ronment where it will develop to the level envisagedin the officially endorsed training targets (2.2.2).Thenecessary legislation has been enacted to allow thedevelopment of sectoral Industry Training Organi-zations (2.2.3), regional Training and EnterpriseCouncils and Local Enterprise Companies in Scot-land, (2.4.3) and the National Council of VocationalQualifications (2.4.2). Other legislation can haveconsiderable influence on continuing vocationaltraining requirements.

2.2.1.2 Food Safety Act 1990Food Safety Act 1990 which, from 1 January 1990,repealed almost all the primary criminal law onfood control in the UK, is not directly derived fromEC law but is compatible with all existing EC require-ments. Directives on such matters as basic foodsafety and enforcement are given expression in theAct, but more importantly in the EC context, minis-ters are empowered by the Act to make orders andregulations to implement future EC legislation andto amend existing legislation for that purpose.

The Food Safety Act 1990 introduces the 'due dili-gence' defence into food law, "...it shall....be adefence for the person charged to prove that hetook all reasonable precautions and exercised alldue diligence precautions and exercised all due dili-gence to avoid the commission of the offence byhimself or by a person under his control."

Most individuals and companies can be expected toimplement systems that would enable them to dem-onstrate that they hove taken all reasonable precau-tions and exercised all due diligence in the event ofa prosecution under the Food Safety Act. What isreasonable depends on the process: producinghigh risk foods such as chilled cooked meats willrequire greater precautions compared to thoserequired for producing low moisture cooked foods.One factor which is common to both high and lowrisk foods is training. Ensuring staff have beentrained to the appropriate level, being able to dem-onstrate that the training has been carried out and

keeping the training requirements under review willbe important factors in a due diligence defence.

Ministers have power under the Food Safety Act tomake regulations requiring persons engaged infood business and handling food to be trained. Con-sultation on draft regulations began in mid 1991,and in July 1992 the government outlined its propo-sals for food hygiene training requirements. Theapproach is modelled on the EC Food HygieneDirective.

There has been considerable activity in this area inanticipation of pending legislation, and much inregard to due diligence. Professional organizationssuch as the Institute of Environmental Health Offi-cers (IEHO), local authorities, Industry TrainingOrganizations and private companies now offertraining for food handlers. Many of the larger foodcompanies have developed their own programmes.

2.2.1.3 Other legislationHealth and,. safety at workThe Health and Safety at Work Act 1974 applies toall persons at work, employers, self employed andemployees. The legislation protects not only peopleat work, but also the health and safety of the gen-eral public who may be affected by work activities.One section in the general duties to employeesrequires "the provision of such information instruc-tion raining and supervision as is necessary toensure, so far as is reasonably r racticable, thehealth and safety at work of his employees".This canbe a factor in determining the training policy in allareas of a factory, from training in the safe use offork lift trucks in a warenouse to training on a pro-duction line.

Sex discriminationPositive action in vocational training is permitted insome circumstances by Section 47 of the Sex Dis-crimination Act. This may involve single-sex trainingfor women only or men only, which is designed tohelp them find work or make progress once in workby improving their skills and qualifications.The posi-tive action provisions have been used to provide sin-gle sex training opportunities for occupations inwhich men or women are under-represented.

A review produced by the Equal Opportunities Com-mission (Clarke, 1991), observed that the overallproportions of women and men employees receiv-ing training are very similar. However, it suggestedthat the training figures conceal underlying genderinequalities.This being primarily the result of the dif-ferences in women's and men's occupational distri-bution, and the concentration of women in lowergrades of employment. This is a situation character-istic of much of the food industry. The factors pre-venting women undertaking training appear to beprincipally family commitments and financial consid-eration.

2.2.2 The national training framework

2.2.2.1 Training targetsThe government has promoted .] training systemthat operates at national, local and sectoral levels.

la

19

1.

20

At the national level the government has estab-lished the National Advisory Council for Educationand Training Targets (NACETT) to monitor progresstowards the National Training Targets, and advisethe government on performance and policies whichinfluence progress towards them. The Council isemployer-led with representatives from both sidesof industry and education.The NACETTwiII also pro-vide business leadership in raising skill levels andincreasing employer commitment to training andeducation. The network of Training and EnterpriseCouncils (in England and Wales) and Local Enter-prise Companies, in Scotland (2.4.3), focus on train-ing matters within specific geographical regionswithin the UK. The Industry Training Organizations(2.2.3) provide the sector specific knowledge and astrategic overview of their sector training needs.

In its document "Strategy for Skill" (Department ofEmployment, 1991) the government sets out itsstrategies for training, vocational education andenterprise, these are:

Employers must invest more effectively jn the skillstheir businesses need.

Young people must have the motivation toachieve their full potential and to develop the skillsthe economy needs.

Individuals must be persuaded that training paysand that they should take more responsibility fortheir own development.

People who are unemployed and those at a disad-vantage in the jobs market must be helped to getback to work and to \elop their abilities to thefull.

The providers of education and training mustoffer high quality and flexible provision whichmeets the needs of individuals and employers.

Enterprise must be encouraged throughout theeconomy, particularly through the continuedgrowth of small business and self-employment.

The government have endorsed national educationand training targets which underpin the strategicpriorities and give a measure of what needs to beachieved to raise skill levels. The targets were origi-nally promoted by the Confederation of BritishIndustry (CBI) but are now supported by all thesocial partners.The targets are in two parts, Founda-tion Learning and Lifetime Learning.

Foundation LearningBy 1997, 80% of young people to reach NVQ II (orits academic equivalen1

Training and education to NVQ III (or its academicequivalent) available to all young people who canbenefit.

By 2000, 50% of young people to reach NVQ III(or its academic equivalent).

Education and training provision to develop

20

breadth, self-reliance and flexibility.

Lifetime LearningBy 1996, all employees should take part in train-ing or developme ; activities.

By 1996, 50% of the workforce aiming fo. newNVQs or units towards them.

By 2000, 50% of the workforce qualified to atleast NVQ III (or its academic equivalent).

By 1996, 50% of medium and larger organiza-tions to be Investors in People.

These targets are ambitious and all-embracing, withparticular significance for Training and EnterpriseCouncils (TECs) and Local Enterprise Companies(LECs) (2.4.3), National Vocational Qualifications(NVQs) (2.4.2) and Investors in People (IIP) (2.2.5).To achieve the training targets considerable commit-ment is needed from industry plus the support andcommitment from all aspects of the training world,TECs, LECs, Industry Training Organizations (ITOs),and of training providers.

2.2.3 Industry Training Organizations(ITOs)The ITOs were preceded by Industrial TrainingBoards (ITBs) which were established by the Indus-trial Training Act 1964 to provide or secure appro-priate training for people employed or intending tobe employed in their particular industry. They wereempowered to raise a levy from certain employers.Following a review in 1981 (Manpower ServicesCommission) the government decided tF satisfac-tory training arrangements could be beh,. devel-oped without compulsion unless this was justified bya sector's specific circumstances. Since that time theITBs have been wound up, except in constructionand in engineering construction. A voluntary asso-ciation of the ITOs, the National Council of IndustryTraining Organisations, NCITO, was established in1988 to maintain and develop the effectiveness ofindependent sector training arrangements.

The Industry Training Organizations are employerled, and funded, bodies which act as the focal pointfor training matters at the sector level. Of the cur-rent 123 ITOs in Great Britain, eleven cover most ofthe interests of the food and beverage sector (seeAppendix 2). Although they are not governmentbodies they are officially recognized by the govern-ment's Employment Department. ITO's raise theirincome from industry in a number of ways, includingvoluntary subscriptions and sale of training services.They may receive some support from the govern-ment for specific projects or research, but no corefunding.

ITOs are very diverse in structure, size, membershipand resources. At the invitation of the government,NCITO developed a Code of Prartice to ensure thatthe ITOs were clear about their role and responsibil-ities, and effective in their operation. This Code ful-fils the government's intention set out in the WhitePaper "Employment for the 1990s" (Department ofEmployment, 1988) for there to be a set of guide-

lines by which ITOs can judge progress and identifyobjectives. At the heart of this Code lies a list of idealoutcomes, or performance criteria. These ideal out-comes are grouped under five headings:

Identification of sector training needsEstablishing training standardsRepresenting sector training interestsProvision of training-related informationTraining support and services

Thus the Code outlines four types of strategic activ-ity: identification of sector training needs; establish-ing training standards; representing sectoral train-ing interests; the provision of training related infor-maticon. These are strategic in that they cover theminimum conditions for government recognitionand they require active pursuit by every ITO, irre-spective of its size, or of the training capability of itsmembers. There are also support activities, includ-ing: networking or brokerage of training resources;developing training materials and techniques; pro-viding direct training services.These are consideredsupport activities as they may contribute to the stra-tegic activities, but their provision does not dependon the existence of an ITO. The need for these sup-port activities depends on the training capability ofthe employers in the sector. A number of ITOsengage in little or no support activities, but are stilleffective in terms of the "ideal outcomes" above, asthey have a programme of strategic activities.

Food sector ITOsThe food and drink sector has a relatively large num-ber of ITOs which look after its interests. Their sizevaries considerably, fo example, the National Asso-ciation of British and ,rish Millers covers only 5000employees, while other ITOs may encompass asmany as 100,000 employees. Most of the food ITOsare part of, or are largely supported by, trade asso-ciations. Thus they only cover a proportion, perhapsbetween 75% and 95%, of the employees workingwithin any sub-sector of the industry.

In spite of the relatively numerous ITOs, coverageacross the sector is incomplete. The interests of bak-ing (other than craft bakers), brewing and snackfood industries are not currently served by an ITO.In a move strongly supported by the EmploymentDepartment, the Food and Drink Federation hasrecently established a new ITO, the Food and DrinkIndustry Training Organization (FDITO). The aim isto extend the ITO coverage in the industry althoughit is not intended to replace ITOs currently recog-nized as providing an acceptable level of service,and wishing to continue in operation. It is possiblethat some of the existing ITOs might wish to mergewith the FDITO. Others, especially those that havebeen very successful in their sub-sector, see littleadvantage in amalgamation. It is hoped that closerlinks between the existing ITOs and the new organi-zation can be established. The governing council ofFDITO, and some of the other ITOs, include tradeunionist and educationalist representation.

The activities undertaken by the ITOs vary consider-ably between the different organizations. Some ofthe smaller ITOs are probably the most active, espe-

cially in terms of the number of employees covered.The level of staffing in the ITOs also varies consider-ably, again, especially when the size of the work-force covered by the ITO is taken in to account. TheEmployment Department, in association withNCITO, commissioned a review (HOST, 1991) whichconcluded that ITOs make a valuable contributionto meeting sector training requirements.

2.2.4 Business environmentSome of the most significant developments takingplace in the UK food industry are the developmentof quality assurance standards such as ISO 9000 (BS5750), the adoption of quality management sys-tems, and the Investors in People standard (2.2.5).Meeting the requirements of large retailers andother significant customers has forced many compa-nies to work towards a quality assurance and/or aquality management system. A number of compa-nies have chosen to work for accreditation to theISO 9000 series standard, while others are workingtowards a total quality management system (TQM)as developed by people such as Deming, Juran andCrosby. Training is very much part of these systems,since, while they do not determine training policy,they do require a company to have one. A numberof food companies following the ISO 9000 routehave found meeting the training requirements to beone of the biggest problems.

It is not surprising that companies, especially thoseoperating a quality management system, expecttraining providers to operate similar systems thatwill ensure the training given meets the qualitystandard of the customer. Many TECs and LECsinsist that the training providers they use adopt theISO 9000 standard.

Recently the Meat Industry Training Organizationhas established a "Network of Excellence". This is a,network of training providers, private and public,that are committed to working to provide a qualityservice. It will enable companies in the meat industryto identify training providers they know will be striv-ing to provide a quality product and whose per-formance will have been subject to an externalaudit.

2.2.5 Investors in People (IIP)The employers' organization, Confederation of Brit-ish Industry (CBI), proposed in its report "Towards aSkills Revolution" (1989) a national initiative to "..highlight the steps companies should take to maxi-mize their investment in people and ensure that theyhad the competitive edge to survive and prosper inthe 1990s and beyond". This initiative has become"Investors in People", a national standard embody-ing the practices and principles used by Britain'smost successful companies in developing their work-force. The "Investors in People" national standardwas launched in 1990, any company whatever itssize can work to reach this national standard andgain the Investors in People kitemark.

The standard was developed to provide a bench-mark against which companies can measure theirachievements and performance in developing theirworkforce. There are four principles to the standard

21

21

1.

22

from which a number of assessment indicators havebeen derived which are used to judge whether thecompany has reached the standard. The four princi-ples of the standard concern commitment, planning,action and evaluation. The assessment of a com-pany for the standard is undertaken by the compa-ny's local TEC.

The principles are:

An Investor in People makes a public commitmentfrom the top to develop all employees to achieveits business objectives.

An Invest:. in People regularly reviews the train-ing and development needs of all employees.

An Investor in People takes action to train anddevelop individuals on recruitment and through-out their employment.

An Investor in People evaluates the investment intraining and development to assess achievementand improve future effectiveness.

The Employment Department see the major benefitto companies reaching this standard as:

Improving earningsReducing costsImproving qualityIncreasing staff motivationIncreasing customer satisfactionImproving organizational reputation

To achieve the IIP status it needs a strong commit-ment from the most senior levels of management.The company needs a clear policy on continuingtraining and development, and to define clearly thebusiness and human context in which that plan is set.Targets and standards set f or development actionshould, where appropriate, be linked to achievingexternal standards, particularly NVQs, which aidstransferability but is often regarded as increasingthe cost. Many aspects of the standard will be metby organizations that are committed to quality man-agement systems and the ISO 9000 standard.Theseinitiatives will typically involve training programmesand an assurance that the training systems meetdefined criteria. IIP goes further than Total QualityManagement (TQM) and ISO 9000 in terms ofemployee development. IIP would expect employ-ees to be aware of the business aims and targets ofthe company and puts more emphasis on reviewingtraining and development needs. More significantlythe IIP standard expects employees to be madeaware of development opportunities that are opento them and for them to be encouraged to help iden-tify their own development needs. Finally theaspects relating to evaluating investments in train-ing and development are not covered by theseother standards.

To date there are about 350 Investor in Peopleorganizations, although it is estimated that abouttwelve hundred companies are committed andworking to IIP. It is impossible to estimate what per-centage of these are food companies. Two of the

22

companies in the case studies, Bird's Eye Walls andProspect Foods have gained the IIP award.

2.2.6 Position of social partners

2.2.6.1 Trade Union Congress (TUC)The TUC fully supports the National Education andTraining Targets but also wants unions to exert influ-ence on employers to set targets at the enterpriselevel. Also they wish to see trade unions putting train-ing and employee development near the top of thenegotiating agenda in all unionized work places,and promoting a positive approach to the trainingand development of the workforce. The TUCbelieves that unions must share ownership of theagreed targets with management. They see it as theemployers' obligation to then up access for all thework force and the government's obligation asensuring that the necessary funds are available todeliver the targets. Strong support is also given toNVQs and the Investor in People standard.

A number of unions have members in the food indus-try, as indicated in Appendix 2, with the Union ofShop, Distributive and Allied Workers (USDAW) rep-resenting the largest number of employees. Severalof the unions have representation on various ITOs.

2.2.6.2 Confederation of BritishIndustry (CBI)The CBI's programme for training (1989) proposedthe National Education and Training Targets whichseek to establish qualifications as the norm andmake lifetime learning a reality throughout theworkforce. The CBI would like to see all companiesworking towards the IIP standard.

The CBI would like to see a market created for train-ing with the TECs (2.4.3) as regulators of the localmarket. They see the government funding the costsof courses for young people leading to nationallyrecognized qualifications and employers offeringjobs to meet the wage costs, replacing the choicebetween a job or training by a job and training.

There are a number of employers organizations, aslisted in Appendix 2, with the Food and Drink Fed-eration representing the largest section of the sec-tor. Some play a role in training by also acting as anIndustry Training Organization (ITO).

2.3 Employment environment

2.3.1 Employment in the UK foodindustryFrom 1974 to 1990 employment in the food, drinkand tobacco industries fell on average by 15,000/year, with brief upturns in the numbers betweenJune 1990 and June 1991. However, a dramaticreduction of 47,800 (15,200 men and 32,600women) occurred between June 1991 and June1992, the total now is 495,700 in Great Britain(Employment Gazette, 1992). The need for largenumbers of unskilled process operatives has fallenas new technology has been introduced. Concomi-tantly, more semi-skilled and skilled operators arerequired to handle the high technology equipment;they are also making more routine quality control

checks, which, in turn, has resulted in a fall in therequirement for laboratory technicians.

Changing lifestyles and eating habits of the con-sumer have tended to bring about alterations in thepatterns of employment rather than decrease it. Fig-ures for employment in slaughtering and the proces-sing of meat and poultry have risen in response todemand for value-added poultry and pork-basedready meals. Manufacture of this type of readymeal for major supermarket chains is a relativelylabour-intensive process.

In the dairy industry, employment has fallen from89,709 in 1987 to 77,762 in 1991 (Dairy Trade Fed-eration, 1992). Significant changes in the structureof the industry mean that more people areemployed as independent franchisees rather thanin the employment of the major dairies (franchiseeshave increased from 4,700 in 1987 to 8,777 in1991). A rise in the numbers of operatives for liquidmilk production has occurred due to the increasedmarket for flavoured milks and low fat and fat freemilks (5909 operatives in 1987; 6215 in 1990). Prod-uction of yoghurt and dairy desserts has increasedsignificantly, but due to the use of efficient technol-ogy there has been a slight reduction in employ-ment.

The Federation of Bakers report a fall in employ-ment in the plant bakery sector, but figures foremployment in the manufacture of bread, biscuitsand flour confectioneryas a whole have risen significantly.This can partly be attributed to an increase insmall specialist companies making cakes and pas-tries. There has also been a rise in employment insugar and chocolate confectionery and soft drinksproduction.

There is a higher percentage of men compared towomen in the total workforce (Table 2.9), but signifi-cantly greater numbers of women in part-time work.The vast majority of the labour force is white (95%),with Indians being the most strongly represented ofthe ethnic minorities (3%). The figures show that notonly is the workforce shrinking, but there was areduced number of young people employed in1991 both as total figures and as percentages ofthe workforce for that year. This reflects both thereduced recruitment during the recession, retainedolder workers and the expected demographicdownturn of the early and mid 1990s.

People in permanent jobs in the food and drinkindustries make up 950/0 of the workforce, with 4%in temporary jobs and 1% on contracts or fixedperiod jobs. The mobility of the workforce in 1991was 2 or 3% higher than in 1985. About 80-85% ofthe workforce remaining static in both the sameoccupation and the same job, with 6-11% in either adifferent job or a different occupation. Around 9%was not accounted for by these statistics (LabourForce Survey).

The main employment areas by activity in the foodand drink industries are shown in Table 2.10. Thesedata are collected by a different system to that usedfor those in Table 2.4, and cover different years.The

proportion employed in the labour intensive activ-ities are increasing, while the total employed isdecreasing.

Table 2.9 - Employment in the UK food and drinkindustry for 1985 and 1991(and percentage of total for each category).

1985 1991

Total employed 658173 562423

Men 409657 (62%) 354566 (63%)

Women 248516 (38%) 207857 (37%)

Men, part-time 7310 (1%) 11045 (2%)

Women, part-time 87020 (13%) 68650 (12%)

Total part-time 94330 (14%) 79696 (14%)

Age 16-19 50599 (8%) 34711 (6%)

Age 20-24 110994 (17%) 75722 (13%)

Age 25-54 417828 (63%) 385537 (69%)

Over 54 78752 (12%) 66453 (12%)

Ethnic origin - white 611644 (95%) 517716 (95%)

Ethnic origin - Indian 7637 (1%) 14664 (3%)

Ethnic origin - Pakistani/Bangladeshi 358 (1%) 5401 (1%)

Ethnic origin -W. Indian/Guyanese 7241 (1%) 3035 (1%)

Source: Labour Force Survey

Table 2.10 Major areas of employment in the foodand drinks industry (% of total employed in the sector)

Activity 1985 1991

Bread, biscuits, flour confectionery 21 27

Slaughtering & meat products 13 15

Brewing & malting 12 11

Milk & milk products 8 8

Cocoa, chocolate & sugar confectionery 8 6

Fruit & vegetable processing 7 5

Soft drinks 3 4

Source: Labour Force Survey

An area of concern for the EC and government isthe employment of women. Large numbers areemployed by the food industry, although theyremain in the lower paid jobs. Because of familycommitments many women are reluctant to workshifts and consequently do not attract the premiumspaid for unsocial hours. In the very large fall in thefood industry's employment observed during 1991and 1992, it has been women's jobs which have suf-fered most.

2.4 Training and recruitmentTraining is of fundamental importance in an industryproducing an essential item like food and drink.There is a moral and legal obligation to supply prod-ucts that are both safe and nutritious. A consider-able number of training providers, whether they arecolleges, universities or private companies, delivercourses for all sections and levels of this industry.Attracting a work force of the quality required is oneof the food and drink sector's major problems. Uni-versities often experience a similar problem in

23

24

recruiting students to food science and technologycourses, although there is almost guaranteedemployment on graduation. Students in schools seethe industry as 'craft" orientated rather than thetechnological industry it is. Considerable effort ismade by the larger companies to improve theirimage in this respect.

The scope for training for young people coming intothe industry is extensive, with courses that often canbe taken as full-time or as part-time courses while inemployment, e.g. Business and Technician Educ.J-tion Council (BTEC) qualifications. Universities pro-vide MSc programmes that can be taken as a seriesof one week modular courses over a period of twoor three years. These postgraduate courses aredesigned to integrate with career devElopment pro-grammes of junior and middle managers. Similarsector-specific modular MBA programmes are alsoavailable.

One of the more recent and significant develop-ments is the establishment of the National Voca-tional Qualifications, which are qualificationsgained in the work place based on a person's abilityto perform a range of work activities. Anotherdevelopment is the establishment of TECs and LECsto coordinate the local delivery of vocational train-ing.

2.4.1 Initial educationEducation is compulsory for children between theages of five and sixteen. All pupils follow thenational curriculum up to 16 when they take Gen-eral Certificate of Secondary Education (GCSEs)examinations. These are structured so a wide rangeof abilities can g in a graded pass within the system.

Many students continuing in school education willstudy up to 4 subjects leading, after two years, to theGeneral Certificate of Secondary Education exami-nations at advanced (A) level. Success in theseexaminations can lead to entry to University coursesor BTEC courses in colleges of further and highereducation.

There are also many vocationally based coursesavailable to students after GCSE, these includeBTEC certificates and diplomas, City and Guilds ofLondon Institute awards, Certificate of Pre-Voca-tional Education, and secretarial business skillsoffered by Pitmans, Royal Society of Arts and theLondon Chamber of Commerce. Business and Tech-nician Education Council accredits vocationalcourses in a wide range of occupational areas.These can be taken as a full-time courses after leav-ing school or as part-time course while employed.

Over 45% of BTEC students are released fromemployment on part-time courses with fees paid bytheir employers. BTECs can be linked to more aca-demic disciplines with students progressing to Uni-versity education. BTECs successfully bridges thegap between initial and continuing education andtraining. BTECs operate at 3 levels of competence,first, national and higher national, these will beshortly linked to the National Vocational Qualifica-tion system.

2.4.2 National VocationalQualificationsThe National Council for Vocational Qualifications(NCVQ) was established to develop qualificationsthat met the needs of employment. These qualifica-tions are intended to be within a structure whicheverybody can use and understand. NCVQ isresponsible for their accreditation and providesquality assurance. The objective of the system is todevelop people with the competence required in allsectors in order that firms may compete successfullyin world markets. A similar system of Scottish Voca-tional Qualifications (SVQs) was established in Scot-land.

National Vocational Qualifications are gained inthe work place and are based on a person's abilityto perform a range of work activities to nationalstandards, as demonstrated at work. Each NVQ ismade up of a number of units of competence, andwithin each unit are a series of elements which speci-fy the competence. Elements are individuallyassessed and certification is available for each unit.A NVQ is given a title and a level to place it in aframework to show how these qualifications relateto each other and how people can progress throughthe system. The main purposes he NVQ frame-work are to create a coherent classification forqualification and to facilitate transfer and progres-sion both within and between areas of competence.The framework covers eleven major occupationalareas and five levels of competence.The five levelsof competence are defined as follows:

Level 1 competence in the performance of a rangeof varied work activities.

Level 2 competence in a significant range of variedwork activities performed in a variety ofcontexts, individual autonomy and collabo-ration with others

Level 3 competence in a broad range of variedwork activities, considerable responsibilityand autonomy control/guidance of others

Level 4 competence in a broad range of complex,technical a, ,d professional work activities,substantial degree of personal responsibil-ity and autonomy, responsibility for thework of others and allocation of resources

Level 5 application of a significant range of funda-mental principles and complex techniquesacross a wide variety of contexts, substan-tial personal autonomy, accountability foranalysis and diagnosis design, planning,execution and evaluation

The specifications for the NVQ are the responsibilityof the lead body for the industry, and set thenational standard. A lead body may be a profes-sional organization such as an ITO or consortiumbodies from a particular industry. The NVQs areassessed by an Awarding Body, which is approvedby the National Council for Vocational Qualifica-tions, which is also responsible for quality assuranceand certification.

Table 2.11 - National Vocational Qualifications in thefood and drink sector

Title Level

Meat processingabattoir process operations 2

- manufacturing butchery 2

- manufacturing operations 2

manufacturing packaging 2

poultry industry operations 2

Food and manufacturing operations 1,2

Source: National Council for Vocational Qualifications

2.4.3 Training and Enterprise Councils(TECs)The White Paper "Employment for the 1990s"(Department of Employment, 1988) announced thegovernment's intention to set up a network of Train-ing and Enterprise Councils throughout the wholeof the UK, which would be independent limited com-panies, responsible for delivering training andenterprise initiatives relevant to needs of the localcommunities which they were serve.The key featureof the TECs was that they were to be headed bymanagers from industry, ensuring that leadershipfor the training system in the UK was placed firmly inthe hands of employers. Although lECs were neworganizations with a separcte ;der iiy, existingorganizations such as the Chamber of Commerceand Industry, Local Employer Networks and the CBIusually provided a nucleus for the formation of TECBoards.

Development of TECs received widespread supportfrom Business and Community Leaders, with theresult that a full network of 82 TECs (England andWales) and 20 Local Enterprise Companies (LECs) inScotland have also been established.

Funding of the TECsTECs are funded by the government to undertakeactivities which take account of the government'sstrategic guidance for developing skills and enter-prise. TECs are also encouraged to develop addi-tional sources of income.

Role of the TECs and LECsTECs and LECs are asked to address key issues

under each of six priorities set by the government.They are expected to provide for the long termunemployed as their first priority and work to thestrategic priorities set out in the government's docu-ment Strategy for Skill (see section 2.2.2.1).

Since the TECs and LECs are intended to be local" intheir emphasis, the diversity of approaches to train-ing and enterprise displayed is considerable. SomeTECs have taken a long-term view and given prior-ity to encouraging economic prosperity in theirregions rather than satisfying short-term need withhastily conceived training programmes. Plans tosteer education and training systems in directionswhich will encourage life long learning by individ-uals is also a clear message from TECs. Such plansinclude the development of Education-BusinessPartnerships and encouraging the adoption ofNational Vocational Qualifications by companies.

