Bosses neglect staff for systems

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MANY hard-pressed business people must have long suspected it. Now there is documentary evidence: UK companies have been concentrating on setting up computer systems at the expense of managing their staff.

Organisations in different industrial sectors, and ranging in turnover from pounds 20m to pounds 4bn, excel at planning and systems but seriously neglect to manage their people and do not listen closely enough to their customers, according to a report published last week.

'Leaders and Laggers in Logistics' is the latest annual examination of the practices instituted by leaders in logistics in an effort to achieve excellence. It was conducted by A T Kearney, a Chicago-based international management consultancy, and the Institute of Materials Management, the professional body, based at Cranfield Institute of Technology, that furthers understanding of material management, or the integration of management strategies and procedures connected with the flow of materials through a company.

Logistics is basically the business process that enables raw materials to be converted into finished goods. Its effectiveness can be measured by its ability to achieve this conversion as quickly as possible, at the right time, to the right quality, at the lowest cost.

Since the movement of materials through the supply chain is controlled by two flows of information - one for planning and one for tactical control of the process - excellence is achieved by getting both the material and the information flows to work together.

The survey of nearly 100 companies found that the past five years had seen impressive gains in both productivity and service performance, with tough targets set for the future. Organisations were advanced in their use of computer systems and had made significant improvements in the way they planned their operations.

However, 90 per cent of respondents lacked the improvement programmes, employee relationships or measurement systems required to ensure effectiveness. And advanced techniques available to understand customer needs were not consistently used by two-thirds of companies.

Jonathan Anscombe, the A T Kearney manager who led the research project, said: 'These are encouraging signs, but the survey supports our view that the real breakthrough in logistics performance will come not through technology, but through application of good management principles.'