Training in the Food and Beverages Sector in Denmark. Report for the FORCE Programme

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ED 398 435 CE 072 312

AUTHOR Hoist, Ole TITLE Training in the Food and Beverages Sector in Denmark. Report for the FORCE Programme. INSTITUTION European Centre for the Development ofVocational Training, Thessaloniki (Greece). REPORT NO ISBN-92-827-6730-2 PUB DATE 95 NOTE 87p. AVAILABLE FROMUNIPUB, 4611-F Assembly Drive, Lanham, MD20706-4391; 800-274-4888; fax: 301-459-0056 (Catalogue No. HX-93-96-839-EN-C: 8 European Currency Units). PUB TYPE Reports Research/Technical (143)

EDRS PRICE MF01/PC04 Plus Postage. DESCRIPTORS Case Studies; *Continuing Education; DairyFarmers; Educational Needs; *Food Processing Occupations; Foreign Countries; Job Skills; 'Job Training;Labor Needs; *Meat Packing Industry; Postsecondary Education; Program Effectiveness; ProgramEvaluation; Secondary Education; Vocational Education IDENTIFIERS *Denmark

ABSTRACT A study of the food sector in Denmark waslimited to the slaughterhouse, dairy, beverages sectors.The food sector was the most important single industry in theDanish economy. It was the largest manufacturing sector, generatedone-third of total manufacturing, and comprised approximately 8 percent ofthe total Danish gross domestic product. It was a veryheterogeneous sector predominantly made up of large companies. With no legalrequirement for continuing training under Danish law, atradition developed over the years with regard to initial andcontinuing training that was based solely on voluntary agreements betweenmanagement and work force. The main principle of all vocationaltraining was that the state made resources available in its budget.The chosen strategic course that aims to establish acustomer-supplier relationship with foreign food companies by providing a high levelof market readiness regarding quality, taste, appearance, and packagingof primary products would require the Danish food sector'sproduct development efforts to be strengthened. The strategy wouldrequire the improvement of a number of commercial skills(languages, selling, marketing, and intercultural activities) in programswith a distinct European base. Four companies were involvedin case studies: Loven Petfood A/S, Nr. Vium Mejeri, CarlsbergA/S, and Steff/Houlberg. Each case study described the company,continuing vocational training, specific training programs, and training assessment.(YLB)

' c* ***** ***** ************** * ****** ****************x' Reproductions supplied by EDRS are the best that can bemade from the original document. *********************************************************************** FORMATION CONTINUE EN EUROPE European Commission

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El 0v, BEST COPY AITAHABLE 0 g FOOD AND BEVERAGES SECTOR TRAINING IN THE FOOD AND BEVERAGES SECTOR IN DENMARK REPORT FOR THE FORCE PROGRAMME

drawn up by Ole Hoist

1993

First edition, Greece 1995 Published by: CEDEFOP European Centre for the Development of Vocational Training, Marinou Antipa 12 GR-57001 Thessaloniki (Thermi) Tel. 30-31 + 490 111 Fax 30-31 + 490 102 The Centre was established by Regulation (EEC) No 337/75 of the Council of the European Communities, last amended by Council Regulation (EC) No 251/95 of 6 February 1995 and Council Regulation (EC) No 354/95 of 20 February 1995. 3 Cataloguing data can be found at the end of this publication.

Luxembourg: Office for Official Publications of the European Communities, 1996

ISBN 92-827-6730-2

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

Printed in Germany FORCE

Formation continue en Europe Commission of the European Communities TASK FORCE Human Resources, Education, Training and Youth Rue de la Loi, 200; B-1049 Bruxelles

THE IDEA FORCE The future economic strength and the potential for social progress of the European Community depends on a consistent improvement 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 companies 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 trainers and training bodies, employer and union representativeseveryone 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 network, an exchange programme, transnational and transfrontier 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. JOINING You can take part in the FORCE network and apply for financial assistance to join its innovation and transfer exchanges and projects if you are: a large, medium-sized or small company, a training body working with industry or commerce, 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 trainingand thus to shaping the European Community.

3 CEDEFOP

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

Institutional status

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

Working guidelines for the Centre are laid down by its Management Board, whose members represent 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 and adopts the Annual Report.

The members of the Management Board are appointed by the organizations they represent and remain 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 service and a constantly updated bibliographical database receive information from a network of national correspondents, and the information is then made available to a very wide audience, in part via highly sophisticated computerized channels. Its carefully planned publishing policy also ensures that the Centre's voice is heard on major issues in the field of vocational training. It produces its own regular publications (»Vocational Training«, »CEDEFOP flash« and »CEDEFOP flash special«) and occasional publications such as research reports, monographs and manuals.

Research: CEDEFOP, as a centre for the promotion and coordination of research within the Community, provides support in the form of information, expertise and encouragement for the planning and implementation of vocational training initiatives in Member States. In so doing it serves as a focus for innovation.

Consultation: CEDEFOP, as an organization supporting the Commission, has the task of promoting a concerted approach to vocational training problems. It takes every opportunity to promote and encourage training. ACKNOWLEDGEMENTS

This study was carried out in the framework of the TheprojeCtteam wouldliketothankthe European Food and Beverages Industries, withincompanies who gave access for research, and the EC FORCE programme and conducted by a whose staff provided the information and help central team made up of: which enabled us to write the case studies. We very much appreciate the time and effort invested Jim Burns and Richard King, Reading University UKso generously. Louis Mallet, CEJEE, Toulouse France Wilfried Kruse, SFS Dormund We would alsoliketo thank the employers' Maurizio Sorcioni, Fondation CENSIS Rome organizations and trade unions, and their representatives, who contributed to the research by under the responsibility of Francois Delay, Crege making suggestions for case studies, attending Management and in close collaboration with Tina meetings and commenting on the draft report. Bertzeletou, CEDEFOP. CONTENTS Page

PART 1 - SECTORAL CONTEXT Introduction 13 1.The food and beverages sector 14 1.1 The cooperative society 14 1.2 Characteristics of the food sector 14 1.3 Exports 16 1.4 Profits within the food sector 16 1.5 The slaughterhouse sector 16 1.6 The dairy sector 19 1.7The beverages sector 21 2.Market environment and social context 27

2.1 The international challenge to the Danish food sector E 27 2.2 Discussion 29 3.Employment 32 3.1 Food sector employees 32 3.2 Future recruitment trends/discussion 33 4.Training and recruitment 34 4.1 Continuing training public or private? 34 4.2 The vocational training system in Denmark 34 4.3The continuing vocational training system in Denmark 35 4.4Continuing vocational training organized by the Ministry of Education 37 5.Future training requirements 38 5.1 The scope of continuing vocational training in Denmark 38 5.2The role of vocational colleges in continuing training 40 6.Summary 43 Appendix 46

PART 2 - CASE STUDIES 1. LOVEN PETFOOD A/S 47 Introduction 47 1. Company overview 47 1.1 General description of the company 47 1.2 Technology, organization and quality 48 1.3 Human resources 49 1.4 Working conditions and trade union/organization membership 50 2. Continuing vocational training 50 2.1 Target groups and types of course 50 2.2 Company training objectives and policy 51 3. Description of a specific training programme 51 3.1 Overall description of programme: training

activity E 51 3.2 Reasons for training programme 51 3.3 Initiative and decision 51 3.4Course objectives 51 3.5Training organization 51 4. Training assessment 52 5. Summary 52 Appendices 53

2.NR. VIUM MEJERI 55 Introduction 55 1. Company overview 55 1.1 General description of the company 55 1.2 Technology, organization and qualification requirements 56 2. Continuing vocational training 59 2.1 Company training policy 59 3. Description of a specific training programme 60 3.1 General description of training programme 60 3.2 Reasons for training programme 60 3.3 Initiative and decision making process 60 3.4Course objectives and expectations 61 3.5 Training programme 61 3.6Training organization 62 4. Training assessment 63 5. Summary 64 Appendices 65

3.CARLSBERG A/S 67

Introduction F 67 1. Company overview 67 1.1 General description of the company 67 1.2 Technology, organization and qualification demands 68 1.3 Human resources 69 2. Continuing vocational training 70 2.1 Company training policy 70 2.2 Target groups 70 2.3 Training development and planning 70 2.4 Type of training courses 71 3. Description of a specific training programme 71 3.1 Carslberg's tasks until 1996 and purpose of general education for the brewery workers 71 3.2 Access to general continuing training 72 3.3The training programme 72 4. Assessment of the training programme by the various parties involved 72 5. Summary 73 6

Appendices P 74

9 4.STEFF-HOULBERG 77 Introduction 77 1. Company overview 77 2. Continuing vocational training 79 3 'Desciiption of 4 specific training programme quality awareness 80 4-5. Summary including assessment by the social partners 80 Appendix 82

PART 3 - TRENDS Conclusion 83

10 PART 1:

SECTORAL CONTEXT

Introduction

1.The food and beverages sector

2.Market environment and social context

3.Employment

4.Training and recruitment

5.Future training requirements

6.Summary Appendix

BEST COPY AVAILABLE INTRODUCTION

The purpose of this report is to provide the overall The report is based on extensive data dating back European study with an understanding of the food over thelastfiveyears.For some sections, sector in Denmark, in general, with particular however,ithas been necessary to use older referencetothe accompanying case studies, material. On the whole, the report is structured placing these in the national context. in accordance with the principles laid down by the central team,but with some exceptions.For It has, however, proved necessary to restrict the example, Denmark has not passed legislation that subject matter of the report in comparison to whatsets specific requirements for further training of has been defined by the central team under NACE company employees. Denmark has a long history 15. The report thus places special emphasis on the of voluntary basic and continuing training. slaughterhouse and dairy sectors which, in various areas, constitute the Danish food sector. These two Similar conditions thus influence the content as sectors are particularly important and interesting well as the focus of the individual sections. in respect of the potential of the Danish food sector.In economic terms they are similarly of Ingeneral, the Danish food sectoris a very major importance with regard to employment and heterogeneous sector, a fact which may impede exports. direct comparisons. In spite of this, a number of common development trends have been identified. The programme considered it important to include In principle, this report will place greater emphasis the beverages sector. This has, however, proved on matters of a general nature rather than on difficult since, for traditional reasons, this sector is matters of a specific nature. The case studies will not includedinthe Danish food sector. Data attempt to shed light on specific matters. The major comparable to those of the remaining food sector partofthecontentioussectionshave been are, therefore, not easily obtainable. discussed with a number of key people from the companies.

13 12 1. THE FOOD AND BEVERAGES SECTOR

The food sectoristhe most important singleThe cooperative movement in Denmark is char- industry inthe Danish economy. Measured in acterized by the following: turnover, the food sector is the largest manufactur- The primary producers own the second link in ing sector in Denmark with one-third of total the chain: finishing/processing. manufacturing turnover being generated by this A network of many ramifications and associa- sector. The major part of this turnover is directly tionsacting together withinallproduction connected to agricultural production. If the food stages. sector's share of the national gross domestic A high level grass roots participation within product at factor cost is calculated, this amounts organizational work. to DKK 56.4 million in 1991, of which DKK 22.7 A strong position with regard to possibilities of billion came from the primary sector and DKK influencing the forming of national as well as 33.7 billion from the secondary sector. DKK 56.4 international policies affecting the food and billionequals approximately 8% of thetotal beverages sector. Danish gross domestic product at factor cost. A high utilization coefficient with regard to the possibility of establishing a number of common In relation to other Western European countries the initiatives, for example within: Danish economy isgreatly dependent on the - production technology development agricultural sector and, thus, on the production sales and processing of food as illustrated in Table 1. research - training - information Table 1.1 - The importance of the food sector in Denmark compared to other manufacturing countries. The food The cooperative movement isstill an important sector's share of production and employment (1985). factor in the Danish food sector and the linking of the following stages: supply of primary products Production (%) Employment (%) finishing distribution retail,is of immense importance. As shown in Table 1.4, the coopera- Japan 8.9 9.6 tives are still an important and influential group of Germany 9.5 4.9 owners, not only in respect of production, which USA 12.3 7.1 through ownership, vertical production integration Sweden 12.9 8.4 and networks have created close links. Politically, United Kingdom 13.3 9.4 they have also been able to use their primary France 16.8 10.2 positions and ideological background to further Netherlands 24.8 14.7 New Zealand 27.1 24.1 the interests of the trade. Limited companies are DENMARK 33.0 17.0 becoming even more important, mainly as a result Ireland 37.0 21.6 of continuinginternationalization,as pressure from multi-nationals and other financially power- Source: OECD, Technology and the Food Processing ful Danish groups is giving rise to conflict in this Industry, STI Review, No. 2, Paris 1987 supplier-owner relationship. In contrast to the meat and dairy sectors, the beverages sector is organized in limited compa- In 1990 atotalof 238,000 people werenies, a type of organization which is similarly employed in the food sector, 132,000 as employ- determined by historical conditions. This sector ees. (see Table 1.2) has developed in close relation to the first wave of industrializationin Denmark which took place The Danish food sector is clearly dominated by around the turnof the century andis,thus, i.e.the dairy sector and two major sectors, primarily established by means of bank and city- slaughterhouse and meat sector. Thus, more than based capital. half of the total turnover in the food sector (60%) comes from these two sectors. Similarly, in 1990, Table 1.5 thus shows that the turnover of the the same two sectors accounted for 60% of Danish Danish beverages sector amounts to the equivalent food exports. of 7% of turnoverincompanies which are traditionally included in the food and beverages 1.1 The cooperative society sector(excludingtobacco).Beeristhe most Cooperativesocietiesare a typicallyDanish important item within the sector. In 1989, beer phenomenon; approximately 75% of food sector salesreached DKK 5,026 million. A single turnover comes from cooperatively owned activ- company, the Carlsberg Group, accounts for ities. approximately 75% of all beer sales.

The overwhelming dominance of the cooperative 1.2 Characteristics of the food sector within the Danish food sector is a result of special The Danish food sector is a very heterogeneous historical conditions which are outside the scope sector.The tablebelow specifiesthevalue of thisreport. A brief characterization of the produced,intermsof1985 prices,ofthe 1 cooperatives should, however, be included: individual sub-sectors. 13 Table 1.2 Employment in the agricultural and related sectors (in thousands)

No. of people 1975 1980 1989 1990

Agriculture including fur producers 184 159 120 116 Slaughterhouses, meat 21 22 26 26 Dairies 12 11 10 8 Sugar refineries 4 4 3 3 Animal foodstuffs 10 11 11 11 Wholesale 4 5 4 4 Total processing 52 54 54 52 Total employment in agricultural sector 237 214 175 169

Other supplies and services 51 56 50 52 Investment 30 32 14 17 Total employment 318 302 238 238 Of which employees 146 150 130 133

Source: The Danish Farmers' Union

Table 1.5Manufacturing and sales of food and beverages, Table 1.3Breakdown of exports by commodity group excluding goods resold without further processing 1989 (%) 1990 (DKK million)

Grain 10% ISIC Other animal products 15% Dairy 20% 3111 Slaughtering, processing 32,300 Pork and tinned meat 38% and preserving meat Vegetable products 17% 3112-19, 312 Other food manufacture 53,899 313 Beverage sector 6,626 Source: Tal om Landbrug, 1991 Total 92,825

Source: The Danish statistical year book 1991, p. 260

Table 1.4The cooperative movement's influence on food production

Sector No. of companies and associations % of production or sales

Dairy 37 cooperative dairies with 91% of all milk production 117 factories 93% of butter production (3 companies accounting 86% of cheese production for 75% of turnover) 86% of consumer milk

Preserved milk products 1 company, Milco 37% of preserved milk products

Slaughterhouses 5 cooperatives with 50 factories 92% of pork production

Cattle sales 1 association with 15 cooperatives 45% of cattle market

Poultry 1 company 46% of production Eggs 1 company 67% of production Seeds 1 company 70% of production Sugar 1 company 14% of production Fruit, flowers, vegetables 15 cooperatives 75% of production Fur-bearing animals 1 association 98% of production

Grain and fodder 3 main companies with 47% of grain and fodder 103 local cooperatives 47% of fertilizers

Source: Andelsudvalget

,o Table 1.6Value produced in 1985 for sub-sectors of the Measured by Danish parameters, the Danish food food sector sectoris predominantly made upoflarge companies. 54% ofallemployees workin DKK million companies with 200 or more people. In comparison, the equivalent percentage is 42% for the Slaughtering and meat preparation 37,050 sectorin general.Theslaughterhouses and Bacon factories and slaughterhouses 35,475 breweries are worth noting in this respect. Poultry dressing factories 1,575 Dairy produce 21,225 In terms of turnover, the food sector is the most Dairies 15,416 Cheese processing/ important manufacturing sector in Denmark. As preserved milk product factories 5,075 shown, the food sector is clearly dominated by the Consumer milk factories 734 dairy and slaughterhouse sectors.Inaddition, Other foods 32,260 sugar, tinned vegetables and fruit, minced meat Tinned vegetable and fruit factories 2,444 and chocolate and confectionery manufacture are Fish processing 6,304 of considerable importance. Thus, primary agri- Oil production 2,100 cultural production is, to a large extent, the basis Margarine factories 1,212 of the Danish food sector. As mentioned earlier, Fishmeal factories 1,721 the present report is restricted by the conditions Manufacture of flour, grains 1,741 stated in the introduction. Bread-making factories 1,007 Cake-making factories 2,160 The food sector in Denmark consists of a total of Bakeries 3,072 Sugar refineries 2,955 860 companies (1986 figures) owned by 525 Chocolate and confectionery factories 2,429 companies. The figures do, however, understate Potato flour manufacture 2,586 theconcentrationofownership which isa Feedstuff manufacture 2,523 characteristic feature of a number of sub-sectors Beverage production 6,224 (slaughterhouses, dairies, breweries). Spirits and liqueurs 670 Breweries 5,554 The above table indicates a greater production concentration than in other sectors of industry. Source: Nationalregnskabsstatistikken 1987 Thus, three major companies account for 28% of turnover and the 10 largest companies for 44%, whereas figures for industry in general are 9% Table 1.7 Size and relative composition of the food sector and 16%. The above data are from 1986 and 1987 since then the concentration in the food sector has intensified.Itis worth noting that since 1982 Production value Employment employment has shown a downward trend for all companies employingless than 500 people, Slaughtering/ whereas the opposite is the case for companies meat production 37.7 35.2 with over 500 employees. Compared to other Dairy production 23.0 12.3 OECD countries, there is a relatively high degree Other foods 32.5 40.8 of concentration in the food sector, although the Beverages 6.8 11.7 Danish food sector isstill modest compared to internationalfoodsectors.During theperiod 100.0 100.0 1979-1987 productivity rose more significantly in the food sector than in other industries, on Source: Danmarks Statistik 1986 og Industristatistik 1986 average 1.7% compared to1.2% generally. Slaughterhouses, with their significant increase in employment, saw a somewhat higher productivity Table 1.8 Breakdown of companies according to the number of employees ( %) 1986 than found otherwise in the food sector. 1.3 Exports No. of employees Food sector Industry The table shows that the meat and dairy sectors are the most significant with regard to manufactur- 6-9 13 19 ing exports. 10-19 20 31 20-49 28 29 50-99 17 11 1.4 Profits within the food sector 100-199 10 6 Ifprofits are made up of gross earnings, the 200-500 9 3 following picture emerges for the food sector

501 3 1 during the period 1979 to 1985.

