Training benefits bottom line even in slump

PUBLISHED : Tuesday, 10 November, 2009, 12:00am
UPDATED : Tuesday, 10 November, 2009, 12:00am

Certain employers in Hong Kong have no doubt concluded that the best way to get through the recession is to cut costs everywhere, forgetting that sometimes you have to spend one dollar in order to save two. This is especially true in the area of training because, while there may appear to be an immediate bottom-line benefit from cutting programmes, this can often turn out to be a false economy.

'In face of the economic downturn, companies had to tighten their budgets in an effort to maintain profitability,' said Raymond Ng, chief operating officer of GS1 Hong Kong.

'For some, one of the first things to cut was training, but this is much more than an avoidable expense. It is an effective tool for companies to improve their performance, stay competitive and maintain their competitive edge in the long run.'

Illustrating the point, he said that seminars and briefings run by GS1 Hong Kong could help companies that managed all or part of a supply chain to achieve lower operational costs and higher levels of efficiency.

For example, organisations can sign up for a workshop on the Supply Chain Operations Reference (SCOR) model, and for a certified SCOR professional programme. The basic model is recognised worldwide as a diagnostic tool to enhance the efficiency of transport and logistics. Devised originally by the Supply-Chain Council in the United States in 1996, it is regularly updated and is now into a ninth version, incorporating information about the latest technology and thinking.

Many multinationals are known to employ the SCOR model, including McDonald's, Coca-Cola and Procter & Gamble. The concept was officially launched in Hong Kong in 2004, thanks to co-operation between the then newly formed Supply Chain Council - Greater China Chapter and GS1 Hong Kong.

In essence, the SCOR model sets out categories of key performance indicators. These relate to things such as the reliability, responsiveness and continuing costs of the supply chain, and the criteria used are broadly applicable across many different industries.

Apart from providing a framework to identify, assess and tackle supply-chain related problems, the model also provides guidelines for introducing and applying best practices. The area of process improvement includes values and principles such as the popular 'theory of constraint' and the Six Sigma approach to improving a company's internal management functions.

Introductory briefings are available free of charge. The subsequent workshops that constitute the SCOR certification programme are set at HK$10,000 for GS1 Hong Kong members and HK$15,000 for non-members. After attending the workshops, individuals also need to pass an examination to receive the certification and to be duly accredited.

The programme is divided into two parts, each taking two days. The first focuses on understanding the importance of having a proper framework and provides examples of different ways to structure a supply chain operation. The second then covers more in-depth aspects of how to implement specific improvement projects and to monitor their impact on operational performance and general efficiency.

In the early days, many of the people attending the workshops were at senior management or director level in their respective companies. Looking ahead, though, the aim is to instruct mid-ranking and junior staff in the same principles so that employers can benefit more fully and individuals know exactly where to look for savings and tighter controls.

Rocky Yu, manager of professional services for GS1 Hong Kong, is encouraged that SCOR is now well established and winning adherents. One clear sign of this is that more small and medium-sized enterprises (SMEs) are sending their employees to attend the workshops and are putting the principles into practice.

'Local SMEs realise that well-known companies are now using SCOR, and if they want to conduct business with them, they have to learn how the big companies operate,' Yu said.

He said that a quick review of people enrolled in the briefings and workshops in the last year showed about 60 per cent were from the bigger organisations. This was not surprising but, given the large number of SMEs operating in Hong Kong, it was logical to expect the relative proportion of attendees would gradually shift.

In this respect, Yu detected 'plenty of interest' from staff working for SMEs, but was slightly concerned when their companies were not yet ready to commit the financial support to allow interested employees to complete the full programme. Therefore, it was essential to point out the potential medium-to-long-term gains for each company, which could be substantial.

It is also worth noting that the SCOR workshops receive support from the Vocational Training Council's New Technology Training Scheme. At a practical level, that means if a company enrols staff for the workshop, generous subsidies are available, usually equivalent to half the standard fee.

Ng added that GS1 Hong Kong was in no way forcing local companies to adapt to the SCOR model. Its intention was simply to promote the methodology and framework, making it clear that these helped to enhance employee skills and, at the same time, to generate cost savings through better all-round performance.

'We hope to educate companies, teach them how to benchmark against other similar firms and recognise areas that need improvement,' Ng said.