2.4.4 Educational level of workforceThe qualification level of employees in the manufac-turing Hdustry, including the food and drink sector,has increased during the period 1980 to 1990(Table 2.12).

Greater increases are apparent for employees withA or GCSE /0 levels and equivalent qualifications.

Educational attainment levels of people employedin the food industry are significantly below the aver-age for those in the manufacturing industry, at quali-fication levels from GCSE/0 to degree level. Whilethere is little information available on the role ofeducational qualifications in the recruitment ofworkers, it is generally claimed that the food indus-try has a poor image, especially with school and col-lege students.

Since the government disbanded the statutoryIndustrial Training Boards in 1982, formal returnsfor training carried out and money spent have notbeen collected. It is therefore extremely difficult togauge the size and scope of the training effort. For1990, the Labour Force Survey estimated that15.4% of the 21,648m workforce received job-related training. Measuring direct training costs interms of courses attended, trainers' fees, room hire,and the like is relatively straightforward. The truepicture, taking into account opportunity costs, ismore difficult to calculate.

Table 2.12 The proportion of employees in the manufacturing industry, and the food and drink sector with

various levels of qualifications

Highest level of qualificatio.held by the employee

Food and drink Manufacturing industry

1985 1990 1985 1990

Degree or equivalent 4 4 6 6

Higher education 3 3 4 5

A level or equivalent 17 23 28 32

0 level or equivalent 6 6 12 14

CSE (below 0 level) 6 6 6 5

So' e: Labour Force Survey

The Labour Force Survey shows that the proportionof employees receiving training has increased dur-ing the decade from 1980 (Table 2.13). Again thefood industry lags behind the manufacturing indus-try as a whole, with 8% and 11% respectively receiv-ing training during 1990.There is no obvious reasonwhy the food industry trains less. The need to main-tain good hygiene and to meet due diligencerequirements of the Food Safety Act would appearto imply that the level of training in the food sectorshould be relatively high.

Table 2.13 - Proportion of employees working in the foodreceiving training during the last four weeks.

woi king for ISO 9000 accreditation or adopting theprinciples of Total Quality Management and work-ing towards the II P standard. All are possible stimulifor training.

The Food Hygien Regulations are of most immedi-ate concern because of the requirement forhygiene training. As the Regulations affect almostevery employee in a factory, hygiene programmesare being implemented over a period of at leasttwelve months. It is not possible to assess the extent

and drink sector and in manufacturing industry

Food and drink sector (%) Manufacturing industry

1985 1990 1985 1990

Receiving training 6 8 8 11

- on the job 2 3 3 3

- away from the job 3 4 4 6

- both on and away from the job 1 1 1 2

Not receiving training 94 92 92 89

Source: Labour Force Survey

9-5 Future training requirementsThere are many issues that need to be addressed bythe food industry if it is to have a well trained work-force. One question is why the corporate commit-ment to training appears often lower than in the restof manufacturing industry (Table 2.13)? Anr Cher iswhy CVT is not seen by the industry as central to fac-ing future business challenges? Some companies,either as a result of cost benefit analysis or from anenlightened management, are convinced that train-ing pays. Of the pressures shapin, . uture trainingrequirements, increasing business performance isalways going to be the highest priority, but otherfactors, such as legal requirements, will have a sig-nificant influence.

The business and market pressures have been previ-ously discussed. A response to these could be in

of commitment in the sector as a whole, although itwould seem that considerable progress has beenmade, there is still a significant amount of hygienetraining be done before all the target populationis reached.

The adoption of Hazard Analysis Critical ControlPoint (HACCP) procedures as required by the ECfood hygiene directive will also generate new train-ing requirements. These will be much more specificcompared to training requirements resulting fromthe implementation of ISO 9000 accredited systems,for example.

One important question that is not possible toanswer is, will the NVQ system be adopted on a sig-nificant scale by the industry, and will it help theindustry meet its training requirements?

APPENDIX 1

Table 2.71 - Food expenditure (current prices and %)

Food 1980

expenditure £m

(household)

1985 0/0

£m

1990

£m

1991

£m

%

Bread and cereals 3175 13.4 4165 13.5 5963 14.2 6334 14.4

Meat and bacon 6624 28.0 7898 25.8 9832 23.5 9941 22.6

Fish 748 3.2 1055 3.4 1594 3.8 1671 3.8

Milk, cheese

and eggs 3550 15.0 4385 14.3 5505 13.1 5805 13.2

Oils and fats 942 4.0 1041 3.4 1035 2.5 1043 2.4

Fruit 1300 5.5 1666 5.4 2710 6.5 2931 6.7

Potatoes and

vegetables 2442 10.3 3539 11.5 5386 12.9 5852 13.3

Sugar andconfectionery 2130 9.0 3022 9.9 3868 9.2 4157 9.4

Coffee, tea andcocoa 787 3.3 1179 3.8 1233 2.9 1315 3.0

Soft drinks 1183 5.0 1697 5.5 3202 7.6 3345 7.6

Other foods 774 3.3 1010 3.3 1534 3.7 1659 3.8

Total 23655 100 30657 100 41869 100 44053 100

Source: Central Statistical Office, 1993

Table 2.7.2 - Relative proportion of employment, sales and value added in UK food and drink industry, 1990)

SIC Employment Employment Sales Sales GVA GVA

group '000 wo £m £m %

1980

411 5.4 0.9 1345.2 2.6 178.7 1.3

412 116.8 20.2 8724.9 17.1 1914.4 14.3

413 39.7 6.9 6128.0 12.0 1145.8 8.6

414 18.7 3.2 1245.0 2.4 347.5 2.6

415 21.0 3.6 1184.3 2.3 272.3 2.0

416 5.8 1.0 1222.8 2.4 259.3 1.9

419 157.8 27.3 5260.6 10.3 2123.7 15.9

420 5.8 1.0 1274.6 2.5 312.7 2.3

421 54.8 9.5 3956.6 7.8 1352.6 10.1

422 21.0 3.6 3937.8 7.7 675.0 5.1

418/ 423 61.5 10.6 5768.2 11.3 1942.6 14.6

424 1..1 2.4 2146.8 4.2 773.6 5.8

426 3.6 0.6 5774 1.1 153.9 1.2

427 30.4 5.3 5397.1 10.6 1151.0 8.6

428 21.6 3.7 2729.8 5.4 738.7 5.5

Total 578.0 99.8 50,899.1 99.7 13,341.8 99.8

Source: Central Statistical Office, 1993

2727

Table 2.Z3 Size of manufacturing units in food, drinkand tobacco (units, 1991, employees,('000) 1989)

Employmentgroup

No. ofunits

No. ofemployees'000

0/0

1-9 6076 57.9 22.6 4.2

10-19 1345 12.8 18.8 3.5

20-49 1240 11.8 38.0 7.1

50-99 649 6.2 44.6 8.2

100-199 517 4.9 72.3 13.3

200-499 450 4.3 114.2 21.0500-999 150 1.4 99.1 18.2

1000 & over 67 0.6 107.2 19.7

Total 10494 100.0 543.7 100.0

Source: Central Statistical Office: 1993

Table 2.Z4 - Number of enterprises and employment ('000) in food and drink industry 1985 and 1989

SIC Industry Enterprises Employment '0001980 1985 1990 1985 1990

4115 Margarine 58 12 3.1 3.1

4116 Processing oils 45 42 4.0 2.3

4121 Slaughter houses 755 514 16.9 17.1

4122 Bacon, meat processing 750 655 59.2 61.0

4123 Poultry s:aughtering & processing 148 123 27.5 35.64126 Animal by-products 115 92 3.4 3.1

4130 Milk, milk products 402 333 41.0 39.7

4147 Fruit & vegetable processing 297 242 16.5 18.7

4150 Fish processing 287 277 27.8 21.0

4160 Grain milling 111 90 6.2 5.8

4180 Starch 26 7 1.7 1.3

4196 Bread & flour confectionery 3892 3859 116.2 132.1

4197 Biscuits 64 71 27.2 25.7

4200 Sugar 7 4 7.9 5.8

4213 Ice cream 278 255 3.3 10.6

4214 Cocoa, chocolate & sugar confectionery 317 275 47.4 44.2

4221 Compound feeds 380 301 12.7 11.7

4222 Pet foods 200 170 7.6 9.3

4239 Miscellaneous foods 814 984 63.7 60.24240 Spirit distilling 54 46 16.4 14.1

4261 Wines, cider & perry 86 54 4.3 3.6

4270 Brewing 171 128 35.6 30.4

4283 Soft drinks 228 207 17.3 21.6

4290 Tobacco 22 25 23.9 13.1

Source: Business Statistical Office, 1993

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APPENDIX 2

Industry training organizationsNational Association of Master BakersScottish Association of Master BakersThe Biscuit, Cake, Chocolate Confectionery AllianceDairy Trade FederationBritish Soft Drinks AssociationFood Manufacturers' Council for Industrial Training(until September 1993)Food and Drink Industry Training OrganisationUK Association of Frozen Food ProducersMeat Industry Training OrganisationIncorporated National Association of British andIrish MillersSea Fish Industry AuthorityUnited Kingdom Sugar Industry Association

UnionsTrades Union CongressBakers' Food and Allied Workers UnionUnion of Shop, Distributive and Allied WorkersTransport and General Workers' Union

General and Municipal Boilermakers and AlliedTrade UnionManufacturing, Science, Finance

Employers organizationsConfederation of British IndustryThe Food and Drink Federation (A federation ofabout 40 employers organizations)Biscuit, Cake, Chocolate and Confectionery Alli-ance.British Meat Manufacturers Association.The Brewers SocietyBritish Soft Drinks AssociationFood AssociationFederation of BakersIce Cream FederationNational Association of British and Irish MillersThe Sugar BureauSnack, Nut and Crisp Manufacturers AssociationScottish Salmon Smokers AssociationUK Association of Frozen Food Producers

. 2 329

30

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Ashby, A. W. (1978) Britain's Food ManufacturingIndustry, Journal of Agricultural Economics, Vol. XXIX,No. 3

Balasubramanyam, V and Nguyen, D (1991) Structureand Performance of the UK Food and Drink:ndustries,Journal of Agricultural Economics,Vol. XVII,No.1

Blackaby, D. H. and Hunt, L C (1990) An Assessment ofthe UK's Productivity Record in the 1980's:Has there been a miracle?, Economics, Vol XXVI,Autumn

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Confederation of British Industry (1989) Towards aSkills Revolution

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PART 2:

1. McVitie's Biscuits

2. Prospect Foods Ltd

3. David A. Hall Ltd

4. Birds Eye Wall's Ltd

5. Clifford Foods PLC

6. Tunnel Refineries Ltd

BEST COPY AVAILABLE

ji

1. MCVITIE'S BISCUITS

1.1 Company overviewUnited Biscuits (Holdings) plc is the UK-based par-ent company of a group spanning 19 countries andemploying over 40,000. Its sales of around £3bnper year cover biscuits and cookies, snacks, confec-tionery and frozen foods. McVitie's group em-braces the company's European biscuit opera-tions, of which McVitie's (UK) is the largest singlesection and the main focus of this study. The Man-chester biscuit factory is the production site re-searched.

The McVitie and Price Company was established inEdinburgh approximately 150 years ago as a smallbakers shop producing cakes, bread and biscuits.Over the years the company grew to become a verysuccessful enterprise selling its products under thebrand name McVitie's, or McVitie's and Price. Duringthe course of time the batch processes werereplaced with continuing conveyor systems. Thebusiness expanded and began to specialize incakes and biscuits, further manufacturing facilitieswere built in London and Manchester.

In 1948 McVitie & Price and Macfarlane Langmerged to form United Biscuits (UB), with WilliamCrawford & Sons and William MacDonald & Sonsjoining the group during the 1960s. In 1968 theacquisition of Kenyon Son and Craven, Europe'slargest nut processor allowed the formation of KPFoods, and in 1974 Keebler Foods (USA) wasacquired. Over a period leading up to 1989, the UBgroup pursued a policy of acquisition and diversifi-cation coupled with organic growth putting it in thetop ten UK food companies. In the same year, thegroup re-structured into 5 main operating divisionsand a development division:

McVitie's: Sweet and savoury biscuits and cakesKeebler Co: Cookies and crackers, salty snacksKP Foods: Snack foodsRoss Youngs: Frozen fish and seafood products,desserts and pizzasTerry's: High quality confectioneryDevelopment: Developing new markets world-wide notably Asia Pacific, China, Japan, Philip-pines and Brazil.

Of these operating divisions, Keebler Company ofUSA had, in 1991, the largest sales at almost £1bn,with profits of £67m or 7%. McVitie's group, with alower level of £787m sales, almost 30% of whichwere generated outside the UK, achieved profits of£107m or over 13%. The KP Foods group, which isthe leading UK snack and processed nut producer,also has major European interests. KP sales of£504m in 1991 yielded £43m profits (8%). RossYoungs frozen and chilled foods business sales at£543m gave only £27m or 5% profits, and Terry'sgroup confectionery £153m sales produced over9% or £14m profits.

In early 1993 the Terry's group was sold to Kraft/General Foods (Philip Morris), which already ownsthe Jacobs Suchard confectionery business. At thesame time, the KP Foods group acquired the pre-mium snackfood company Derwent Valley Foods.The company's overseas snackfood interests were

significantly increased in November 1992 by theacquisition of Coca Cola Amatil (now called Smith'sSnackfood Company) in Australia.

1.2 UB groupUB's central group functions provide a fully inte-grated service to the operating divisions including:finance and accounting, business planning, pur-chasing, personnel, pensions, legal affairs, distribu-tion, research and development and corporatecommunications.

U B's strategy for the 1990s is to become an interna-tional business and a world leader in food forsnacking by developing its biscuit and savourysnack business worldwide, especially Europe, USAand Asia Pacific, building its confectionery marketsin Europe and restructuring to improve returns on itsinvestment in the chilled and frozen foods markets.

The group personnel director considers that theeffective development of the group's humanresources throughout the world is the key to theachievement of current and future commercialobjectives. His department provides for humanresource management issues, and a framework ofpersonnel policies, which support/the needs of thebusiness. These needs reflect national and interna-tiorol. s-)cic I and legislative changes. In addition it isresponsible for the development of top manage-ment across the group.

1.3 McVitie's groupBoth the McVitie's group and McVitie's (UK) operatefrom head offices in a new business park in Staines,a town located about 30 miles west of London.Based at Staines is the managing director for thewhole McVitie's group to whom the managingdirector of the UK operation and other Europeandivisions report.

A European Management Board controls the activ-ities of the European divisions. Operation of theEuropean Board will not be covered directly withinthe present case study because many of the Euro-pean acquisitions have been made very recentlyand group policies on training and human re-sources development have not been fully inte-grated into this part of the company.

1.3.1 Marketing strategy andEuropean developmentThe UK biscuit market is the largest in Europe, andsince the mid-1980s has continued to grow slowlybut significantly in volume and real price terms.Thislarge mature market of some £1.3bn in 1991 isdominated by McVitie's, whose major brands andretailer's own-label production account for nearlyhalf UK total biscuit sales. Its core products encom-pass leading UK brand names like Digestives, RichTea, Chocolate Homewheat, Hob-nobs and Pen-guin. Other major biscuit companies include JacobsBakery (BSN), Burtons (ABF) and Fox's (NorthernFoods).

Exports of biscuits have grown markedly in recentyears and now amount to 12% of the UK producedvolume. McVitie's is the leading brand in Eire, Scan-

(-1,)

31

32

dinavia, and Hong Kong and its Carr's brand nameis the leader in the US speciality cracker market.

In order to gain a significant position within conti-nental Europe the group has pursued a particularlyactive acquisition policy in recent years. In 1990McVitie's took over Verkade, and acquired majoritystakes in three Spanish snack food companies. In1991 investments were made in three leading bis-cuit companies: Oxford Biscuits (58% holding),Fazer Biscuits (49%) and Gyori Keksz (84%). Oxfordis the largest biscuit manufacturer in the Nordicregion and has over 50% of sales in its home coun-try Denmark. Fazer is Finland's biscuit market leaderat 40% and its fourth largest food company. GyoryiKeksz is Hungary's largest baked foods manufac-turer, with 50% of the biscuit market. Joint ventureswere initiated with Wardell Roberts snack foods inEire and further inroads into the Spanish snack mar-kets were also made. 1992 has seen the purchase ofa 74% stake in Aura, an Italian manufacturer ofchocolate and confectionery, and the establishmentof a joint company with Roye; Brands to sell sweetsand biscuits in Spain.

The McVitie's group considers that it has establishedits foremost position in the biscuit, cake and snackfood markets of Europe through its commitment toproduction efficiency, quality control and effectivemarketing.

1.3.2 McVitie's UK companyorganizationMcVitie's (UK) has three operational groups: Clas-sic, Snacks, Variety and Export each headed by acommercial director who sits on the McVitie's UKboard. These commercial directors each controlmarketing, technical developments, marketresearch and financial matters relating to their ownarea of the business and operate through StrategicBusiness Units (SBUs).The export division acts as thefourth SBU. Commercial departments provide thelink between the various manufacturing operationsand the sales force. Development and marketing ofnew products is the responsibility of the commercialdirectors.

In line with UB group management policy, McVitie'sis striving for a flatter management structure, lesssupervision of operators, and more efficient use ofnew technology. This places much greater respon-sibility on the company to provide training to allowpeople to carry out their jobs effectively. It also putsmore responsibility on the individual for their per-formance and personal development. Gaining staffof sufficient calibre to allow such a policy to beeffective requires carefully planned recruitmentstrategies and extensive training programmes.

1.3.3 McVitie's marketingWhile the biscuit market is long established and hasbeen typically stable with a slow upward trend italso has become closer to confectionery and snackfoods in terms of consumer perceptions. Productssuch as confectionery countlines (like Nestle's Rown-tree Kitkat) and cereal bars, are frequently includedin market research analyses of the biscuit market.Many new products arise in this interface between

33

markets, while others stress high quality or tradi-tional values. At times of consumer real incomegrowth product developments typically emphasizepremium quality and style, while recession in theecor,omy frequently leads to trading down by con-sumers to more modest biscuit types. Lifestylechanges have brought about increased informalityand snacking, and this, along with other consumerconcerns such as healthy eating, may influenceproduct style and image as well as ingredients andtaste.

McVitie's in the UK market have positioned a num-ber of their biscuits as convenience snacks andmoved with the economic climate to develop pre-mium products or more basic alternatives. Newproducts and traditional brands have been stronglysupported by advertising expenditure. While thismaintains the marketing initiative and pushes prod-ucts through the distribution chain, especially via themajor retailers, the company also supplies over40% of retailers' own-label biscuits. This latter seg-ment of the market accounts for around 30% of theUK biscuit sales, and provides a significant source ofrevenue and profit for McVitie's. Both companybrands and own-label products need to be com-petitively priced yet consistent in quality.This combi-nation of cost effectiveness and high productionstandards requires a significant investment in bothcapital and human resources.

1.3.4 Manufacturing operations in theUKMcVitie's UK has five factories located at:

Harlesden, West LondonTollcross, Glasgow, ScotlandAshby de la Zouch, LeicestershireManchester, NW EnglandCarlisle, Cumbria, NW England

with a smaller specialist operation in Scotland.

1.4 The Manchester biscuit factoryThe Manchester factory was established during1917 and still stands on the same site. It is locatedsouth of central Manchester in an urban location.This factory produces a range of mainline biscuitproducts whose labels are household names, suchas Penguin, Jaffa, Digestive and Homewheat.Addi-tionally the factory produces a range of own-labelproducts for well-known stores such as Sainsbury's,Tesco's, Asda and the Co-operative Retail Society.The total annual sales value is comfortably in excessof £100m. There is also new chocolote refinery onthe site which supplies chocolate to various McVitie'smanufacturing sites and became operational in1989. The refinery currently operates completelyindependently from the main biscuit factory in termsof ma- )ower and shift patterns.

1.4.1 WorkforceApproximately one thousand people are employedon this site, of which about 60% are directly con-cerned with production, i.e. process operators,packers etc. (see Appendix). The total numberemployed in the factory has changed little over thelast three years. There is a slight seasonal variation,

the production staff increases by between 60 and80 during the second half of the year. Temporarystaff are recruited from very much the same groupof people each year. This site has agreed with theUnion of Shop, Distributive and Allied Workers, theunion representing most of the p.- duction staff,that temporary staff employed for 26 weeks in a 39week period should become regular.Male staff are employed primarily on the proces-sing side and female staff on the packing side, butthese distinctions are now blurring rapidly. A gen-eration ago the workforce was almost entirely whiteand totally local but it is now racially mixed. Thisreflects the pattern of immigration into the localityana the fact that employees are drawn from a muchwider catchment area than previously. The work-force is remarkably stable, only 8% per year turn-over of staff. In some cases, entire families work forthe company.

There are three main categories of employeesbased on manner of payment:

Hourly paid majority of the workforceWeekly paid clerical and administrative staffMonthly paid -Jaffa and refinery staff, and man-agement

Hourly paidUnskilled: The lowest level recruited and coversthe packing team, hygiene operators, biscuit teamoperators. This group receive about 4 to 8 weeksinitial training in biscuit packing and machineryoperation.

Semi-skilled:Trained to operate process plant e.g.mixing, moulding, baking, enrobing with choco-late etc. on production line producing in excess of2000 biscuits/ minute. Working on the variousshift systems gives enhanced remunerationthrough shift allowances.

Craft engineers: "Blue Pages", Special EngineeringGrade system. These are the most highly paid ofthe hourly paid workers. They work in teams andore responsible for maintaining equipment. Theyare specialized into mechanical, electrical andelectronic engineers. Strict guide-lines for recruit-ment is combined with four years of apprentice-ship training plus day release at local further edu-cation college. The usual age at entry is between16-20 years.

Weekly paidClerical: This group covers wages clerks, purchasingclerks, stationery clerks, etc.

Monthly paid Zone 4Technicians: Grade G: (Bottom of Zone 4) Person-nel in this group include microbiology and ingre-dient laboratory technicians and quality assur-ance staff. There are approximately 30 Grade Gstaff. Where special skills are required they maybe recruited externally.

Supervisors 1st and 2nd Line supervisors:Grades H & I; Supervisors provide the linkbetween hourly paid workers and monthly paid

management, and control a team of 10 or morepeople.

Plant manager: Grade I. These people areresponsible for staff on a production line fromdough mixing to packing.

Junior managers: Grade J. These managers havea greater level of professionalism and a thoroughunderstanding of technical matters and processcontrol.

Monthly paid Zone 3Middle managers: A professional level.with techni-cal competence, usually qualified with a degree,HNC, HND or similar qualification. This level willinclude managers in factory services, employeesrelations, training and recruitment, safety, technicaladvisers and engineers.

Monthly paid Zone 2Senior managers: This covers the senior factorymanagement team of Z including operations man-agers A, B and C, the factory service manager.

Monthly paid Zone 1Senior managers: factory general managers

Shift patternsThe hourly paid workers and lower grades of man-agement (Zone 4) usually work shifts.There are twobasic shift patterns in the factory, 'ach of theseexists in a number of small variations starting andfinishing time.The shift patterns followe 1 affects thepay received. There is a 16.66% premium for thoseworking double day shifts, and 33.33% premium fornight shifts.

1. Packing plantDays 08.00 17.00Evening 17.00 22.00Night shift (permanent) 22.00 - 06.00

2. Process operators and engineers (double days +nights)Days 06.00 - 14.00

14.00 22.00Nights 22.00 06.00

Women in production tend to work either days orevening "twilight" shift as these suit their domesticarrangements best. Only about 11% of the totalfemale production workforce choose to work thepermanent night shift. The pattern is similar forwomen working in other functions within the fac'ory.Consequently women are amongst the lowest paidworkers on the site because they do not benefitfrom the shift allowances.This situation is not so pro-nounced in the new Jaffa Cake line where 6 of the24 newly appointed process operators are women.

Wages policyAll wages are negotiated centrally for the five majorfactories in the group by the Staines Head Office,with representatives from each site present. It is notMcVitie's policy to compare their rates with those oftheir competitors. The rates of pay are, without shiftpremiums, about average for the area. Unemploy-

3.1

33

ment in the area is high so the e are few recruitmentproblems for unskilled and serif skilled workers.Thecraft engineers are highly skilled and difficult torecruit so the factory is keen to keep them, theyreceive top rates of pay.

1.4.2 Educational level of staffThere is little data available on the educationalattainment of the factory workforce. The bulk of theunskilled and semi-skilled labour have average orless than average academic qualifications.The high-est qualified hourly paid staff are the craft engi-neers who are generally qualified to National Cer-tificate or Higher National Certificate level (HNC).Plant managers and supervisors in operations Aand B have generally not reached high standards incompulsory education, nor do they have much post-compulsory education. Team leaders/ shift manag-ers in Operations C have generally studied prevoca-tional courses, some to HNC or degree level. Therecruitment policy for this group was to look for peo-ple with a good level of compulsory education.Tech-nical education was not considered important. Thetechnical competence required by the middle man-agers usually means that they are qualified to HNCor degree level. In recruitment to manager levelsMcVitie's look for people who can demonstrate thatthey have a commitment to personal developmentwith good interpersonal skills and a flexible attitude.High levels of technical competence is generally notrequired as technical problems can be referred tothe central research and development laboratories.

1.4.3 Factory organizationThe general policy within this establishment is todivide the operation into a number of independentunits. This has been achieved in the areas wherethere has been recent capital investment in plantand machinery. Thus the chocolate refining and theJaffa Cake line, which is not yet on stream, (Opera-tions C) are physically and operationally independ-ent to the rest of the factory. Operations A and B,the older production lines, are as far as possibleoperated as separate units, however operationssuch as mixing cannot be divided into two separateoperations, so the one unit serves both operations.The layout of the ovens and packing lines is such thatthe different operational units cannot be physicallyseparated, they all do as far as possible operate asfactories within a factory. There are also factoryservice, finance and personnel units within theestablishment that serve all operations.

The biscuit production process is a highly automatedcontinuing process with a high level of process con-trol. It is essentially a very straightforward tradi-tional process of:

Mixing - Moulding Baking Finishing . Packing

With the use of well specified raw materials themajor production problem is the control of the plant.Biscuit products generally have a medium to longshelf-life and present no significant food safetyproblems.

ber of plant managers who work double day shifts,alternating between the shifts each week. Eachplant manager is responsible for running a unit oftwo production lines. Process operatives alternateweek by week on a double day shift. Others followpermanent double day shifts or night shift. Report-ing to the plant manager are packing supervisors.The packing staff work a permanent non-rotatingshift pattern, either day shift, evening shift or nightshift.

The maintenance and engineering functions areoverseen by an operations engineer, to whom theengineering charge-hands report.

The operatives are trained in one particular functionand operate only within that function, i.e. moulding,baking operations etc. There is flexibility in the sys-tem in that the operatives can look after two similarlines and cover for others working on that opera-tion. Plans are in operation to train the operatives tobe fully flexible across functions.

Operations BThis is very similar to Operations A except that theplant managers in some case look after one produc-tion line only, but then also oversee the packagingwithout the benefit of a packing supervisor.

Operations CThis operation is organized on a different basis.Reporting to the operations managers are teamleaders / shift managers. In this operation the prod-uction operatives, and engineering charge-handsall report directly to the shift manager. Also theoperatives are trained in all aspects of the produc-tion, so the flexibility comes from people moving upand down the line. The team leaders/shift manag-ers are normally qualified to HNC or degree level,however less qualified personnel with experiencemay be appointed. For the operators attitude ismore important than qualification; people who candemonstrate they are committed to self develop-ment are usually selected.