No. of companies 860 6,505 1.5 The slaughterhouse sector The Danish slaughterhouse sector comprises 132 Source: Industristatistikken 1986 companies with a total of 25,000 employees. 15 This sector has several important areas of which Table 1.9 - Export of food and beverages (DKK billion) - the bacon factories are by far the largest and most Nominal prices important, with a totalof 17,000 employees distributed throughout five cooperative companies 1980 1987 with 25 slaughterhouses. The second largest are the meat factories and canneries which account Meat 15.9 18.3 for a total of 6,000 employees in approximately Dairy produce 5.7 6.5 50 factories. The 24 cattle slaughterhouses and Fish, etc. 4.9 8.9 Grain, etc. approximately 20 poultry dressing factories both 1.7 4.1 Fruit/vegetables 0.5 employ approximately 1,700 people. 1.2 Confectionery 1.3 1.1 Coffee/tea 0.4 0.5 The sector is very heterogeneous; it includes a Feedstuff 1.5 1.2 number of small private companies alongside very Various food products 1.0 1.6 large groups. Danish Crown, for example, is not Beverages 0.8 1.3 only one of the largest slaughterhouse companies Total food 34.0 45.3 but also one of the largest manufacturing compa- Exports 103.0 158.7 nies in Denmark. Source: Danmarks Statistik. Danmarks vareindforsel og The Danish meat production sector dominates udforsel. Argangene 1980, 1987 both exports, turnover and employment within the agricultural sector and is,thus, a key factor in Danish trade and industry.Total Danish meat Table 1.10 - Rise in gross earnings in the food sector and selected sub-sectors 1979-19985 (%) exports are now well over DKK 20 billion and the sector represents one-third of all employment in Food sector 123.2 thefoodsector and approximately 35% of Slaughterhouses and meat sector 166.6 turnover.Thetablebelowshowsthatthe Manufacture of dairy products 68.5 slaughterhouses are themaincontributorsto Coffee and tea production 96.3 these figures. Beverages sector 208.4 Bacon factories and slaughterhouses 165.1 The following discussion therefore concentrates on Dairies 53.8 the pork sector which collectively represents: Bread-making factories 54.8 Denmark's largest export item Other manufacturing companies 139.9 40% of agricultural exports 35% of food sector turnover Source: Nationalregnskabsstatistikken 1987 9% of total EC pork production Since it appears that the food sector experienced lower 20% of world exports earnings during this period than the manufacturing sector in general,itis worth noting that the slaughterhouses and beverages sectors are considerably above average. The The Danish cooperative slaughterhouses are the reasons were the extensive rationalization and concentra- dominant single factor in the pork sector, account- tion measures taken during this period. ing for approximately 93% of all pork supplies and 72% of cattle supplies through their ownership of cattle slaughterhouses. Table 1.11 - Manufacturing value added and investment (net) in 1989 for companies employing six or more people (DKK million)

1.5.1 The slaughterhouse structure in !SIC Value Added Investment Denmark Developments within the structure of the slaughter- 3111 Slaughterhouses 1989 7,475 683 house sector have gradually reduced the very high and meat sector 1988 7,344 1,074 number of slaughterhouses which were established as a result of the cooperative movement at 3112-19Other food 1989 17,281 2,089 sectors the beginning of the century. This development has 312 1988 16,583 2,155 been characterized by mergers and the closing 313 Beverages sector1989 4,422 595 down of companies. 1988 4,418 504

Table 1.14 shows that the process of restructuring Source: lndustristatistikken 1991 has been very drastic within the pork sector. Compared to the structure in other countries, the Danish companies are fairly large. Today, Danish The Danish pork sector does not have long-term Crown is, for example, the largest slaughterhouse experience in the production of processed meats. companyinNorthern Europe.Followingthe Approximately 80% of exports can be classified mergers,slaughteringtakesplaceinfewer as primary products which are either sold whole slaughterhouses; the former slaughterhouses have or in joints. Approximately 14% are processed been converted to meat processing factories or goods, a further 13% are pure branded goods closed down entirely. sold for direct consumption. Two companies are 17 18 Table 1.12 developed process technologies and the organization of the slaughtering process. In this connec- Exports No. % of tion the classification technology is all-important (DKK million) employed as it is the means by which it is possible to achieve a quality and sortingcontrol,this being the employed in turnover significant factor for the meat processing sectors food, beverages & tobacco in Europe and Japan. The carving techniques used inDanish slaughterhouses likewise provide a Pork 16,226 29.2 31.6 great advantage. This high level of technology is Beef 3,397 4.0 4.0 the reason why the Danish pork sector has been Poultry 670 able to set a number of technological standards. Source: De Danske Landboforeninger, Statistik Nyt 89 nr. 3 The possibility of using technological classification methods to determine meat content with great accuracy and, thus, supply "tailor-made" primary products to meet specific requirements is consid- Table 1.13 Pig supplies to the individual slaughterhouses 1991 ered to be a decisive competitive advantage in a market which is continually increasing its demands Slaughterhouse Head % Division in terms of the quality of primary produce.It should be noted that the majority of technological Danish Crown 7,135,526 43.7 development originates from within the slaughter- Vestjyske 3,392,628 20.8 ingsector.Slagteriernes Forskningsinsttitut (the Steff-Houlberg 2,549,001 15.6 Danish Slaughterhouse ResearchInstitute)has Royal Dane Quality 1,326,874 8.1 playedadecisiveroleinthisdevelopment Syd 1,193,231 7.3 together with the Danish Meat Trade College's Thisted 695,605 4.3 trainingandexperimentalslaughterhousein Silkeborg 44,148 0.3 Roskilde. Skwrbwk 5,328 1.5.3 Supply of primary produce Total 16,342,341 100.0 The products from the Danish pork producers constitute an extensive, stable and efficient primary Source: Danske Slagterier, Statistics 1991 p. 10 product base, especially the major technologically advanced pig farms. The slaughterhouses obtain their slaughter pigs from approximately 32,000 Table 1.14 Number of slaughterhouses producers but 75% of production derives from only 6,000 livestock farms. These large, efficient farms Companies 1962 1980 1991 are generally the highest earners and are the backbone of primary production. Cooperative 62 18 5 Private 15 2 0 1.5.4 The vertical structure of the pork Total 77 20 5 sector A detailed description of Danish slaughterhouses Slaughter units must necessarily include the first stage of the value chain, i.e. the interaction between pork produc- Cooperative 62 34 25 tion and the slaughterhouses. Because of the Private 15 2 0 uniform high quality of their primary products the Total 77 36 25 Danish slaughterhouses have had an historically strongpositionontheinternationalmarkets. Source: Danske Slagerier. Statistics 1991 p. 11 Competitiveadvantageshavebeencreated through targeted and long-term efforts in respect of primary products and processing. particularly dominant within the food processing sector, Tulip International and DAK. It should be Compared with other countries which do not work noted that both these companies operate as limited withverticalintegration between the primary companies with considerable capital contributions producers and the slaughterhouses, the Danish from institutional investors. Both companies are, pork sector has created a unique interaction. however,jointlycontrolledby a number of Usingdirectinformation,fixed-termarrange- cooperative slaughterhouses. ments,aprofit-sharingsystemamongstthe producers in accordance with the number of pigs 1.5.2 Level of technology supplied by them and objective classification of Based on a general assessment, and alsoin the pigs, the Danish slaughterhouses are able to international terms, Danish cooperative slaughter- select animals that are best suited for processing houses are technologically advanced. Within the and sale. At the same time, the pig producers can carving and boning sections, the Danish slaughter- increase their earnings by increasing their share of 18 houses have a technological lead due to speciallythe total value added created. 17 1.5.5 Product range Table 1.15 Total turnover in DKK million During the past 20 years we have experienced a clearshiftinfavour or pork which todayis 1972 1986 1988 Denmark's most important export item. Pork 3,824 13,387 13,650 1.5.6 Trade associations Beef-veal 572 2,327 2,010 To an outsider it may be difficult to analyse the Processed products 1,483 4,966 4,867 network of companies, organizations and institu- Other 579 1,852 1,459 tions which constitute the Danish pork trade. This tradeis a direct extension of the cooperative Total 6,458 22,532 21,986 system previously mentioned in a system which is unique to Denmark. The individual pork producers Source: Forum for industriel udvikling, fig. 11 own the bacon factories which established the "Danske Slagterier" (the Danish Bacon and Meat In spite of the reduced number of employees in Council). This association owns a number of direct production, more people are employed in subsidiaries and has considerable capital inter- bacon factories and in related processing activ- ests in a number of companies with links with ities than in 1968. The explanation is probably Danish agriculture. that the number of slaughter pigs has risen (11 millionin1968, 14 millionin 1984 and 19 The work of the associationispredominantly million in 1991). In addition, today, the amount of financed by means of the so-called "Pig Levy processing is also higher than previously. Finally, it Fund" into which a production tax of DKK 9.0 per should be noted that the automation of traditional slaughter pig is paid. The capital in the fund is carving methods is taking place at a slow rate used to finance various common objectives with within an otherwise increasingly technological the overall objective of furthering sales of Danish production process. The result is a high level of pork. A considerable amount, moreover, is spent specialization with few working operations for the on research and development at the slaughter- individual employee. houses research institute whose results are made available to all parties involved. In this connection, 1.6 The dairy sector the joint efforts in respect of the implementation of The dairy sector represents the second largest sub- advanced sorting and classification technologies sector within the food sector, accounting for 25% inthetrade deserve aspecialmention. In of total Danish agricultural exports, approximately addition, considerable sums are spent on combat- 13% of food sector employees and almost 25% of ing disease, veterinary and food matters, primary turnover. production breeding, etc. The association also endeavours to promote Danish sales in more than The structure of the sector has changed drastically 100 countriesto which Denmark exportsits since the post-war era; a systematic and consistent products. The political impact of this industrial restructuringhasresulted intheclosureof organization is considerable, both at home and approximately 1,000 dairies. Part of the restruc- abroad. turing was due to internal influences and general 1.5.7 Productivity and employment technological development introducing high tech- nologicalprocessingequipment,butoutside Over a period of 20 years, productivity in bacon influences have also determined this develop- factories has soared and since 75% of the bacon ment: changes resulting from technological shifts factories' costs consist of payments for primary inothersectors,publicinterventionand,in products, the economic advantages of increased particular, changed market conditions and com- profits in connection with processing are consider- petition. A number of EC regulations have played able. In comparison with other sectors, slaughter- a major role in this respect. houses employ relatively few white-collar workers, as much as 85% of the total workforce being blue- collar workers. The corresponding percentage for Table 1.16Export value of dairy produce (incl. FEOGA) the rest of the food sector is 70%. Traditionally, Danish bacon factories have been dominated by DKK billion 1981 1987 1991 male workers, 73% compared to 67% in the rest of the sector. The percentage of women is highest Butter 1.59 1.65 1.43 within the meat processing areas, particularly in Cheese 3.58 4.71 6.00 such areas as delicatessen, packaging, cleaning Preserved milk, etc. 1.83 3.35 3.46 and canteen services. The majority, approximately 80%, of the male workforce is unskilled. Over a Total 7.00 9.71 10.89 period of ten years, the falling number of employ- Index 100 139 156 ees in bacon factories is due to general automa tion,forexampleinternaltransport,various Source: Mejeristatistik. de danske mejeriers FwIlesorganisa- processing methods, etc. lion, 1992, p. 8 19 18 BEST COPY AVAIL& Table 1.17 European dairy sector concentration city. The majority of butter production today takes place in large factories. Danish cheese production Country No. of dairies % of milk produced was formerly characterized by traditional batch production in cheese vats with a certain degree of Belgium 6.9 20.5 automation in the subsequent pressing, salting, Denmark 2 75.0 curing and packaging processes. Here, too, the Germany 9 15.2 development will be towards using thelatest France 24 59.6 biotechnology to replace the cheese vat. Ireland 6 57.5 Netherlands 6 74.5 1.6.2 Employment in the dairy sector United Kingdom 6 68.9 In relation to the structural development of the dairy sector described above, a drastic increase Source: Landsbrugsradet 1987 in employment might be expected. A production shift from butter to cheese (more labour intensive, There were 1,300 dairies in Denmark in 1960. By higher degree ofprocessing)has,however, 1987 this figure had fallen to 67. The 1970s andresulted in an unchanged employment level. 1980s, in particular, were marked by mergers in the sector. Today, the sector is dominated by twoThe number of white-collar workers employed in large companies, MD Foods and Klovermaelk,the dairies, approximately 16%, is stable. White- owning approximately 70% and approximatelycollar workers include a growing number of 25% of milk production, respectively. The remain- women, whereas the number of women employed ing 5% is produced by 24 cooperatives and 26 as dairy workers is stable, approximately 20%. privately owned dairies.In 1991, 92% of raw Skilled labour accounts for approximately one- milk was, thus, produced by cooperative compa- thirdofalldairy employees. This workforce nies. The sector resembles the slaughterhousecomposition does not differ from that found in sector in being clearly dominated by the coopera-the slaughterhouses. tivemovement. One ofthemostimportant prerequisites for the above mentioned reduction 1.6.3 MD Foods in the number of dairies is the development of Recent developments in the dairy sector have been refrigeration and packaging. This development influenced by one all-dominant company, namely has resultedinlarge-scale operational advan-MD Foods. Itis a unique example of how one tages which the dairies have cleverly utilized. company has been able to make its mark on an entiresector, whichis why a more detailed Inparallelwiththehorizontalintegration, a descriptionofthisparticular company seems vertical integration has also taken place. Thus, relevant here. approximately 12% of the wholesale price of milk pays for transport to the retail outlets. In 1979, A total turnover of DKK 13 billion makes MD MD Foods took the initiative by creating a national Foods one of Denmark's largest companies. The distributionsystemtominimizethesecosts. company differs from other Danish companies in Klovermwlk has, likewise, established distribution itsclearly specialized and extremely targeted depots, however, only for milk producers. The strategies with considerable thrust in its markets. market needs products with a high degree of processing, the current product development this MD Foods is a good example of how a small entails, combined with a number of technological country can build up an international group factors, point towards one large Danish dairythrough optimum utilization of national conditions company withfewlarge- and medium-size and prerequisites. companies and a number of small companies with niche production. An even higher degree of The group is owned by 13,000 members of a cattle production specialization on fewer and larger farming cooperative society. They form the basis of factories may, in addition, be expected. primary production and the supplier network and, today, they own one of the world's largest and most 1.6.1 Production specialization technologically advanced dairy companies. This During the 1970s consumer milk production was position has been achieved through systematic concentrated in a few large dairies with a very restructuring and buying policies so that today, MD high level of automation. Automation has been Foods accounts for 70% of Danish milk production achieved through computerization and process and 90% of butter and cheese exports. control. This development will continue with the automationof tapping,taking and packing. 1.6.4 Competition Within the preserved milk products area, a similar On an international scale, MD Foods is one of the development, introducing electronic monitoring world's three largest dairy companies. However, systems, has taken place. Within butter produc-MD Foods is special in that the company acts as tion the development has been from traditionalan exporter on international markets. Therefore, churning to continuous butter production, devel- MD Foods' primary competitors are not the other 20 oping packaging equipment with increased capa- large international dairy companies, but rather 19 internationalfoodconglomerates,particularly Table 1.18Product profile. MD Foods' turnover shows the groups like Unilever, Nestle, Kraft and Borden. following distribution: These companies are all strongly represented on the dairy produce market.In comparison with Consumer milk 25% these real competitors and by European stan- Cheese 50% Butter 20% dards, MD Foods is a medium-size company. Other 5% The products are standard products with price and uniformity being the most important competition parameters.Future MD Foods effortswillbe The major part of all milk is used for making butter, directed towards operating as a sub-supplier for43% in 1986. The quantities of milk used for ready-prepared foods (e.g. cheese for Italian- butterproductionhave,however,decreased style pizza). markedly; in 1960, 67% of milk was used in butter production. Increasing quantities are now Approximately half of all MD Foods products are used in cheese production; from 1960 to 1986 sold as branded goods. In future, an increasing the quantity has doubled. share of the company's products will be sold under major retail chain brands as it is anticipated that these will occupy a dominant position on the 1.7 The beverages sector market for branded goods. Total Danish beer and mineral water production in 1989 was 8.7 million hectolitres and 2.1 million 1.6.5 Degree of internationalization hectolitres respectively, corresponding to a total and strategy value of DKK 6.4 billion, not including excise duty Approximately half of all MD Foods sales are and VAT (of which beer accounted for DKK 5 exports to its main markets in the United Kingdom, billion and mineral water DKK 1.4 billion).In Germany and Iran (feta cheese). France, Italy and 1990 beer exports reached DKK 1.2billion the Middle East are growing markets. whereas beer imports were DKK 18 million, the Danish consumers' interest in foreign-made beer The strategy is to move from being a completelybeing limited. An increase in beer imports was Danish dominated dairy company to building an only measurable during the years 1965 and 1985 international organization with the aim of achiev- in connection with a number of industrial disputes. ing increased market shares abroad. This means Total beer imports in 1990 amounted to approxi- building up sales and production companies in mately 27,000hectolitres,correspondingto other countries,theDanish base of primaryapproximately 0.3% of total Danish beer con- products being insufficient to continue the neces- sumption. It should be noted that a hidden import sary expansion. This process is considered to be is taking place without being recorded in official highly capital intensive, for which reason it will statistics; this import is the so-called cross-border clearly have to be implemented by establishingtrade with consumers importing their own beer. limited companies and raising capital from otherThis type of import is estimated to be 10% higher sources. than stated in official figures.

