In my world: the plant baker

19 September, 2008
Page 32 
John Foster is MD of Fosters Bakery, based in Barnsley, south Yorkshire, which supplies fresh and frozen products into major retailers, airlines and caterers
Imagine a key piece of equipment is playing up and you call in a skilled mechanic to give it a service. I guess you'd be mortified if the repairman only had one tool in his toolbox - to be used no matter what the underlying problem was.Yet this is exactly how the government controls inflation - by the Bank of England, through their one tool of hitting the interest rate, no matter what the underlying problem in the UK or global economy.With the economy overheating, an interest rate hike reduced the disposable income in Joe Public's pocket and reined in his spending, retailers were squeezed and, in turn, they screwed suppliers. It seemed to work, albeit painfully for food manufacturers.But the inflationary pressures are no longer frenzied indulgent spending; the problems are global, weather and commodity-based. The symptom of inflation has a different cause and therefore needs a different treatment. Mrs Foster reckons that food and fuel increases are as good as an increase in the interest rate to curb unnecessary overspending - people do not need additional Bank of England-imposed pressure.In our business we still do our own maintenance, transport, and a number of things we could easily subcontract. Over the years, I have been advised to outsource non-core activities and rid us of the burden. We use very few pre-mixes and prefer scratch recipes. We prefer permanent well-trained staff to temporary labour. Offloading burdens can sound attractive, but the government, having outsourced interest rate control to the Bank of England, has lost control and, I suspect, may pay a heftier price. In recessive times the key to survival is control. The ability to change a variety of ingredients in a recipe, along with the retained knowledge of how to do it, means you can adapt where others cannot. The ability to modify a piece of equipment quickly and cheaply in-house, to respond to customer desires, is a competitive advantage.The ailments in the economy are different from those of the past decade or so, like the ailments in the current wheat crop. There is no magic formula to today's problems, but a full toolbox and wide knowledge is important - in recipe formulation, production control, delivering customer service or controlling the UK inflation rate. Just after the Iron Curtain fell, I delivered charity aid medical supplies into Romania. Included in our supplies were some rectal tubes - used, I guess, to stick up the appropriate body orifice for bowel disorders. One stock-depleted hospital told me that the syringes, needles and dressings would run out in about a month, the rectal tubes - perhaps a year. I asked what they would do when the supplies ran out and the answer was that they use whatever tools they have.My thoughts were with the poor souls requiring treatment over the next two to nine months; no matter what their ailment, the only treatment available would be a rectal tube - about as welcome as another rate increase from the Bank of England!

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