1.5 Continuing vocational trainingpractices

1.5.1 UB training policyAs described previously UB is a company that ismade up of a number of operating divisions andservice networks operating as stand alone inde-pendent operations. For training and developmentthey work within a common set of guidelines andprinciples coordinated from the centre to ensurethat agreed standards and practices are main-tained.

Fundamental to U B's training and development pro-gramme is the need to maintain a workforce thatwill improve business performance and competitive-ness. A central tenet is the belief that everybody canoptimize their performance and progress by gain-ing a clear understanding of their personalstrengths and weaknesses.

34Operations A 1.5.2 Management trainingReporting to the operations manager are a num- The management development executive, compris-

3.5

ing the group chief executive and managing direc-tors from all the divisions, have the task to ensurethat the group has ..."the best equipped manage-ment resource performing to its full potential tomeet present and future needs"... of their business.Their strategy is to identify necessary manpowerrequirements and to focus on ways of measuringindividual performance, developing and motivat-ing people in their own and the company's best

interests.

1.5.3 UB Development Programme(UBDP)The philosophy of the programme is not only toencourage people to learn skills and knowledge butalso to be able to pass on the relevant elements ofthose skills and knowledge to their subordinatesthrough the process of coaching and counselling.There are three dimensions to the UBDP: manage-ment essentials, experienced manager develop-ment and the self development journal (SDJ).

Management essentials: A formative and stand-ardized groundwork for direct entry graduates,other external recruits and those internally pro-moted to junior management, typically aged

under 30.

Experienced manager development: A frame-work of learning designed to enable all individ-uals and their managers to develop the key knowl-edge and skills to meet the functional standardsand on-going business needs. Regular reviews,separate to yearly appraisal of job performanceand of the individuals potential for different roles

are undertaken. Learning for the experiencedmanager is driven by: self assessment and devel-opment; coaching from the individual's manager;self directed use of checklists of key skills; creativedialogue between boss and individual to gener-ate learning activities that enhance job perform-ance and develop the individual; appropriate useof specific tailored off-job courses.

Self development journal: This is a personal jour-nal that explains the philosophy of the UBDPwhich provides a frame of reference to help the

individual identify the knowledge and skillsneeded to do a job and offers guidelines fordevelopment. Three aspects of personal develop-

ment are addressed: job knowledge and skills,business performance and managing people.

During job reviews with an individual's line man-

ager a checklist of specific skills that need to bedeveloped are identified. Actions and developmentplans with a time scale for their implementation areagreed. Performance guidelines as defined by the

company enable the employee to see what is re-quired of a person of his grade as well as the neces

nary skills required in a higher grade. To encouragemotivation considerable emphasis is placed on theindividual identifying their own training needs, as

opposed to the company deciding upon them.

The Manchester factory follows the UB DP for theirmanagement staff. All staff of the appropriategrade have been given the self development jour-

nal and know about the operation of the UBDP.There is considerable variation in the vigour and

extent to whit' it is applied. Managers who aredeveloping their careers are given every encour-agement to seek training to develop their knowl-edge and skills and maintain their SDJ, while it is rec-ognized that managers settled in their career areless likely to do so, particularly those close to retire-

ment.

1.5.4 Annual appraisalAn annual appraisal system operates for the 140people at Manchester in Zones 1, 2, 3 and 4.1t plays

an important role in determining the training needs

for this group of managers.

The appraisal asks:

1. Did this person achieve his/her objectives last

year?

2. What are the objectives for this person next

year?

3. To achieve these objectives what training willthey need?

The answers go to help identify if a person has the

potential to move upwards. McVitie's plans in thefuture to place more emphasis on the use of SDJ's in

appraisals.

1.6 Training at McVitie's Manchester

1.6.1 PolicyThe McVitie's group considers that it has established

its foremost position in the biscuit markets of Europe

through its commitment to production efficiency,

quality control and effective marketing. Thus the

training policy within the Manchester factory is aswithin the McVitie's group as a whole, to train toimprove business performance.Appropriate training

is available to all the workforce, this might be training

in operational skills or personal development.

In general emphasis is placed on personal develop-ment, particularly interpersonal skills and teamwork, rather than technical knowledge or expertise.

This is also the case forfirst-line managers. As biscuit

mo. ..,g is essentially a straightforward process, arelatively small group of technical experts on site

and those at the Research and Development Centrein High Wycombe can be relied upon to solve any

technical problems.

Senior management at the factory is striving tomake a gradual change from the old hierarchywhere operations were organized to function to

one of operational teams. Present practices inOperations A and B mean that process operatorswith particular skills are able to cover for each other

across the production lines e.g. moulders from theDigestive lines would be competent in manning the

Penguin moulding operation. Ideally, the companywould like to progress to a situation where processoperators would be trained in all the skills required

on any given line e.g. moulding, oven operationand cooling, etc.

35

36issswigunigicumimmemmingszawrig.

2.

36

The Manchester workforce is remarkably static andthus there is a considerable need for continuingvocational training to improve the skill base of theworkforce. Traditionally, employees have pro-gressed from packaging operative to plant opera-tive. Packing team members are normally promotedto supervisor and plant operatives are normally pro-moted to plant manager. However difficulties arisesince the personality and educational attainment ofgood biscuit packers and plant operatives areunlikely to be that required for supervisors andplant managers of the future without extensivere-training.

A change in the present attitude in the workforce isrequired to one where they are not only moreresponsible for their own tasks but also relate to theoverall performance of the team. In operationalteams it is difficult to shift the blame for poor per-formance to another "functional" group. Also ahigher calibre of staff is generally required both interms of the management skills of the team leadersand in the literacy and numeracy skills of the processoperators. Recruitment of the right people or ad-equate training of the existing workforce is essentialif the new working practices are to be successful.

Supervisors and plant managers represent the firstlevels of management within the factory and bylocal agreement with the workforce have been usu-ally recruited from plant operators or process work-ers and supervisors respectively. Only when no suit-able internal applicant can be found would anypost be filled externally. The result of this policy hasbeen that insufficient managers of appropriate cali-bre to make commercially significant decisions havebeen obtained by internal promotion. Given thestrong competition in the UK biscuit market seniormanagement has recognized that more able super-visors and plant managers are essential to the suc-cess of the business.Three short term solutions to thisproblem were identified:

a. promote the best of the applicants and heavilyreinforce with training,

b. attempt to recruit externally,c. transfer applicants in from other sites.

As far as possible solution (a.) was adopted alongwith an offer of training to any other employee, on avoluntary basis, to help them meet the basic criteriafor promotion to the first level of management. Thisapproach was adopted to increase morale and con-fidence in the work force. However external recruit-ment was required to provide supervisors andoperators of sufficient quality for operational teamworking on the newJaffa line C and in the chocolaterefinery.

Despite the excellent facilities and resources in thetraining department there existed a lack of interestin the past amongst all but the very keen staff. Con-siderable effort i... being made to make all theemployees aware of Ihe accessibility of thisresource by advertising ,vithin the factory and "sell-ing" training to everyone. Particular attention isbeing paid to the "traditional" part of the factorywhere attitudes are fairly entrenched, in compari-

son to the refinery or the new Jaffa line where newrecruits to the company have a more enlightenedand positive approach to training and develop-ment.

Briefings are held once a month for half an hour oneach shift. Production lines are stopped and supervi-sors give all factory staff information on a range ofitems from local news to important . ompany policy.The training department, including the factory ser-vices manager and the training manager haveorganized themselves to take 10 minutes of some ofthese shift briefings (including those at 3.00 am inthe middle of the night shift) to let people knowabout all the training resources and opportunitiesopen to them, and encouraged them to ask for train-ing on anything they found difficult. Since new work-ing practices were introduced, operatives requiredliteracy and numeracy skills to fill in charts relating toe.g. quality control tests, results of metal detectiontests. Some workers admitted difficulty in doing thissort of thing, the offer of training provided themwith a helpline which many have taken up.

UK government ministers have power under theFood Safety Act 1990 to make regulations requiringpersons engaged in food businesses and handlingfood to be trained. Although there is no suchrequirement at present consultations are takingplace with interested parties on s"ch regulations.The approach is modelled on th -C draft FoodHygiene Directive. Many companies, includingMcVitie's, are introducing training in anticipation ofthe regulations.

As a responsible food manufacturer McVitie's workto avoid the commission of an offence under theFood Safety Act. Ensuring staff have been trained tothe appropriate level, being able to demonstratethat training has been carried out and keeping train-ing under review are important factors in demon-strating that they have exercised all due diligence asrequired by the act.

1.6.2 Training organizationThe factory training manager is responsible forestablishing the training direction and standard. Heis also responsible for the organization and monitor-ing of the training for all employees excep those inthe chocolate refinery and Operations C. Reportingto him is a training officer who assists him in this roleparticularly the monitoring of the training. Most ofthe training is given by the teacher operators.

There is a separate personnel and training officer(PTO) for the chocolate refinery and 'affa line,reporting to the manager of Operations C, whoworks closely with the training manager. It isexpected that PTOs will be established for the otheroperations.

The training manager organizes the appraisal sys-tem which helps identify the training requirementsof all monthly staff in the factory. An annual trainingplan is constructed after consultation with all man-agers regarding the training requirements for theirstaff. He also liaises with the McVitie's group train-ing manager on group policy, attending a meeting

with other training managers every three months.Regular, six weekly interval, meetings are held withthe factory general manager to review the factorytraining policy.

The vast majority of training is done on the job orin-house. One-off requests for sp _cialist trainingmight be done by equipment suppliers if it involvesmachinery, or by external trainers if they have suit-able courses. Despite their serious commitment totraining McVitie's are very cost conscious and do notnormally use external training providers because ofthe expense involved. In general the direct costs oftraining are relatively low, while the costs associatedwith trainee salaries etc. are considerably higher.

1.6.3 Training budgetThe total planned training and recruitme It budgetfor the factory in 1992 is around £500,000. Themajority of this, some £250,000 to £300,000, isaimed at meeting the new (largely initial) trainingrequirements for Operation C, the Jaffa productionline, with its more technically demanding machinery.Almost all of the people involved will be new recruitsto McVitie's. The new chocolate refinery is likely toabsorb a further £50,000 as this too involves consid-erable advanced technology.

Of the remaining funds, some £150,000 will bespent at the Manchester factory. This figure coversthe direct costs of training, such as those associatedwith the Training Centre, and trainir2 course feesoutside. Cost of wages and salaries of those beingtrained are also met from this budget.

1.6.4 Operational skills trainingA training matrix has been developed for all 30operational teams in the factory (including the can-teen). It lists along one axis all the tasks which a teammust carry out and the team along the other axis.The matrix records those who are proficient andthose who need training in a particular task. Thematrices are used by supervisors in conjunction withthe training department to identify worker'sstrengths and weaknesses and draw up plans andbudgets for any training which is necessary.

There are training manuals and check sheets forevery job done in the factory and this approach has

been used for about 20 years. The check sheets arecompleted for each trainee. They record traininggiven for each of the points which together make upa task identified on the matrix. Check sheets alsoindicate when the training was given, how long thetraining took, and date of completion.The instructormust confirm whether he /she considers the traineecapable of carrying out the operation under nor-mal conditions. The training is also assessed by thesupervisor who confirms that the trainee is trainedto the required standard. Finally the trainee signs tosay whether they agree or not with the instructor'sand supervisor's assessment. Thus it is very much anassessment of coma dente in a particular job. Thesigned record also avoids disputes regarding com-petence to operate the plant, and enables the train-ing department to determine when a refreshercourse is required. The matrix also covers any train-ing obligations under the Health and Safety or the

Food Safety Act. Mostly there is no set time limit forthe training, which takes as long as necessary (withinreason) for the trainee to reach the required level ofcompetence.

Teacher operatorsMuch of the training is given by teacher operators.These are operators who have been trained inteaching skills within the factory. They give instruc-tion on specific operations to workers ,,lected bytheir supervisor, in addition to working on theseoperations themselves. There are about 60 teacheroperators on the factory Poor, with each shift andeach line having one. They use the training manualand training check sheets to test proficiency ofoperators and complete a weekly progress form.

The teacher operator has the necessary skills as wellas the experience to be aware of all the operationalaspects of a particular job, they receive slightlyhigher pay than an operator, and a small bonus foreach person trained. The numbers trained by ateacher operator can vary considerably from yearto year or month tc ionth depending on the factoryrequirements.

1.6.5 Training to meet legalresponsibilitiesTraining to meet legal responsibilities is largelyorganized within the training matrix for a team, asdescribed above. Training food handlers to meetthe expected new regulations is a new training com-mitment. All managers have the Basic Certificate inFood Hygiene from the Institution of EnvironmentHealth Officers, who validate and monitor coursesof various levels in food hygiene.

A computer-based training (CBT) package has beendeveloped for the whole workforce by McVitie'sgroup training department.The Manchester factoryhas a number of terminals running this packageavailable to staff in the training room. It is hopedthat all staff will have completed it by the end of1992, out of a workforce of about 950, so far about350 people including all managers have used thepackage. It has a built-in testing system so the pro-gramme cannot be finished unless correct answersare given to questions posed. A person of averageability should be able to complete the package in1-2 hours. However some workers take longer, upto six hours to complete it, due to literacy problemsand difficulty with the English language.

1.6.6 Personal developmentA personal development programme known asManchester Skills Development Programme (MSDP)has been developed at this factory. The philosophyof this programme is: know your job, how can youdo it better? and, what do you need to do know toget promotion? It is aimed primarily at the eight hun-dred hourly paid staff but does not preclude the sev-enty craftsmen engineers, the eighty technical staffor the seventy supervisory staff, if they wish to studyany of the programmes.

The approach is to offer several different packagesof training to any employee wishing to study.Included in this offer is counselling to identify train-

,JS

2.

37

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38

ing needs, access to a variety of training packages,individual coaching at no monetary cost to the indi-vidual and in some cases the attainment of nation-ally recognized certificates.The purpose of this com-mitment to training was to raise levels of ability inorder to ensure successful management promo-tional opportunities.

Through the co-operation of McVitie's Headquar-ters, Stockport and High Peak TEC (see Sector Analy-sis) and the senior management of the Manchesterfactory, seven different training programmes havebeen offered.

Individual employees at any level can volunteer forthese training courses to meet their own individualneeds. General education, technical and manage-ment subjects can be studied either in the classroomor through open learning.

The programmes open to employees on this volun-tary basis include:

1. Full company sponsorship for any employeewishing to study a work related course of furthereducation at local schools or colleges.

2. Off the job training, on food-related, process-control, computerized simulator, purchasedfrom Rediffusion Simulations Ltd.

3. General literacy and numeracy classes, Englishand maths run as an evening class on Wednes-day evenings on the factory site workingtowards a recognized examination, with no costto employees except their time.

4. The Biscuit, Cake, Chocolate and ConfectioneryAlliance (BCCCA) open learning Home Studyunits on food production. The BCCCA (an Indus-try Training Organization, see Sector Analysis)assesses and certificates each employee whocompletes a Home Study unit to the requiredstandard. Most of the topics offered in theseunits relate specifically to the sub-sector.

5. Computer, computer software and computer-ized training packages.

6. Open learning system leading to the NationalExamination Board of Supervisory Manage-ment (NEBSM) "Certificate of Supervisory Stud-ies"

7. Interactive video learning programmes.

During the promotion of this programme all employ-ees who had applied for a promotable position andhad been turned down are targeted for specialbriefings.

1.7 Assessment of training bymanagement and workforce

1.7.1 Views of McVitie's head officeWhilst recognizing the serious commitment to train-ing shown by the Manchester factory, the trainingand development manager at McVitie's UK head

j

office is aware that the training of managers hastaken precedent over training of the workforce atthe operative level. Recent savings in operationalcosts are to be directly re-invested in a far reachingprogramme called "The Way Forward" which isintended to bring cultural change to the whole work-force. The programme will be in two parts: teamentry skills and team operation skills.

Team entry skills will seek to develop an attitudechange in the workforce by teaching them skills inproblem solving, the management of change, teambuilding, safety, literacy and numeracy.Team opera-tion skills will involve multi-skilling of the workforcedown a production line (as previously discussed) butmay cis° include interpersonal skills, e.g. customercare.

At present the Manchester factory's MSDP seeks tointroduce some of these changes, but on a volun-tary basis. The Way Forward will be a multi-millionpound operation providing substantial on the jobtraining during working hours and will involveimaginative schemes for implementation if seriousproduction losses are to be avoided.

McVitie's is a strongly marketing-orientated com-pany, and one of the key features is that its recruit-ment policies place more weight on personal inter-action skills than on technical expertise because bis-cuit makinn is essentially a simple process. From thispoint of ...ew less emphasis is therefore put onupdating in technical skills for managers than mightbe expected in view of the company's serious com-mitment to training. The view taken is that interper-sonal skills are far more important and that a hand-ful of technical experts, e.g. in the Research andDevelopment Centre in High Wycombe, can berelied upon to solve any technical problems.

1.7.2 Views of factory managementThe factory general manager said that McVitie'swas a very dynamic company, constantly changingin its efforts to maintain its premier position in the UKbiscuit market. In contrast, the workforce at Man-chester was remarkably static and a combination ofthese two facts had ci sated a considerable need fortraining to improve the skill base of the work force.He felt that changing people's attitude to their jobwas essential if the change from traditional workingpractices to more flexible operational teams was tobe successful.

The management felt that the advertising and pro-motion of training within the factory had been verysuccessful with more workers than ever coming for-ward to use the open learning packages and takeadvantage of the basic literacy and numeracy clas-ses available. They also highlighted the success ofthe training matrices which, while simple in concept,offered supervisors a straightforward way of identi-fying training needs of workers throughout the fac-tory and canteen.

After the introduction of MSDP, managers notedsome improvements in both attitudes and perform-ance of employees. Through the enthusiasm andtechnical knowledge of some operators gained

using the c..,len learning facilities, production faultswere more quickly identified ensuring that onlygoods in prime condition were despatched tocustomers. Good and relevant lob applicationswere now coming through from employees who pre-viously would not have applied for promotable posi-tions. A strong link now exists between the increas-ing numbers of females suitable for process opera-tion vacancies and the number of BCCCA technicalunits being studied. A further benefit of this personaldevelopment programme can be seen in the sub-stantial savings that have been achieved with adver-tising and recruitment agency fees as a direct resultof internal recruitment.

In the view of the training manager, the trainingoffered to Manchester employees addresses everyeducational and development training need, rang-ing from remedial mathematics and English throughto the theory and practice of technical and mana-gerial subjects. No employee, at whatever level,could genuinely state that his or her training needswere not being catered for. Close liaison with othertraining managers in the McVitie's group and withgroup training officers at head office ensured thefree flow of ideas throughout the group.

1.7.3 Workforce viewsAmongst the workforce the teacher operator sys-tems was well-liked. They saw several advantages,principally the availability of the teacher operatorsfor refresher instruction, often this appeared to beundertaken on an informal basis, other times theoperators requested refresher instruction throughtheir supervisor. The operators felt there was ampletime available for this skill revision during produc-tion breaks.

1.7.4 Trade union viewThere is a full-time convenor for USDAW, the unionwith the largest representation on site. Most of thetraining given by McVitie's was considered to be ofa good standard and appropriate. Some concernwas expressed regarding training of temporarystaff, which was felt to be the minimum possible.

1.8 SynthesisUnited Biscuits and in particular the McVitie's groupwere highly rec )mmended to the UK researchers bythe major trade unions represented in the company.The particelor factory studied appears very con-cerner; to maintain good relations between man-agem ant and workforce, and many employees hadrema;ned with the company for over ten years. Staffturn Jver, at 8% is extremely low.

Throughout the United Biscuits group as a wholethere is a well defined commitment to personaldevelopment and training and the results of thisstudy on the McVitie's Biscuit Factory show that com-pany policy is being implemented throughout theworkforce from the senior management team to thefactory floor. This is supported by the regular meet-ings of the site training manager with both tie McVi-tie's UK training and development manager and thefactory general manager.

Evidence for the factory's commitment to training,

and its belief in the success of its policy, can be seenin its successful application for a National TrainingAward (Part 1., 2.). In addition, the factory generalmanager is a director of the Stockport and HighPeak Training and Enterprise Council (StockportTEC, see details on TECs in Se tor Context Analysis).Despite tight cost controls, substantial funds areavailable for training, and managers and supervi-sors have been pro-active in advertising and sellingtraining to the workforce using posters, briefingsand newsletters. Cost savings were ploughed backinto the training budget. Personal development andtraining schemes on offer to workers through theMSDP cost them nothing but their time.

Training is carried out in a methodical fashion, withthe simple but effective use of the training matrix.The teacher operator system is well liked by theemployees, and is but one aspect of the accessibilityof training in the company. However not all trainingopportunities were taken up by errq,loyees, sincemany had scarcely used the facilities in the trainingdepartment itself. The computer-based training forhygiene training had the effect of overcomirg thisreticence. Hence the CBT package has provedimportant not only for its benefit in educating staff infood hygiene but also for introducing some of theolder workers to computers, and for many it hasbeen the first time they have visited the Training Cen-tre despite working in the factory for many years.Problems with literacy and numeracy identifiedwhilst using this CBT package encouraged individ-uals to take up the basic programmes on offerunder the MSDP.

The training staff at McVitie's group head officeand the Manchester factory were aware of the gen-erally modest educational qualifications of theworkforce and wished to promote a cultural changeas far as possible.The general policy of internal pro-motion to fill vacancies is coupled with a system ofcounselling to help those who fail to secureadvancement. The appropriate training is advisedto enhance subsequent promotional prospects.However new machinery and emphasis on respon-sibility and teamwork did necessitate outside recruit-ment.

Process operatives interviewed tended to associatetraining with initial training, and did not alwaysrecognize updating of knowledge and skills as train-ing, i.e. the CBT hygiene training. As mentionedabove, particular satisfaction was expressed for theteacher operator system, especially its informality.This gave the impression that the workforce stillviewed formal training with some apprehension.

Government initiatives on human resource develop-ment such as National Vocational Qualificationsand Investors in People are of interest to McVitie's,but there is a concern that they will prove costly toimplement in terms of paperwork and work-basedassessors. The training matrix and skills checksheet are in many respects similar to the approachof NVQs (see Sector Context Analysis) but the skillsassessed are more specific to the requirements ofthe factory. However, compared to the NVQ,employees are not assessed to a national standard

40

and the McVitie's approach does not give them arecognized or transferable qualification.

At present the NVQs are only in a draft form for thissector. When final versions are available the train-ing manager intends to assess their suitability for theMcVitie's factory. The key questions are: will they

41

raise standards, will operators make better biscuitsif they reach the requir :.d NVQ standard, will theybe cost effective? i.e. will they improve business per-formance? It is by no means a forev se conclusionthat McVitie's will adopt NVQs if they can see nobenefit from them. The unions nationally stronglysupport the NVQ system.

APPENDIX

People interviewedMcVitie's UK Head Office, Staines

Ian Web ley: Employee Relations ManagerHelen Roome: Training and Development Man-ager

McVitie's Manchester Biscuit Factory

James Dunlop: Factory General ManagerIan de Courcy: Factory Services ManagerAndrew Greasley: Employee Relations ManagerBrian Humble:Training and Recruitment ManagerBridie Fanning: Personnel and Training Officer,Operations C.Shirley Moss: Production Training OfficerEdward Hill: Graduate Management Scheme,TraineeRichard O'Connor: Process Operator, MixingRoomRose Woodrow: Teacher Operatdr, PackingPat Brownhill: Teacher Operator, PackingSteve Brown: Mont Manager, Digestive BiscuitsPeter Goodwin: Maintenance Electrical EngineerTerry Brammer: USDAW Convener

Company overviewDistribution of staff, by oge and sex, August 1992

Part-time Age 16 -30 Age 31 -45 Age 45 -60 Totals

Male 3 0 0 3

Femal 21 65 84 170

Full-time Age 16 -30 Age 31 -45 Age 45 -60

Male 82 157 227 466

Female 48 76 113 237

Numbers of people employed in various categories, averaged from 13 periods of 4 weeks, for the years 1989,

1990, 1991 and the first 28 weeks of 1992.

Category of employment 1989 1990 1991 1992

Direct:Male days 56 57 55 49

Male shifts 81 79 80 79

Male nights 130 137 152 146

Male evening 4 7 4 4

Female days 176 185 175 165

Female days p/t 24 22 20 18

Female evening pit 125 141 141 128

Female nights 32 41 43 41

Total direct 628 669 670 630

IndirectMale days 19 18 18 18

Male shifts 4 4 4 4

Male nights 1 1 2 2

Female days fit 19 17 16 15

Female days pit 4 4 5 7

Female evening p/t 2 2 2 1

Female nights 1 0 1 1

Total indirect 50 46 48 48

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Category of employment 1989 1990 1991 1992

Warehouse:Male days 6 7 4 1

Male shifts 4 4

Male nights 5 5 4 4

Male evening p/t 2 1 1 1

Female days 5 4 3 4Female shifts 2 2

Female nights 1 2

Female evening p/t 3 4 3 3

Total warehouse 21 21 22 21

Repair and maintenance:Days 7 8 7 8

Shifts 77 72 69 73Nights 13 14 13 13

Total repair & maintenance 97 94 89 94Total hourly paid workers 796 830 829 793

Weekly paid:Clerical f/t na no 16 14

Clerical p/t na na 5 6

Total weekly paid 29 25 21 20

Monthly paid:f/t na na 124 117p/t na na 13 14

Total monthly paid 140 132 137 131

Refinery:Monthly paid 10 10 10 11

Weekly/hourly paid 34 38 38 37

Total refinery 44 48 48 48

Microbiology laboratory - monthly paid 8 8 6 6

Total factory 1017 1043 1041 998

Leavers/transfers perm. 7 7 5 8

Starters/transfers perm. 7 12 2 7

Figures excl. YTS, casuals & trainees 8 7 1 2

All functions annual turnover (°.,o) 8.54 9.32 8.30 7.86

Absence rate (Wo) 5 5 5.12 4.81

Temporary staff - May-Dec. only 38 25

Notes:1992 figures for hourly workers appear to be low because they cover a period up to 28 weeks (Friday 10 July)and do not reflect the higher numbers of temporary workers employed between July and the end of the year.

na: figures not available.Direct: Directly involved in production.Indirect: Factory support services.

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Distribution of staff, grades of personnel

Level Male Female Total

Manager Zone 1 1 1

Manager Zone 2 7 0 7

Manager Zone 3 23 2 25

Manager Zone 4 54 62 116

Clerical 0 15 15

Secretarial 0 4 4

Skilled 82 0 82

Semi-skilled

and unskilled 469 406 875

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2.

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2. PROSPECT FOODS LTD

2.1 Description of Prospect Foods groupProspect Foods is a family owned private companybased in North Yorkshire, and encompassing BettysCafe Tea Rooms and Taylors of Harrogate. Thegroup's interests span food manufacturing, retailingand catering: with tea and roast coffee as its mainproducts, along with the hand-craft manufacture ofbakery and flour confectionery supplied to its tearooms and associated retail outlets.