1.6.6 EC market regulations Table 1.19 Danish beer exports 11,000 hectolitres) The many EC market regulations to control total agricultural production and, at the same time, United Kingdom 59 ensure fixed prices for the producers have, in Sweden 121 practice, proved to cause heavy over-production Belgium 183 of several products, including dairy products. Germany 997 France 110 In the period from 1973 to 1980, approximately Italy 357 200,000 dairy cattle, i.e. 15% of all stock but only Switzerland 37 USA 59 10% of milk production, were slaughteredin Greenland and the Faroe Islands 90 Denmark under the EC scheme of rewarding Other 290 producers for reducing their dairy stock. The primary producers who made use of these schemes Total 2,303 are, first and foremost, less efficient farms with the result that, in the period from 1973 to the mid- Source: Tal fra Bryggeriforeningen, 1992, p. 5 1980s, despite this reduction, milk production rose by approximately 15%. Milk production has fallen somewhat in subsequent years. Inadditionto exports to approximately 120 countries,the branded "Carlsberg" and"Tu- 1.6.7 Use of raw milk borg" products are brewed under licence by 47 Whilst milk production has remained relativelybreweries in 27 countries. Figures from these stable for a long period, the use of milk in various breweries were unobtainable. dairy products has changed significantly. 21 20 Mineral water exports totalled DKK 120 million in Table 1.20Danish beer domestic market sales 1990 1989, whereas imports amounted to a total of DKK 53 million. Alcohol % Excise duty Volume

Danish beeris made of agriculturalprimary Category 11 4.2-4.6 DKK 1.37 5506 (86%) produce such as barley malt, raw grain and hops. (lager) Category A 5.8 DKK 1.78 329 (5%) During brewing, all the ingredients are boiled in (luxury) the same vessel, the yeast is added and beer is Category B 7.0-8.0 DKK 2.15 276 (4%) gradually brewed, forming inter alia alcohol in the (luxury) process. The beer is then matured for between one tofivemonths(differentmaturationtimefor "I-Ividtol" 2 0 0 275 (5%) (not liable to differenttypes)and,followingmaturation,is excise duty) bottled and capped. Afterpasteurization the Light beer, etc. bottles are labelled and packed in crates of 12 or 30 bottles. Total 6386 (100%)

The taste of the beer varies from one brewery to 1 Category of excise duty on beer, etc. another, depending on the quality and composi- 2 Danish type of ale which, by Danish definition, may be either top or bottom fermented. tion of the primary products used, maturation time, bottling and storage conditions after the beer has Source: Tal fra Bryggeriforeningen, 1992, p. 3 left the brewery. Note: Danish consumption of beer is mainly Category 1 beer (86%) (lager). The consumption of beer allocatedinthe above categories shows only 1.7.1 Production technology limited variation from one year to another. InDenmark, beerisproduced using modern production technologiesinvarious ways. The capacity of the bottling machines, thus, differs Table 1.21 Excise duty on beer and consumption in EC from around 10,000 bottles per hour to 70,000 to and Nordic countries (best selling beer) 80,000 bottles per hour. Putting bottles in crates is mechanized work in most breweries although a EC Countries DKK per 33 cl Consumption per capita 1990 few still carry this out manually.

Ireland 232 90 The technologically most advanced brewery is the Denmark 137 127 Carlsberg Group's Fredericia subsidiary, where United Kingdom 136 110 production iscarriedoututilisingthemost Italy 57 23 advanced principles of beer production including Netherlands 54 90 electronic control and monitoring of the produc- Belgium 51 121 tionprocesses.In comparison with traditional Portugal 26 64 production processes, a relatively limited number Greece 16 41 of employees are involved. Germany 18 143 Luxembourg 14 117 1.7.2 Product range Spain 10 72 The total range of beers on the Danish market France 7 42 comprises approximately 200 different brands (of Nordic countries which 25 are trade marks) and around 300 Norway 340 52 different types of mineral water. Finland 231 83 Sweden 95 60 Danish beer is a typical brand product with each brewery using it own production processes and Source: Bryggeriforenigen special names or brands. This brand effectis stronglyrelatedto consumer expectationsof quality and preference forlocal brands with The fixed tax per bottle means that beer, with a different tastes. low wholesale price,is taxed relatively higher than beer with a higher wholesale price. Beer is divided into four classes according to the alcohol and gravity of the beer before fermenta-Table 1.21 indicates very different structures of tion,inaccordance withcurrent exiseduty excise duty and traditioninEurope with the regulations. Nordic countriesclearly occupying themost heavily taxed position.It should be noted that 1.7.3 Excise duty the level of excise duty does not appear to be the Beer has always been, traditionally, heavily taxed determining factor for beer consumption. Small in Denmark. Thus, approximately half the price breweries are granted some excise duty relief; paid by Danish consumers for ordinary branded however, this is so slight that it has little importance 22 beer is VAT and a special beer tax on beer sales. competition-wise. Almost half of the easing of 21 excise duty is, thus, granted to breweries within Figure 1 Distribution channels for beer and mineral water the four largest groups (which together account for over 90% ofallbeer sales).Mineral water Brewery production is similarly liable to excise duty. In 1985 a new scheme was introduced granting small mineral water factories excise duty allowances, corresponding, in principle, to that allowed Depots Household goods outlets for beer.

Restaurants Retail shops 1.7.4 Distribution channels The distribution of beer and mineral water from the breweries and mineral water factories is mainly Households handled by beer depots and roundsmen.

The beer depots handle the breweries' external sales, comprising 80 to 90% of total turnover, and ing quality resulting from long transportation play are run by depot owners who are independent of adecisiverole.Finally,thespecialDanish the breweries. The geographic limitations of the distribution system must be considered, a system depot districts are determined by the breweries, which ensures efficient beer distribution. By far the who invite tenders. Within a specific district the greatest part of beer sales is distributed in bottles depot owner has the sole sales rights, for the (98%). products of the brewery in question, to shops and restaurants. The depots are supplied from the In quantitative terms, mineral water consumption is breweries or from central distribution stocks. Some only half that of beer and in value terms it accounts depots, however, collect their supplies direct from foronly afourthof beer consumption(cf. the brewery. Bryggerbranchen. Monopoltilsynet. 1978, p. 40). Beer and mineral water consumption is subject to In contrast to the depot system, roundsmen are considerable seasonal variations. Consumption is employed by the breweries and handle sales to relatively higher during the summer months and in shops and restaurants in a particular district. A December forbothproducts. These seasonal limitedpart of thebreweries' sales (6%)is fluctuations make heavy demands on brewery distributedinvery largequantities fromthe logistics,since they have to ensure sufficient breweries to central stocks belonging toretail capacity to be able to handle peak periods. chains. From this point the retail chain concerned Moreover,forquality and handling capacity takes over distribution to the individual retail shops. reasons, there is an upper limit to the size of stock that can be built up outside peak periods. This survey indicates that restaurants constitute the principal customer group. Retail shops account for almost half, of which household goods outlets 1.7.6 The brewery structure in form the largest group. Approximately half of allDenmark domestic sales take place through household Development in the Danish brewery sector during goods outlets and the combined retailsector the last 30 to 40 years has been characterized by accounts for approximately 70% of all beer sales. a heavy reduction in the number of production units and concentration of production in a few, 1.7.5 Beer and mineral water relatively large,breweries and mineral water consumption factories. The breweries are organized in limited companies with city-based capital investment. Throughout the1980s and until1992, beer consumption was stagnant, but in comparison with 1955 figures, consumption almost tripled. In 1989 consumption reached 6.4 million hecto- Table 1.22Breakdown of brewery customers by category 119841 litres(equalto approximately 127litresper capita). No. of customers Distribution 1%) As previously described, foreign beer imports are Households 6,700 25 very modest. The reasons for this are, first and Kiosks, etc. 5,700 21 foremost, the Danish consumers' preference for Restaurants 9,500 36 Danish brewed beer, a preference with historical Institutions 4,900 18 roots. Furthermore, the Danish Law prohibiting canned beer, and the environmental rules stipulat- Total 26,800 100 ing a returnable bottles system cannot be dis- regarded. In addition,it must be assumed that Source: Bryggeribranchen. Mnopoltilsynet. Copenhagen high transportation costs and the risk of deteriorat- 1987, p. 31 23 22 In 1948 there were 129 breweries in Denmark, in Table 1.23 Breakdown of distribution of the beer market 1987 this figure had fallen to 23 breweries and amongst the breweries 1985 (%) 15 mineral water factories owned by 12 companies.In 1984 a total of 9,000 people were 1985 employed in the sector and, by 1992, this had fallen to 5,177 employees. Carlsberg Group 69.5 Jyske Bryggerier A/S The number of employees in Danish breweries and Faxe Bryggeri A/S mineral water factories has been reduced by halfAlbani Bryggerier A/S 28.8 over a ten-year period. Harboes Bryggerier A/S Itshould be notedthatin 1990-1991the Other breweries 4.7 Carlsberg Group had a market share of 75% of all beer produced in Denmark. The survey shows Total 100.0 that Carlsbergisby far the largest brewery company in Denmark. In 1975 its market share Source: Bryggeribranchen. Monopoltilsynet 1987, p. 42 was approximately 80%; this share has declined in recent years, falling to 70% in 1985 due to a Table 23a Breakdown of number of Danish brewery and major labour dispute that year. The 75% market mineral water factory employees according to job 1992 share seems to have stabilized. Faxe A/S has, for a number of years, held a market share of 8- Brewery hands 2,511 10 %. Together with the three other large brewery Distribution employees 327 companies, Jyske Bryggerier A/S, Albani Bryg- Metal workers 344 gerier A/S and Harboes Bryggeri A/S, these four Electricians 113 companies in 1985 accounted for a market share Other skilled employees 53 of approximately 25%, a share which is estimated Salaried employees 1,829 to have fallen to 20% in 1990. Total 5,177 In 1992,throughamerger between FAXE Bryggeri A/S and Jyske Bryggerier A/S (formed Source: Restaurations- og Bryggeriarbeider Forbundet, 1992 by Ceres and Thor), the second largest Danish brewery group was established under the name "Bryggerigruppen A/S". This merger took place Table 1.24 inordertoadapt production and salesto Breakdown of market share of mineral water according to factory 1985 (%) increased national and international competition. In 1992 over 60% of Bryggerigruppen's produc- 1985 tion was exported.

Carlsberg Group 20 The Bryggerigruppen A/S comprised the following brew- A/S Dadeko 22 eries in 1992: Faxe Bryggeri A/S 14 Jyske Bryggerier, Albani Bryggerier A/S FAXE Bryggerierne Fakse Wiibroes Bryggeri A/S, Harboes Bryggerier A/S 21 Ceres Bryggerierne Arhus Other 23 Ceres Bryggerierne Horsens Source: Byggeribranchen. Monopoltilsynet 1987. p. 45 Horsens NyMalteri Horsens Thor Bryggerierne Randers Nunk Imeq Greenland (24%) However, sales of branded beers for national Robert Chain United Kingdom (100%) retail chains should be added for some breweries. plus the FAXE Getranke Vertrieb (Germany, 100%) and In the local markets the following brands of beer Centre Nordique d'Alimentation (France, 100%) are typically sold: beer from the Carlsberg Group, companies. from Bryggerigruppen A/S and from one or two local breweries.

Table 1.24 shows that breweries with relatively Both the Carlsberg Group and Bryggerigruppen large beer sales market shares also have con- A/S have considerablesales throughout thesiderable mineral water sales. The Carlsberg country and may, thus, be called nationwideGroup has traditionally had 30% (there were breweries. several labour disputes in the group in 1985), Faxe, 14 to 15% and four other relatively large In 1985 the other small breweries had market breweries together holdapproximately 22%. shares of approximately 5% or less. They are Dadeko, who produce Coca Cola products, has predominantly local breweries with sales concen- approximately 22% and is, thus, the only major trated on their own towns and surrounding areas. mineral water factory outside the brewery sector. 23 Since 1988 mineral water sales have increased At the same time as this transfer, Carlsberg A/S by approximately 5% per year. acquired 10% of the shares of Cruz de Campo from Guinness, with the possibility of a future 1.7.7 Trade agreements and increase. The Cruz de Campo brewery now associations carries out brewing and sales of Carlsberg's Bryggeriforeningen, the Danish Brewers' Associa- brands in Spain. tion, is partly an employers' association and partly a trade organization, with considerable influence On the United Kingdom market,in1991, on competition. The association members account Carlsberg enteredinto an agreement with for approximately 85 to 90% of total beer sales Courage Ltd(the United Kingdom's second and the Carlsberg Group has more than half the largest brewery group) on the continuance of votesattheassociation'sgeneralmeetings. the 20 year cooperation between Carlsberg Bryggeriforeningen has entered into the so-called and the Grand Metropolitan Group, now taken contractingparties' agreement which controls over by Courage Ltd. competitive conditions in Denmark. This agreement determines minimum prices for all types of Inaddition, Carlsberg has entered into an beer in all forms of packaging and it only involves agreement with Allied Lyons plc, one of the the breweries and depot sales lorries. Discounts of large EC brewery companies, regarding a any kind are forbidden. In addition, the agree- merger of the two parties' brewery activities in ment regulatesrelations, and determines pay- order to form a new company, Carlsberg-Tetley ments to the depot owners and between the plc, of which each of the parties will own half. If breweries and the depots with which they have this merger is approved by the EEC Commis- entered into sole agency agreements. The depot sion and the British authorities it could come owners are not permitted to trade in beer from into force before the end of 1992. The merger breweries which are not part of the agreement. will also mean that the company will become Furthermore, the agreement stipulates advertising one of the three largest brewery groups in the rules. Bryggerigruppen A/S is also an association United Kingdom. member. Carlsberg A/S has strengtheneditsglobal Since 1977 a certain amount of liberalization in standing through the establishment of partner- terms of the agreement has occurred, for example ships, cooperation agreements, the construc- making sales of branded beer toretail chains tion or supply of turnkey breweries or by possible. The branded beer is then sold at a lower brewery take-overs. price than otherwise. Bryggerigruppen A/S The international position of the With the purchase of the Robert Cain brewery in brewery sector Liverpool, Bryggerigruppen A/S has improved its During recent years competition on the interna- position on the United Kingdom market. The tional beer market has intensified and substantialcompany has also entered into an agreement structural changes characterized by take-overs, with the Guinness Brewery in Grenada regarding mergers and alliances between companies, result- brewing and bottling of its Vita Malt product. In ing fromstrategic considerations, have taken addition, various Bryggerigruppen A/S interna- place. tional sales companies have made agreements with trading companies on the sale of Bryggeri- Carlsberg A/S gruppen products. Two-thirds of Bryggerigrup- No other Danish brewery or brewery company ispen's earnings are derived from the export of as heavily involved in international agreementsFAXE and Ceres beertoapproximately 50 and activities as Carlsberg A/S. In 1992 the countries. The main exports, however, are to five Carlsberg Group sold three times as much beer countries: Germany, Sweden, Italy,the United abroad as was produced for the domestic market. Kingdom and the Caribbean.

The Carlsberg Groupisamongst thelargest Concerning shares and influence, Bryggerigrup- international companies on the European market pen A/S is overshadowed by Carlsberg A/S, and is represented throughout the world. thus, sales policy and strategy plus intensified export market competition will determine how In 1991, with a local investment group, the Bryggerigruppen faces the new century. Carlsberg Group purchased a majority holding inUniver-Uniao CervejeriaSA,Portugal's Harboe largest brewery. As a result of Harboe Bryggeri's acquisitions abroadit can now be regarded as a major In August 1991, Carlsberg A/S transferred abrewery concern. 60% holding to the Spanish Union Cerveza to Spain's largest brewery, La Cruz de Campo,Harboe hasestablisheditselfintheformer owned by Guinness plc (Cruz Campo). German Democratic Republic with abottling 25 24 plant in Malchin and a brewery in Dargun. In Harboe's position in Eastern Europe is based on addition, Harboe has purchased a 55% holdingthe success and earningsit has made on the in A/S Viru Olu, the third largest brewery in thediscount beer/mineral water market in Denmark United Kingdom and plans to export from A/S and is entirely dependent on the future selling Viru Olu to Russia. policy of Carlsberg A/S on that particular market.

25 26 2. MARKET ENVIRONMENT AND SOCIAL CONTEXT

Thereisno legalrequirement for continuing 2.1 The international challenge to the training under Danish law. Over the years aDanish food sector tradition has developed with regard to initial and It is necessary to include international demands on continuingtrainingthatissolelybased on future food production in order to understand the voluntary agreements between the management potential for the Danish food sector as Denmark's and the workforce. most important export trade.

The main principle in all vocational training is thatNaturally, this subject has been of great interest to the State makes resources available in its budget. researchers and as a result a number of reports There is,typically, a framework of acts underand analyses have been produced aimed at which the two sides complete the details. providing an overview of the opportunities and threats facing the Danish food sector. With regard to continuing training (e.g. the AMU system the Danish system of labour marketThe following picture of the state of the sector training courses)the State lays down certain emerges: requirementsfortheestablishmentoftrade specific committees for further training by the2.1.1 Trends in society individual trades who may then apply for funds. Internationalizationisglobaland israpidly Certain trades are obviously better than others at increasing. It comprises capital, technology, con- doing this.The general principleisthat the sumption and attitudes. Europe is getting smaller committees must have equal representation with and the Danish "home market"istherefore, a view to achieving complete agreement betweengrowing, particularly so as a result of the Single management and labour. The individual trade European Market. The starting point, however, is specific committees for further training identify the that Denmark has to recognize its position as a scope of the courses based on well established sales district in the northern part of Europe, with a relations with companies within the sector. market share of approximately 2%.

Against this background, the individual companyInternationalization, and in particular the Single isresponsibleforkeepingitselfinformedof Market, also result in keener competition in the general developments which might be considered Danish export markets as well as in the Danish to exert an influence on the company's continuing home market. Even a large Danish food company training activities. appears small in the Single Market.

Commensurate with Western European consu- The common denominator for development is the mers' generally increasing level of wealth, the increasingly strong position of the consumer. The Danishfoodsectorhas seen anincreasing ability to identify and satisfy the changing habits demand for highquality products. Moreover, and needs of the consumer, and to convert these Danish companies are increasingly facing de-into food production will be the decisive para- mands frombothEuropean commercial and meter in competition. This makes considerable processing companies to establish quality control demands on investment in product development systems in accordance with internationally accre- and sales, and thus on capital. More than ever the dited standards. There are further examples ofDanish food sector needs strengthening through consumer demands relating to cleaner, healthierconcentration of capital, sales, research, training and more environmentally-friendly products. Com-and product specialization. panies able to keep up with the times and willing to meet these demands will naturally experience a more significant growth in demand. Against this2.1.2 Production, trade and demands background, if an individual company considers The development can be characterized as follows: thatthesolutiontotheproblemmightbe additional training for various groups of employ- A slackening growth in world foodstuffs trade. ees, it has to take the initiative and organize the Between 1980 and 1987 the total world trade training and,if necessary, obtain and pay for index rose from 100 to 120 whereas the assistancefromthepublic AMU systemor agricultural produce trade index only rose to vocational schools. Companies may also choose 108.Withinthefoodsectortherewill, to use privately run courses. however, be large differences between products, i.e. convenience and highly processed, Thissection,therefore,describes the general perishable foods showing marked increases development trends which the Danish food sector and more traditional foods falling behind. must meet,withparticular emphasis onthe International growth rates for meat production slaughterhouse and dairy sectors. In addition, an have fallen from 1.2% in the first half of the attempt is made to identify and discuss areas 1980s to around 0.9% in the second half of the particularlyrelevantfor continuing vocational decade. The UN predicts correspondingly low training. growth rates in most other food categories. 27

26 There is a trend towards over-production ofthrough take-overs,to achieve more diversity primary agricultural products, particularly in within their range of foodstuffs. This development Europe and the USA. In the EC the supply rate can, thus, be expected to continue internationally, for products such as grain, pork, beef, butter, with still more cross-border take-overs and invest- cheese, sugar, vegetables, is very high. Thements, in order to increase the company's visibility ageing population is, however, expected to (in sales outlets) to the consumer. spend relatively more money on food and, in addition, to be wealthier than previous pen-2.1.5 Outlet concentration sioners. Furthermore, they will demand qualityEuropean retailers have commenced a similar and specialization. process of restructuring with the same end in mind A stagnation is food consumption. The rise in as the food company groups. Their aim is to create demand is dependent on population increase. larger units through take-overs and concentraton Two trends are now emerging: the population in order to achieve maximum advantage from in Europe, as well as in the USA, is decreasing; large-scale operations. the population is ageing, which is assumed to have considerable influence on the quantity, as Initially, as in the food sector, the tendency is for well as the nature, of future consumption. concentrations to be national with the second stage being international. Thus, there is every Internationalmarketdevelopments,therefore, reason to assume that, in future, retail chains will demonstratethatcompetition is increasinglygain considerably more influence on the food about directing efforts to meet new demands on market than they have at present. Most chains will amarket which isgenerally stagnatingbut develop a range of own-brands as a competitive coupled with growth in certain specific sectors.tool to identify the retailer in the mind of the The ability to develop new products and imple-consumer. It can, therefore, be expected that in ment goal-oriented activities will be important. future it will be far more difficult for the food sector to place its own brands on retail chain shelves. 2.1.3 Consumption patterns This development is already apparent with major The shift in tastes and eating habits throughout the retail chains taking the offensive and making Western World is an important one which, again, demands forproductioninaccordance with underlines the need for constant product develop-precisely defined product standards. Topics under ment, product adaptation and the development ofdiscussion are shelf-life, appearance, consistency, new distribution networks. The following trendsetc. The risk for the producers is that even minor should be noted: deviations will be a direct reason for the removal Healthier foods (to satisfy "green" trend, ethics of their products from the shelves. The chains in animal husbandry, etc.). themselves are currently under pressure from other A higher general level of quality for foods. distribution networks, viz the habit of eating out; a A higher degree of processing; food prepara- development which isexpectedtointensify tion and consumption is simpler and easier. towards the turn of the century. Increased demands for sensory attraction and appeal when buying and consuming food. 2.1.6 Technology More people eating out or dining together at Four particular technological trends will mark food the expense of the one-family meal. sector production process development: Larger production units are necessary to reap The change in eating habits will, perhaps, serve allthebenefitsofadvanced,expensive, as sufficient compensation for the general stagna- production equipment. tion in the overall food market if the food sector is New preservation methods/packaging to pro- strongly committed to following market develop- long the shelf life of highly processed, perish- ments and consumer behaviour patterns and able foods, irradiation, aseptic and controlled permits these factors to increasingly influence atmosphere. product development and primary production. Even keener competitive conditions will force shops and companies to considerably reduce 2.1.4 Food sector concentration their storage expenses. As a consequence the The highest number of mergers has taken place in sector has toadjustitselftosmaller,less the food and chemical sectors. A marked concen- frequent deliveries according to the just-in- tration tendency is, therefore, apparent, especially time principle. amongst the larger companies. This development With regard to technological production devel- began in the early 1980s and will probably opment, new developmentswillgenerally continue. spread so rapidly amongst the companies that new technology alone will not be a sufficiently The majority of take-overs in the meat and dairy strong competition parameter. sectors are made with a view to strengthening the company's position within the primary skill sector, The general development trends described above i.e.at the same processing level (typically as for the Danish food sector can be summarized as 28 horizontal integration). Other sectors endeavour, follows: 27 Food production and sales will, in future, be far By staking everything on primary products and more demanding and much more advanced, standardized goods of a high hygienic standard whether primary products or finished goodsand meeting very detailed specifications, the two are produced. sectors will be able to maintain their favourable Competition will concentrate,inter alia, on international image as important sub-suppliers to advanced research (biotechnology), continued large international food companies. The on-going product development and efficient,interna- restructuring process must be continued in order tional marketing and market operations, a for Danish companies to appear as attractive developmentrequiringlarge,international business partners for large foreign companies. units and ample capital. This strategy means that Danish companies will not have to use capital, which is not readily available 2.2 Discussion in the sector, to launch extensive, capital intensive Future strategy decisions and continuing training marketing campaigns. needs, particularly in relation to general competition development trends, based on the above 2.2.3 Primary production descriptions of thedairy,slaughterhouse and Financially sound and efficient primary producers brewery sectors, will be discussed below: are essential for this strategy.to succeed since it is the individual farms who will have to meet the A number of common denominators have been increasing demands on the quality of primary identified for the three sectors, especially with produce. The ability of the primary producers to regard to structural adaptation, market strategies, develop their operations and efficiency will have a process technology development, ownership and decisive influence on product quality and price. employment. The discussion, therefore, aims to encompass thesubjects which are generally Itis,therefore, a condition of success for this applicabletoallsectors and sectorspecific strategy that even closer and more integrated matters will only be rarely addressed. relations between primary production and the processing bodies are established. It could be said 2.2.1 Strategy that the primary producer, by his choice of the Strategic opportunities for the Danish food sector, sub-supplier strategy, will be placed in a key in particular the slaughterhouse and dairy sectors, position with regard to the development of the have been thesubject ofintense debatein entireDanish foodsector.Demands onthe Denmark during the last two years. Against theprimary producers' earnings and investment will background of these discussions two directions intensify, indicating that the on-going restructuring seem to emerge: of the agricultural sector will continue. This means that production will be concentrated on even The first is based on staking everything on thefewer farms. If, for example, too many inefficient development of highly processed, perishable primary producers arestillmaking too high products or products with longer shelf life, i.e.demands on the price of primary produce and finishedor branded goods, becauseitis supplementarypaymentsfromtheslaughter- anticipated that demand will rise more and houses, the capital needed for the sector's growth value is highest in this market. will not materialize and the strategy will fail. The second aims to strengthen the role as a supplier of primary products and standardized Biotechnological possibilities related to the quality goods as ingredients for further processing in of primary products are an interesting area of the food sector. development where contacts already made with publicly financed research and development with- It appears that these two sectors have chosen a in the sector's own research institutes will play an double strategy. The slaughterhouses and dairiesimportantrole,particularlyinareas such as are,thus,stillsuccessfully pursuing their sub- genetic engineering, fermentation, enzyme tech- supplier strategy whereas the processing strate- nology, etc. gies have not yet been fully defined. 2.2.4 Production organization 2.2.2 Sub-supplier strategy The current concentration, merger and take-over The demands made in relation to general devel-trend in the sector, particularly in the slaughter- opment trends in both the slaughterhouse and house, dairy and brewery sub-sectors, will con- dairy sectors are concentrated on primary pro-tinue, first at national and later at international ducts which must, of necessity, be seen as an level. The current automation and industrialization advanced product and not just bulk commodities. of some manual work will accelerate; this was, for These demands are for uniform, accurate quality, example, apparent when the Carlsberg Group bulk quantities,high security of supplies and transferred most of its beer production from the competitive prices, all demands which the slaugh-out-of-date Tuborg brewery in Copenhagen to the terhouses and dairies are well equipped to meet, highly technologically advanced Fredericia brew- since they are areas in which excellent skills and ery. All sectors will benefit from the use of the latest know-how have been built up over the years. information technology; classification and sorting 29 28 technologies in the slaughterhouse sector will havement" involving an entirely new employee group, a decisive effect. Advanced CIM systems (Com-laboratory assistants, is an example of the latter. puter Integrated Manufacturing) with automaticThe large continuingtraining programme ar- process control and checking, linked and con-ranged by the Danish Meat Trade College at trolled by neutral networks, will be introduced inRoskilde, a joint project for Danish slaughter- the future. houses in connection with the introduction of the so-called classification centres inallslaughter- 2.2.5 Training requirements houses, is an example of the former. The target In order to support the food sector'schosen group was an existing group of skilled employees strategy it will be necessary to improve anumber who, through training, were able to operate the of centralskills which are associatedwith a complicated equipment. number of requirements both within andoutside the sector. The training cut across existing demarcation lines and included subjects such as computer tech- The chosenstrategiccourse,which aimsto niques, repair and maintenance, control and super- establish a customer-supplier relationship with vision, hydraulics, pneumatics, process control, foreign food companies by providing a high level etc. The target group for this training programme of market readiness regardingquality,taste, were electricians and mechanics who, having appearance, packaging,etc.of primary pro-completed training, are qualified to operate the ducts, requires the Danish food sector's product equipment.Itis reasonable to assume that,in development efforts to be strengthened. A key future,therewill be a number of continuing qualification for this is that product development is training programmes in relation to new technolog- market-oriented, i.e. a high degree of knowledge icalproduction equipment where trainingwill and insight into the decisive sales arguments of the have to cut across existing demarcation lines various markets. and provide trainees with a basic overall understanding of the process flow. Furthermore, the strategy requires the improvement of a number of commercialskills,for The optimization of quality control will play a example languages,selling,marketing,inter- decisive role in the competitiveness of the Danish cultural activities. food sector's sub-supplier strategy with its extre- melyhighrequirementsforprimary product The Danish food sector, apart from established specification, quality and just-in-time deliveries. sales organizations, has, for historical reasons, ISO certification will,in the near future, be the been characterized by technical and craft skills in norm for the survival of food companies. As all areas. The commercial area has, thus, been mentioned above, there is a close link between weak. This skill area will need to be strengthened primary production and the processing company. and continuingtraininginitiativesintegrating In this connection it will be necessary for the two existing technical/vocational qualifications with sides to carry out joint continuing training leading a number of commercial qualifications will form towards ISO certification for both parties.Itis an important strategic development potential for anticipated that quality control activities will be a the food sector. dominant feature of continuing training.In this connection reference is made to the case study With regard to production techniques, the auto-describing and analyzing Steff-Houlberg's quality mation of a number of labour intensive jobs will development programme as a model programme continue.Advancedprocess andmonitoring for the entire Danish meat sector. The study systems will reduce manual work. On the basis concentrates particularly on the transfer value of of current developments a shift in skills towards a this continuing training activity. high degree of process understanding is detected. EC Directives prescribing precise procedures for Increasing demands for continuing training can be food production, handling, transport, etc., are expected in connection with the introduction ofcurrently being followed up by national Danish new productiontechniques.Thisactivitywill legislation. They make heavy demands on the increasingly be undertaken by the equipmentfood sector's talent for adjustment and innovative suppliers as part of the contract. In general, high thinking. Due to the great number of these, this technology production equipment will make a report will only focus on the most central aspects. number of demands, of a more hybrid nature, onA number of Directives have been passed which workforce skills. prescribe theprincipleof cleaner production technology. In practice this means that demands With the introduction of new production techno- will be made on companies to use the cleanest logy, companies will have to decide between and most recyclable materials. The breweries are, retaining and training their existing workforce or for instance, preoccupied with the issue of whether recruiting new categories of employees with the it will be possible to maintain the Danish bottle necessaryskills.The Danishslaughterhouses' deposit and return system in accordance with the 30 establishment of the so-called "male pig equip- new regulations. Another example are the new 29 rules relating to food hygiene which, in a number increased demands on manufacturers as part of ofcases,tightenexistingrulesonhygiene the established quality control systems and just-in- regarding the production and handling of food. time principle.