Founded some 80 years ago by Frederick Belmont,a Swiss confectioner who settled in Harrogate, Bet-tys Cafes developed a reputation for quality basedon good service and products largely obtainedfrom Bettys Bakery.The Prospect group was formedin 1962 when Bettys acquired C.E. Taylor, a familyowned bakery, cafe, tea and coffee business, estab-lished in 1886. In 1993 the group consists of the twosister companies trading under their respectivenames: Taylors of Harrogate producing tea and cof-fee; Bettys providing cafes and retailing. ProspectFoods is not quoted on the stock exchange and allshares are owned by family. The group had some700 employees and a turnover of £22 million in1991.

2.1.1 Present structureThe main divisions of the group are shown in Table2.1.

Table 2.1 Prospect group

Group Head Office at Harrogate

Catering/retailingBettys Shop and Cafe in:York, Harrogate, Ilkley,NorthallertonTaylors Shop andTea Room in York.

Food manufacturingTaylors Tea and Coffee inHarrogate andBettys Bakery in Harrogate

Mail OrderBettys By Post in Harrogate

The Bettys outlets combine retail and catering ser-vices, with an emphasis on company bakery prod-ucts, tea and coffee. Bettys By Post mail order busi-

ness operates from Harrogate. Taylors at York is aretailer of the specialist teas and coffees which alsohas a small cafe upstairs supplied by Bettys Bakery.Taylors of Harrogate consists of three main sections:

Pagoda House Coffee Roasting and Tea Blend-ing;

St Helena House Warehouse for supplies of teaand coffee prior to processing at Pagoda House;

Plantation House Distribution of finished prod-ucts.

The focus of this study of vocational training will bethe Taylors Tea and Coffee business at PagodaHouse, although training policy matters apply to thewhole group.

2.2 Markets and marketing strategyThe company endeavours to combine traditionalbrands and standards of service with modern prod-

uction techniques and exceptional staff training toensure high and consistently improving quality. Itscatering operations and food products are largelyaimed at the premium end of the market. Bettyscafes serve substantial meals as well as light repasts,and there is an Anglo-Swiss theme to the cuisine.Alsace wines, perhaps the nearest internationallywell-known and traded wines to those of Switzer-land in character, are featured on the menu.

In addition to meeting its own outlets' requirements,the company supplies specialist tea and coffee tothe catering trade and to retailers. It also produces"Yorkshire Tea"which is well-known in the region andnow enjoys national distribution. Yorkshire Tea isblended on a geographical basis to match differingwater characteristics. In addition own-label tea isblended and packed for Morrisons, the leadingregional supermarket.

2.3 Organization of Taylors Teaand Coffee

2.3.1 OverviewTaylors Tea and Coffee at Pagoda House receivestea and coffee in regional/varietal form after mate-rials control and storage at St Helena House. Thefactory blends and packs tea in both loose and teabag form, and roasts and packs coffee.The tea linesinclude five Italian IMA packing machines for teabags and a loose tea line for speciality teas. Greencoffee beans are blended, roasted and packed inan adjacent part of the factory. Bosch coffee pack-ing machines Jre used. Distribution takes place fromPlantation House through the company's team, ofdrivers. Quality assurance systems are replacingthe quality control methods, but monitoring is car-ried out at all stages of the process.

2.3.2 Organization structureWithin Taylors Tea and Coffee here is a somewhatundefined split of activities between the manufac-turing and other operations. This overlap ariseslargely because of the recent inclusion of the coffeebuying activities within the responsibilities of the Fac-tory Manager. The broad headings of the manufac-turing side are shown in Table 2.2 below, whileTables 2.3 and 2.4 give a more detailed organiza-tion structure.

All these areas remain under the control of the man-aging director, but in addition sales, commercialoffice and systems, materials control/central sup-plies teams report to the group administration man-ager/accountant. While this hierarchical report-ing /organization structure exists from managingdirector department heads/ managers - supervi-sors employees, it should be emphasized thateach employee is part of a team of between 5 and15 people under a team leader. Each team memberis given responsibilities commensurate with theirtraining and experience. Team leaders are seen asplaying an important function in both control andcommunication: they designate jobs to team mem-bers and authorize the working of extra hours andmonitor absences. They also act as a conduit forinformation on staff promotional aspirations andideas for improving product and service quality.

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Table 2.2 - Manufacturing operations

Manufacturing operations

Production Engineering Quality controlCoffee Tea & canteen

Coffeebuying

Table 2.3 - Factory manager responsibilities

Factory manager responsibilities: staff areas

Staff turnover at Taylors is now low in comparisonwith difficult years in the 1980s, with 15 people leav-ing in 1991, or some 11% of the workforce, and 16new staff being taken on.

The wages policy is considered by the company tobe at least average for the locality and slightlyabove average for other parts of the food industry.

CoffeeSenior factorysupervisor

Tea

Main line teasupervisor

EngineeringChief engineer

Qualitycontrol/coffeebuying

1. Head roastercoffee blenders androasters

2. Packing team leader -Bosch opei'ators andpackers

Table 2.4 - Other operations

1. Team leaders -production andblending tea bags

2. Speciality/Shift Supervisor -loose speciality teas

3. Team leaders - packing

Sales & commercial and administrative operations

Tea buying and tasting Distribution(Buying director andconsultant taster)

(Distribution manager)

1.Team of electricians

Sales

(Regional sales managers)

Coffee buyer/Qualitytaster;Food technologist with:

1. QA assistants

2. Canteen supervisorand assistants

Materials control/central supplies

2.4 WorkforceThe group has some seven hundred employeesdivided amongst its eight branches, each employingfrom 40 to 180 staff.The workforce requires a widerange of specialist skills to cover the company'sdiverse activities, such as: baking bread and flourconfectionery; coffee roasting and blending; teablending and packing; catering and serving; retail-ing; buying and marketing of specific commoditiesand products. In this context it is perhaps not surpris-ing that training to enhance individual skills is signifi-cant, but a major part of the training effort is con-cerned with teamwork, motivation and personaldevelopment.

Over the entire group, the ratio of male/femaleemployees is 45%/55%, although in Taylors the pro-portion is 60%/40%. Similarly, while in the group asa whole, three-quarters of the employees are part-time, at Taylors the proportion is a mere 7%. It wouldseem that the catering and retailing nature of theother activities in the group particularly attract thefemale, part-time employee, especially given theflexibility of hours available.The breakdown of staffat Taylors of Harrogate is shown in Table 2.5.

There are no employees from ethnic minorities.

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Table 2.5 -Taylors workforce

Job description Numbers: Numbers: Numbers:Male Female Total

Senior managers 1 3 4

Middle managers 6 2 8

Junior/line managers 6 6 12

Supervisors 11 4 15

Skilled workers 52 25 77Admin./clerical staff 0 11 11

Total 76 51 127

2.5 Continuing vocational training atProspect Foods

2.5.1 Overview and company policyProspect group maintains that training is the corner-stone of their business. They have been the recipi-ents of government "Training Awards" in 1988 andin 1991 and were one of the first food companies toreceive the "Investors in People" accreditation (seeChapter 2). The group develops employee skillsthrough on-the-job training and internal and exter-

nal craft training courses. Employees are encour-aged to continue with further and higher education.Staff are sponsored by the company to attendcourses run by the Hotel and Catering Training Com-pany, City & Guilds, Industrial Society and NationalExamination Board of Supervisory Management.Outstanding trainees may obtain one of the annualscholarships at the Richemont Baking College inLucerne.

2.5.2 Human resources policy

2.5.2.1 PartnershipIn the Staff Handbook (1991 Edition) the chapter onHuman Resources Policy covers a range of issues rel-evant to training. In the section on "Partnership",motivational matters are addressed initially:

"We believe that staff should share in the successof the company. We achieve this through encour-aging staff to take a pride in the worth they createand by sharing a proportion of the group's trad-ing profits amongst all staff, in proportion to theirbasic earnings."

Later in this section motivation through communica-tion is stressed:

"We believe that we must encourage involvementin and commitment to the company through effec-tive two-way communication at all levels."

As well as the profit sharing scheme, the companyagrees to pay such minimum rates of pay as arerequired by law, and lays down its own minimumrates elsewhere. This paragraph continues "..eachmember of staff should be additionally rewardedaccording to their efforts and achievements, withinthe company's guidelines."

The third paragraph gives a general policy on train-ing and personal development.

"We believe we must encourage all staff to seizeevery opportunity to learn, to train, to grow anddevelop their full potential as individuals as wellas employees."

The company indicates that it will "respect the legalrights of staff" and will "provide, as best we can,pleasant, safe working conditions and refreshmentfacilities."

Policy on minority groups is also clearly stated in thefinal two paragraphs in this section.

"It is our policy not to discriminate on grounds ofrace, religion or sex. We believe we should be anequal opportunities employer in every way possi-ble."

"It is our policy to look for opportunities to employdisabled people wherever this is practicable.'

2.5.2.2 People, teams and leadershipThis section of the Human Resources Policy describeshow people in the business are organized intogroups (teams) of no more than fifteen, and that

team leaders have both the "responsibility andauthority to lead". These responsibilities cover theareas of communication, training and appraisal.

Considering each in more detail, in the area of com-munication, team leaders are required to hold a"Briefing" meeting and also a "Brainstorming" consul-tation each month with team members.The briefingprovides for the downward flow of information tomembers of the team about objectives, changes orother developments in the company. The monthlycompany "Newsletter" further informs staff ofrecent events. The brainstorming meetings give aforum for staff ideas for improvements.The newslet-ter recognizes these efforts by a short feature on theidea chosen as "Brainstorm of the Month".

Team leaders are responsible for "the training anddevelopment of individuals in their team", and theirteam members' individual performance.The actual training may not be done by the team lea-der, but by the specialist on-the-job trainer mem-bers of the team. In addition, leaders are requiredto keep "formal training records for each member ofthe team" and to participate in the recruitment pro-cess.

Team leaders must hold "regular appraisal inter-views with each member of their team to review pro-gress and agree new objectives, particularly train-ing objectives".

These formal requirements on the team leader sup-plement the "informal disciplines of listening, com-municating, organizing, checking and walking thejob, this makes for an organization where leader-ship and team work create the springboard for indi-viduals to develop their potential with a strongsense of corporate direction."

2.5.2.3 Training Bill of RightsIn the 1991 Handbook, the directors published afundamental and important summary of the compa-ny's training relationship with its staff which theycalled the "Bill of Rights".This states that:

"everyone has the right to the opportunity to trainto be a competent professional;

everyone has the right to earn the opportunity tolearn new professional skills and to broaden theirexperience;

everyone has the right to be trained by profes-sional trainers;

managers have the right to manage training, inthe best interests of all;

everyone has the right to be rewo,.ded accordingto their skills and efforts."

This Bill of Rights effectively means that all reason-able requests for training are granted in the inter-ests of the company and the individual's personaldevelopment. This commitment applies to all staff,including the 75% who are part-time employees.

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2.5.2.4 Training prioritiesThe staff handbook also sets out priorities for train-ing. These are:

setting clear written standards as a basis for train-ing;

training and supporting the on-the-job trainers;

ensuring that checking and testing is done con-stantly and that records are kept;

training for flexibility;

training and development of future team leaders;

promotion from within, other than in highly spe-cialized skills;

training of staff to be positive contributors to"Brainstorming", the company's framework forencouraging staff involvement in new ideas andimprovements;

training in skills such as first aid, and for the selfrespect of the individual and for the benefit ofsociety.

2.5.2.5 RecruitmentThe company is

"committed to enhancing its reputation as a goodemployer, and to building strong long-term linkswith schools, colleges and the local community toensure that potential recruits are fully aware ofcareer opportunities within the company."

2.5.2.6 Implementation, review andmonitoringThe company indicates that the branch managers/directors have the responsibility of implementingthe Human Resources Policy. In addition

"Regular audits are carried out on behalf of theDirectors, by the Group Health, Safety and AuditsOfficer, and the Managing Director will report onprogress to the group Board, quarterly."

2.5.3 Recent training historyProspect Foods' training policy and its implementa-tion have evolved over a number of years and Lon-tinue in a state of dynamic development. Much ofthe company's policy as discussed above has comefrom the problems, lessons and successes of thepast, as well as incorporating the basic philosophyof achieving company objectives through signifi-cant investment in staff training and development.

The company's Training Award in 1988 was givenfor their approach to the motivation of staff: despitethe organization's long standing commitment totraining, it was apparent that there were gaps in thestaff's ability and willingness to recognize opportu-nities and the ways in which problems could besolved. In order to develop ownership of the firm'sobjectives by all and increase staff involvement, thecompany organized a series of one-day off-the-jobconferences in Harrogate which brought togetherparticipants and customers from various sites and

activities. The interdependence of the constituentparts of the company was stressed, and staff wereinvolved together in problem spotting and solving.

In 1991, the Training Award focused on two mainareas: recruitment and integration with the localcommunity; and the adoption of a comprehensiveTraining Bill of Rights, which was noted in Section2.5.2.3. In the late 1980s a combination of factorsmade recruitment into the UK food industry difficult.

Demographic forces had begun to decrease thenumbers of young people coming onto the labourmarket. The public image of the industry had suf-fered from adverse media coverage and concernsabout food safety, along with the view that its activ-ities were generally routine and uninspiring. Add tothis the relatively high rate of growth of the econ-omy at the time, particularly based on the expan-sion of lighter, "cleaner" industry and the situationfor the supply of new labour into food manufactur-ing seemed poor. Against this baclvound, ProspectFoods recognized by 1989 that their employee turn-over rates were rising, the take up of training wasfalling and company profitability suffering.

Prospect's response was to tackle the education-industry interface head-on in an ambitious pro-gramme to improve links with local schools.This wasaimed at generating a better understanding of theindustry, and Prospect Foods in particular, and atmaking potential recruits more aware of the oppor-tunities offered in the company. A further objectivewas to improve the company's knowledge of cur-rent school activities. The scheme, called "TradingPlaces", involved pupils, teachers and head teachersvisiting Prospect Foods, while trainers and manag-ers from the company went to schools. Teachersgained insights into the company's business throughattachments, whilst pupils undertook two-weekindustrial placements. Prospect staff worked withindividual teachers on school projects. The measur-able effects in the first year included a doubling ofyoung recruit numbers, although the wider benefitsof improved industry-education relationships wererecognized, for example, by the North YorkshireTEC who publicized "Trading Places" as one of thefirst examples of good practice in business educa-tion. The scheme also won a Northern Businessaward.

In the same year as receiving its second nationalTraining Award, Prospect also gained the Investor inPeople (I I P) accreditation for its commitment to train-ing and development, one of the first food compa-nies in the UK to be given the award. As we discuss inthe Sector Context Report (Section 2.2.5), IIP in-volves four basic principles from which assessmentindicators have been derived: commitment, plan-ning, action and evaluation. Since assessment of II Pis carried out by an expert from the local TEC, linkswith the education environment were further aug-mented.

2.6 Training in practice

2.6.1 OverviewTraining plays a vital part in meeting the company

Figure 1 - How managers' and staffs' objectives and training needs are defined, recorded, and related to the

company's objectives

Manuals

Define policies and codes of goodpractice for individual jobs,including team leadership andmanagement, and form the basisof training.

V

Operational Plans

Define the company's objectives(short and long term) annually,and form the basis ofmanagers' objectives.

Job Descriptions

For managers, team leaders andthose with very specificresponsibilities over and abovethose defined by Staff Handbooksand job manuals.

Training

turns theory intopractice

Auditing

checks the practicematches the

theory

Quarterly Appraisals

Set and review individuals'objectives, from tasks to trainingneeds, for every member of staff.

Monthly Team Briefing

Confirms progress with the team'sobjectives.

Staff Handbooks

The contractual relationshipincluding personal responsibilitiesfor health & safety, quality andcommitment to flexibility.

VTeam Organization Charts

Everyone is in a team with a teamleader, and organization chartsare published to clarify reportingrelationships.

objective of creating

"prosperity and worth for its staff and sharehold-ers, customers and suppliers and the local,national and global communities. The company'schosen route to achieve this is through the manu-facture and service of food and beverages with acommitment to quality and integrity, to the devel-opment of people and new ideas, and to the bal-ancing of immediate needs against the long termsecurity and future of the company."

This definition of "company purpose" implies secur-ing a strong place in its chosen markets throughcompetitiveness and profitability, and hencethrough a well trained, efficient workforce.Trainingprogrammes at Prospect Foods are concerned withattracting staff, motivating staff, and, as is men-

tioned in the quote above, developing staff poten-tial and new ideas. The Trading Places scheme andlinks with local schools have been briefly outlined inSection 2.5.3, and the initial methods of gainingstaff motivation mentioned earlier in the same Sec-tion. Others are discussed below, as are furtherissues ,-elating to staff development.

Some of these inter-relationships are illustrated inFigure 1, which indicates how operational plansdefine the company's objectives and hence man-agement goals, and how these are related to indi-vidual jobs, and the training requirements. On theother hand, staff and company responsibilities areset out in the handbook, and the role of each personwithin their team is defined. Quarterly appraisalsrelate individual objectives, team goals, and individ-ual training requirements.

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Each year specific themes are adopted, and theseform the basis of the objectives for managers. Forexample, in 1993 the "internal customer" is theemphasis, and this in turn implies a focus on qualityand service. The theme will be translated intodepartment, team and individual team memberobjectives. In production, there are daily meetingsof the factory manager and his management teamto consider daily issues and goals. Once the objec-tives have been clearly set for each individual, theyare left to get on with the job, seeking help from sen-ior colleagues as and when required. The effect is toencourage responsibility and commitment, but notevery individal is comfortable with this approach orprogresses well initially. This management by objec-tives strategy represents a change in style in recentyears from the very prescribed system of activitiesfor each employee which operated previously.

The system of teams and the flatter managementstructure now in operation entails much more effec-tive communication of objectives in order to allowteams and individuals to progress more freelytowards their objectives. Crucially it also requirestraining to be of a much higher order since motiva-tion, confidence and skill need to be combinedwithin the team.

2.6.2. Personal developmentIt is not easy to separate off this aspect of training,since in many respects it is integral to the whole train-ing scheme at Prospect Foods. The company pur-pose quoted above includes the phrase "the devel-opment of people", and the staff handbook formallyencourages those seeking promotion to "make theirambitions known to your Manager and your TeamLeader." It also notes that most promotions are fromwithin the company, and career opportunitiesaround the group are internally advertised.

In practice the company makes strenuous efforts tobring these policies into play. The Board of Directors'statement in the training Bill of Rights gives staff anopen-ended commitment to the training of newskills when this is appropriate to the individual. The"Core Curriculum" and "The Levels" programmes dis-cussed below give a framework of training whichencourages expansion of interests and the gainingof qualifications beyond those required to carry outthe particular job in the company. On the otherhand, staff are not forced into progression, sincetraining is available "on demand" after the requirednecessary skills and legislative commitments havebeen covered.

One significant part in the personal developmentprogramme is the Breath of Fresh Air scheme. In thisprogramme everyone is given one week'sexperience per year outside their normal work envi-ronment. So, for example, a maintenance electri-cian spent one week "meeting and greeting" at Bet-ty's cafe in York. Staff are asked their preference,but it is not always possible to give First choices. Inaddition, the limited time available for training onthe Fresh Air position means only certain, relativelylow -skill jobs can be used for the "new" experience.The scheme runs continuously, and people are giventime in all of the main areas of the group's activities

over a period of about five years.

While the Fresh Air programme takes a great dealof planning and arranging, the training team stres-ses its benefits in terms of personal development ofindividuals, communication and motivation. It is partof the process of appreciating the whole group'sactivities, which is particularly relevant in a verticallyintegrated company where the internal customer iskey.

2.6.3 The Core CurriculumHaving given a commitment to offer training to al:staff in the "Bill of Rights", Prospect Foods found thelack of a well defined and understood "common pur-pose" to the training a potential J rn b a r ra ssment.Hence an important development in the organiza-tion and delivery of training at Prospect Foods camewith the establishment of the "Core Curriculum" in1991. This seeks to create a structure in which indi-vidual training would take place through a pro-gramme of ordered training experiences andcourses. The Core Curriculum has been describedby the company as being

"derived from a desire to satisfy many criteria: thelaw; the practical demands and rigours of thebusiness; the desire to satisfy our staff anddevelop them; to retain them; to ensure that we allwork in a safe environment conducive to individ-ual growth; and to ensure that we create a safeand welcoming environment for our customers."

Given the variety of demands and skills within thecompany's activities, plus the fact that 75% of thegroups' staff is employed part-time, it was a signifi-cant challenge to devise a programme where equal-ity of training prevailed. The motivation for thisapproach was the market:

"our customers expect consistent standards ofsafety, service and care from our staff regardlessof their length of employment or whether theiremployment is full or part-time."

On the other hand, the programme has to "respectthe craft orientation of our operations"and the mod-est educational background of many staff in orderto create an accessible, flexible scheme that meetslegal obligations on the company as defined in the1990 Food Safety Act (see Context Report, section2.1.2), and provides a suitable platform for individ-ual development.

The Core Curriculum has five steps.

1. The Institute of Environmental Health Officer's(EHO) Basic Food Hygiene Certificate, whichwas to be taken within 8 weeks of commence-ment of employment, with a one day refresherevery three years. The course is given by the sixin-company tutors, with each employee attend-ing a one-day training programme delivered bya team of two. A verbal or written examinationis taken by all, and almost all staff have passed.

2. Group Induction Day, which was to be takenwithin 12 months of commencement of employ-

ment. A group of staff visit other parts of thecompany to their own, and spend time with themanaging director.

3. The North Yorkshire Fire Service Fire Course,which consists of a two-hour introduction to fireextinguishers and hands-on use, a one-daycourse on identifying fire hazards and practicalresponses, and finally an advanced one-daycourse on fire experience and management.This training has to be refreshed every threeyears.

4. The St Johns Ambulance Brigade four-day FirstAid at Work Course, refreshed annually in-com-pany and three yearly by St Johns.

5. One-to-one Skills Training is the programme oftraining the trainers for those who have devel-oped their own craft skills, and wish to train newstaff members. Trainers abilities are evaluatedon-the-job annually.

This programme is in addition to the Craft Trainingeach employee receives in their particular job,which it is intended be given on a one-to-one basisby on-the-job trainers.Item 5 in the core curriculum recognized that forcraft skills a more economical method for the com-pany to train trainers would be in-house provisionof what was previously provided by an outside train-ing agency. It involved some questioning of the for-mal academic standards trainers needed toachieve, and some theoretical aspects of the out-side training were dropped, which enabled moretrainers to be qualified through the company sys-tem.

.6.4 "The Levels" individual trainingand development prog:amme

2.6.4.1 OverviewThe latest development in training schemes at Pros-pect Foods represents a further step in the process

to an integrated progressive programme of train-ing, devised with current vocational qualifications inmind. It essentially takes existing company program-mes and develops and restructures them to alignwith the National Vocational Qualifications (NVQ)levels (see Context Report, section 2.4.2) and theManagement Charter Initiative (MCI).

This new development programme, not yet imple-mented at the time of the last visit, builds on the CoreCurriculum, and shares many of its elements. It isdesigned to lay the essential basis of skills requiredfor completing the job for which someone isemployed, and subsequently to provide pathwaysfor development into new areas of work, to take onnew responsibilities, to become a team leader andsubsequently a manager.

The scheme is summarized as follows:

Level 1 concentrates on the individual employee'sjob and defines the basic skills and knowl-edge required to become a competent,well trained member of staff.

Level 2 expands the individual's concerns into theactivity of the branch and business as awhole.

Level 3 relates to the management of your workand that of others as a team leader.

Level 4 directly links with government guidelines inthe MCI, and relates to managerial skills.

Detailed requirements for each level are laid downin the company guidelines, and the award of thelevel status is only made when evidence of achieve-ment is presented. In the notes below, progression toa higher level assumes competence at a lower levelhas been achieved and is ongoing.

2.6.4.2 Level 1

OutlineThere are two main divisions in the skills and infor-mation required to successfully complete this level:

a. Operations:1. competence in the employee's job in

accordance with appropriate skills trainingdocumentation;

2. one week department exchange within the

same branch;3. regular and proven attendance at team

briefs;4. regular and proven attendance at brain-

storms.

b. Information:1. attendance on group Induction Day;2. attendance on Basic Food Hygiene course3. a clear and proven understanding of the

Staff Handbook.

CommentsThe skills in a.1. are described in some 670 skill sheetsand contained in the operators instruction/trainingmanuals for each process and subject. These aredeveloped into the skills training plan for the joband the on-the-job trainer assesses and recordseach trainee's competence. Other assessed aspectsinclude: appearance and personal hygiene; com-munication skills with leader and other team mem-bers; efficient, safe and hygienic working practices;regular punctual attendance. a.2. involves a one-week swap of department within the same branch inorder to give staff greater understanding andexperience, to encourage teamwork and todevelop flexibility. Information and team buildingare the objectives of a.3., the monthly Team Brief-ings, which are structured under headings of pro-gress, people, policy, and points for action. Similarlya.4. requires attendance at the monthlyTeom Brain-storming Meeting.

In b.1., attendance at the group Induction Day,which is now required within 6 months of beginningemployment, provides an overview of the groupand the inter-dependence of its parts. Employeesare required to attend the ENO's Basic FoodHygiene course b.2. within 6 weeks (not 8 as in theCore Curriculum) in order to comply with the "due

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2.

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diligence" requirements of the 1990 Food SafetyAct.The Staff Handbook gives details of the respon-sibilities of employee and company. All theserequirements are assessed by attendance records,completed training sheets, informal questioning byteam leaders, etc.

2.6.4.3 Level 2

OutlineAgain the division into operations and informationis made.The emphasis is on the wider perspective of b.company activity, and on responsibilities outside theimmediate concerns of the specific job.

a. Operations:1. competence in the employee's own job, and

another area of work, again in accordancewith appropriate skills training documenta-tion;

2. at least two of the following skills fire dep- c.uty, first aider, one-to-one skills trainer,other specific skill related to the job;

3. one week branch exchange;

b. Information:1. ability to record, store and provide informa-

tion.

CommentsThe a.1. requirement implies competence in a sec-ond area, just as was the case with the first area ofwork in Level 1. With a second area coming in, flexi-bility and mobility are added to the areas of compe-tence, along with skills in problem detection andsolving in both jobs. a.2. implies training in two ofthe specialist areas mentioned, which might includespecific vocational training undertaken in order tobring extra skills to the job. The exchange a.3. in-volves a week at another branch of the company,and is designed to increase and broaden productknowledge, improve communication skills anddevelop an appreciation of broader problems andneeds.

The information requirement in b.1. involves thekeeping of accurate, legible records, for example,on training, COSSH sheets, production records,stock sheets, temperature record sheets, orderforms.

2.6.4.4 Level 3

OutlineAs well as the division into operations and informa-tion, Level 3 requires additional areas of peopleand finance. "People" is essentially communication,while "finance" concerns planning, monitoring andcontrol of resources. The emphasis is on teaill lead-ership, on the wider perspective of company activ-ity, and on responsibilities outside the immediateconcerns of the specific job.

a. Operations:1. competence in the employee's own job, and

two other areas of work, again in accord-ance with appropriate skills training docu-mentation;

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d.

2. monitoring of work standards against com-pany standards;

3. maintenance of safe, hygienic and effectivework environment for workmates and cus-tomers;

4. demonstration of visible leadership throughwalking the job;

5. one further week on branch exchange;6. contribution to the action plan on the Prem-

ises Audit.

Information:1. attendance at a 2 or 3 Action Centred Lead-

ership (ACL) course;2. ability to obtain, evaluate, record, and store

information, and to provide informationand advice;

3. take responsibility for complaints relating tothe team and its work.

Finance:4. knowledge of team needs and ability to

order and receive these goods;5. monitoring and control of resource use in

the work area, including principles and useof stocktaking.

People:1. knowledge and anticipation of team human

resource needs;2. involvement in recruitment into the team;3. undertaking induction procedures for new

starters in the team;4. carrying out quarterly appraisals with each

team member and an appreciation of the im-portance of appraisals to individual progress;

5. understanding and demonstration of teammotivation skills;

6. assessing the quality of training and com-munication within the team through teamleaders self assessments;

Z planning of work for the team and appro-priate delegation;

8. carrying out monthly briefing and brain-storming with the team;

9. involvement in the implementation of griev-ance and disciplinary procedures.

CommentsThe major changes in the Operations (a.) in com-parison to Level 2 relate to the setting and monitor-ing of standards of work and attitude for the team,with "leading by example" especially significant.Knowledge of the individuals in the team and regu-lar walking the job is required, along with widerawareness of the company's staff and activities.Team leaders also must possess the ability to under-stand and explain the Health and Safety at WorkAct, and to keep the team up-to-date with healthand safety developments. Similarly the team leaderis expected to be aware of accident and emergencyprocedures, including fire, and other legislationsuch as COSHH. The regular Premises Audit, carriedout by the branch manager and management team,inspects for hazards, safety risks, hygiene lapses,damaged equipment, etc. These should be antici-pated and problems tackled and corrected in anaction plan.

On Information (b.), attendance at the ACL course iskey, but there is also a major development in theresponsibility for systems of information and theunderstanding and retrieval of information itself,for team briefings and brainstormings, and for thequality of the goods or service provided by theteam.In the new area Finance (c.), the team leader isresponsible for the goods coming into the team'soperations, involving the checking of deliveries andsigning of notes, and in stocktaking.

A major responsibility for the team leader is People(d.), which involves planning of human resources inthe team: balancing production demands and thechanging circumstances of the team, including man-aging holidays, delegation, recruiting and thebranch induction of new starters. Appraisal of teammembers is also a key responsibility of the leader:who has set individual and team objectives and tar-gets.The team's success will also depend on the leader'scapacity to motivate the team, and generate self-worth in its members.

2.6.4.5 Level 4

OutlineThis level is related to the national standards of theMCI, and requires a portfolio of evidence to becompiled by the manager for its achievement. Thecriteria for this level are retained into the divisions ofits predecessor: operations, information, peopleand finance; but the perspective is much broader.

a. Operations:1. maintenance of standards of operation as

defined in Key Company Policies;2. creation and maintenance of conditions of

productive work, and a quick and effectiveresponse to customers;

3. comments on proposed changes to services,products and systems;

4. implementation, monitoring and evaluationof changes to services, products and sys-tems;

b. Information:1. a good understanding of internal and

external issues which impinge on the work,including local and national communitymatters;

2. good use of available information in deci-sion making;

3. effective recording, and storing of informa-tion received and generated;

4. contributing to, and leading of, meetingsthat solve problems and make informeddecisions;

5. giving of advice through communicatingcurrent, relevant and accurate information.

c. Finance:1. understanding of le company Budget sys-

tems and of company a( counts;2. making recommendations for expenditure

that are intelligent and within agreed budg-ets;

d.

3. effective monitoring and control of allresources;

4. awareness of deviations from budget andprompt seeking of advice.

People: .

1. the use of reliable, current information todefine future staff needs;

2. recruitment of new staff in view of team,branch and group requirements;

3. development and improvement of teamand individual staff member performancethrough careful planning;

4. continued development of skills;5. setting, reviewing and updating of objec-

tives for the team and its individual mem-bers;

6. planning and allocation of work in order toachieve individual, team, branch and groupobjectives;

7. the evaluation of all team members againstthese objectives, and the provision of feed-back;

8. establishing and maintaining the trust andsupport of managers, staff and those work-ing alongside;

9. identification and minimization of conflictsbetween individuals for whom you areresponsible;

10. the implementation of grievance and disci-plinary procedures with integrity;

11. staff counselling.

CommentsThe scope of responsibility in area "a." requires themanager to maintain standards in, for example:supplies and resources, including in its guidance thephrase "nature, substance and quality" as in theFood Act; in dealings with customers, including theavoidance of any problem or situation that wouldhave an adverse effect on customer relations.This issignificantly wider and more external to the com-pany than is required in the equivalent section ofLevel 3, although some elements of evidenceremain the same, for example, departmentalrecords, COSH H sheets. Other evidence is quite dif-ferent to that required in Level 3: it involves the useof Key Company Policies; supplier lists, contacts andspecifications; customer complaint forms (all atgroup level); Quality Audits and Action Plans; plusattendance at Head Office branch exchange andvocational courses, including the Advanced FoodHygiene certificate. The manager is required toestablish conditions conducive to productive workfrom resources of staff, equipment and machinery.This includes creating appropriate staff workingconditions, including those indicated by legislationand company policies; recording incidents, mainte-nance, problems; making suggestions for, and initi-ating, improvements in services, products and sys-tems; implementation, monitoring and evaluationof changes.

Area b. defines the information required by themanager at Level 4, is again wider and more exter-nally focused, dealing with local, and nationalissues, as well as that information that arises inter-nally from briefing sheets, questionnaires, company

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newsletters and annual reports. Reaction to infor-mation is two-way: checking accuracy and effectivestorage on the one hand, use in decision making onthe other.

The finance crea c. is again company wide in scope,with skills being required in the understanding anduse of financial systems, and the association ofresources and budgets to meet both operationaland financial targets.This includes the monitoring ofresource use, for example in stock taking and incapital expenditure reports.

People, area d., again involves a more comprehen-sive understanding of human resources available tothe company in relation to its needs, and to thedevelopment of the team, including recruitment.This includes knowing the strengths and weaknessesof the team members, and making the best use oftraining and development resources in the com-pany; consultation with the team and use of theTraining and Communication Self Assessments;quarterly appraisal systems which encourage com-munication; clear objectives for the team and itsmembers and effective response to things goingwrong.The planning and achievement of objectivesis again carried out in relation to group require-ments. The manager, on the basis of staff capabili-ties and team objectives, then allocates work in themost effective manner. Feedback and good rela-tions with staff are also key elements.

The importance of the new levels system lies in itscomprehensive programme of progression, provid-ing a clear path for those who wish to advance in thecompany. It is linked to, but not expressed in thesame way as, the NVQ and MCI externally verifiedschemes. One of the key difficulties in the companysimply taking these external schemes on boardrelates to their style and language: in a companywhere communication is the lubricant that keeps thesystem running and also to some extent the gluethat holds it together, the official style of NVQ andMCI documents has been seen as inappropriate.The loss may be in transferability, since a qualifica-tion at, say, Prospect Foods level 2, may not beviewed as quite the same as NVQ level 2, by apotential employer.

2.7 Cost of trainingIn Taylors Tea and Coffee, the cost of training in1992 was as follows:

Training expenses:Training equipment:In-house trainersThird party trainers

£ 1,000£ 3,000£16,000£ 1,200

No public funding to assist training expenses wasreceived that year. All employees received trainingin one form or another.

2.8 Assessment of training

2.8.1 Social partnersProspect Foods is non-unionized, with the teamstructure and various formal and informal methodsof providing communication between managementand other staff. In our discussions with members ofstaff of Taylors Tea and Coffee, the overall view wasof a well integrated, caring organization, that isconcerned to develop staff to give the best of theirabilities.This means recognizing the possibly hiddentalents of some staff: the packer who had learningdifficulties and is therefore very patient in teachingothers; the engineer who initially appeared reluc-tant to give information or ujinions but who isdeveloping into an outstanding organizer.

The staff questionnaire indicates a generally goodresponse to the management approach. The 1992results indicated that over 80% of the respondentsfelt that their talents were being used well, they hadenough information about important issues, theyappreciated the opportunity to talk to leaders andtheir suggestions were listened to. 70% felt theywere part of a good team and had enough praiseand encouragement from their team leader,although a slightly lower proportion, two-thirds, feltthey were consulted enough by the leader. Disci-pline was considered about right by 70%, with therest split between too much and too little. Almost80% considered that they had enough good train-ing from the right people.

2.8.2 Conclusion and reporter's viewTraining has been a major feature of Prospect Foodsgroup activities for a number of years, since manyof its products and services dcrnand a high level ofskill in production, catering or retailing, as well asgeneral training to meet government regulationson health, safety and food hygiene. Comparativelyrecently this training effort has been reorganizedinto the Core Curriculum, which defines the order inwhich these different aspects of training take place,and a major further development introduces theconcept of The Levels which expands into an indi-vidual training and development programme.

The young training team of three who manage theprogrammes have to walk a careful tightrope ofexternal forces, such as government regulations,educational changes, market competition, andinternal objectives of efficiency, quality, stability anddevelopment in the workforce. Continual change inthe training system cannot be simply for its ownsake, but needs to represent a lOgical improvementon the previous system, so that its purpose is per-ceived and it is accepted by the staff. We were notable to interview staff about the latest develop-ments since these were riot in place at the time ofour last visit, but previous measures appeared wellreceived internally as well as being judged favour-ably by external assessors. Clearly the success ofthis ambitious and comprehensive new programmewill be a key element in the company's future devel-opment.

APPENDIX

People interviewedSue Symington: group Training ManagerCaroline Hewson: Training SupervisorAndy Barwick: Factory ManagerRichard Light: Main Line Tea SupervisorJayne Hirst: Quality Assurance ManagerGary Taylor: Main Line Tea Machine MinderLorna Worley: Packer/Trainer

Company overviewTaylors Tea and Coffee workforce full-time

Male Female

Age 16-25 26-55 55 16-25 26-55 -55

1988 7 41 5 31 32 3

1992 13 50 10 20 24 1

Taylors Tea and Coffee workforce part-time

Male Female

Age 16-25 26-55 .55 16-25 26-55 .55

1988 0 1 1 0 4 2

1992 0 1 2 0 6 0

3. DAVID A. HALL LTD

3.1 History and description of companyThe brothers David and James Hall started produc-ing meat products for their father's three shops froma small factory on the outskirts of Glasgow. Theshops were sold in 1950s when it was decided toconcentrate on manufacturing as sufficient atten-tion could not be given to both the family shops andthe factory. David A. Hall Ltd was incorporated in1955, commencing operations at its present prem-ises in Broxburn near Edinburgh in 1963.

Since its establishment in 1950 the company has arecord of almost continuing growth, with turnoverincreasing from £18,000 in the first year to £42.5min 1990 and £50m in 1992. The Broxburn plant ini-tially extended to 2250 m2, but has been expandedon several occasions to its present size of 14,40C m2.To help achieve its expansion plans the companymade a successful application for a grant from theTraining Agency under Business Growth Trainingscheme. As a result of this programme a totally inte-grated business plan for developing the existinghuman resources was accepted. This led to theestablishment of the training department in 1989.

In 1991 the company acquired an additional 9000m2 of factory on a site at Woodburn about one milefrom the main factory. The new unit became opera-tional in October 1992, the company were lookingto increase sales by 500/0 when the new factory wasfully operational. Unfortunately about four daysbefore this study commenced the new factory wasrased to the ground by a fire. Within two weeks ofthe loss of the Woodburn factory production wasbetter than 95% of the pre-fire figure. This wasachieved by purchasing a new plant for productionand installing it at the old site.

Halls plan to introduce a total quality managementprogramme in the near future, which they prefer tocall a "Total Business Improvement Programme" asthis emphasizes the need for everybody to be invol-ved with quality. The company has defined a missionand quality statement. Their near-term plansinclude a commitment to working towards theInvestor in People standard.

3.2 Markets and marketing strategyHalls manufacture mainly pork products including:bacon, ham, gammon, sausages, sliced cookedmeats, black pudding, various pates; plus a range ofbaked products such as pork pies, steak pies andsausage rolls. In addition the company produces anincreasing variety of added value breaded meat,and vegetarian, products a number of which aremarketed as "crunchier and "pork parcels':

Over the period 1989 to 1991 in Great Britain therehas been a reduction in the consumption of carcasemeat and meat products from 1019g to 962g percapita per week. Over this period the consumptionof carcase meat has generally been lower in Scot-land compared to England 290g and 355g per per-son per week, similarly for bacon 84g and 145grespectively. However, the consumption of othermeats and meat products in Scotland at 421g perperson per week is above the average in England of355g. The trend in Great Britain is towards increas-

ing consumption of convenience foods, as indicatedby the rise of 3% in expenditure over the period1990 to 1991, compared to a 1% increase for allfood groups. In Scotland the expenditure was 4%greater than the Great Britain average for conven-ience food. (Ministry of Agriculture, Fisheries andFood 1992)

Halls is a major bacon curing company supplying aregion where bacon consumption is low comparedto the rest of the Great Britain. However the con-sumption of meat products and convenience food ishigher here than average. Since Hall's has to becompetitive to retain its position in the market, thecompany is developing their range of added valueproducts in line with local market trends.

Approximately 50% of the company sales arethrough the "Halls" brand label, and distributed tosmall retail units in Scotland and Northern Englandthough seven distribution centres. The rest of theproduction is sold directly to large retailers such asMarks and Spencer, Tesco, Co-op, Asda, and Safe-way. As distributing to small retail outlets throughtheir own van sales network is expensive, there is anincreasing tendency to distribute to a central depotof a supermarket. This also follows the trend forincreased supermarket sales as consumers movetowards one-stop shopping.

3.3 Halls manufacturing anddistribution operation

3.3.1 ManufacturingDavid A. Hall Ltd is a privately owned company, withmany members of the Hall family involved in theday-to-day management of the company, as wellas on the Board of Directors. It is Scotland's largestindependent bacon curing, cooked meats and sau-sage manufacturers. They purchase and slaughternearly 4000 live pigs per week, producing a rangeof cured meat products, sausages, savoury bakeryproducts, delicatessen goods, traditional cookedmeats, haggis (Halls are the worlds largest pro-ducer) and other value added products. Thedepartments in the factory are: Lairage, Slaughter-house (EC approved), Butchery, Curing, Bacon pre-packing and slicing, Cooked meat, Sausage, Bakeryand laboratories.

Meat processing is not highly automated comparedto most of the food industry. Slaughtering andbutchering are labour intensive operations requir-ing skilled workers, and many of the other opera-tions such as curing, cooking and slicing are difficultto arrange into a fully automated continuing flowprocess. This is mainly due to the nature of meat,which is generally too soft and flexible to be con-veyed and positioned reliably by mechanically han-dling. The production and packaging of conven-ience foods are also very labour intensive proces-ses, mainly as a result of the number of componentsin the retail pack. In general the level of technologyemployed in the factory is comparable with othermeat processes in the UK. Most of the products pro-duced present considerable potential for foodsafety problems. The cooked meat department,especially the slicing and packing operation is an

i6

area where significant control and care has to beexercised, this includes regular health checks of allemployees working in this area.

3.3.2 DistributionHalls operate six distribution centres in Scotlandand one in Tyne Tees in England, operating a total of100 vans with 140 people employed on von sales.

3.4 WorkforceThe company employs over 1350 people. It is situ-ated in an area where there is a good supply oflabour to draw on, albeit with generally a low levelof initial education. Indeed few of the employeeshave any formal qualifications. Wages are under-stood to be generally slightly above average for thearea, mainly to compensate for the unpleasantenvironment in a meat processing factory.

A small number of temporary workers are taken onfor peak periods at Christmas, Easter and Summer.These generally come from the same pool of peopleon each occasion. Students from local colleges offurther education and universities are used.

The factory operates on two shifts, 6.00 to 14.00and 14.00 to 22.00. A number of workers, such asthose in maintenance, hygiene and production unitspreparing for the day shifts e.g. cooking and bak-ery, also work a night shift of 22.00 to 06.00. Butch-ers, abattoir workers and quality assurance depart-ment follow a 07.45 to 16.45 shift and the office08.45 to 17.00. A 33% and 50% shift premium ispaid to workers on the evening production andnight shifts respectively.

The position of a manufacturing operationemployee in the company organization is indicated

by hat colour, for example, blue hats are worn bymanagement personnel. Table 5.1 shows the gradestructure, with associated qualification and compe-tence levels, as indicated by the Scottish VocationalQualification (SVQ) or National Vocational Qualifi-cation (NVQ) (see Context Analysis).

Progression to a higher grade or level will onlyconsidered once a person has achieved the mini-mum qualification for the higher position.This struc-ture is relatively new so many people do not havethe minimum qualification for their grade.

There are four grades of operatives, A, B, C and D.Recruitment is generally in to the lowest level, D. Anoperator will be assessed for upgrading to C gradeand after further skill training to B or A grade. Thedistribution of workers between the differentgrades depends on the degree of flexibility re-quired in the department. "A" grade workers aretrained in all the operations of a department, butfor efficient working it is not necessary for every-body to be this grade, most will be B or C grade.Operatives within a department work as team, andare assigned work by their supervisor depending onthe day's production requirements.

A system of team briefing has recently been intro-duced to improve communications between man-agement and workers at all levels, and its effective-ness was clearly demonstrated after their recentfire.

3.5 Training policyPrior to 1989 training was arranged in an informalway, with few,.if any, procedures to identify trainingrequirements.The company has grown substantiall yover the preceding years and future significant

Table 3.1 Management structure and qualification (internal arranged and validated qualification unlessotherwise indicated)

Grade SVQ level Basic qualification for grade

Managers(five grades)Blue hats

6 Post graduate Diploma in food control .Hygiene Course (Diploma level)'.Management Charter initiative'.

Supervisor 4 Institute of Supervisory Management.'Yellow hats

Charge hand 3

Green hatsHigher National Certificates in Food Manufacture.

Lead hand 2 1 day HASAWA'. 1 day hygiene course.Red hats 4 day supervisory course.

General operative 1 Induction course. 12 weeks job skills training.(four grades) 1 day food hygiene tour se.

Professional qualification validated by the Institute of food Science and Technology, London.Course validated by the Royal Society of Health.Course validated by MCI Russell Square, LondonCourse validated by ISM, Mansell House, Litchfield, StaffordshireBusiness and Technical Education Council qualificationHASAWA, Health and Safety at Work Act, internal (muse on safety to meet iequir ements of the Act.

1r

expansion is envisaged. A consultant who wasemployed under the Business Growth Trainingpackage persuaded Halls that to maintain a com-petitive edge over their rivals in terms of productquality and productivity they needed to mprovetraining and personnel development. At t le timecriteria for promotion were vague and basicl moreon personal relationships than ability to do tne job. Itwas decided to invest in training with the objectiveof developing the existing, but largely untrainedworkforce. Few had any formal vocational qualifi-cation. The objective was a flexible committedworkforce with qualifications appropriate to theirgrade (Table 3.1).

Training is now extended to all aspects of the com-pany. All levels of the workforce are given theopportunity, and encouraged, to obtain appropri-ate qualifications. With operators the main empha-sis is on operational skill development, with supervi-sors and management the emphasis is on personaldevelopment to enable them to take on managerialresponsibilities.

To motivate employees to undertake training theyare encouraged to work towards nationally recog-nized qualifications such as NVQ or SVQ with muchtraining being undertaken during working hours.Small gifts, such as engraved glass tankards, havebeen given to mark the successful completion of acourse of work leading to a qualification.

3.6 Training programmesThe training department was established in 1989,and currently consists of a training manager and anassistant. They operate in conjunction with 20 train-ing officers. Each department has at least one train-ing officer, several have more depending upon theirsize.Trainers receive 2 days instructional techniquesand take a 4 day trainer/ assessor Scotvec module.The main function of the training officer is to identifyand agree training requirements with departmentalmanagers and then train operatives in the basicskills used in the department. An important aspect ofthis is maintaining training records. The trainingofficer undertakes production work when not train-ing, and receives extra pay for their training respon-sibilities, whether or not they are training. A depart-ment is compensated by the training departmentwhen the training officer is training and not avail-able for production. Personai development pro-grammes are arranged directly by the trainingdepartment.

3.6.1 Operator skills trainingInitial training and training in specific skills within adepartment are the responsibility of a departmen-tal training officer. A new recruit will take part in a12 week induction programme to help integratenew employees into the organization as quickly aspossible. Induction also is used to meet trainingrequirements of the Health and Safety at Work Actand basic hygiene training. An employee's progressis assessed during induction after 2, 4, 8 and 12weeks.

The training requirements of a department areidentified through the training records, these

records are usually maintained in the form of atraining matrix, as shown in Appendix 2. Workerslooking to be promoted to a higher grade will alsorequest the necessary training for the new grade.The training officer will agree with the departmentmanager or supervisor the necessary trainingrequirements for the efficient operation of thedepartment. Training is given and assessed in thework place, the operative has to demonstrate com-petence to the training officer and departmentmanager, their assessment is openly discussed withthe operative. There is no specific time length to theskills training given to an employee.

3.6.2 General skills and personaldevelopmentThe training department encourages all employeesin all aspects of the business to improve their skillsand competencies in the workplace. A number ofinternally organized and run ccurses are offered,Table 3.2.

The company is an accredited training centre forMeat Industry Training Organization (MITO) (SeeContext Analysis) and an approved training organi-zation for the Lothian Local Enterprise Company(LEC). The Institute of Supervisory Managementhave recently accredited Halls as an approvedopen learning education centre to conduct man-agement or supervisory courses for this awardingbody. Operatives are encouraged to work towardsnationally recognized and transferable vocationalqualifications such as NVQs and SVQs. A numberare working for level 2 NVQ's, for which MITO is thelead body for the meat industry.Through accredita-tion of prior learning it is anticipated that a majorityof the operatives could achieve a NVQ level 1.

Other NVQ's are used including;

NVQ level 2

NVQ level 3

NVQ level 4

Butchers; Distribution; Stores;Bakery; ClericalClerical; Technician Electrical;Technician MechanicalManagement

Completion of a SVQ/ NVQ in some instancesinvolves the use of external training providers. Inthese cases either employees attend local collegesor external teachers are brought to the company'spremises to provide tuition.

3.6.3 Training activities in 11992A considerable variety of training courses werearranged or run using internal or external trainingproviders. A total of 1238 participants, from 945employees, or about 70% of the work force tookone or more of over 70 courses. A total of £70,300was spent on training courses, which represents thecost of the training to the training department, staffcosts, external training providers, materials extra. Itdoes not include the employee's time while trainingor other training department activities.The principaltraining course activities during 1992 were hygienetraining to meet the proposed EC Hygiene Direc-tive, and induction training for new employees.Other courses covered a range of topics represent-ing most aspects of industrial life, from safety

f 53

71'

59

60

Table 3.2 - A selection of the internal courses available from the training department

Course title Duration Cost' Numbertrainees

Basic SupervisorySupervisory Management (ISM)Food HygieneHealth and SafetyCOSH H Regulations

Noise RegulationsEffective CommunicationACL and Team BuildingTime ManagementInductionIntroduction to Supervisory Management (ISM)Team Briefing

TQM

4 days240 hours1 day1 day1/2 day

1/2 day1 day1 day1/2 day

I/2 day

40 hours

'2 day1 day

£200£500£ 50£ 50£ 30£ 30£ 50£ 50£ 30£ 30£ 50£ 30£100

384

560na

na

na

nana

na

295na

114

na

Includes training department costs only; na: not available.

training, use of fork lift trucks, team briefing tech-niques, to anti-smoking clinics, counselling tech-niques and training for union representatives. Morerecently an innovative course in fire fighting and fireprevention has been used.

Two types of courses were used for hygiene train-ing, the major activity of the year. A basic course forthe majority of the employees (560 participants)and an intermediate course for managers (21 par-ticipants). Approximately 43% of the workforcereceived hygiene training during 1992, accountingfor 45% (£32,200) of the expenditure on trainingcourses.

The commissioning of the new Woodburn site wasresponsible for the high level of induction trainingfor new employees. This was given to 295 employ-ees, representing nearly 22% of the workforce and12.5% of the total budget spent on training courses.

3.6.4 Management supervisory studiesThis course has been designed as a result of a needidentified by a training needs analysis instigatedunder the Training Agency, Business Growth Train-ing Option 5 Progrc .me. Production managershave many years of practical experience, but havenot received training in managing people. To sendthese managers away for training could causeproduction problems, so an open learning coursewas proposed. The contents of the course weredetermined by Halls in association with anothercompany some of whose employees would also beparticipating in the scheme and with a representa-tive of the Open College7. The course proposed fol-lows the Open College Effective Supervisioncourse, supplemented by group sessions on specifictopics, leading to the Institute of Supervisory Maii-agement certificate. The group sessions are held onthe company's premises.

The syllabus consists of;

1. Open learning through the study of Open Col-lege Effective Supervisor programme 240h

2. Practical group work sessions on specific topicsled by the training manager 30h

3. Specialist courses provided by external trainingproviders 5 days

There are five modules covering Communications,Managing People, Finance, Employment, and Tech-niques. Assessment is based on written assignments,workshop sessions, and a project report.

The course is being followed by managers for vari-ous sections of the company, production, distribu-tion, finance etc. and by people at various levels.While existing managers (blue hats) will beexpected to follow the course a number of othergrades, including yellow hats and operatives, havebeen encouraged to follow it. The current coursehas 34 active students.

3.7 Assessment of training

3.7.1 Halls workforceThe employees recognize that substantial changehas taken place within the company since the estab-lishment of the training department. Several ofthose interviewed had been with the company for anumber of years and had left school with few, if any,qualifications. A number have, with considerablepersonal satisfaction, successfully completedcourses for a nationally recognized qualification.This, and the resulting increase in responsibility atwork, has increased their job satisfaction to a levelnot previously experienced.

Training officers have in some circumstances founddifficulties in establishing working relationships with

The Open College was established in 1987 to provide and encourage wide access to vocational education and train-ing through open learning, it offers a broad i ange of services within the area of open and flexible ;earning, includingcustomized training programmes.

5

older colleagues who had been with the companyfor many years. As a result of using Training for Trai-ner courses, the confidence of the departmenttraining officers has improved and overcome theseinitial difficulties.

3.7.2 National reporterA substantial change has taken place in the trainingpolicy at Halls since 1989. The policy is designed attraining an existing, largely untrained workforce.The workforce on the shop floor is largely apprecia-tive of the training they have been given, and aregenerally well motivated. A problem could developwith the managers and supervisors, blue hats andyellow hats, who have been with the company forsome time.The criteria originallyused to promote orappoint the se people is not necessarily the same asthat used by the company today. Those well estab-lished in their jobs might well be reluctant to train tomeet the new standards. If the qualification struc-ture is adopted as a formal requirement will it leadto the demotion of these people? A formalappraisal scheme is to be phased in over 5 years as

part of the human resource development strategywhich will provide counselling for these reluctantincumbents.

The level of acceptance of the training policy is notcompletely uniform across the company. If this is areflexion of the views of the upper managementand directors it could indicate potential long termproblems for the training policy.

Much of the company's approach to training istransferable to other companies. They see workingto achieve a nationally recognized qualification asimportant. They use a simple matrix method foridentifying training requirements. Perhaps mostimportantly they are committed to training to givethem a competitive edge, although it is not clearwhat stimulus gave them this view.

ReferencesMAFF (1992) Household Food Consumption andExpenditure 1991, Annual Report of the NationalFood Survey Committee, HMSO.