The Danish interpretation of these regulations has As previously mentioned, there are no direct legal resulted in the demand on all food manufacturers requirements in Denmark regarding the establish- and the retail trade for extensive internal control of mentofcompanycontinuingtraining pro- the established hygiene system. The establishment grammes. The passingof a number of EC of an efficient system of internal control in the Directives,subsequently followedby national entire food sector, and adjacent areas, will require legislation, means that a new Danish practice in extensive efforts regarding continuing training and thisfieldmust be expectedinfuture. Today schemes have already beeninitiatedinthis responsibility lies solely with the individual com- respect. Similar examples will, no doubt, result in pany.

30 31 3. EMPLOYMENT

Between 1987 and 1989 the Danish food sector connection between working conditionsinthe experienced a more significant fall in employment individual company and the amount of multi- than other sectors; approximately 9% compared skilling. The trend is towards highest flexibility in to 4% in other sectors. the largest companies in the sector. Temporary flexibilityisextensively used;thisappliesin The employment situationin the country, as a particular to overtime but also to shift work and whole, has developed unsatisfactorily over a 15unsocial working hours. The extensive use of year period with approximately 9% of the work- temporaryflexibilityis,toacertainextent, forceunemployed.Thistrendhasincreased connected to the food sectors' relatively capital slightly in recent years. However,it should be intensive production equipment, which is typical of noted that overall more people are employed the process sectors and should not be left unused today than 15 years ago. This apparent paradoxfor lengthy periods of time. can be explained by the continual increase in the number of women in the labour market, especially The study found a relatively high degree of the public labour market. In addition, during thisspecialization in the flexibility of functions within period new jobs have been createdin newthe food sector and highlights the piece-rate sectors,primarily the servicesector, whereas system in slaughterhouses as an illustration of this nearly all traditional sectors have declined. point. There is a similar trend in companies with a high level of technology where employees' skills Inboth the slaughterhouse and dairy sectors areoftenconnectedtotheperformance of employment during the period fell by 7% and in specific, limited jobs. Intensive flexibility is closely the brewery sector there was a significant fall ofconnected to the use of the piece-rate system, around 27%. With regard to white-collar wor-particularly in slaughterhouses. The study sum- kers,in the slaughterhouse sector there was a marizes the results and concludes that, with regard marked fall of 14%, whereas in the dairy sectorto manpower planning, the Danish food sector there was an increase of some 20%; inthe typically operates within a short time span which breweries the number fell by 4%. The reason for is, however, longer in terms of training and skill thisfallisprimarily foundinthepreviously acquisitioningeneral. Furthermore, the study mentioned restructuring process experienced by stresses another characteristic feature that food all three sectors. The objective of the merger and companies have, to a great extent, decentralized acquisition strategy has mainly been the closure of their manpower planning so that, typically, an a number of small and non-competitive production individual company makes an autonomous choice factoriesinordertoestablishbigger,more on the basis of centrally decided production plans. profitable units. The food sector has a relatively high level of The period has also been characterized by unionization (85%). The national Union of Food rationalization and theintroductionof workand Allied Workers (NNF) organizes both skilled process technology, especially in labour intensiveand unskilled employees and, according to the processes. Productivity and profits have increased, in general, for all three sectors but with fewer production employees. This trend is expected to Table 3.1 Breakdown of number of bacon factory continue in years to come. employees 131,1111 November 1989

Overall, the same picture applies to both the dairy Total number of white-collar workers 1,840 and brewery sectors regarding the composition of full-time 1,597 the workforce and distribution by gender. How- of these: women: 456 men: ever, dairies employ more white-collar workers 1,141 part-time 154 (21% of the workforce) compared to slaughter- of these: women: 124 houses (13% of the workforce). Slaughterhouses men: 30 also have fewer female employees (18% of the apprentices: 89 workforce) compared to dairies and breweries of these: women: 41 (24% and 20% respectively). men: 48

Total number of blue-collar workers 11,868 3.1 Food sector employees full-time 11,001 A recent major study on manpower in the food of these: women: 1,995 men: 9,006 sector (The Food, Beverages and Tobacco Sector part-time 254 and Staff Planning, Alborg University 1987) tried of these: women: 193 to identify general development trends in respect men: 61 of manpower and planning in the food sector. apprentices 613 of these: women: 153 The heterogeneity of the sector has a considerable men: 460 influence on the individual company's options in 32 termsofflexibility.The data show aclose Source: lndustristatistikken 1991, p. 72 31 study, the employees are included,in various Itis likely that specialization will continue at an ways, in manpower planning. unimpeded rate. Tasks will change in a number of 1. areas as many manual operations will disappear As previously mentioned, qualifications in the foodand be replaced by more process-oriented control sector are, to a large extent, obtained through theand monitoring tasks. The question is whether the interaction of a number of training institutions; this three sectors under review will continue to train is particularly true of the meat and dairy sectorsapprentices and thus use skilled employees or who both use national specialization schools. whether theywill,toa greaterextent,use Skilled and unskilled employees in the remaindercompletely new employee categories (e.g. metal of the food sector are not offered the sameworkers) or, as an alternative, unskilled employ- opportunities for systematically arranged continu- ees. ing vocational training. With regard to employees, in general, the food sector is characterized by There is no simple answer to this question. an economic strategy aimed at motivation in order to increase job performance. For example, the linkThe meat sector does not, for instance, distinguish between the piece-rate system, work rate andbetween skilled and unskilled employees, thus remuneration. there is no financial reason to have agreements.

Another result of this economic strategy is that, It is, however, necessary to take into consideration when thereis a need to increase production, the fact that meat production, for example, as overtime and other forms of temporary flexibility opposed to the metal sector, handles biological are extensively used. However, in slack periods items in a separating process necessitating basic lay-offs are often the result. insight into and knowledge of a number of meat related problems. In view of the sector's overall strategic development possibilities as manufac- 3.2 Future recruitment trends/ turers of highly processed primary produce and discussion the associated creation of an extensive quality Assuming that the food sector (represented here bycontrol system to ensure a uniform primary product theslaughterhouse,dairy and brewery sub- standard, it is likely that in future the sector will sectors) consistently follow the sub-supplier strat- need skilled employees with a high degree of egy, this will result in the following picture of future expertise in meat. In addition these employees will recruitment requirements for the sector: also need to be multi-skilled in order to handle a number of productionaspects.However, the The reduction of employees caused by currentnature of the skills required will change in a automation, company mergers and increased use number of areas due to automation and these of information technology will continue. This will changes will gradually be incorporated into basic render many middle management positions super- apprentice training. fluous. Future overall recruitment strategy in the meat, Another trend,inthe opposite direction,will dairy and brewery sectors will entail the recruit- however, make itself felt as the increased use of ment of more employees from outside the sector, information technology, automation with electro-especially for management, control and marketing nic production control, new management princi-jobs where the requirement will be for employees ples, will necessitate a middle management group with medium level commercial education. As with far "broader" skills, skills that are far more mentioned above, recruitment has traditionally relatedtoknowledge.Thiswillinvolve,for been internal but infuture these positions will instance,theabilityto manage and control increasingly be filled by economists, marketing complex production technologies and to under- graduates, etc. In areas such as product develop- take continuous development of both employees ment, quality and process control, the sectors and organizational structures. This type of skill will already employ people with either a technical or becriticalforslaughterhouses,dairiesand university background. The sector trend to use breweries in the future. Traditionally these sectors these groups of employees has declined in recent have, to a large extent, recruited their middle, and years which is not immediately explainable. Itis frequently also top, management from the sector likely that the priority will change, linked to a itself,i.e. from amongst the best of the skilled sector demand for training institutions to provide employees. It is likely that in future the sector will, continuing trainingdirectly aimed at meeting to a greater extent, be "forced" to recruit universitysector needs. For example, market-oriented pro- graduates with no sector-related background and duct development, biotechnology, etc. A number then train them in sector areas. of continuing trainingactivities can,thus, be expected for this target group. With regard to the future skills of employees, the following picture emerges:

33 32 4. TRAINING AND RECRUITMENT

The general development trends in a markedlystrategicallyin connection with training. They increasing international competitive situation will have become used to continuing training being lead to higher priority being given to continuing offered by either the AMU or vocational school training in the Danish food sector. In addition to systems which are, of course, not directed towards sector specific factors pointing to increased effortsthe special problems of the individual company in respect of continuing training, it should be noted but towards thesector as a whole.Ifthe that the age structure of the workforce is currently companies want "company adapted" continuing changing, with fewer young and more older training from the public system, both co-funding employees. Furthermore, the technological devel- and the company's active participation in course opment the food sector is undergoing indicates planning are necessary. There are comparatively that efforts should be directed towards improving few large companies with training departments the existing workforce's skills, especially in rela-which have the skills and carry out systematic tion to the operation of new processing equip- employee continuing training in accordance with ment, and overall understanding of production company strategic goals. The problem is particu- flow, the process and product. Finally, there are a larly acute in the food sector where companies do number of company external factors which also not generally allocate resources for training but highlight the necessity for increased efforts for relyoncooperationwithpublicinstitutions. continuing training, e.g in product development, However, the meat and dairy sectors in particular marketing, etc. are in a good position as they both have access to nationwide specialist schools which in numerous The EC Directives regarding food handling and ways, therefore, act as the training department for production have been followed up in Denmark bythe companies and have specialist insight into a number of national acts stipulating increased sector matters. efforts in a number of areas, such as production technique, veterinary provisions, hygiene stand-4.2 The vocational training system in ards,quality, environment, etc. These willall Denmark necessitate a massive effort in relation to continu- It is, of course, important to know the extent and ing training in the near future and, at present, the quality level of initial vocational training in relation responsibility for this lies with the individual sectorto the identification of continuing training require- or company. ments. Itis assumed that the more relevant and company adapted the initial training is, the less 4.1 Continuing trainingpublic or need there will be later on to improve workforce private? skills by means of continuing training. In general, As previously mentioned, a political tradition that the Danish level is high; 90% of young people training activities are generally a public responsi-completeinitialvocationaltrainingandthe bility and obligation has developed over the Vocational School Reform of 1990 established a years: This includes all levels from primary schoolsystem which clearly delegates the responsibility to university. for training content and tuition to the trade and local educational committees. A system has, thus, Tuition is, in principle, free of charge at all levels; itbeen established which makesitpossibleto is financed by tax payers. This tradition also continually adapt the vocational content accord- appliestovocational,basic andpost-basic ing to the companies' needs. Trainingis also training and, to a large extent, also to continuingcarried out on an alternance basis with theoretical training (AMU). and practical training in school and time spent, mainly in practical training, in the company. Thus, The effect of this principle has, however, also been there are good possibilities for initial training to be that companies have become used to a number of both up-to-date and relevant. state institutions undertaking the task of training, resulting in the responsibility lying with the state andThe vocational training system in Denmark consists not the individual company. At the same time, it is a of 120 schools distributed throughout the country general feature of Danish business that the majority and the basic structure of the 85 courses offered of companies are small with few employees. are mainly as described below.

A summary of these circumstances shows thatA typical vocational education and training course many companies regard and use the variousconsists of an initial school period of 20 weeks training systems in place of a company trainingduration or a practical training period of similar department. duration.The secondschoolperiodfollows immediately afterwards and thenthecourse The remaining problem is,however, that mostalternates between practical training and school companies do not have the immediate skills, either periods. There are approximately 85 vocational organizationally or in terms of employees, to carry education and training courses, but during the out the task. This problem is greatest with regard to individualprincipalcoursesthestudent may continuingtrainingbecause many companieschoose to specialize. In effect, there is a wide 34 have simply not been used to thinking and acting range of choices in the vocational training system.

33 The underlying principle of the course structure is standing of the structure and development of that all students receive the same basic training society. Each school is, therefore, committed to during the first stage; the degree and specializa- offering a broad range of optional subjects. tionsubsequentlyincreasesthefurtherthey progress in their training. 4.2.6 Administration Vocational training systems are governed by two 4.2.1 Admission sets of rules; one lays down the targets and There is normally no restriction on admission toframework which apply to all vocational schools vocational training. and courses. They are defined in the Vocational Training Courses Act, the Vocational Schools Act Students may enter a vocational training course in and a dozen ministerialorders covering the two ways: They may start directly at the vocational individualparts ofthevocationaltraining school and undergo a 20 week school period or courses. The other set of rulesrelates to the they may start the course with a practical training principles of the individual courses and these are period in a company. After the second school laid down in the education orders. period, the students must complete a practical training period which means they have to enterThe tradespecificcommittees determinethe into a training agreement with a company. vocationalgoalswhichthelocaleducation committees will later convert into teaching in the 4.2.2 The first school period schools. As a result of the administrative regulation Itis the overall aim of the first school period to of the courses, there is a free choice of school and make the students more confident in their choice ofteachers for the students; not only do the students training. Teaching is focused on practical taskschoose the course and, thereby, their future job, and workshop activities. they also have the opportunity to choose the type of teaching which suits them best. In parallel with the teaching, the students are given a thorough orientation into the individual courses; 4.2.7 Funding they are advised of the requirements for graduates In principle tuition is free but the students have to in the individual occupations and opportunities ofpay a token deposit for admission to a vocational continuing education and training in their field. school.

4.2.3 Practical training The student receives a salary during the practical If a student wishes to commence a course with a training period and a student who commences the practical training period in a company he or she course with a practical training period will be paid must have a training agreement with the company. a salary during the whole course. However, The training agreement must cover the whole students who commence the course with a school training course and notjusttheintroductory, period have to find other ways to make ends meet practical training period. during the first school period; once the student commences the practical training period, he or The company must contractually commit itself to she is paid a salary. train the student and only when the contract is signed can the student commence the training4.3 The continuing vocational training course. The trade committees, who are made up of system in Denmark representatives from the employers' and employ-The total volume of continuing vocational training ees' organizations, are responsible for the indi-in Denmark cannot be documented; data for vidual courses and approve the company as a continuingtraining isextremelysparseand practical training location. insufficient.Ingeneral,the demand for both public and private continuing training soared in 4.2.4 Assessment the 1980s and is expected to increase still further The students' work and progress are subject to in the 1990s. The description below is limited to continuous assessment, either in the form of an public continuing training since data for private examination or assessment by the teacher oftraining was not available.It should be noted, classwork.In both cases the student's work is however, that the scope of private continuing graded. Most vocational education and training training in Denmark has reached considerable courses end with an examination. Depending on proportions, probably exceeding public continu- the course followed, it may be in the form of a ing training. journeyman's test, an examination or a combina- tion of the two. Since the 1960s there has been broad political acceptance in Denmark that continuing training is 4.2.5 Optional subjects a public matter and should be paid for from public In addition to providing the students with practical resources. skills, the vocational training courses are also meant to strengthen the students' general knowledge, their Two ministries are responsible for public continu- personal development and give them an under-ing training in Denmark, the Ministry of Labour 35 34 and the Ministry of Education (talks are currently in DKK 751 million should be added to these figures progress regarding the possibility of strengthening in respect of compensation for loss of earnings, coordinated efforts by gathering all these activities travelling expenses, etc. under one ministry). 4.3.4 Structure The following description concentrates on continu- The Minister of Labour is ultimately responsible for ing vocational training under the auspices of the the AMU system. An educational council has been Ministry of Labour with only a brief description of established to act as an advisory body and both activities undertaken by the Ministry of Education. sides of industry are equally represented on this 4.3.1 Historical background council. The council has created four educational committees with the power to establish sectoral The AMU system, which is the most important and, committees with equal representation. In this way in terms of volume, the most interesting of the the individual sectors have a large say in what the public continuing training systems, dates back to AUD capital is used for. From the outset the Danish 1940 when the unskilled employees' union took food sector has established the relevant sectoral the initiative and established this system. Against bodies and through these has exerted consider- the the boomin1960, the background of able influence on the number and content of Folketing passed an act of continuing training for courses. semi-skilled employees, at a time of a generally increased demand for unskilled labour combined with the introduction of a number of new work4.3.5 The labour market course system techniques. At the same time the Act was intended summary as an incentive for unskilled young people. The AMU systemisthe most important state initiativefor continuing vocational trainingin In 1965 the Folketing passed a further act onDenmark. In terms of course activities and use of continuing trainingfor skilled employees who resources the system is growing, a growth which is were thenplaced on an equal footing with expected to continue. In recent years the system unskilled employees. In 1965 retraining courses has been brought up-to-date with the establish- were introduced to meet bottle-neck problems in ment of AMU schools which now form a national industry. From 1972 (a year of crisis in Denmark) school network. A characteristic feature of the special pre-vocational training was introduced forAMU system is that the development of flexible young unemployed people and in1978 wascourses is increasingly important, courses which extended to other unemployed groups including specifically aim to fulfil the continuing vocational women and immigrants. 1971 saw the introduc-training needs of individual companies. AMU tion of a wage compensation scheme. courses are run either in AMU schools, vocational schools or on company premises. Within the 4.3.2 The current legal basis for the scope of this study it has not been possible to labour market course system (AMU) document the Danish food sector's exact use of the The present Act was passed in 1986 and includesAMU system. However, the case studies should continuingtrainingforunskilledandskilled shed some light on this. The slaughterhouse, dairy employees and special courses for young peo- and brewery sectors all have established sectoral ple, women and the unemployed. As a newcommittees which make extensive use of the AMU initiative, the AMU was also empowered to offer system. Political trends in Denmark indicate that, continuing trainingto other groups, the mostwith regard to future continuing training, agree- noteworthy feature being that foremen are now ment may be reached on placing public efforts also covered by the Act.In addition the Act high on the list of priorities; the AMU system, in facilitatedspecialindividual company,tailor- particular,is expected to receive considerable made courses with 75% of expenses being paid resources. by the state and the remaining 25% by the company. The state grants course/loss of earn- Political discussions are currently taking place ings compensation for all areas of continuing concerninga more expedient useof public vocational training according to the rules in force. resources to fight the very high unemployment ratein Denmark. The allimportant principle, 4.3.3 Funding which has been set in reports from two ministerial Course activities within the AMU system arecommittees, has been to link the considerable financed by the AUD Fund (a Danish training Danish "transfer payments" to a requirement that scheme for all public and private employees) which the resources be used for active purposes, i.e. is paid for by both employers and employees. AMU "active use with requirements", instead of the operational expenditure for courses in 1987 was: former "passive receipt without requirements". It is envisagedthatthiswillrequire unemployed Courses for unskilled people to undertake continuing training in sectors employees DKK 544 million with"bottle-neckproblems".Thisgoalhas Courses for skilled employees DKK 257 million received broad acceptance both from the political 36 Other courses DKK 208 million parties and the two sides of industry. 35 Simultaneouswiththeon-goingdiscussions, 4.4 Continuing vocational training publicly financed training and education is in the organized by the Ministry of Education midst of a period of evolution, where the demands Resources are also available from the Ministry of put forward by allinterestedparties can be Education;inrecent years these funds have summed up as "more and improved training and totalled DKK 130 million. In contrast to the AMU education". This means demands for more flexiblesystem, these resources are used to include the teaching methods, possibly including information individual company or consortium of companies in technology solutions. The following, promising,the entire process, i.e. the identification stage, initiatives should be noted: The VUS scheme development stage and, later on, the phasing out. (support training for adults) which enables people In order to obtain a grant from the Ministry, a without medium- or long-term vocational training company has to demonstrate active participation, to undertake training during working hours. Theusually in the form of co-funding, amounting to at course content is of an all-round nature, but up to least 30% of development costs. The scheme is a 25% may be specifically related to the sector. relatively new and in many ways innovative one, Training may take place in the company and the the starting point being cross-disciplinary in the state subsidizes loss of earnings, course develop- sense that the aim istofulfil actual company ment andtrainers'salaries.The schemeis training needs, not tofulfil traditional requests comparatively new and itis too early to assess from a specific trade or sector. Development funds the results. However, this initiative can also be(for the development as well as the phasing out seen as recognition of recruitment problems facing stage) can be applied for by private and public all parts of the sector due to the continually falling course schemes alike. The target is the so-called numbers of young people. Efforts are concentrated "in between group", the group between the skilled on employed and unemployed adults. and academic level,generally with a certain degree of management responsibility. Another example worth noting is the favourable opportunities for adults receiving proper voca-The scheme has found extensive use within the tional training. Finally, there is the "open training vocational schools, in particular, in cooperation scheme" under which individuals or companieswith consultancy companies. This has in many formulate their own training based on existing and ways promoted a more efficient use of public recognizedtrainingschemes.Thesetraining fundsforcontinuingtrainingsinceschools, courses can be completed inpairsifspecial companies and private consultancies have been qualifications are required and can take place atobliged to enter into a binding cooperation with any time and in the long-term be combined to report, efficiency review and pilot course require- form a fully recognized training programme. The ments, thus ensuring a high degree of utilization. student or individual/company organizing the The aim of this scheme has, moreover, been to test training pays approximately 20% of the costs, new innovative models for continuing training. the rest being subsidized. After only two years, Considerable sums have already been granted for this scheme has already justified itself. various types of multi-media and distance learning schemes. Finally, the scheme has promoted a Taking everything into account, there are many higher degree of willingness to carry out analyses indicationsthatfuturetrainingschemeswill with the various parties involved in continuing increasingly have to recognize the companies' training. One example is a number of schools and difficultiesinconnection withparticipationin some of the larger Danish companies which, traditional continuing training programmes. Flex-together, developed a new method of identifying ibility, continuing training as an integrated part ofa company's continuingtrainingneeds.This the very organization of the work process, on-the- method (Competence 2000), which to a large job training and multi-media training are key- extent involves the individual employee who is to words for future continuing training in Denmark. undertake subsequent training, and the company's strategic goals,is widely used today in many Danish companies. All results are, thus, always made available to anyone who shows an interest in the scheme.

37 36 5. FUTURE TRAINING REQUIREMENTS

With a view to creating an up-to-date empirical5.1.1 Organization and funding of basis to support future initiatives by the Danish courses government and the two sides of industry in the Continuing training activities are classified under field of continuing vocational training, the Na-five main categories in the report, depending on tional Institute of Social Research implemented the the auspices under which training takes place. largest all-round study todate of continuing 40% of companies make use of in-house courses, vocational training in Denmark. The report wasapproximately 25% use the publicly financed published in 1991. The basic data, from both the AMU courses and approximately 33% take companies and employees, is comprehensive and advantage of courses offered by the employer its nature such that the report's conclusions can be and employee organizations.In addition, one considered generally applicable toallsectors, company in three uses "other courses". including the food sector from which 98 companies took part in the study. The conclusions of the A general feature indicated by the study is that report thus form the background for the following continuing training in Denmark normally involves description and discussion of a series of general no cost for the students (however, 3% had suffered issues applicable to the Danish food sector. some loss of earnings in connection with such activity). 5.1 The scope of continuing vocational training in Denmark One-third of all employees between the ages of 5.1.2 Recruitment and reasons for 20 and 60 (approximately 740,000 people) havecontinuing vocational training never taken part in continuing vocational training Almost half the course participants undertook activities; two-thirds state that they have taken part training without any request from their employer. at least once. Furthermore, the study shows that However, of the unskilled people, only one-third thereisa tendency for the same people to took part on their own initiative. participate. Trade affiliation and job category are the decidingfactorsforparticipationin The report shows that both the employees and the continuing training. Not surprizingly, participa-companies felt that the most common reason for tion frequency is highest amongst the monetary continuing vocational training was the company's and finance sector and lowest within manufactur- implementation of new technology and working ing companies with few employees. A higher level methods. The companies' rationale for in-house of participation can be assumed for food sector courses is clearly based on management demands companies, compared to the rest of the manufac-and initiatives for continuing training for employ- turingsector,asthesearegenerallylarge ees (new technology). companies by Danish standards. Union membership in the food sector is relatively high, a factor With regard to suppliers' courses, the reasoning is which is of crucial importance to participation. In primarily the introduction of new technology and addition,therateat whichthisindustryis materials as well as the production/sale of new introducing new process technology is compara- products. tively high, a factor worth highlighting. The reasons given for AMU courses are slightly It is estimated that, on average, 1.2% of working different. 40% of the companies state that these hoursinDenmark are spend oncontinuing are related to employee wishes and related to new training; here, again, there is a disproportionate technology, new work assignments and new spread with white-collar workers being estimated employees. It should be noted that approximately to spend 1.7% and the unskilled about 0.6%. It 12% of companies gave less pressure of work should be noted that the food sector in Denmarkthan normal at the time of enrolment as their employs a large number of unskilled people. The reasonforparticipationin AMU courses; a study also draws attention to the fact that companies consideration not applicable to other types of with a technological head-start are relatively more course. inclined to use resources for continuing training than companies who are lagging behind. Thus, thereisa correlationbetween a company's5.1.3 Practical application of skills investment policy and the frequency of continuingacquired training. The Danish food sector, headed by theThe majority (87%) of students questioned stated slaughterhouse and dairy sectors, is, generally, inthat they had been able to apply what they a powerfulposition as regards technological learned on their most recent course in their work. development. The level of continuing training in Taking applicability as a criterion for success, it these types of company can, thus, be expected to may be concluded that most continuing training in be higher than in other manufacturing companies. Denmark is a success. Finally,it should be emphasized that both the slaughterhouses and dairies have access to largeThe following table shows that course participants sector-oriented schools and colleges operating on generally assess what might be termed "person- 38 a nationwide basis. ally related labour market impact" as high. 37 Table 5.1 Results from course participation and equipment, knowledge of materials, safety factors). Suppliers courses are linked to the supply of equipment and materials. Greater personal satisfaction 80 Courses offered by training organizations can More interesting work assignments 25 be described by keywords such as manage- Improved career opportunities 20 ment and economics, administration; a "be- Better job 10 havioural" course for shop stewards can also Higher wages 10 be added to this group. The "other courses" group covers topics such as management and cooperation,economics, 5.1.4 Company evaluation of courses administration, computing and foreignlan- Companies generally rate the benefits obtained guages. from courses highly. Assessments vary according to the type of course and employee group. For5.1.8 General or specific training example, companies value the benefit gainedrequirements? from suppliers' courses where blue-collar workersA characteristic feature is that employees gener- are the target group. ally expressed a need for continuing vocational training with a broad-based application (i.e.in 5.1.5 Desire for continuing vocational other companies/sectors).This isparticularly training important since companies are often assumed to According to the study, two-thirds of employees be reticent when it comes to non-company specific state that they would liketo undertake morecourses, for fear of being unable to recoup their continuing vocational training. This wish is most training investment. marked amongst groups that have the participation rate to start with. The study does not make it 5.1.9 Future continuing vocational clear whether the group was actually willing, buttraining requirements this should be generally interpreted as the employ- Accordingtothestudy, 80% of companies ees' immediate motivation for further continuing consider that their employees will need continuing training. vocational training in the future. 46% think that the requirement will be greater for sales and market- The study showed thatthedesirefor more ing courses; 42% indicate computing for admin- continuing training among white-collar workers istrative purposes and 42% point to management was based onafearof unemployment, a and organization. Quality control and personal determinant that does not apply in the case of development are also topics expected to assume the blue-collar workers. greater importance in forthcoming years. 5.1.6 Need for continuing vocational 5.1.10 Barriers to continuing training vocational training 45% of employees feel that they have a need forThe study showed that the prime cause for failing to additional continuing vocational training in con- caterfor a recognized continuing vocational nection withtheir current work. 55% of thetraining requirement was "pressure of work", the companiesstatedthatthey have an unmetmain reasonstatedby both employees and requirement for continuing training. Inter-sectorcompanies. The companies state that they have competition plays an essential role in the compa- problems sparing employees to take part in courses. nies evaluation of this requirement. CompaniesAnother important argument is the "high cost of with a low level of technology evaluate this need continuingtraining".Itshould be notedthat as being greater than those with a high technolog- approximately half the employees indicate that ical level. However, the willingness to implement they are willing to take part in continuing vocational specific activities is inversely proportional to these training during their leisure, i.e. unpaid, time. statements. 5.1.11 Conclusion and discussion 5.1.7 Content of continuing vocational Danish employees spend, on average, approxi- training mately 1.2% of their working time on continuing It is not possible within the context of this report to training. This corresponds to well over 40% of detail the series of special course subjects spread employees takingpartincontinuingtraining over the five types of course; in general the subject during the course of a year, although it should profiles of the five course types are as follows: be noted that white-collar workers are inthe majority. This quantitative observation says noth- In-house courses cover a wide spectrum with ing, however, about the useful value of the activity. the main emphasis on management, economics Would there be any pointinincreasing the and administrative topics, including computing. percentage ratefor continuing training?Itis AMU courses typically cover topics relating to altogether very difficult to determine what re- physical production (operation of machinery sources should be used for optimum effect. To 39

PASTcon AVAIL& 38 answer this question, the objectives for continuing The college has a very strong affiliation with the vocational training, in general, must be laid down sector, particularlythemanufacturingsector beforehand. Is it to be used to solve the structuralhouses. The college's executive committeeis, problems which many sectors, including the food thus, traditionally nominated by the Danish Bacon sector, find themselves facing or is the aim a and Meat Council.Furthermore, the college's narrower company specificonedirectedat highly active executive committee is made up of requirements created by technology develop- an equal number of representatives from different ments, hygiene regulations, safety levels, etc.? quarters, the most important being the National Union of Food and Allied Workers in Denmark Theprincipalbarrierstocontinuingtraining (NNF) and Slagteriernes Arbejdsgiverforening indicated by the study are "pressure of work and (Federation of Danish Slaughterhouse Employ- difficultiesin managing without employees" In ers).In addition, a number of local education Denmark's case the obvious step is to try and committees are attached to the individual training combinethisobservationwiththefactthat fields offered by the school curriculum. Here, too, approximately 10% of the workforce is unem- the characteristic composition of the committee is ployed. Rotation schemes might be envisaged in based on equal representation of the employers which, as part of theirqualificationprocess, and employees. unemployed people work as temporaries, standing in for those selected for continuing training. In 5.2.2 Production training facilities a labour market with a declining young popula-The Danish Meat Trade College in Roskilde and tion and, thus, an impending lack of skilled labour the Dalum Technical College are both unique in in the future, this seems to be an idea worth trying. the sense that they have full-scale production factories which are used forboth teaching/ 5.2 The role of vocational colleges in training and experimentation. continuing training The public training institutions in Denmark play aThe Meat Trade College operates a training and central role in continuing training. Mention has experimentalslaughterhouse whichslaughters been made of schools in the AMU system and the 50,000 pigs per year. The student-cum-trainee following description will, therefore, be limited to production is freely sold on the market and the the vocational colleges. Most of Denmark's 120 college is an authorized export slaughterhouse vocational colleges serve a local area where theywith a large part of its annual turnover deriving offer initial, post-basic and continuing training for from exports to the United Kingdom. a number of sectors. The food sector, for historical reasons,isparticularly privileged; two ofits The internationally accredited Danish Meat Re- largest sectors,the dairy and slaughterhouse searchInstitute,with which the Meat Trade sectors,have comparatively large nationwideCollege has set up a close cooperation, although specialist schools; viz Dalum Technical College it remains traditionally separate, is also located in (the Danish Dairy Training Centre and, thus, the Roskilde. specialist school for the dairy sector) and the Danish Meat Trade College in Roskilde (specialist In summary, the Danish meat sector has success- butchery school). fully established a centre of knowledge which, in its own unique way, links research, development The brewery sector also has a specialist vocationaland training into a unified whole. school,the Scandinavian School of Brewing. Given that the activities of these specialist schools 5.2.3 International objectives are, individually, rather extensive and complex, The college offers training courses within the field the following description is restricted to the Danish of initial, post-basic and continuing training to Meat Trade CollegeinRoskilde and can be both Danish nationals and foreigners. The col- generally assumed to be applicable to the other lege's international department is currently experi- schools. encing an increasing growth rate in sales for its training and special course activities throughout 5.2.1 The Danish Meat Trade College in the world (especially Europe and Scandinavia). Roskilde Through its international objectives, the college The Danish Meat Trade College in Roskilde, with occupies a central position in a number of EC 450 employees,is one of Denmark's largestfinanced projects, the purpose of whichisto vocational schools. The college was founded 27 promote continuing training in the European meat years ago on the initiative of the Danish Bacon sector (FORCE, COMETT, EUROFORM, LINGUA). and Meat Council. The college is an "independent institution" operating on a private financial basis, Prospective students come from both the retail and but,ina number offields,operationsare production areas of the slaughterhouse sector. governed by a set of official rules. Approximately 80% of college income is derived from public From its many activities, the following description funds, calculated on the basis of the number of 40 concentrates on the college's continuing voca- students. tional training offer for the production sector. 39 5.2.4 The company's training technology innovations in the slaughtering aisle department process in all slaughterhouses. Various interested A characteristic of college initiatives within theparties regard this organizational model as being fieldof continuingtrainingisthatthey are very efficient in terms of the introduction of new developed and planned in close cooperation with technology.Futureinnovations withinsorting, representatives from the sector, particularly the classification, quality control and CIM will be NNF and Slagteriernes Arbeldsgiverforening. similarly organized by the college. The (weekly) courses are financed by the individual slaughter- Close cooperation has also been established with house companies. the Danish Meat Research Institute with a view to identifying traditional training tasks associated 5.2.6 Management courses with the introduction of new technology in the As new production technology is introduced there slaughtering aisles. The planning of the college's is an increased need for middle management to continuing training programmes is distinguishedobtain the skills to undertake new, ofteninter- by the college's prospective work on behalf of the disciplinary, managerial tasks. The college is thus sector and the individual slaughterhouses. In manyconducting an on-going analysisof tasksin cases the college acts as the company training collaboration with the sector in order to identify department and, amongst other things, maintains these requirements. Against this background, the career records for individual employees. college is offering anextensive,regularly adapted,continuingvocationaltrainingpro- However, requests from the companies are also gramme for middle managers in the slaughter- common and thecollegehas organizedits house sector. continuing training efforts with one department specialized in this activity. The course syllabus increasingly contains elements of a general nature, for instance subjects such as In summary, there is a general consensus within meeting management, quality comprehension, the the sector that the Meat Trade College in Roskilde manager as an employee developer, etc. The is the training location for the sector both withtarget group are the "master journeymen" or other regard to initial and continuing training. skilled people who have displayed flair and, at the same time, are predisposed to career progression. 5.2.5 The relationship between The college records the individual participant's training, research and production career plan and,thus,ensures a continuous It was decided to establish the first trial unit foraccumulation of skills in slaughterhouse manage- the development and implementation of a highment potential. The individual courses are held in technology classification centre in the college's Roskilde and typically last one week during which slaughterhouse. The actual developmental workthe participants are accommodated at the col- was carried out by the Danish Meat Research lege's hotel and course centre, which boasts up- Institute.It quickly became apparent that theseto-the-minute facilities. The courses are funded high-technology facilities, which were also ex- through the AMU subsidy system. tremely important for the sector in terms of primary product strategy, would require extensive\ continu- 5.2.7 Continuing training for unskilled ing training for a number of employee grpups inemployees the slaughterhouse companies. For many years the college has offered introduc- tory courses for newly appointed slaughterhouse Even before the first unit was put into service by a employees. These courses are held peripatetically slaughterhouse company, the relevant employee at slaughterhouse premises and conducted either groups hadundertakenaseriesof coursesby the colleges' regular teachers or a staff of enabling themtooperatethe equipment to trainers. These trainers are recruited after complet- optimum effect. ing their apprenticeship in the individual slaughterhouse and have followed a special sequence of The link between research and development andcourses at the college. The courses, which are training was central to this comprehensive con- funded through the AMU system, are aimed at tinuingtraining programme which, duringits unskilled adult employees. The unskilled employ- initial phase, involved a total of 500 people. The ees are able to link a number of courses together specific training focused on plant operation/ to form a valid vocational training programme, on maintenance/repair tasks although general com-a par with a "normal" trainee apprenticeship. prehension goals were also containedinthe programme with a view to consolidating hybrid5.2.8 Summary inter-sectoral competence. It is impossible within the framework of this report to examine all the many continuing vocational A series of continuing training programmes is training options offered by the college. Each year being conducted along the same lines as those the college presents a prospectus to the sector, described above followingcollectivesectoral providing an overall, modular review of the many decisions to introduce a series of new production options available. It should be noted that this is a