61

APPENDIX

People interviewedDavid Taylor, Training Manager,Margaret Cairns, Training Co-ordinator,Jackie Smith, Training Officer, sliced cooked meats,David Ritchie, Charge hand, green hat baconcuring,Stuart Forest, Butcher, and Branch Secretary for theUnion of Shop, Distributive and Allied Workers,Gordon Wilson, Manager, Bakery Department.(initially recruited from a job creation initiative)

Company overview

Sales; 1991 £48.6m

Staff structure as at(Figures for 1988 were not

Permanent staff

Staff turnover; 6.5%

November 1 1992available)

male female

Temporary staff

male female

16-25 26-55 ..,55 Total 16-25 26-55 :,55 Total

5 16 21 53 56 109

Grades of personnel

Job description male female

Senior managersManagersSupervisors

Skilled workers -maintenanceSemi-skilled workers technicalUnskilled

Clerical/secretarial

16-25 26-55 255 Total 16-25 26-55 .>55 Total Total

Full-time

137 434 38 609 85 309 24 418

Part-time

2 3 6 11 15 174 8 197

Skills analysis, bacon pre-pack line 4

13 1

42 8

45 30137

22 24

378 6124 49

641 724

Splitter Assistant Tiromat Tiromat Scale Packer

splitter packer

Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Stage 6 Stage 7 Hand slicermisc. operation

Ellen P/N P/N P/N P/N P/N C P/NBeth P/N P/N P/N P/N P/N C P/NMargaret P/N P/N P/N P/N P/N F P/NDonna P/N P/N P/N P/N P/N C P/NAngie P/N P/N P/N P/N P/N P/N P/NClair P/N P/N P/N P/N P/N P/N P/NPatricia P/N P/N P/N P/N P/N P/N P/NMaureen P/N P/N P/N P/N P/N P/N P/NMarion P/N P/N P/N P/ N P/N P/N P/NPeter

AlexGrantHectorAndyLachlan

P/NP/NP/ NP/NP/NP/NP/NP/NP/N

Presser and line supplierPresser and line supplierPresser and line supplierPresser and line supplier

Material handlerMaterial handler

P/N: Performs now;C: Cover;F: Future

62

d61

4. BIRDS EYE WALL'S LTD

4,1 Company overviewBirds Eye Wall's Ltd is part of the Unilever groupwhich is one of the world's largest group of compa-nies.Their stated policy is to be foremost in meetingthe doily needs of consumers across the world intheir chosen markets. The greater part of Unilever'sbusiness is in branded consumer goods, primarilyfoods, detergents and personal products. Its othermajor activity is in speciality chemicals.

4.1.1 UnileverThe two companies Unilever PLC and Unilever NVoperate as need; as is practicable as a single entity,have the same directors and are linked by arrange-ments including an Equalization Agreement which is

designed so that the position of the shareholders ofboth companies is os nearly as possible the same asif they held shares in a single company. The Unilevergroup divides its operations into four productgroups: detergents, personal care, foods, other.

Within the Unilever group the food executive hasstrategic and financial responsibility for their foodoperations. The Unilever food companies in Europeare listed in Appendix 1. The executive operatesthrough area groupings: Northern Europe (includesUK); Southern Europe (includes France); NorthAmerica.

Within the Northern Europe and Southern Europegroups each company operates semi-autono-mously. In each country there is a National Manage-ment which coordinates activities in areas which arecommon to all Unilever companies, such as tax andsome aspects of training. The National Manage-ment is not responsible for financial matters.

4.1.2 Birds Eye Wall's LtdBirds Eye Wall's was formed in 1981 when Birds EyeFoods was merged with another Unilever Company,Wall's Ice Cream. This merger created the largestfrozen food and ice cream business in Europe. Dur-ing the period of 1984 to 1987 the Birds Eye Wall'scompany underwent a period of re-structuring.Four sites were closed with production being ration-alized into four sites managed as three productionunit,: The Hull and Grimsby sites are managed asone unit, Table 4.1.

Table 4.1 - Employment in Birds Eye Wall's, 1992

Location

Walton onThames

Hull

GrimsbyGloucesterLowestoft

Operation Staff

Head office 500

Vegetables and frozen fish products 850

Frozen fish products and meals 1500

Ice cream 1000

Frozen vegetables, burgers andpotato products 1000

Total work force 4850

4.1.3 Birds Eye Wall's HumbersideThere has been food processing activity on the BirdsEye Wall's Ladysmith Road site in Grimsby since

1899. Originally a family-owned business calledSmethurst, it was the first company in the UK tooperate a fish quick-freezing plant. In 1946 Uni-lever took over the business and in 1957 Smethurst'swas merged with Birds Eye Foods.The Grimsby fac-tory was so successful that Birds Eye expanded theiroperations in the region, acquiring their first prem-ises in Hull in 1959. Originally the Hull factory sup-plied fish moulds to the Grimsby operation, later itdeveloped other products including frozen vegeta-bles.

Within the Humberside area there is a high concen-tration of food manufacturing companies. Birds EyeWall's is unusual in the area for having substantialoperations on both banks of the Humber, and theHull and Grimsby sites play different but comple-mentary roles. They are equal and largely inde-pendent operations with some common manage-ment, This study examines the training operations ofthe Grimsby site only.

In 1989 Unilever decided to invest £40m in a newproduction facility and new fish finger plant. Thenew facility, known as Europa House, began pro-ducing frozen meals in March 1990. The Grimsbycomplex is developing products the for Dutch andBelgium market, replacing those previously manu-factured at the Iglo -Ola factory in Hoogevee Hol-land. The company has obtained a European Com-mission Licence to export meat products to other ECcountries.

4.2 Products and processAt Grimsby there is the 2-line fish finger factory andthe 7-line high technology Europa factory produc-ing ready meals. This site manufactures fish finger:;for the UK and Europe. In a highly automated pro-cess, frozen fish blocks are cut to the required size,breaded, fried and packaged in a continuing pro-cess, before being frozen. A wide range of addedvalue meat products are also produced here underthe "MenuMaster" label as well as low fat readymeals branded as "Healthy Options". Althoughmainly a continuing production line, a large numberof manual operations are required to assemble theproducts. Good hygiene and product protection isan important priority for frozen foods.

4.3 MarketsThe UK frozen food industry is now characterizedby a few major players producing the householdname products, and by a multitude of smaller pro-ducers who supply retailers with own-label prod-ucts at prices which offer serious competition toBirds Eye Wall's and the other major manufacturers.Birds Eye Wall's has the largest share of the frozenfood market (about 25% in 1988), although in cer-tain niche areas other manufactures have a signifi-cant share. Ross Foods (United Biscuits) is next withabout 11% (Economist Intelligence Unit, 1991). Fro-zen food consumption in the UK is high compared tomost EC countries, as shown in Table 4.2. The con-sumption of frozen foods is relatively static, but withsome increases particularly in convenience foodsand cereal based foods (Table 4.3).

There has been a reduction in consumption of bur-

62

7r-,771.7

63

2

gers and convenience fish products. For all the othercategories, both the proportion of households pur-chasing and the level of consumption has increased,the latter at a slightly higher rate. Despite the reces-sion the market for Birds Eye Wall's traditional peas,beefburgers, fish products and waffles hasremained steady, with a very small decline in theready meals market during 1992.

Birds Eye Wall's produce only their own brandedgoods which include household names like"Menu Master", "Healthy Options" and "CountryClub" vegetables. The Grimsby factory does alsoproduce a small amount cf products for Italian,Dutch and German Unilever companies.

Table 4.2 - Frozen food consumption in a number ofEC countries, 1989

Country kg/ head

Denmark 24.5UK 21.9France 18.4

Norway 17.4

Netherlands 15.8

Germany 15.2

Belgium/ Luxembourg 14.4

Ireland 13.7

Italy 5.8

Source: Birds Eye Wall's "Retail Business calculations"

Although products are marketed through the largeretail multiples a significant proportion has beensold through small independent retail outlets. Theretail market share of this group of retailers isdecreasing, and this trend is likely to continue. Themajor multiples have been very successful in market-ing their own-brand products, which are now oftenperceived as quality products. Both these factorsare putting pressure on Birds Eye Wall's market.

Table 4.3 - Household consumption of frozen foods

Household consumption(oz/person/week)

Householdspurchasing (%)

Frozen food 1985 1991 1985 1991

Burgers 0.91 0.70 15 10

Conveniencefish products 1.05 0.90 19 14

Convenience mealproducts 1.20 1.55 14 17

Convenience cerealfoods 0.90 1.22 14 15

Vegetables 1.60 1.96 13 15

Ice cream/mousse 2.86 3.33 17 19

Source: Ministry of Agriculture, Fisheries and Food,1985 and 1991

Through its food group executive, Unilever is harmo-nizing frozen food products on a Europe-wide

)

basis. The Grimsby site needs to match any Euro-pean food supplier in environmental, bacteriologi-cal as well as product quality standards. These fac-tors are adding to the pressure for increased prod-uctivity.

4.4 Humberside management structureand organizationReporting to the factory general manager are: twooperations managers, one for Grimsby and onefor Hull, plus the personnel, commercial, planning,technical, engineering and agricultural managers.Each department has teams operating on both sites.

The Grimsby operations manager has a team ofmanufacturing managers looking after variousaspects of the operation, who are assisted by manu-facturing assistant managers (MAMs).These MAM's(formerly supervisors) look after operating teamswhich comprise process line technicians, processtechnicians and process operatives.

4.4.1 WorkforceThere are approximately 1500 people employed atthe Grimsby site, of which a large percentage arewomen working as process operatives on four andfive hour part-time shifts. A variable number ofemployees on temporary contracts are used tocope with peaks in demand. There are few workersfrom ethnic minorities employed in the factory, butthis reflects the general situation around Humber-side.

The workforce is relatively stable with a number ofworkers I Dying been with the company for 20 or 30years.During the last three years there has been low staffturnover.

4.4.2 Shift patternsPart-time workers follow a four hour shift pattern of6 x 4 hour shifts per day;

06.00 10.00; 10.00 14.00; 14.00 18.00;18.00 22.00; 22.00 02.00; 02.00 06.00

Many women workers work 20 hours in 5 x 4hrshifts, as this is the minimum number of hours towork per week to be eligible for state benefits andredundancy payments. A number of women workthe twilight or night shifts.

Full-time workers follow an eight hour shift patternof 3 x 8 hour shifts per day.

06.00 14.00; 14.00 22.00; 22.00 06.00

Craft engineers and process line technicians followa different pattern:

08.00 16.00; 16.00 00.00; 00.00 08.00

The shift system has evolved within the food industryin the locality that is common to many companies. Ina few cases, employees will work one shift at BirdsEye Wall's and go straight to the next shift atanother employer.

4.4.3 Wages policyPay at the Humberside factories is high both in rela-tion to the food industry in the area and for the local-ity when compared to other companies. Wages arenegotiated through the three unions representedon the site: GMB which represents the majority ofworkers, electricians union (AEAW) and the supervi-sory union MSF.

Acquisition of additional skills is sometimes linked topay. Successful completion of the multi-skilling pro-gramme by craft engineers resulted in their upgrad-ing, which in turn was linked to higher pay. Similarly,the new process line technicians will also beupgraded on the successful completion of theirtraining and will receive a concomitant rise in pay.

4.5 Training

4.5.1 Policy

4.5.1.1 Training policy of UnileverUnilever does not set a central training policy for itsvarious operations. However they do have central-ized training policy and programme for the highermanagement grades, such as fast-track program-mes for those destined for the very highest level ofmanagement.

4.5.1.2 Unilever UK NationalManagement (UKNM)The UKNM have a policy to encourage companiesto invest in training, to help spread best practicefrom one companyto another and facilitate trainingin areas of common interest, e.g. training of indus-trial tribunals, graduate training. They also run agraduate training programme for all the UK Uni-lever companies.

As the UKNM have no direct financial control orresponsibility, they can only advise and encouragethe UK companies to follow their policies. In particu-lar they try to influence a company's attitude andculture. For instance, the UKNM were particularlyinfluential in stimulating the drive to gain accredita-tion with the Investor in People award. The UKNMprovides a forum for discussion of common issuesbetween the subsidiary companies' directors.

The Unilever food companies have recently estab-lished a UK foods training committee, which is look-ing at areas where they can cooperate. Appraisaltraining for managers is now done as a group as aresult of this assrf:intion, and other initiatives areunder discussion.

4.5.1.3 Binh Eye Wall's training policyThe Birds Eye Walls personnel director, based at thehead office ch Walton on Thames is the custodian ofthe total company training effort. He is responsiblefor establishing priorities, ensuring that best prac-tice is transferred from one site to another, thatbudgets are controlled and company initiatives arefollowed through.

The principal objective of the training policy is to sup-port the business objcctives of Birds Eye Wall's byensuring that each employee can carry out their

role to the highest standard and to facilitate thedevelopment of each individual to their full poten-tial. Central to this is the need to compete with thebest in Europe in terms of productivity, product qual-ity, bacteriological and environmental standards.

Much of the current training policy is directedtowards implementing changes in working prac-tices. Competitive pressures during the 1980s led toa new initiative in 1987 called "Workstyle A cata-lyst for change". This required a change of attitudeamongsrthe workforce. The old autocratic manage-ment style was abolished and new work patternsand style introduced. Process personnel wereorganized in semi-autonomous work groups hav-ing "line-assigned" skills. Such groups then took onresponsibility for product quality, organizations oftasks, skills training and achievement of productiontargets. An additional programme was also set upto multi-skill engineering craftsman to increase theirflexibility, i.e. equip electrical engineers withmechanical engineering skills and vice versa.

In the most recent training initiative during 1992/1993, craft engineers are being trained in produc-tion skills, and will be designated as craft line tech-nicians. Similarly, process operators are beingequipped with basic engineering skills and desig-nated as process line technicians.

The training costs for Birds Eye Wall's is in Table 4.4,the various elements of the training cost are shownin Table 4.5

Table 4.4 -Training costs for Birds Eye Wall's in 1992

(£000)

Course costsTrainees salariesTraining staff/materialsTotal

1417

625252

2294

Table 4.5 Major components of course costs forBirds Eye Wall's in 1992 (£000)

ManagementAssistant managementHead office/salesMulti-skillingLine technicians

Other craftProcess other

Total

380 26.822C 15.5

160 11.3

45 3.2

140 9.9

472 33.3

1417 100.0

Process and craft line technicians - a major item for

1993

A company wide consultative procedure was alsointroduced to improve communications betweenmanagement and employees at department, fac-tory and company levels, and to encourage the feel-ing of ownership of their work. It also gives theemployees and unions the opportunity to raiseissues, such as training, with the management. Thisconsultation and communication system consists of:

61

2.

65

1. Work group meetings for all employees, meet-ing fortnightly;

2. Departmental Consultative Committee, consist-ing of elected representatives and meetingevery 2 months;

3. Factory Consultative Committee, elected repre-sentatives, meeting quarterly;

4. Company Consultative Council, elected repre-sentatives, 6 per site per year;

5. Chairman's visit to all sites meeting with allemployees.

Elected committees are composed of one third man-agement, one third union representatives and onethird elected employees.

Many of the training activities are the result of thiscultural change.

National Vocoiional QualificationsBirds Eye Wall's has been actively involved in thedevelopment of National Vocational Qualificationsfor the food industry. During 1993 a pilot studyinvolving 30 process operators/site will evaluatetraining and competence assessment for NVQs atLevels 1 and 2.

4.5.1.4 Birds Eye Wall's HumbersideIn addition to implementing centrally derived policy(e.g. multi-skilling programme of craft engineersand the line technician initiative), the Humbersidesites have used the central training framework toestablish a policy for training operators in basic skillsand for meeting legal requirements for trainingassociated with hygiene and health and safety atwork. Training of personnel at all levels was alsogiven extra impetus at the Grimsby site by the needto derive maximum benefit from the major capitalinvestment in plant and equipment.

Birds Eye Wall's was the first company on Humber-side to gain the Investors in People Award as well asthe first of the three Birds Eye Wall's sites to becomeaccredited at the time of the last visit.

4.5.2 Training programmesThe personnel manager together with the generalmanager are responsible for developing the Hum-berside training policy. The training programme isimplemented by the training officer and his staff.

The training programmes can be grouped into thefollowing categories; assistant management, craftengineers, operative, clerical, trainees, companyeducation scheme. The training department is also

Table 4.6 -Training budget for Birds Eye Wall'sHumberside

66

Grimsby Hull Humberside

Assistant managersEngineeringOperativeClerical

Total for 1992

£ 58,95042,25062,000

775

£ 163,975

£ 51,56025,10052,010

400

£ 129,070

110,51067,350

114,0101,175

293,045

0,erf,r. ,*7- ';

responsible for an industry-education links scheme.The training costs, not including training departmentcosts and opportunity costs are shown in Table 4.6.

A significant proportion of the training is given byexternal training providers, who in some cases alsoundertake aptitude testing as part of the selectionprocess.

4.5.2.1 Assistant management trainingThe major elements of the training for this group areshown in Table 4.7 together with the direct costs.Themajority of the assistant managers (AMs) and manu-facturing assistant managers (MAMs) are complet-ing the Henley Career Manager open learningpackage.This leads to a nationally recognized managementcertificate which will eventually be linked to theManagement Charter Initiative. There is also a sig-nificant programme to develop engineering skills ofthe MAMs.

Table 4.7 - Major training elements for assistantmanagers in 1992

Topic Cost (£) Comments

Management courses 10,000 Will involve up to 60%of MAM's, validatedby MCI.

Engineering skills .13,000 Will involve up to 40%of MAMs

Pre-retirementpreparation

350 AM over 55 years

Electricity at workregulations

1000 4 MAM/AM's

Information technology

Languages

1000 All AM's

300 Self learning software

Individual training 2000 As agreed in annualneeds review

Engineering principles 1300 External course for 2engineers

4.5.2.2 Engineering craftsmanThe training for this group can be divided into foursections, multi-skilling, line technician training, skillstraining and apprenticeships. The major elementsfor this group are shown in Table 4.8.

Multi-skillingThis is not such a major item in the present training asmany of the current craft engineers will have nowbeen through this programme.

The training officer initially interviewed craft engi-neers to assess their current level of knowledge anddiscuss the new skills which would be required.About 70 craftsmen registered for the trainingwhich lasted 12 weeks at a training centre followedby work experience in the factory. Typically crafts-

Table 4 8 - Mellor training elements for engineeringcraftsmen in 1992

Topic Cost (£) Comments

Multi-skills 5000 6 craftsmen, En Tra

validated

Various plant A variety of courses

operations

Line technician 9000 6 Craft engineers

Plant operation 12000 GCTA programme, Cityand Guilds validated

Apprenticeships Continuation of existingtraining for 9 apprenticesand 1 recruit

men took 9-12 months to reach the required stand-ards. This mufti skilling programme won Birds EyeWall's a National Training Award in 1989.

ApprenticeshipThis is 4 year training programme during which con-siderable time and effort is devoted to developingcraft engineering skills in a group of able youngpeople. At present Humberside has 10 engineeringapprentices.

4.5.2.3 Process operativesThis is numerically the largest group of employees.The major programme in terms of the budget forthisgroup is training for process line technicians.Although hygiene training will be given to all prod-uction employees this group were targeted during1992. The various elements of the 1992 trainingactivities are shown in Table 4.9.

Process line technicians 1992/1993 initiativeThis programme will allow process operatives toacquire engineering skills and so take on some firstline maintenance and repair work to give the workteams more flexibility. Process operatives who wishto join this programme must first take a trainabilitytest aimed at assessing their manual dexterity andability to follow instructions.

The training consists of four full-time one week pro-grammes given by an external training providerworkshop.These are linked to periods in the factory.The assessment of the training takes place in the fac-tory.

Hygiene trainingIn 1990 Birds Eye Wall's won another National Train-ing Award for its design and implementation of aplan for hygiene training throughout the whole com-pany. Initially training was carried out by trainersfrom Grimsby College. More recently a highly moti-vated process operative, with previous experiencein catering, has at her suggestion become qualifiedas a hygiene trainer.

Table 4 9 Maior training elements for processoperatives in 1992 and course costs (£)

Topic Cost (£ ) Comment

Food hygiene 3000 500 process operators,internal course, RIPHHvalidated

Line technician 51000 17 operatives, 4 weekcourse on-site validation

Internal transport 1500 80 operatives, externaland internal trainers,externally validated

Cost /qualityawareness

Various processoperations

75 operatives half-dayinternal course

7 internal courses forbetween 12-100operatives

Pre-retirement 3500 180 operatives, 2 day on

site

Process NVQs

assessors

1000 6 skills trainers

First aid 2000 4 day course, St Johnscertificate

The aim of this programme is to meet the require-ments of the Food Safety Act 1990, and that all food-handlers in the company should study for andachieve the appropriate certificate from either theRoyal Institute of Public Health and Hygiene(RIPHH) or the Institute of Environmental HealthOfficers.

By running two hygiene training courses per week,each with about 12 employees, almost all staff onHumberside are now trained. The use of an internaltrainer saved the company money, and the trainerwas more readily accepted by her colleagues thanan outside training provider.

Skills trainersEach working group has a skills trainer. Usually this isa process operative who has been specially trainedto train and advise on the operation skills neededfor a production line. Most operators are familiarwith one line. If flexibility demands that they workfor a period on another line, then the skills trainerwould be on hand to answer any questions theymay have about the new task.

4.5.2.4 Clerical staff trainingThe 1992 training programme for this group isshown in Table 4.10.

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Table 4.10 Training costs for clerical staff

Training area Costs(£) Comments

Spreadsheets 175 ITEC evening course

Shorthand 100 College evening course

Graphics software 500

Informationtechnology

External course

Self-learningpackages

4.5.2.5 Company education schemeThe company makes sure that all its employeesunderstand the benefits of training and the supportthe company will give them should they wish toundertake further training which will help them intheir job. Posters are displayed around the factoryto help promulgate the company's commitment totraining and the help they are prepared to give.

4.5.2.6 Appraisal systemThe company has an appraisal scheme in whichevery employee is appraised.The aim of appraisal isto identify strengths and weaknesses and Find outhow training can help an employee to develop his orher full potential.

4.5.3 EvaluationThe company culture has changed significantly inthe last few years. Prior to 1987 the managershipstyle was autocratic with little room for involvementof the workforce. There was a strong traditionalmanagement/ union interface. The business envi-ronment was rapidly changing, with increasedmechanization, need for a higher skilled workforceand ever increasing need to compete on a pan-European basis.

The strategic change in 1987 with the introduction ofthe Workstyle programme saw the introduction ofgroup working, group responsibility, and a philoso-phy of continuing change.The formula used to intro-duce this transition was based on three importanttenets: the need to consult and communicate; theneed to involve the workforce; the need to train anddevelop employees.

4.5.3.1 Company evaluationEvaluating the effectiveness of the new approach,including training, is very important to the company.This evaluation should be quantitative where pos-sible. An independent survey of the employees hasshown an overwhelming acceptance for the pro-gramme. The company feels it now has excellentemployee relations and a stable work force. Its busi-ness results have improved and it is now competitivewithin Europe. The adoption of the Workstyle prac-tices has achieved:

reduction in plant downtime and a quickerresponse to technical problems and has helped toincrease line efficiency by 13%;

greater skill base, flexibility, team working and

employee tr../olvement from an average of 5.6training days per employee per annum;

absenteeism reduced from 8.4 to 4.9%;

32% of employees joining Sharesave savingtowards share ownership;

an annual saving from the introduction of linetechnicians;

obtaining the meat product export licence;

no product has been declared unfit for sale due topoor microbiological quality;

customer complaints down 11%;

3 National Training Awards over the last fouryears.

Their major strength is in technical training and per-haps their weakness is in training for head officeand sales personnel.

4.5.3.2 Union evaluationThe major union on the site generally is very positivetowards the company. It is on one hand concernedthat the new practices are resulting in a decrease inthe workforce, on the other hand it sees the trainingits members are receiving as a way to secure job sta-bility and job satisfaction. When legislation abol-ished the closed shop, union membership on the sitechanged very little, the. -ompany has been happy toencourage newly recru,ed employees to join anappropriate union. Craft engineers were initiallycautious in their attitude to the line technicianscheme, they felt it could threaten their jobs andresult in maintenance work being contracted out-side the factory.

4.5.3.3 Evaluation by the workforceMembers of the workforce all expressed consider-able satisfaction with the training offered by thecompany, particularly the hygiene training and thesystem of skills trainers for each work group. Opera-tives were trained on all parts of the line allowingthem to move around and reducing the boredom ofan otherwise repetitive task. The process techniciansaid he preferred the current attitude in the factory.He felt more involved with his work now that he wasable to take action himself on a breakdown insteadof waiting for an engineer to come and do the job.The manufacturing manager, who had been withthe company for 40 years felt that attitudes had cer-tainly changed, and that employees were now moreflexible and more keen to be involved with theorganization of their group.

4.5.3.4 Evaluation by nationalreporterThe Unilever central management do not appear tosignificantly influence the training policy of Birds EyeWall's except that they essentially set the businesstargets for the company. Training is seen as funda-mental in implementing their business plans. Theyhave adopted a Total Quality Management typeapproach for their management system so the train-

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ing policy is to improve business performancethrough both a highly skilled and an appropriatelyskilled workforce. Business plans, objectives andperformance are promulgated to the employeesthrough the consultative procedures. This also givesthe social partners a forum for discussion. Theunions are very positive towards the company,there was little evidence of local interest in nationalissues such as NVQs. It is also interesting to note thatalthough the majority of the workforce are women,11 of the 14 union shop stewards are men.

The quality of their training programme ha beenrecognized by their achievement in gainingNational Training Awards in 1988, 1989, and 1991.They have also been accredited as an Investor inPeople and won the John Sainsbury Award for train-ing.

Training schemes at all Birds Eye Wall's factories arefocused on priorities agreed by head office and theintroduction of new initiatives are phased in acrossthe various sites with a site sometimes taking a par-ticular lead in one area. Grimsby for instance, ledwith the "Workstyle Programme" and development

of semi-autonomous working groups for which itwon a National Training Award in 1988.

The company is careful to use the most cost and timeeffective methods of delivering training.This has ledto a mixture of internal and external training provi-sion in which external predominates. The size oftheir training programme enables them to buy aproduct carefully tailored to their requirements.

Nevertheless, it is interesting to note that in at leasttwo cases employees have pointed out that internaltraining provision would be more cost effective andthat company has agreed to support these employ-ees in training to train.

As the company follows a Total Quality approachmost of its policy and strategy are transferable toother companies, although perhaps their approachto the implementation of these policies is moresuited to large production units.

ReferenceEconomist Intelligence Unit (1991) Retail BusinessNo 398

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APPENDIX

People interviewedKen Butt, Personnel Director, Birds Eye Wall's HeadOffice, Walton on ThamesMark Fitzpatrick, Factory General Manager, HumbersidePeter Smith, Personnel Manager, HumbersideNeil Toyne, Training Manager, GrimsbyJoy Hollingsworth, Hygiene Trainer, Humberside.Eddie Elliott, GMB Senior Steward, Humberside.Eric Wilson, Process Line Technician, GrimsbyGeorge Maidens, Manufacturing Manager, Fish Fin-gers, GrimsbyProcess Operatives on fish finger line at Grimsby.Laundry Reception Staff, Europe Factory, Grimsby.

Company overviewStaff Structure as at December 1992 and 1988

Male Female

Managers 13

Assis.-^t managers 48

Engineering 60

Process operatives full-time 321 68

part-time 31 966Clerical full-time 9 28

part-time 13

Training costsTraining costs for Birds Eye Wall's in 1992 (WOO)

Course costs 1417

Trainees salaries 625

Training staff/ materials 252Total 2294

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Unilever Food Companies in Europe(Equity capital held by NV or PLC is indicated wherethis is less than 100%)

Unilever NVNetherlands: Van den Bergh en Jurgens BV: Iglo -Ola

BV: Loders Croklaan BV: Uni Mills By.

Portugal: Iglo Industries de Gelados Lda (74%).

Spain:

Belgium:

Denmark:

France:

Agra SA: Frigo SA (99%): Indusii:asRevilla SA (90%).

Unilever Belgium rIV.

Unilever Danmark A/s.

Astra - Calve SA (99%): Boursin SA(99%): Cogesal SA (99%): Francaisd'Alimentation et de Boissons SA (99%):

Frigedoc SA (99%).

Germany: Fritz Homann LebensmittelwerkeGmbH & Co KG: Langnese - IgloGmbH: Meistermarken - WerkeGmbH:'Nordsee'Deutsche Hochseefis-cherei GmbH: Union Deutsche Lebens-mittelwerke GmbH

Greece:

Italy:

Unilever PLC

UK:

Elais Oleaginous Products A.E. (51%):Lever Hellas A.E.B.E..

Unil -It S.p.A..

Birds Eye Wall's Ltd: Brook Bond Foods

Ltd: Lipton Ltd: Lipton Tea CompanyLtd: Loders Croklaan Ltd: MattessonsWalls ltd: Van den Berghs and JurgensLtd: John West Foods Ltd

Ireland: H.B. Ice Cream Ltd: W&C McDonnellLtd

Source: Unilever Annual Report 1991

5. CLIFFORD FOODS PLC

5.1 Company overviewThe structure of the UK's milk and milk productsindustry consists of a central core of large organiza-tions and public companies, such as Dairy Crest,Northern Foods, Unigate and MD Foods, plus theRetail Cooperatives, along with a number ofmedium and small firms. Clifford Foods plc has beenthe largest of the medium-sized companies in thiscompetitive fringe, but in February 1993 the com-pany received a take-over bid from Unigate. This

bid was accepted by the directors and family share-holders who control over 50% of the company'sordinary share capital. As this report was written onthe basis of information supplied before the take-over, it will describe the situation in Clifford Foods asin its previous independent form.

The whole Clifford group had over 1500 employeesin 1991 and a turnover exceeding £140m in thatyear. Turnover was running at about the same levelin the first half of 1992 at £70.1m, but with areduced profit of only just over £1 m. As well as itsmain activity in milk and dairy products Clifford'shad interests in fruit juices, food coatings, meatproducts and ready meals.

5.1.1 HistoryThe company began in 1874 as William Clifford'sone-man dairy business with two cows, two pailsand a yoke, delivering milk on foot to a small area ofrural Middlesex. As economic growth and urbaniza-tion transformed the community and developedconsumer demand, so by the early years of the 20thcentury the company acquired more cows and usedhorse-drawn carts to make doorstep deliveriesover an increasing area. The milk processing andretailing divisions expanded, and after the SecondWorld War the company established a bottlingplant in the new town of Bracknell in Berkshire.

Over the next twenty years, Clifford's business tookover 30 dairies, and by 1960 became a public com-pany, albeit with a substantial family holding, whichremains the case today. In the 1960s and 1970s thecompany expanded both in its geographical areaof operations and product range. Dairies wereacquired in Bristol in the late 1960s (later, in 1987, tobe sold to Express Dairies) along with a 50% hold-ing in Cotteswold Dairy Ltd of Gloucestershire. In1974 Middlesex Dairies were sold, but four yearslater the County Dairies group in Oxfordshirejoined Cliffords resulting in a major expansion ofthe milk business. In ddition the company hadbegun to manufacture cream and yogurt in the1960s, milk shake base in 1974, and moved into fruitjuices by way of County Dairies in 1978. Furtherenlargement of the product range came in the1980s with the acquisition of Morton Foods, Roy'sQuality Foods, Danby's Foods and Moruzzi FoodsLtd (the latter sold in 1990).

5.1.2 StructureIn 1992 the structure of Cliffords Foods plc com-prised three main divisions: Cliffords Foods, Clif-fords Dairies and County Dairies.

Cliffords Foods Division was made up of threewholly owned subsidiaries: Roys Quality Foods in

South Wales (chilled convenience foods), DanbyFoods in Yorkshire (frozen ready meals) and Mor-tons in Oxfordshire (food coatings). In addition thecompany had 50% holdings in the Cotteswold Dairyat Tewkesbury and Wye Valley Fruit Juices at Ross onWye.

Clifford's Dairies Division (based in Brackne!') wasthe retail arm of the company responsible for door-step deliveries of bottled milk. These have largelybeen franchised to 250 small independent fran-chisees. The division also ran a van sales operationcalled Elm Farm Foods.

County Dairies Division subject of studyCounty Dairies Division originally had two quiteseparate operations in Bracknell and Kidlington, butrationalization has been proceeding for the last twoyears.

Bracknell siteThere were about 209 people employed on this sitein 1992 which handles milk destined almost entirelyfor doorstep delivery by franchisees of CliffordsDairies. Row milk is received from tankers, pro-cessed into various types, including standard,skimmed and UHT, and bottled in glass returnablebottles. The site also produces value added prod-ucts such as milk shake base, cream, pot shake,cottage cheese and chocolate and custard sauces.Many of these are own-label products for the majorsupermarket chains or fast food operators.

Kidlington siteThe Kidlington site employed 468 people in 1992. Ittoo receives raw milk which is processed, but herebottled into non-returnable containers (carton andplastic) for retail customers, primarily the major mul-tiples. In partnership with Bowater, the company isestablishing the largest on-site dairy plastic bottleblow-moulding operation in Europe at Kidlington.The main non-milk processing and packaging activ-ity involves a very modern fruit juice plant produc-ing largely for major retailers. The head office ofCounty Dairies was also based in Kidlington.

Cliffords also had a sales and marketing operationfor the "Cool Count ry"brand of long-life dairy prod-ucts including a new range of yogurt imported fromGermany.

5.2 Markets and marketing strategy

5.2.1 The milk market in the UKThe UK dairy industry has experienced significantchange in recent years and more is expected in thefuture. Developments relate to both the supply ofmilk from farms and to the retailing of milk to con-sumers. On the supply side, by mid-1994 the milkmarketing scheme will have moved from the currentstatutory monopoly organization (Milk MarketingBoards) acting as first handlers of milk, to a systemof voluntary cooperatives. The MMB in England andWales intends to form a cooperative called the "MilkMarque". This organization will not be permitted toprocess liquid milk into products, and the MMB hasto "float off" its processing arm Dairy Crest, the larg-est milk processor in the UK, as a private company.

71

2.

72

In the future, processors may also make individualcontracts with farmers to supply milk or enter intocooperative schemes with groups of dairy farmers.

Unlike in many other members of the EC, the major-ity of milk is consumed in liquid form in the UK. Tenyears or so ago in England and Wales 90% wasdeliverej in one-pint glass bottles to customers'doorsteps. Since then there has been a markedswitch from doorstep delivery to retail shop sales,which by 1992 accounted for at least 40% of thetotal. Retailers frequently sell milk in larger packsizes, for example two pint cartons, or four, five orsix pint plastic containers. Multiples dominate theshop sales, where low prices, as much as 30% belowdoorstep delivered and small retail prices per unit,and long use-by dates have encouraged consumersto switch from, or supplement, the traditional deliv-ered supplies. In addition doorstep deliveries of milkare now in the process of transfer to small independ-ent franchisees rather than as previously throughretail divisions of dairy companies.

Milk consumption has continued to decrease overthe decade, with a significant movement from full-fat pasteurised to skimmed and semi-skilled milkwhich in 1992 accounted for almost half of the totalliquid consumption. The overall decline reflects thlower consumption of milk-using beverages sucrascoffee and tea, and an increasing consumer prefer-ence for taking them with little or no milk. Otherdrinks, particularly soft carbonates and fruit juices,tend to be preferred, especially by younger consum-ers.The increased consumption of breakfast cerealsrequiring milk has partly offset the fall in beverages.

v.61k products, such as cream, cheese, skimmed milkpowder and butter, are allocated milk once therequirements of the liquid market have been ful-filled. Butter is the "sink" product, and tends toreceive supplies last of all. Hence the effect of sea-sonal fluctuations in milk supplies from farms andthe impact of political restrictions on farm outputthrough the operation of dairy quotas under theCAP are particularly keenly felt in the manufactureof this residual product. In the face of falling milksupplies, many processing companies have had toclose their creameries and several of the remainingplants are running far below capacity. Changes inthe organizational structure of milk processing men-tioned above are likely to bring about further ration-alization within the dairy products industry.

5.2.2 Company policiesAt Cliffords Dairies, the policy of retailing milk fordoor-step delivery through franchisees has beengenerally successful, but it has meant that the com-pany itself retains responsibility for some of the lessprofitable milk rounds which could not be fran-chised. Cosi savings and a reduction in week-endworking for office staff have been achievedthrough computerization of retail and dist, ibutionactivities. This area of milk retailing has continued tobe profitable.

County Dairies produces own-label milk for themajor retail chains such as Sainsbury's, Tesco, Wai-trose and Marks and Spencer, and in general relies

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heavily on the business of the retail multiplies.Thesecompanies have a growing share of the liquid milkmarket as doorstep delivery declines. The consider-able bargaining power of major customers results inlow retail margins, and further pressure arises fromthe current tendency of supermarket multiplies toprice liquid milk very aggressively. The competitiveweakness of processors is exacerbated by thedecline in liquid milk consumption which hasresulted in some areas of over-capacity. In thesetight conditions there is very little scope for expan-sion in the dairy industry and County Dairies pur-sues a policy which involves keeping very close to itsexisting key customers, growing organically withthem and developing new products only in areaswhich are likely to be profitable.

County Dairies at Kidlington not only processes milkbut is responsible through the sales team for liaisingwith the retail customers for the sales of milk in non-returnable cartons. Production planners coordinatesupplies of milk with processing and market require-ments. This is a complex task as County Dairies' sup-plier and customer base remains very large anddiverse ranging from unsophisticated small farmersto the fast food and supermarket chains. Majorretailers also tend to leave their orders to the lastminute to minimize their delivery and storagerequirements. Dairy products from Bracknell such asfresh milkshakes in pots and sweet sauces also aretargeted at large retail customers, but competitiveconditions remain keen and profits low. Much of thisproduction takes place under retailers' own-labelbrands.

Although primarily a dairy company, in order tomaintain profitability in the face of falling sales ofliquid milk over the past decade Cliffords has diver-sified into other food areas through buying severalsmall specialist companies and through investmentin the fruit juice operations at County Dairies. Mor-ton Foods makes coatings for fish, chicken and otherprepared foods, primarily for own-label customers.

Roys Quality Foods markets a range of preparedconvenience products including pies, sausages, pas-ties, quiches, ready meals, cooked meats and anincreasing range of vegetable-based items. Its tradi-tional van sales have declined while improving rela-tions with retail multiples have been developed.

Danby's Foods make ready-prepared frozen mealssold to major retailers and caterers.All three compa-nies have had recent substantial investments inplant and management and aim to meet latest EClegislation standards. The marketing policy at thefruit juice side of the Kidlington factory involves thedevP!opment of new quality juices and drinks, andlately freshly squeezed products and carbonatedchilled juices. Again own-label production and prod-uct development for retailers is very significant.

By contrast the long life Cool Country products aremarketed through cash and carry wholesalers toindependent small retailers and to the cateringtrade such as the cross-channel ferries' cateringoperations. These products are not typically soldthrough multiple retailers.

5.3 Factory organization KidlingtonThe factory receives milk from bulk tankers whichunload into temperature controlled storage holdingtanks. The milk is transferred to pasteurisation orUHT processing and thence to the packaging plant.These stages of the operation are computerizedand highly automated. Because of the variety ofcontainer sizes and forms in which retailers requiredelivery, the next stage of loading cartons or plasticbottles onto pallets or into cages is at present verylabour intensive.This stage is due for modernizationwhen a particular delivery system has been agreed.

5.4 Workforce

5.4.1 StructureThe workforce comprises unskilled and semi-skilledoperators, charge hands and supervisors in produc-tion, distribution, skilled maintenance together withlaboratory, clerical, secretarial and managerialstaff and directors. Generally production andoperational staff are hourly paid using a clockingsystem, while some managerial and supervisorystaff are monthly paid.

A number of workers have been with the companyfor many years and staff turnover is generally low.Because the dairy industry does not pay particularlyhigh wages a few experienced operatives do leaveto go to more remunerative jobs. The effect of therecent recession has meant that the company hastaken effective measures to improve efficienciesand lower labour costs by reducing temporaryemployees and cutting down numbers of staffemployed by natural wastage and minimal redun-dancies.

Fewer women than men are employed althoughthere is a high proportion of women in senior posi-tions. This includes the divisional personnel man-ager, all laboratory managers and most seniorlaboratory staff, senior accounts staff and the salesand marketing team.There are about 30 staff repre-senting ethnic minorities between the two sites (5%Kidlington, 2.5% Bracknell). These are mostly fromthe Indian/ Pakistani group. This is not due to anyprejudice but rather reflects the low level of ethnicminorities in the communities from which the work-force is drawn.

County Dairies does not generally employ 16-yearold school leavers as past experience has foundthem to be poor timekeepers because of the natureof the working arrangements and the need for closesupervision. There are relatively few 18-year oldemployees.

Bracknell site Workforce is mode up as follows:

Male: Total 162 (76%) Female: Total 47 (24 ° /a)

Age 16 25 26-55 55 16-25 26-55 55

Numbers 22 119 21 10 28 9

Kidlington site Workforce is made up as follows.

Male: Total 392 (84%) Female: Total 76 (16%)

Age 16-25 26-55 >55 16-25 26-55 >55

Numbers 27 324 41 15 57 4

Breakdown of activities at KidlingtonOf the 468 employees at Kidlington, 200 are indairy production and distribution, 200 in fruit juiceproduction and distribution, and 60 in administra-tion. Of the latter, there are 14 in sales whichincludes telephonists/receptionists, 30 in finance, 5on projects, 3 personnel and training, 2 on businesssystems. The dairy operation includes a mainte-nance team of 17 engineers and a laboratory teamof 14. Similarly, the juice operation includes a main-tenance team of 16 and a laboratory team of 20.

Shift patternsFruit juice production operates a 3-shift system andsome 2-shift working. Distribution generally works a2-shift pattern. Dairy operations work a 2-shift sys-tem on processing, with main production areasworking early start to finish.All operational staff arerequired to "work to finish" which may involve longhours if there are production difficulties or delays.Many managers also work lengthy hours althoughnot formally required to do so by their contracts.

5.4.2 Educational levels of staffQualifications of unskilled operatives range fromnone to GCSE standard (grades A E). Supervisorsgenerally have GCSE or equivalent and will haveacquired or be working towards NEBSM qualifica-tions. Some Supervisors may also have City andGuilds Certificates. Laboratory technicians have arange of qualifications which may include City andGuilds Certificates, BTEC first, national or highercertificates, or degrees. Managers generally havedegrees, although those who have been promotedfrom within the company may not.An example is thedairy operations director who joined the companyas an unskilled process operative and worked hisway up to a senior management position.

5.4.3 Wages policyWage negotiations are carried out for the wholeindustry through the National Joint Council of theTGWU, USDAW, GMBATU and the Dairy Trade Fed-eration. Dairy industry wages are generally lowbecause milk production tends to be associated withpoorly paid agricultural labour. The latest agree-ment on wages and conditions of employment foremployees in the dairy industry in England andWales was made in July 1992.

In the case of the Bracknell site, wages might beregarded as low for the locality which is part of "sili-con valley"and includes highly paid workers in com-puter industries. The company considers that wagerates at Kidlington compore roughly with those inthe locality for similar types of employment. Simi-larly wages are thought to be about average in rela-tion to other parts of the dairy industry.

Cliffords would like to move towards all staff being

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paid salaries, but this is not popular because of lossof overtime pay. If overtime pay was added to sala-ries, operatives would ear-. more than supervisoryand managerial staff.

5.5 Continuing vocational trainingpractices

5.5.1 Clifford Foods plc - training policyThe rJrnpany's first statement on training policywas issued in 1969, and in 1973 this was updated bya board of directors notice which embodied the fol-lowing sentiments.

The company recognizes that training of staff is fun-damental to its efficient and profitable operation,and that this will be carried out in a systematic way.Managers are accountable for the selection, train-ing and development of all those reporting to him,and for the delegation of these responsibilities tomanagers and supervisors at a lower level.

The specific aims of the training policy for all levelsof staff are:

a. To provide induction training forall new entrantsor those transferred to a new department;

b. to ensure that training and further education isavailable to enable all individuals to reach aneffective performance in their jobs;

c. to develop promotion potential;d. to promote a sense of responsibility and good

working relationships; ande. to assist individuals to identify with the interests

and operations of their working group and ofthe company.

To achieve these aims, each year a training assess-ment and training plan will be prepared.

5.5.2 County Dairies division - trainingpolicyIn line with the Cliffords Foods policy statementabove, County Dairies pursue an active pro-gramme of continuing vocational training amongstthe workforce aimed at improving skills levels andencouraging personal development. The Compa-ny's Training Review for 1992/3 argues that theworkforce is its most important resource, since whiletechnology is available worldwide, it is the ability touse it that counts.This in turn depends on the qualityof the workforce, not simply their individual skills butalso their effectiveness as a learn. A stable andeffectively trained workforce requires investment intraining and rewards to those who develop skills,and should lead both to higher product quality, andthrough more efficient working, reduced labourcosts.

Recent difficult trading conditions in the dairy indus-try mean that company policy is to offer exceptionalservice and customer care to key customers. This canonly be achieved by having a well trained and moti-vated workforce which extends from the first line ofcontact at switchboard level to production staff andsenior management. Legal requirements under theHealth and Safety at Work Act and the Food SafetyAct 1990 are also driving a considerable training

73

effort. Regular visits from factory inspectors andpressure from major retailers also ensure that man-agement maintain their commitment to achieving awell-trained workforce.

In the Dairy Division of the company, the decisionwas taken in 1991 to combat fierce price competi-tion in the market by transforming County Dairiesinto a low-cost producer.This required: the rationali-zation of production into bottled milk at Bracknelland non-returnable cartons at Kidlington; the intro-duction of plastic bottle production at Kidlington;further investments in production machinery to gaineconomies of scale. While these technical changeshave largely been achieved, a complementary con-dition for increased competitiveness necessitatesthe development of a smaller, more highly and flex-ibly skilled workforce, which is only producedthrough an on-going programme of training. Otherspecific requirements to be tackled through trainingare: to increase efficiency and economies throughreduced downtime and planned maintenance; thefurther development of professional competenceand manufacturing skills; enhancement of owner-ship and accountability through performance stand-ards and appraisal. It was thought that such achange in culture within the dairy would require amajor initiative concentrating on the common andspecific training needs of all the main operationalcategories: management; supervision; operatives;laboratory; engineering and distribution.

The dairy production process was identified as thecore area of the business, and a common needsplan which covers all the functional roles has beendeveloped to strengthen the understanding of theo-retical and practical applications. This plan hasthree main phases and requires that all those in-volved in the dairy operation have an appreciationof:

1. basic issues: product; pasteurisation; microbiol-ogy; hygiene (training undertaken at Rease-heath College of Agriculture);

2. further developments: CIP systems; basic foodhygiene certificate; carton testing and quality;

3. certain key individuals would undertake train-ing in the following areas: advanced foodhygiene certificate; production and processmanagement; manufacturing resource plan-ning; supply chain management.

The rationale behind the basic issues training is todevelop understanding and hence a sense ofinvolvement and responsibility. It is intended thatprocess instructions are carried out because theoperative knows the consequences of failure to runequipment or plant correctly. The further training inCIP extends basic understanding to the mainte-nance of quality and hygiene in plant facilities, whilefood hygiene training for process operatives andpackers gives the knowledge to spot machine, pack-aging and process errors. Carton testing and qual-ity provides essential insight for diagnosing prob-lems in carton quality, machine processing and pack-aging.

Key operation staff would be trained by means of

the Advanced Food Hygiene Certificate in the tech-nical expertise to meet the "due diligence"and "com-petent person" aspects of defence under the FoodSafety Act, 1990.Again practical knowledge acquired should betransferable into awareness and anticipation ofproblems in the production processes. Manage-ment skills would be developed in two ways: manu-fuduring resource planning, which enhances themanagement role through knowledge and deliveryof industrial techniques; and supply chain manage-ment, which covers interaction both internal andexternal to the firm. Supply chain managementfocuses on understanding how decisions made inone area impact elsewhere in the chain; howmis-management of the chain adversely effectscustomer service; and on the agreement of per-formance standards with suppliers.

5.6 Training programmes

5.6.1 Formal performance appraisalsystemCounty Dairies have a well documented and organ-ized appraisal system which aims to: evaluate theeffectiveness of managers and staff; help ensurethat people and jobs are correctly matched; agreeand update job responsibilities including standardsand levels of authority; agree and obtain commit-ments to measurable performance objectives thatstretch the individual and ensure achievement ofcompany and departmental objectives; systematicreview of individual's strengths, weaknesses andpotential development; identify training needs toimprove performance; provide feedback; obligemanagers to talk things through with each of theirimmedic ;e subordinates individually, that is, be "intouch".

Appraisals are carried out annually. Appraisees aregiven a preparation form by their managers to com-plete and return at least a week before theappraisal. Following appraisal targets and objec-tives are set for the next 6-12 months and the train-ing officer is advised of any training requirements.

5.6.2 Management trainingprogrammeFollowing appraisal, the training officer will drawup a training plan in conjunction with the personnelmanagers and senior management.

Training courses are run internally if resources areavailable and cover the following topics: employ-ment law; group behaviour, team working , peopleskills, etc.; health and safety training; industrial rela-tions. External courses are used for specific techni-cal training, for example UHT processing, and indi-viduals will be sent on these as production needsrequire.

All employees are encouraged to obtain furthertechnical qualifications and the company will payfor day release or evening classes provided theyare job related.The use of open and distance learn-ing methods is also supported and two managershave successfully completed open learning pack-ages in management skills.

5.6.3 Graduate training programmeIn the last two years, County Dairies have notrecruited any graduates but in better economictimes the following programme for graduates wasused:

Year 1: substantial multidisciplinary projects given tonew graduates which will help them understand allaspects of the business: Monthly Review and Evalu-ation (MORE) carried out as part of a constantappraisal system; log book kept and signed off asgraduate completes assignments;

Year 2: given production supervision post; MOREcontinues; further education encouraged.

5.6.4 Supervisor trainingCounty Dairies has 69 supervisors split between thetwo sites. While supervisors have a range of qualifi-cations from none to graduate they all follow a3-day NEBSM course leading to a qualification insupervisory management. They undertake project-based training within the company as well as healthand safety and food hygiene training. CountyDairies is seeking NEBSM accreditation for its super-visory training.

5.6.5 Operator trainingOver the last 18 months the company has beendeveloping formal "Safe Operating Procedures"forall tasks carried out in the factory. These areextremely detailed and contain not only a column ofinstructions on how to do the job, but also on thehealth and safety implications and training require-ments for the job. A system of training matrices isalso used to identify competences and trainingneeds amongst the workforce.

The company has a multi-disciplined appruach toengineering craftsmen at Kidlington, with theacknowledged need for further development at theBracknell site. The aim is to enable repair and main-tenance of machinery to be carried out in a moreflexible and cost-effective manner. Top gradeoperators undertake technical training at Rease-heath College in dairy technology and increasedflexibility will follow as key individuals understandprocess operations from both operational andmaintenance points of view. Others take 3 monthstraining leading to City and Guilds Certificates. Thecompany also has a few engineering apprentices.

5.6.6 Basic food hygiene trainingThe 6 hour basic IEHO course in food hygiene hasbeen undertaken by all staff in production andmaintenance, laboratories and product develop-ment. In a few cases it has highlighted literacy prob-lems amongst employees which the company hasdealt with in a sensitive manner, using oral ratherthan written examination, and by encouraging staffto attend Adult Learning classes.

5.6.7 Specific training programmes oncustomer care

5.6.7.1 Sales officeThe liquid milk market of declining doorstep deliv-ery, generally the more profitable area, and

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76

increased importance of retail sales through multi-ples, has focused on the need to improve customercare and service.This was seen as potentially signifi-cant in slowing the decline in bottled milk sales andin maintaining good relations with major retail buy-ers. In addition, the drive towards making CountyDairies a low cost producer required a greaterexploitation of economies of scale from the rational-ized processing through increased sales. The costreduLtions included the combining of the Bracknelland Kidlington sales offices into one unit at Kid ling-ton, with reduced staff and hence extra pressure onthose remaining.

There had also been a number of adverse com-ments by customers about the competence of thecompany's switchboard operators and staff in theSales Office. This amounted to a potentially serioussituation because, whilst at the lower end of the sta-tus and pay scale, these staff are the first line of con-tact for both customers and suppliers and coulddamage the company image by poor performance.Most of the staff involved had not received any for-mal training for the job and in the vital area of com-munications there was no proper procedure for tak-ing and reporting messages.Therefore a full reviewof the training needs of the sales and customer ser-vice areas was carried out.

Initially the company used a BBC training packageon Customer Care, which was quite successful andled to a brainstorming session with the staff con-cerned to find out their reactions. This was particu-larly fruitful because staff were flattered that theyhad been asked for their opinions and came for-ward with some very useful ideas. The next stagewas a tailored programme devised with a Woking-ham-based consultancy, Sigma Marketing, whichcovered further telephone and communicationskills, created a pro-active approach by the salesteam and helped to develop staff personally.

The three-module programme consisted of:

1. training on customer care and business docu-mentation during which staff visited customersand tried to understand their problems on a per-sonal level;

2. telephone handling skills course on speech, sin-cerity, practical use of telephone equipment;

3. customer care and sales awareness, includingsales promotion.

The programme was tailored to provide consistentlanguage, culture and approach. Workshops,videos, critique and feedback session were used.The training involved a good deal of realistic role-playing and achieved a much greater appreciationof the external customer or internal production plan-ner's point of view. Even hesitant, longer establishedmembers of the team were encouraged to partici-pate by the relaxed atmosphere of the training, thedrawing out of group ideas, and the commitment bysenior line management to implement suggestionsfrom the course.

During the programme, each member of the salesteam produced an action plan which included, for

7:5

example, reducing numbers of complaints, advisingcustomers on new products and promotions, deal-ing with enquiries more quickly and effectively,improving communication with account managers.The results showed a significant improvement in self-esteem by the sales team, much better relationshipsbetween the team and customers and colleagues inthe factory. Individual sales team members nowdeal with particular customers, with enhanced own-ership and commitment, and with an incentive todevelop new products and sales. In a validationexercise three months after the main trainingperiod, ii was discovered that: complaints hadreduced from an average of 20 per week to 2; themanager was no longer required to handle prob-lems, whereas previously some 15-20 enquiries perweek had been necessary; disputed orders andclaims due to incorrect or incomplete deliveries fellby 50%; staff meetings to deal with problems wereno longer required and qualitative feedback fromcustomers showed marked improvements in tele-phone manner, customer care and information pro-vided.

The programme also highlighted the need for betterplanniny and communication within County Dairiesand this ultimately led to training in supply chainmanagement.

5.6.7.2 Supply chain managementThe sales office programme led to an examinationof County Dairies supply chain involving all stagesof the business from raw materic!s through to thecustomer's finished product. Staff involved includedsales and marketing, sales office, planning, produc-tion management, purchasing and distribution. Theobjective was to improve understanding and com-munication, making sure that those involvedworked as a team and to develop an effective strat-egy for County Dairies.

The training course looked at case studies on Wool-worth's and Tesco's and asked staff to apply some ofthe same principles to County Dairies supply chain ina series of workshops.These also included agreeingstandards of performance with suppliers and crisismanagement.The programme was somewhat revo-lutionary since it involved junior soles and switch-board staff working alongside managers. The fearwas that senior staff would shout everyone downand junior staff would be intimidated. In the eventthis did not happen and extremely good resultswere achieved which have been the source of com-pliments from customers and suppliers.

5.6.8 The cost of training and trainingrecordsDespite the company's commitment to training thetraining officer reported that the budgets had beencut in 1993 whilst the dairy production operationunderwent a major te-,hni...al refurbishment anddevelopment programme.

Detailed records of all courses attended by staffand the direct costs are held by the personneldepartment. Data for the Bracknell site for theperiod December 1991 - December 1992 is asfollows:

8 first aid courses55 basic food hygiene21 safety for managers

6 safety for reps2 factory inspection workshop2 code box printer2 UHT Seminar

The vast majority of these training days were deliv-ered "in-house". The total direct cost of the trainingas measured over this period for the Division was in

excess of £120,000. These figures exclude accom-modation and subsistence costs. Of these costsincurred, about 20% was provided by the DairyTrade Federation through the co-responsibility train-ing fund.

External funding of trainingThe possibility of obtaining partial support from theDepartment of Trade and Industry (DTI) for the Cus-tomer Care Training was investigated. Costs wouldhave been only portly met by the DTI and the com-pany would have been expected to use aconsultantselected by the DTI. This was not acceptable and itwas agreed to use the services of Sigma Marketing(see Section 5.6.7.1) which proved very successful.However courses in supply chain management (seeSection 5.6.7.2) have been 90% funded by the DairyTrade Federation.

5.7 Assessment of training

5.7.1 Social partnersDiscussion with management and members of thesales team showed an appreciation of the improve-

ments in the company's training in recent years. Amore comprehensive programme had been essen-tial due to the market and legal changes in the com-pany's environment, and the restructuring andrationalization of production and marketing. Reali-zation of the need to maintain good customer rela-tions and the implications for supply chain manage-ment had brought about a greater commitment andappreciation of teamwork by staff at all levels. Flexi-bility needed in production and engineering rolesinvolved the breaking down of traditional skill

demarcation lines, and acceptance of this was com-ing.

5.7.2 National reporter's viewOver the past two years the company hasresponded to the tighter economic environment byrationalization and cost reduction, and yetattempted to maintain or enhance its product qual-ity and customer care. Creating a more flexible,responsible and integrated workforce has neces-sarily involved a major training effort using bothexternal and internal resources. The recruitment ofa new training officer in 1991 gave added impetusto the programme and provided the catalyst to fur-ther develop the company's pro-active approach toimproving health and safety standards and trainingto more than satisfy the company's legal obligations.

The particular programmes studied in the report,sales office and supply management, showed a sen-sitive use of external trainers to improve interper-sonal skills, develop individual's abilities and atti-tudes, and meet business needs.

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APPENDIX

2 People interviewedTerry Garrott: Personnel Manager, Bracknell SitePaul Wharton: Divisional Training Officer, CountyDairiesSharon Newitt: Sales Office Supervisor

Comments obtained from:Bel Appleby: Divisional Personnel Manager

Company overview

1991 1988

Turnover (£m) 140.6 124.6

Operating profit (£m) 5.9 6.8

Average Staff Numbers 1,523 1,745

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6. TUNNEL REFINERIES LTD

6.1 Description of the company

6.1.1 Company structureTunnel Refineries Ltd are a cereal sweeteners andstarch producing company.Tate and Lyle and its sub-sidiaries are the major share holders in the corn-pany, with 66.70/0 of the shares'. Other cereal sweet-eners and starch producing companies eitherwholly owned by Tate & Lyle or in which they are themajority share holder (the percentage of sharesheld is indicated), in EC and USA are;

Belgium

USA

Germany

Greece

Netherlands

Spain

Amylum NV Cereal sweetenersand starches, (66.7%)

A. E. Staley Manufacturing Com-pany, Cereal sweeteners and star-ches, (90%).

Prignitz- Starke GmbH

Biamyl SA

Zetmeelbedrijven de Bijenkorf BV

Campo Ebro Industrial SA

The other shareholder in both Tunnel Refineries andAmylum NV is CIP. Tunnel operate as a largelyautonomous business unit.

6.1.2 Products and marketing strategyTunnel process over 350,000 tons of French maizeand British wheat annually, and they have their ownflour mill in Suffolk. Their major products are glucosesyrups, fructose, and starches, and the companysupplies the soft drinks, confectionery, conveniencefood, pharmaceutical, and paper industries.By-products, or co-products, are maize germ for oil,gluten and gluten meal. Tunnel considers that theyare operating in a high volume/ low margin indus-try. The biggest demand for sweeteners will bedetermined largely by the soft drink consumptionwhich in turn can be influenced by seasonal andweather factors.

Fructose can be used as a substitute for sucrose inmany products, one of its advantages is that it has120% sweetness of sucrose. However, the EC hasplaced a quota on fructose production, to protectsugar beet industry. Tunnel is the only UK companywith an EC quota. Fructose is also known as isoglu-cose, and sold under the trade name iso-sweet.

Profitability of syrup production is affected by theCommon Agriculture Policy (CAP) of the EC, throughthe relative raw material prices in starch and sugarregimes. Tunnel's future is likely to be affected bydecisions taken within the CAP. For example, a pos-sible cereals deficit in EC because of a reduction inCAP support might well affect the company's profit-ability.

The main UK competitors are Cargill, AB R, and Cer-estar. Tunnel have approximately 300/0 of the mar-

' Tate and Lyle PLC annual report 1992

ket. Their current turnover is about £100m, profitswere in the region of £2 -3m in the 80s, and in 1992in the region of £5m.

6.2 Training policy

6.2.1 BackgroundTo a large extent the unit operations used in theproduction operations at Tunnel are closer to achemical plant than to a food factory. It is a capitalintensive operation, replacing equipment has beenthe main area of capita! expenditure.

During the early 1980s the plant was overmanned,so a programme of labour reduction was under-taken. By the mid-1980s the company had focusedon its core business operations, contracting-outancillary operations such as catering, transport, andthe construction and operation of a combined heatand power plant. In the late 1980s the payroll wasstill high, this was partly due to the location of theplant which is just east of central London on the riverThames. To maintain their operating margins it wasnecessary to reduce costs, further de-manning wasconsidered essential.

A skills evaluation programme was undertaken. Asa result it was decided to upgrade skills of the work-ers and introduce team operation on shifts. Thismajor initiative was known as "Project Futures". Witha more flexible workforce it is hoped to reduce theshop floor work force from 151 to 132 and achievea saving of £750,000.

Recent capital investment in a new more sophisti-cated plant was another major reason for furthertraining.

6.2.2 Training programmeThe objective was to change from a system whereeach shift consisted of: shift process operators, shiftmaintenance craftsman, and shift quality controlstaff; to a team of process operators that wouldundertake first line maintenance and the necessaryquality control operations. First line maintenance isdefined as the ability to change a unit, such as apump, to ensure continued production.

A team of eight personnel from various levels andparts of the factory was bought together to imple-ment the skill development programme. The teamwas trained in instructional skills and then under-took most of the training themselves.The main train-ing location was the local Lambeth Skills Centre,which was taken over and equipped with the appro-priate plant. in order to see the conditions and con-text of the training, an instructor from the Skills Cen-tre trained at Tunnel, which included working shifts.

A total of 5,500 man-training days, of which almos,80% was conducted "iii house" were undertaken.

Shift maintenance craftsmen largely elected not totake part, as they saw training to work on produc-tion as being demeaning. Since their skills are verytransferable, at a time of reasonable demand in thelocality they could move to other companies.

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BO

There were three aspects to the training: quality con-trol, craft skills and team skills.

Quality control training has been very successful.Operatives now carry out a full range of tests, fromraw material to finished goods checks.A wide rangeof procedures :Ire carried from simple pH measure-ments to use of high pressure liquid chromatogra-phy. The most significant problem was developingthe necessary skills to interpret the results, such aschromatograms. The staff in the quality controldepartment still take responsibility for productrelease, and help in trouble shooting and interpreta-tion of results. In a sense the QC staff act as consult-ants o the production team.

Acquiring the necessary craft skills to undertake thefirst line maintenance of the plant did not causeproblems. However the team operatives found thediagnosis of mechanical problems difficult.They pre-ferred to change a mechanical unit irrespective ofthe problem, rather than diagnose the problem andtake necessary action. Consequently a craft-man isemployed on each shift to assist in the diagnosis ofproblems.

Major problems occurred in developing team skillsand accepting ownership of their job objectives andtargets. Motivation and decision making were prob-lems, operatives found it difficult to act on their owninitiative, for example, acting to shut down the plantin a crisis. The change from a well structured systemto team operation in one step proved to be toomuch of a problem. Reducing team size and increas-ing the number of team leaders has helped to allevi-ate the problem.

6.3 Evaluation

6.3.1 Company evaluationThe cost of training was recovered within the firstyear from the reduction in labour costs. Quality and

reliability has improved because routine processmaintenance is carried out in a planned way by day-work technicians. Quality is now seen as somethingfor which all employees have a responsibility.

Improving productivity highlighted the need to sim-plify and modernize the paper work control system.Outside consultants have been employed to mod-ernize the system. This will help in the move towardsISO 9000 accreditation.

Training at plant operator level has been a key issuein recent years and will continue to be so in the nearfuture. Evaluation of the costs and benefits of train-ing are undertaken, targets to cost saving throughtraining are set for each initiative.

A number of environmental side effects (prin :ipallysmell) can originate from the operation of the plant,none of which are dangerous, L.t thPy can be irritat-ing. It is therefore essential that the operatives actresponsibly and take responsibility for preventing orminimising any environmental pollution. Priority isgiven to maintaining a good relationship with thelocal authorities.

6.3.2 Evaluation by the nationalreporterAfter a brief initial interview with the training man-ager it was not possible to progress the case studyfurther within the time scale of the survey.

The responsibility for training policy is to bedevolved almost completely to the site. The objec-tives of the training policy are clearly to improvebusiness performance.

The company have a considerable interest in thedevelopment of National Vocational Qualifications,but it has not been possible to discuss this with thecompany.

APPENDIX

People interviewedD. A. Rice, Personnel Manager, Tunnel Refineries LtdInterviews with other employees have not been pos-sible.

7 3

PART 3:

Conclusions

Glossary

80

CONCLUSIONS

1. Developments in the UK foodindustryThe food industry in the UK forms a major partof the

chain from agriculture to consumers, and about one

quarter of consumers' expenditure on food and non-alcoholic drinks is accounted for by value added in

food manufacturing. The industrycontributes about2.5% of GDP out of a total food sector (agriculture,manufacturing, wholesaling, catering and retailing)contribution of just under 9% (see Table 2.2). A sim-

ple division of the industry into agriculturally orien-tated sectors such as grain milling, sugar, meatslaughtering and dairy processing and consumerorientated sectors like confectionery, biscuits, snack

foods and soft drinks, serves to emphasize the dif-fering pressures in the economic environmentof theindustry. The former group has tended to decline

with the agricultural industry and its EC support,

while the latter, although not completely recession-

proof, has fared better in recent years than manyindustries, particularly those producing investment

goods and consumer durables.

Overall the consumption of food has grown slowly

in the last decade, less than 1% per year, while alco-

holic beverages have increased by about half the

rate for food. Hence food and drink represents asmaller proportion of consumer spending as real

incomes in the economy rise, the total, includingmeals out having fallen from over 28% in 1980 tounder 24% in 1992. Household spending on food is

currently less than half this percentage. This propor-

tion would probably be much lower if producershad not responded to changing consumer needs for

more processed, convenient, and hence value-added products. The market has also become morefragmented in order to meet more specific con-

sumer requirements.

The structure of the industry is fairly concentrated,since while there are almost 10,000 food manufac-turing firms in the UK, it has been estimated that ten

account for approximately 30% of all UK food sales.UK-based companies also rank highly in Europe,with some 13 of the top 20 European-owned food

and drink companies. US-based companies

account for about one-half of the European top 20

if they are included. A further important feature ofthe food sector is the size and significance of majorretailers, and the bargaining power they are able to

exert over their suppliers in terms of price and speci-

fications. Manufacturers with well-known brands,supported by significant advertising expenditure,

are able to hold their own, but most have comeunder pressure from retail. s' own-label products.

Many manufacturers, especially those with excess

capacity, produce retailers' own-laoels in competi-

tion with their brands. Others have tried to establishinternational brands to spread risks and expand

profit opportunities.

Despite the size of UK food manufacturers, manystudies have suggested that productivity, although

improving, is relatively modest compared to rivols in

the major industrial countries. Improving produc-tivity results from reducing employment, as labour is

replaced by capital, often involving changes in tech-

nology, and from changes in human resource man-

agement. These have created new pressures for con-

tinuing vocational training in areas such as multi-skil-

ling of engineers and introduction of team working,topics which are developed in several of the case

studies.

The food industry in the UK is also a major employer,in 1990, 2.4% of all employees were employed in

this sector. The numbers have been steadily falling

since 1974, between 1985 and 1990 they fell from

636597 to 532089 (Labour Force Survey) i.e. about

16%. However during 1991 a dramatic reductionof nearly 50,000 occurred. The three largest sub-sectors in terms of employment are bread and bis-

cuits production, NACE 419; slaughtering and meatprocessing, NACE 412; and brewing, NACE 427.

Together they account for over 50% of the employ-

ment in this sector. During the period 1985 to 1990employment in these sectors changed by -5%, +1%

and -20%, respectively. A contrary trend to the eco-

nomic fortunes of agriculturally and consumer ori-

entated sectors.

The increase in employment in sub-sector NACE412, slaughter and meat processing, can partly be

attributed to a trend towards convenience foods.

Meat processing is increasing at a rather slowerrate, suggesting that more labour intensive opera-tions are being introduced in this sub-sector. Theincrease in labour is most usually in unskilled or low

skilled packing operations, in areas where there arehigh food security or safety risks. This is contrary to

the situation in other sub-sectors where changingtechnology and automation is resulting mainly in the

loss of unskilled packing operatives, e.g. in biscuit

production.

There are a number of pressures for change which

are affecting human resources management. Theincreasing power of major retailers in the last 10

years to dictate their own terms has squeezed profit

margins as illustrated in the Cliffords study.This is the

result of demands for more competitive pricing and

tighter product specification. Another pressurecomes from the public interest and concern overfood safety issues.The level of interest in food safety

is greater in the UK compared to the rest of the EC.

These economic, social and health issues have led to

the wide spread introduction of quality assurance,including Hazard Analysis Critical Control Point pro-

cedures, and of quality management systems. In

anticipation of implementation of the EC hygienedirective there has been a rapid and extensive intro-

duction of food hygiene training programmes.

2. Development of CVT training policyUniversally in the companies studied, the primeobjective of training was to improve business per-

formance. A further common feature was the desire

to establish effective communications, both verti-

cally and horizontally. Management in the compa-

nies studied expected the employees to listen tothem, however, they also accepted it was a two way

process and were prepared to listen to, and usuallyactively seek, +he views of their employees.

Developing flexibility in the workforce was a high

priority in the training programmes of the compa-81

3.

82

nies studied, as both a short term and long termobjective. This was manifested in several ways. Oneaspect was multiskilling the workforce, particularlythe craft engineer level.These engineerswere beingtrained in other aspects of engineering, i.e. themechanical engineer would be trained in the skills ofthe electrical craft engineer (Birds Eye Wall's,Tunnel,McVitie's, Cliffords).

Another approach to increase flexibility was theintroduction of team working and often much of thetraining was directed to this policy. Therewere sev-eral aspects to this training. Giving the team theskills they needed to be flexible was one objective. Afrequent example was training process operators(Birds Eye Wall's,Tunnel, McVitie's) to undertake firstline maintenance and repair operations in place ofthe craft engineer. Skills and understanding in qual-ity assurance and control procedures were alsoimportant aspficts of training policy. Operatives atTunnel were trained to use sophisticated laboratoryequipment so they could undertake on-line qualitycontrol. Social and interpersonal skills necessary ina team were also features of many studies. A conse-quence of team working was often a reduction inthe number of layers in the management hierarchyin the factory which occasionaily produced cultureproblems.

The desire to change the culture of the workforceoften occurred simultaneously with the introductionof team working. A similar policy was also foundwhen team working was not an issue. The mainobjective here is to persuade the workforce toaccept responsibility or owner,Jiip for job perform-ance and meeting production targets and objec-tives. Thus a feature of many of the case studies isthat they are now introducing, or intending to in thenear future, job appraisal for all employees.Appraisal was previously only for management andsupervisory levels.

Various aspectsThe

legislation affected companytraining policy. The most obvious and significant interms of the costs was hygiene training. This hastaken a significant proportion of the training budg-ets of small companies over the last two years and islikely to do so for at least another year. For someworkers the hygiene training has been the first train-ing they have received during their working life.When this was accredited by a third party it was forsome the first qualification they had received. Lessobvious, but particularly important was the effect ofthe 1990 Food Safety Act and the introduction ofdue diligence defence. This has particularly high-lighted the need to maintain training records, whichis a step towards establishing a training policy.Theselegal requirements could provide an importantentrance to training for a company with no previoustraining policy, especially if support and guidancewere available.

A further commonality in training policy was thatmany of the companies had recently invested in newprocess plants. Training for the resultant change intechnology was therefore a feature in many of thecase studies (McVitie's, Prospect, Cliffords and BirdsEye Wall's).

All the companies supported personnel develop-ment programmes. This is partly because they sawthe workforce as not necessarily being of the educa-tional level theywill require in the future as new tech-nology is introduced, and partly encourage careerdevelopment from within the company. Prospectwere particularly committed to personal develop-ment, with schemes designed to encourage theadvancement of existing staff.There were also shortterm objectives such as up-dating skills and knowl-edge.

The benefit of training to individuals became appar-ent from the interviews with employees. This wasespecially so in the case of Halls and Prospect,where a training policy is a relatively recent innova-tion. Here considerable individual satisfaction hadbeen gained by training, especially when it resultedin gaining a nationally recognized qualification.

3. Social dialogue on trainingTraining was not a significant feature of the socialdialogue with the unions within the case study com-panies. At the shop floor level there was little interestin national training issues.The concern was directedtowards problems of individual employees. Cer-tajyty they were anxious about loss of jobs resultingjrbm restructuring the workforce, and so were scep-

/itical about training for this objective. National train-ing issues such as the training targets supported bythe TUC and CBI did seem to be a concern at theenterprise level.There was no pressure for the adop-tion of NVQs. Also there was no evidence of theunions requesting a greater commitment to trainingfrom the company. At a regional or national levelthe attitude of the unions towards training wasrather different. Their commitment to developingtraining was obvious from their participation in pro-jects such as the NVQ/ SVQs.

The driving force in the case studies for trainingcame from within the company. They went to consid-erable trouble to promulgate details of voluntarytraining schemes to all employees, especially thoserelating to personnel development and establishgood communications systems. Important aspectswere listening to employees reactions to trainingprogrammes and ideas for training within the com-pany.

82t C./

4. Relationship of the educationalsystem to continuing trainingOperatives in the food industry generally havelower than average levels of initial education, par-ticulary those who have been in the industry forsome years. The need for operatives to undergohygiene training identified literacy and numeracyproblems in some employees. McVitie's respondedby arranging classes for these people. Also it is a sec-tor that employs rather fewer graduates than therest of the industry. Part of this problem could be theresult of the poor image that this sector has withschool and college students.

In recent recruitment (e.g. at McVitie's Jaffa line,Birds Eye Wall's) personal qualities, attitudes ofapplicants, particularly willingness and ability tolearn, and an average level of general education

were of greater importance than a good level of ini-tial technical education.

National Vocational Qualifications (and SVQs)were not widely available across this sector at thetime of the case studies and so it is not possible to dis-cuss their use in detail. Opinions appear to bedivided about their usefulness. Meat industry NVQ/SVQs were available and were being adopted byHalls. They favoured the modular approach andfound the concept of achieving a nationally recog-nized qualification an important motivating factor.Elements of the Prospect new training system havebeen designed to integrate with NVQs. McVitie'sfelt that their own training and competence testswere best for their needs, they would adopt NVQs ifthey led to "better biscuits". In general, assessing thecompetence of a person after training was consid-ered to be particularly important.

5. Planning and concept of trainingIn the case studies training plans are determined pri-marily by business objectives and the need to meetproduction targets. The need to meet legal require-ments imposed by the Hygiene Directive is currentlya dominant feature of training plans, but this fea-ture will be considerably less significant when all theexisting personnel have received the training. Fur-ther factors are the need to maintain the skill base ofthe workforce, and provide for employee develop-ment.

At operative level an operator/skill matrix was atool used by all companies. Each element of thematrix being used to indicate whether an operatorwas trained in a particular skill. This tool helps toboth plan training actions and maintains a trainingrecord. Formal appraisal interviews, a feature ofmost management systems, and all employees atProspect, are now being introduced at all levels inthe other cases. This can be expected to become themajor mechanism for identifying individual trainingneeds.

6. Target groupsThe groups targeted were again very much deter-mined by current business objectives. Across thecase studies training at all levels was important. Theapparent reduction of management training is

mainly due to the increase in training activities forother workers rather than an actual reduction inmanagement training. There is a recognition thatthe less well paid in the workforce (e.g. telephonistsat Cliffords) can have a considerable effect on acompany's business performance.

With the exception of training to meet legal require-ments, training was voluntary. Although failing torespond to a request to undertake further trainingcould make career development more difficult. Peo-ple with readily transferable skills sometimes left thecompany rather than train for new developments.

One company specified levels of competence andtraining required for each level in their hierarchy,these had to be achieved before a person was con-sidered for promotion. Individuals seeking promo-tion were a largely self-selecting group for training.

7. Contents, methods and organizationAlthough it is difficult to be categorical it appearsthat on the job" training was preferred where pos-sible for all levels of a company hierarchy. Whetherthis was undertaken by the in-house training depart-ment or by an external training provider was deter-mined by cost. A typical approach was to have inter-nal trainers externally trained. At the operative level"teacher operators" were a common feature. Thesewere operatives who had been trained to teachtheir colleagues in the operation of the plant.

Open and distance learning was available particu-larly for personal development programmes. Awide range of approaches was adopted, to suit theparticular circumstance of the company. Forhygiene training the methods used ranged fromclassroom to open learning, computer-based sys-tems.

There was a strong preference for the training, otherthan personal development, to be focused on thecompanies objectives. This seems at times to militateagainst working for a specific qualification espe-cially using external training providers. On theother hand working for a nationally recognizedqualification was seen as attractive as it coulddevelop motivation and commitment to training.

8. Costs and financingPublic money was generally not available for con-tinuous vocational training. Training was thusfinanced completely by the companies. Cost benefitevaluation of training was important, and meas-ured where possible, especially with Tunnel andBirds Eye Wall's. The major benefits coming fromreducing manpower, and increasing quality assur-ance. Training benefits were also assessed by meas-uring changes in the efficiency of systems, e.g. Clif-fords used frequency of complaints as an indicatorof training effectiveness.

9. DevelopmentsThe development of NVQs and SVQs will have a sig-nificant effect on training in industry in general. Theimpact of the recently launched NVQs for processoperators is difficult to assess at this early stage,benefits of working for a nationally recognizedqualification were demonstrated in the case studies.On the job training will no doubt continue to be themost important form of CVT.

Another important initiative that could have a con-siderable impact on training is the Investor in Peoplestandard. Two of the companies in the survey wereaccredited with reaching the Investor in Peoplestandard.This was largely a paper exercise for thesecompanies as they already had effective humanresource management and training policies. Thatthese case studies were chosen as they were consid-ered exemplary regarding training, suggests thatcompanies working to achieve the II P standard aregoing to be amongst the most effective users of CVT.

Developments of CVT in this sector are likely to bestrongly influenced by the strong market pressuresfor product quality and consumer interest in safety.Thus quality assurance standard such as ISO 9000

3

84

and systems such as HACCP can be expected toincrease in importance. The EC Directive on foodhygiene specifies that a HACCP approach shouldbe adopted to ensure food safety.

Changing works practices, which could include TotalQuality, can also be expected to influence futuretraining requirem ?nts. The great use of team work-ing, devolving responsibility for first line mainte-nance and repair to operatives, multi-skilling ofcraft engineers can all be expected to shape future

61

CVT plans. Increasing technology will highlight theneed for a highly skilled workforce and lead to areduction in manpower, mainly through the loss ofunskilled workers. It is generally felt that the educa-tional level of unskilled workers in this sector is gen-erally low. Retraining this group for the changes intechnology could present particular problems.

ReferencesReport of the Committee on the MicrobiologicalSafety of Food, 1990 HMSO London

GLOSSARY

ACARD Advisory Council for AppliedResearch and Development

ISM Institute of Supervisory Manage-ment

BCCCA Biscuit, Cake, Chocolate, Confec-tionery Alliance

ISO International Standards Organiza-tion

bn One thousand million ITB Industrial Training Board

BS British Standard ITO Industry Training Organization

BTEC Business and Technician Education LEC Local Enterprise CompanyCouncil

m million

CAP Common Agricultural PolicyMAFF Ministry of Agriculture, Fisheries

CBI Confederation of British Industry and Food

COSHH Control of Substances Hazardousto Health

MCI Management Charter Initiative

MITO Meat Industry Training Organiza-CR5 Five firm concentration ratio tion

CVT Continuous Vocational training MSF Manufacturing, Science, FinanceUnion

DTI Department of Trade and Industryna not available

EC European CommunityNACE General industry classification of

EHO Environmental Health Officer economic activities within EC

FDF Food and Drink Federation NACETT National Advisory Council for Edu-cation and Training

FD ITO Food and Drink Industry Trair ingOrganization NCITO National Council of Industry Train-

ing OrganizationFDT Food Drink and Tobacco

NCVQ National Council for VocationalGCSE General Certificate of Secondary Qualifications

EducationNEBSM National Examination Board of

GDP Gross Domestic Product Supervisory Management

GMB General and Municipal Boilermak-ers and Allied Trades Union

NVQ National Vocational Qualification

SIC Standard Industrial Classification

GVA Gross Value AddedSVQ Scottish .'ncational Qualifications

HACCP Hazard Analysis Critical ControlPoints TEC Training and Enterprise Council

HASAWA Health and Safety at Work Act TGWU Transport and General WorkersUnion

HNC Higher National CertificateTQM Total Quality Management

HND Higher National DiplomaTUC Trcc le Union Congress

IEHO Institute of Environmental HealthOfficers UK United Kingdom

IGD Institute of Grocery Distribution USDAW Union of Shop, Distributive andAllied Workers

IIP Investor in PeopleYTS Youth Training Scheme

CEDEFOP European Centre for the Development of Vocational Training

Training in the food and beverages sector in the United Kingdom(FORCE programme)

Jim A. Burns, Richard King

Luxembourg: Office for Official Publications of the European Communities

1994 - 85 pp. 21.0 x 29.7 cm

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