40 1 212WIP Vr1111;30V AVA1111 continuing training scheme with a modular design employee must also be briefed, in depth, as the 1. and many points of access, as well as "discon-course period oftenentails aslight dropin tinuation options", geared to the individual com- remuneration because the individual in question pany's requirements.Furthermore, the scheme is excluded from the piece-work scheme for that represents a unique chance for the individual period. employee to map out his/her career path. Course development is regularly discussed with the sectorAnalyzing thecollege's continuing vocational and, thus, on-going efforts are made to predict training programme itis clear that, compared to future continuing training requirements and to be thepast,therehas beena move towards ready with a training programme to hand. increased offers to the intermediate group in the slaughterhouses, a group that will, foreseeably, Itis characteristic of the college thatit closely play a central role in the introduction of various monitors the companies' use of their workforce. automation technologies. During periods when the slaughterhouses are forced to make employee cut-backs, the college The courses on offer show that,infuture, the holds information sessions on the opportunities, college will opt to focus on the so-called "soft both financial and substantive, for skill upgrading qualifications" under headings such as quality instead of redundancies and the consequent loss consciousness, cooperation, organizational devel- of amassed skills. opment, etc. The rationale here is the college's assumption that this group will form the "key In the final analysis, of course, it is the company's people" of the future within the sector and that a economic considerations which are crucial in such boost in skills is necessary in order to guide future achoice,buttheindividualslaughterhouse developments.

2 41 6. SUMMARY

The topic of quality will be a special area ofneed for increased continuing vocational training commitment for the Danish food sector which has initiatives. chosentocommititselfpredominantlytoa primary produce and sub-supplier strategy.It There is a strong political desire in Denmark to must be expected that foreign purchasers ofchange the unemployment system so that the Danish foodstuffs will increasingly demand thatunemployed individualis no longer a passive productioniscertifiedin accordance with an recipient of public assistance but is activated either internationally accredited standard to enable the by means of training or a job of, albeit, limited purchasing company to minimize itscosts, for duration. The goal is for the unemployed indivi- example, on incoming controls. In addition, the dual to either improve/change his/her occupa- purchaserwillrequireacarefullybalanced tional skills or at least keep in touch with the labour guarantee with respect to product quality, based market. The newly implemented VUS scheme is a primarily on consumer requirements regardingpublicly financed scheme enabling employees taste,fat,appearance,nutritionalvalue,etc. withlittleor no educational qualificationsto Against this background, itis interesting to note participate in courses during working hours. that a Danish slaughterhouse is the first in the world to achieve ISO certification. In addition, it is The initiative for implementing a course is taken particularlyinterestingthatthisISOproject either by the individual company or the sector involves primary producers,thus creating an organization in question. As a rule, the course inter-connection within the chain of values, which participant, employed by the company, incurs no might almost be termed a quality chain. costs, as a payment from public funds, corresponding to maximum unemployment benefit, is made. The Steff-Houlberg case study permits a number of In the event that this payment does not cover the interesting observations.Itisnotable that ISO employee's normal remuneration it is possible that certificationiscarried out as a jointproject theindividualhimselforthe companywill involving all company employees. In this connec-supplement his income up to the normal rate. tionit is striking that the various projects are all With regard to course content, the VUS scheme is instrumental in conveying an overall understand- not permitted to cover elements aimed at voca- ing of this quality concept. Thus, it is not a one- tional qualifications. Course subjects are aimed at sided behaviour therapy, but rather a change of improving general skills, e.g. language, spelling, attitude resultingin changed behaviour. More-reading, etc. However, the subjects may, to a over, it is remarkable that all the employee groups certain extent, be sector oriented. Several case generally displayed great interest in the project. studies undertaken have revealed great interest in Typical reasons given for this interest were that the VUS scheme which is considered to be directly they were able to immediately grasp the sensible applicable to the fulfilment of strategic company and sound thing in the management's presentation goals.Inaddition,the scheme has particular of a project which so strongly stressed "quality relevance to the food sector, as many employees control" as a development strategy. It has certainly have a poor educational background. An overall proved profitable in terms of continuing vocational up-dating of the employees' general education training activities; already, after the first year, it level is considered a prerequisite for a subsequent, has been possible to demonstrate a number of goal-directed continuing training programme. The economic improvements. The Steff-Houlberg ex- VUS scheme appears tooffer a number of periences will eventually be placed at the disposal interesting possibilities with regard to the endeav- ofallDanish slaughterhouses. From the veryour to integrate initiatives to relieve unemploy- beginning the project was planned in such a ment and raise educational levels; the possibility way that the results could also be used in other of establishing rotation schemes seems to offer companies. Another interesting aspect is the linkgreat potential. between the project and primary production. The company's declared goal is that the quality control Rotation schemes are an arrangement whereby a system must, of necessity, comprise the whole previouslydeterminednumberofemployees "from soil to table" chain. The current generalundertaking a permanent training programme trend in Denmark is that continuing vocationalare temporarily replaced by unemployed indivi- trainingisa "hot"politicalsubject. Thereis duals. The advantages accruing from this scheme general agreement amongst politicaldecision are that the unemployed keep in touch with the makers, both in the Danish parliament and in labour market and, at the same time, the company sector organizations, that continuing vocational skill level is raised. These schemes seem to offer a training initiatives should be given higher priority great deal of potential, particularly in the food and constantly rendered more efficient. In the lightsector with its many simple work tasks. Further- of this there is a clear political aim to providemore, the company itself takes an active role in increased subsidies for this field. identifying the content of VUS programmes.It should be noted that the law imposes severe An interesting Danish approachisthe currentrestrictions on the VUS scheme regarding the endeavour aimed at implementing systems which arrangement of continuing vocational training will connect initiatives for the unemployed with the programmes adapted to companies. 43 42 To date the arrangement has generally been found continuing vocational training programmes involv- to be successful. In the long-term more flexible ing the adaptation of both attitude and behaviour, barriers between general and company specific activitieswhich are oftenjoint arrangements subjects are predicted so thatitwill become regardless of working tasks and statusinthe possible to implement true occupational continu- company. The Steff-Houlberg case study substanti- ing vocational training. This should be viewed in ates this trend quite clearly. the light of the aforementioned increased awareness amongst the social partners of the need to A problem raised by Commission initiativesin find alternative ways to strengthen initiatives to relation to the food sector lies in the fact that they improve continuing vocational training and meet do not set aside resourcesto implement the individual companies' requirements. necessary national continuing vocational training but leave thistonationallegislation.Itisa There was a general observation throughout this common feature of the companies studied that study that the Danish food sector is very aware of their continuing vocational training activities are the many initiatives currently being taken by thefinanced from public funds, typically the AMU Commission within the food sector. system. The political tradition of publicly funded continuing vocational training courses in connec- This highlights the numerous directives with directtion with a well-developed educational system relevance to the food sector, the vast majority ofcomprising technical colleges and labour market which have been followed up by national legisla-(AMU) schools has meant that the companies tion and which have been thoroughly discussed in (especially small ones) have not been obliged to trade publications, seminars and conferences. build up the necessary skillsto implement a Taking into account the export-oriented nature ofcontinuing vocational training course. To a great the Danish food sector, the Danish ministries, extent, it could be said that these schools operate institutions and trade organizations have attached as the companies' training departments both with great importance to this area from the start. regard to development, achievement and analyses. This system has many advantages but the Danish food sector companies have directly and disadvantage is that the companies are not forced systematically aimed to incorporate the directivesto build up internal training competence, which is into the planning of company strategic develop-especially characteristic of small companies. ment opportunities and have also demonstrated a willingness to earmark resources to provide the However, the case studies show that matters are necessary continuing vocational training involved.changing and companies now participatein arranging continuing vocational training courses, The general attitude amongst the social partners especially those concerning the foundations of the and the companies is in favour of an open and company (e.g. ISO certification) which demand a free European market for foodstuffs and initiatives high degree of active cooperation and compe- to create equal competitive conditions with the EC tence. This also applies to the introduction of new are supported. This study envisages no appreci-technology (e.g. the Carlsberg case study). The able difficulties for the Danish food sector to meet introduction of new technology affects the very the provisions of the individual directives, espe- organization of work which, of course, actively cially where hygiene and veterinary services areinvolves the company. It is surprising that none of concerned. For years Denmark has been building the companies studied uses information techno- up a strong starting positionin terms of both logy (interactive video, CBT, etc.)in continuing handling and processing foodstuffs. vocational training (only Steff-Houlberg used a video to supplement training), particularly since However, it cannot be denied that Commission these methods areinthe processof being initiatives contribute to the burden on the Danish introduced in Denmark. food sector, at a time when there is a general weakening in the world economy. Another interesting feature of the case studies is the high demand for skills. There is a distinct trend, A typical feature of many of the directives is the much stronger than previously, to seek qualifica- aim to raise the quality of fully processed foods. tions of a hybrid or general nature. The explana- These directives, which are oftenjustified bytion for this is likely to be found in that fact that consumer preferences, thus encourage the indivi- increasedprocessautomationnecessitatesa dual company to be able to certifyits quality completelydifferent work organization which control and production processes. Assessed from completely breaks away from traditional special- the continuing vocational training viewpoint, this ities and skills.Itis, therefore, important to the initiativehasfrequentlytendedtoimpart a companies that the individual employee is multi- combined attitude to all employees, e.g. that ofskilled and able to take a comprehensive view of hygiene and quality. It is interesting to note that in production. The trend applies to the companies' this context the social partners clearly feel that they introduction of new production technology. It has have a commoninterest.This isconcretely been found that to a greater extent than previously 44 ' reflectedinthat fact that companies arrangecompanies are demanding more general skills, 43 e.g. management and cooperation and commu- has been identified throughout the study in terms nication, together with an overall understanding of both the social partners and the companies. A of the total process flow. In the immediate future, a clear tendency to regard continuing vocational change in employee skills can be expected in the training as an investment in the future is eclipsing Danish food sector. New skills will gradually bethe view that continuing vocational training is an added to traditional occupations, preferably fromadditional company cost. Continuing vocational the commercial field. trainingis an investment in the future that will strengthen the competitiveness of the individual Despite preliminary expectations, an increased company. interest in continuing vocational training courses

44 APPENDIX

Bibliography Annual reports

Danske Slagteri- og kodforaedlingsselskabers MD Foods 1991 placeringiden internationale konkurrence Steff -Houlberg 1991 (The position of Danish slaughtering andTulip International A/S 1991 meat-processing companies amidinterna- Carlsberg 1991 tional competition), Jesper Standskov, Aarhus Uni- Annual Report of the Danish Meat Research versity, 1991 Institute 1990/91 Agricultural Council of Denmark 1991-1992 Landbrugspolitisk Strategioplaeg (Draft agricultural policy strategy), Danish Ministry of Agriculture, Danish Brewers' Association Report 1990/91 1987

The European meat industry in the 1990s, Frans Statistical material Smulders, ECCEAMST, 1991 Tal om landbruget (Farming figures), Copenha- Bryggeribranchen (The brewing industry), The gen, 1991, Agricultural Council of Denmark Danish Monopolies Control Authority, Copenhagen, 1987 Tal fra Bryggeriforeningen (Statistics from the Danish Brewers' Association), Copenhagen, 1992 Hvad skal fodevareindustrien leve af? (What is the food industry going to live off?), Forum forDanske Slagterier Statistisk (Statistics from the Industrial Development, Copenhagen, 1989 Danish Bacon and Meat Council), Copenhagen, 1991 Arbejdsmarkedets Handbag (The labour market handbook), AOF (Workers' Educational Associa- Various editions of Statistisk &bog (Statistical tion/WEA), Copenhagen, 1990 yearbook)

Medarbejderuddannelse (Employee training),Statistsk 10 -firsoversigt (Statistical 10-year Danish Employers' Confederation, 1987 overview), 1991

Efteruddannelse (Further training), National In-lndustristatistikken (Industrial statistics), various stitute of Social Research, Copenhagen 1991 volumes

Fremtidens arbejdsmarked (The labour marketNationalregnskabsstatistikken (National ac- of the future), Institute for Future Studies, 1991 counting statistics), various volumes

Mejeristatistik (Dairy statistics), 1991, The Danish Dairy Board

Specialarbejderuddannelsen, 1990, Kedindus- trien (General and semi-skilled employees' training, 1990, the meat sector), Meat Trade College, Roskilde

Landbruseksporten, 1987-1191 (Agricultural exports 1987-1991)

Agricultural Council of Denmark, 1991

Panorama and EC industry, Eurostat, 1992

46 45 PART 2:

1.Leven Petfood A/S

2.Nr. Vium Mejeri 3.Carlsberg A/S

4.Steff- Houlberg

BEST COPY AVAILABLE 46 1. LOVEN PETFOOD A/S

Introduction Products This case study deals with a medium-size feedstuff The company produces wet food for cats and undertaking which was taken over by a major dogs; the food is packed into aluminium cans, the drug company,Lovens KemiskeFabrik(Lion Can Flex cups. Dog food accounts for 20% of Chemical Works) in 1987. company products and 80% is cat food. The Can Flex cups are manufactured in 5-7 different sizes Leven Petfood A/S (Lion Petfood Ltd.) has been and the contents are produced in a number of built up and structurally altered since its take-over. varieties, e.g. lamb, fish, game, beef, shellfish, Production has concentrated on purely wet food in etc. The company believes it has found a niche in Can Flex-packing. Investments have been made in the form of a luxury product in Can Flex packages. production technology and production has been The products are non-perishable with a shelf life of rationalized and made more efficient which has two years. 10-15% of the petfood produced is resulted in considerably increased productivity. diet food which is produced especially for frail During the last five years the number of employees animals, these products are only sold through has grown from 25 to 160 people. The case study veterinary practices. The company uses a total of is concerned with a planned course, of one week's approximately 60 different recipes. duration,forthe 50 productiondepartment employees. Markets As mentioned above, 10-15% of the company's The course was specially designed for Leven productionis diet food sold through veterinary Petfood A/S and deals with the specific companypractices, mainly on the Danish market. Only 4% production process and conditions. Thisis the of the remaining food production is sold on the first time such an initiative has been undertaken by home market; the restis exported to Europe, the company and it has great expectations. The Japan, USA, Taiwan, amongst others. The com- case studyisbased on interviews withkey pany's sales policy is to obtain many, but small, personnel from the company, which were held market shares. The company offers dry as well as on 6th January and carried out by Jette Bangwet food inits range and frozen and tinned Jensen MA. products are also includedinthe range. The MARS group isa leading competitor on the Europeanmarket andthere isconsiderable 1. Company overview demand for products which imitate their range. All exports are under private-brand labels. The 1.1 General description of the company company produces for niche markets; its products are considered to be luxury ones and, therefore, 1.1.1 General company data fetch a slightly higher price. Nevertheless, compet- Leven Petfood A/S (Lion Petfood Ltd.) is a five yearition has intensified and the market has become old company producing wet food for cats and more of a buyer's market. Profit margins have dogs. In 1992 the company had an average of fallen resulting in demands on both efficiency and approximately 160 employees and a turnover of product quality. DKK 125-130 million. 1.1.2 Company history, development Leven Petfood has a sister company, Leven Agro and strategy Ltd., which produces dry animal food. The two companies have a joint sales department, a home History market sales department, linked to Leven Agro in In 1987 the feedstuff factory, HVH-Cannery, in central Jutland, and a subsidiary company in Vr6 was purchased and taken over by the Lovens Brussels which controls the main part of export Kemiske Fabrik. sales. At that time the factory had between 20 and 25 Leven Petfood is located on two sites in Vr6, a employees and its turnover during the first 18 small town in the northernmost part of Jutland,months was DKK 18 million. Since then, through approximately 30 km from Alborg the nearestradical rationalization, considerable investment large town. This is an area with a relatively high and organizational adjustments, the company has level of unemployment. developed into an export company with approximately 160 employees and a yearly turnover of The company is situated in the centre of Vra in over DKK 180 million. In 1991 and 1992 profits buildings which date from the 1920 and weretotalled DKK 3 million. From 1987 to 1992 originally built to house the Cooperative Bacon capacity andproductivity increasedconsider- Factory of Old Vr6. They were subsequently used ably; this is due, among other things, to invest- for the production of tinned goods and animalment in new machinery. In 1991 and 1992 a total foods. The actual production and can fillingis of DKK 15millionper year was invested. carried out here; the Packaging, Stores and Sales Capacity increased by 70% and productivity by Departments are located on another site which 30% last year. The company currently specializes 47 was taken over 18 months ago. in the production of wet food in aluminium cans

4 (Can Flex cups). Previously the company produced Filling the cups tinned food, deep frozen goods and sausages. InthePackaging Department thecups are During thelast two years the company has labelled, packed together in cardboard boxes concentrateditsefforts to build up productionand stacked on pallets. The pallets are then techniques and a great deal of work has beentransported to the Finished Goods Store. The done with regard to production planning and Packaging Department comprises six packaging inventory control. lines, four of which are recently purchased, newly developed packaging and palletinglines. The Development and strategy lines are fully automatic and computerized and In future the company is likely to choose to aim atcan be programmed for a number of different more specialized products in the form of enriched packaging and palletingtasks.Thistypeof petfoods. packaging line is staffed by three people, two of whom feed the machine with cups while the third The present range of diet products are considered watches and ensures optimum running of the line as first generation products, the second genera-and is ready to intervene should a fault occur. tion, i.e. more medical, are underway and itis Unskilled employees operate the packaging lines; precisely in this field that Lovens Kemiske Fabriknew machines are run by technicians who also possesses special expertise.Itis anticipated thatinstruct their fellow employees in the operation of this will lead to demands on the company to these machines. Lubrication and maintenance is controlproduct contents and document theircarried out by the technician group and each shift nutritional values.It has not yet been decided running the machines is constantly staffed by one whether the company will seek ISO certification,or two technicians. In addition to the six pack- but it has immediate plans for a comprehensiveaging lines there are shrinkwrap units, units for documentation of product quality requirements. packaging goods together, and other less sophis- Work is going on at present with a view toticated packaging machines. building up PC systems to facilitate production follow-up and thereby minimize waste. Rationali- 1.2.2 Company organization zation and increased productivity will continue to A company organization chart isprovided in be a feature of company strategy. Appendix 2. The Works Manager is responsible for the factory. The Technical and Production 1.2 Technology, organization and Departments are organized along similar lines. quality Each of the five Production Departments is led by a foreman and one or two assistants. The assistants 1.2.1 The manufacturing process and are experienced employees recruited from the technology hourly-paid employees, their position was introduced approximately a year ago. The company Wet food production aimisfor a clear,distinct organization with A number of different by-products from fish, pigs, explicit channels of command and clear distribu- cattle, shellfish and game (e.g. lungs and liver) are tion of responsibility and relatively specialized used as raw materials in petfood production. Aemployees. large amount of the raw materials are delivered fresh, a smaller part being delivered frozen. InWork organization and employee addition, a number of supplementary materialscategories are used. During the manufacturing process the Due to equipment investment, the running-in and raw materials are weighed, minced and, accord-maintenanceofmachineryisbecomingan ing to the recipe, mixed with other raw and increasingly important task. Minor repairs and supplementary materials. Flour and supplemen- adjustments were previously the responsibility of tary materials are weighed beforehand and mixed the foreman but with the introduction of sophisti- manually. The mincing and mixingis done incated and expensive machinery onlyskilled batches in isolated mincing and mixing machines. technicians are permitted to carry out repairs. All Transport and weighing are carried out manually. shifts in the Packaging and Production Depart- The finished forcemeat is filled into Can Flex cups ments are staffed by one or two technicians per and lids are put on. Filling is carried out by an team.Itistheir job to install and run-in new automatic filling and sealing machine. The job machines, repair and maintain them and instruct involves feeding the machine and supervising the employees intheir operation.Inaddition, the process. Laboratory employees check that the technicians also lubricate and adjust the machines sealing process is in order. In the event of faults the and repair defects. machine is stopped and a technician is called in. The cups are heat treatedinautoclaves and The unskilled employees operate the machines, transported to the Packaging Department. Clean-oversee production and stop it in the event of a ing in the Production Department is carried out byfault occurring and call in a technician. The hourly external personnel. paid employees have their own fixed working places in the Production and Packaging Depart- 48 ments. The principle of lettingthe employees 48 alternate between the different workposts has tory technician apprentice, 1 technician appren- been abandoned on account of the high costtice and 2 data processing junior clerks are and complexity of the machines involved. It is the employed. Employment for all apprentices and intention to make individual employees experi-juniorclerksceasesthreemonthsafterthe enced and responsible forspecific machines. completion of their apprenticeship. Production control and sampling analyses are the responsibility of laboratory technicians. Employee development and numbers Each year the company adaptstoseasonal 1.3 Human resources production fluctuations by employing or dismiss- ing hourly paid employees. Last year this involved Employment structure 20 people.In addition to this, the number of In 1992 Loven petfood employed approximately hourly paid employees has decreased due to 160 people,of these 40-50 were salaried production rationalization, a development which employees. The following table provides a break- is expectedtocontinue.Employeesinthe down of employee distribution between depart-Technical Department are an increasingly impor- ments and changes in employee numbers fromtant group; within the last year their number has 1991 to 1992. grown from three to ten. At the same time the number of salaried employees has increased with Table 1.1 the expansion of the Production Development and Quality Control departments. Department/group 1992 1991 Merit rating of hourly paid employees Sales Department 10 10 In connection with the fact that the company Finance and Administration 20 24 dismisses hourly paid employees and, addition- Technical Department 10 3 ally, iscontemplatingfuture changesinthe Hourly paid employees 110 160 remuneration system, themanagement has Production Development Department 3 1 evolved a points system with a view to merit Quality Control Department 6 1 rating of employee skills. This system will be used by the foremen, for example, when the question of Total 160 200 dismissals arises. The individual is assessed on the following eight factors:

Quality,i.e.thelevelof correspondence Groups with changed significance between the finished work and requirements The Technical Department expanded from three to Knowledge of the work four employees in 1987 to ten employees in Performance 1992. This growthisrelated to the increased Functional flexibility investment in machinery and the fact that the plant Initiative, capability and will to independently has become more sophisticated and costly, for solve problems and implement work and tasks example the new packaging lines. Planning,capabilityof carryingout work rationally and without waste of time Employee composition Seniority (counted up to two years) There is a fairly even distribution with regard to Absence age. In the past a high number of young people were employed but the ages are now more mixed.The points are allocated by the foreman. The idea There is an even distribution between the sexes. is to make it function so that the foreman can show it to the individual. The points system is seen as the Educational background start of a change in the remuneration system; pay The foremen have a mixed educational back- will be divided into basic rate and skills bonuses. ground, e.g. cook, dairyman, sausagemaker, metal worker. The Technical Department employ-Employee turnover ees are skilled metal workers or engineers. HourlyThe company's declared objective is to achieve a paid employees are mainly unskilled and about stable and low turnover in employees. However, 10-15 have some form of qualification. Duringin connection with company modernization it has thepast two years there have been several been necessary to dismiss both foremen and examples of more people with higher educational hourly paid employees. There are, in general, no backgrounds being employed than previously. For recruitment problems either for seasonal or new example, the company engaged a young engi-permanent employees. neer instead of a technician and a young chemical engineer instead of a laboratory technician. Recruitment and internal promotion Greater importance is attached to experience (soft Apprentices qualifications) and informal skills and attitudes Itis company policy to employ apprentices and than formal (hard) qualifications when hourly paid 49 junior clerks. Currently 2 junior clerks, 1 labora- employees are recruited.In general, an even 49 distribution in sex and age groups is sought. Thedesignedforthecompany's 50Production company also employsolderpeople,partly Department employees and is the most compre- because this results in satisfaction and balance in hensive training activity to date. From 1991- the work teams and partly a workforce of stable 1992 all foremen, one employee per shift and employees. The Forcemeat Production Department's laboratory employees participatedin a safety most important requirement ist experience within course. The one-week course is run by AMU and the framework of the food sector.In general, is mainly funded by Leven Petfood. The course is greater store is placed on attitudes than formalrecommended by the Works Manager because it qualifications; in other words it is essential that all is instrumental in promoting increased awareness the employees get along together. Local labour is of safety within the company and, also, because preferred because the company wants a stableofthehighlyregardedcommunication and workforce. It is not considered unusual for employ-collaboration aspects it provides. Other courses ees, either hourly paid or salaried, to recommend attended by employees relate to specific training acquaintances who subsequently obtain employ-concerning their work. For example, new employment in the company. ees inthe Autoclave Department attended an autoclave course; a boiler attendant followed a A military backgroundis considered an assetcertification course which was a requirement of becauseitisconsideredthatitequatesto the authorities and 4-5 people have learned to discipline and responsibility. The points systemsdrive a lorry. Through these courses it has been also highlights the requirements sought of the ensured that a suitable number of employees meet employees. their job requirements. Foremen and assistants have participated in courses relating to specific Local labour market USA qualityassurancerequirements anda The company islocatedinan area with a manager has undertaken a productivity course relatively high unemployment rate.Ithas nowithin the framework of the Danish Employers' difficultiesinrecruitinghourly paid, or other, Association. When new machines are purchased, employees. Seasonal workers are also easilythe technicians instruct employees in the operation recruited and, at present, the labour market in of the machines. The management consider that terms of engineers and qualified technicians is a the company has a great need for general AMU buyers' market. courses, however, to be considered relevant it is deemed necessary for the course to be adapted to 1.4 Working conditions and trade the company. union/organization membership Work is carried out in two shifts working five days2.1.1 Planning and developing training a week. Almost everyone belongs to a union;Admission to in-company training unskilled female employees belong to KAD (the The employees have the opportunity to apply for unskilled female workers' union) and the unskilled courses but, according to the shop steward, hourly male employees to SID (the unskilled male work- paid employees are not very interested. The ers' union), the technicians are members of the Works Manager selects participants for courses. CO-Metal TradeUnion.The company isa member of the Arbejdsgiverforeningen DanskWorks Council Industri (Danish Industry Employers' Association). The Works Council has discussed the management's ideas concerning remuneration related to Remuneration is negotiatedviaacollective skills, but as yet there are no plans for this to be bargaining agreement, part of the pay is nego- developed and implemented. tiated by decentralized wage negotiations. The remuneration system is based on straight hourlyFuture plans rates. Hourly rates for unskilled employees are The company is contemplating relating skills to DKK 80/hour with a shift work premium. Men remuneration,aspreviouslymentioned. Itis and women receive equal pay. The company is examining the possibilities of training the foremen contemplating the introduction of a basic remu- in management and cooperation skills.In addi- neration and skill allowance system as the presenttion,the company is following an experiment system has no motivating effect; a points system taking placeinanother company innorthern relatingtoskillsisbeing developedforthis Jutland where employees are attending a three purpose. week course within the framework of the AMU system; one course in quality assurance, one in 2. Continuing vocational training quality control and another in productivity.If the The following is a description of how employee experimentissuccessfulthe whole workforce training in relation to production is handled by the might participate over the next two years. As the company. publicauthoritiesfinancethemainpartof remuneration costs, the company is willing to 2.1 Target groups and types of course make this up to the full rate. The one week's duration planned course de- 50 scribedinthis case study has been specially 59 2.2 Company training objectives and 3.4 Course objectives policy The programme has several aims: the company The company has no formaltrainingpolicy wishes to raise product quality and reduce the relating to production employees. number of production errors. An element of quality control is increased awareness by the employees 3. Description of a specific training of company operations. At the same time, this is programme an element in preliminary preparation for the introduction of a higher level of production follow- 3.1 Overall description of programme: up. The management expects the employees to training activity play an active part when production errors occur, The described programme is a course of one e.g. to step in and stop production when they are week's durationforallproduction employees sufficientlyknowledgeable.Forexample,an which has been specially developed for Leven increased understanding of hygiene will contri- Petfood. bute to more careful handling of raw materials with regard to time and temperature conditions. 3.2 Reasons for training programme Another company aim is to make employees more During its early years the company gave highaware ofthefinancialaspectsof company priority to the technical aspects of the company; itmanagement. From 1993 a monthly meeting will now appears that the time has come to devote be held at which the results of the previous month's more attention to human resources.In the fiveaccounts willbe presented.Furthermore,the years in whichithas been owned by Leven management wants to raise the employees' self- Petfood,ithas expandedconsiderably;the confidence and self-knowledge with a view to number of employees has risen from 25 to 160obtaining a stable workforce. In addition,itis and during this period a number of employees company policy to create an attractive work place have been replaced. The company's workforce is although it is not one of the leading companies in mainly unskilled with no background in the food terms of remuneration. sector.AccordingtothecurrentProduction Manager it has been quite difficult to change the 3.5 Training organization employees' attitudesinrelationtoproduction hygiene. In general, company development has Duration been characterized by major rationalization and In total five one week courses have been planned increased productivity, a development which iswith approximately ten participants per group. expected to continue. One course is to be held each month from January to May 1993. Thisis a slack period for the 3.3 Initiative and decision company and, therefore, the course can be run Theideaforthetrainingprogramme was withoutit becoming a problem to release the conceived between the Production Manager and participants. an external consultant (an acquaintance of the ProductionManager). Thecoursehasbeen Access to courses discussed with the Works Council and a majorThe courseisofferedtoall50 Production topic of this debate is how it would be possible toDepartment employees which means thatitis motivate the employees in relation to their jobs virtually compulsory. and increase their interest in their jobs in general. Withinthiscontext askillsbonus was alsoTarget group discussed.Althoughtheshop stewards and All employees associated with production are to employees were not involvedinthisinitiative, participate in the course, i.e. hourly paid employ- neither in the planning nor the concrete elabora- ees, foremen's assistants and laboratory techni- tion of the course, they have been kept informed. cians from the petfood manufacturing department. There is no pronounced need for this course, (note: Packaging Department and Stores employ- according to the shop steward. In his opinion theees are not included),itis anticipated that 50 company wants the employees to become moreemployees will participate in the course. interested in their work and thus contribute to a reductioninqualitycosts. He referredto aCourse development: content and form Collective Agreement, two years ago, when, as The course contents have been developed by a an innovation, it was agreed that all employees team consisting of a consultant, a representative were entitled to attend one week of training perfrom an educational institute and the company year. In response to the question as to whether the Production Manager. The contents have, thus, employees had availed themselves of this right, the been specially developed for the Leven Petfood answer was negative. The training efforts of the target group. A detailed course programme can company are generally considered to be satisfac- be found in Appendix 4. tory; the shop steward did not perceive any areas requiring continuing training. The course comprises a vast number of subjects relatingto company production such as raw materials,supplementarymaterials,forcemeat 51 51 production, meat chemistry, mechanical engineer- The course described in the case study is aimed at ing, heat treatment, packaging and productionemployees in the Production Department which development. Production hygiene, control systems has not been automated to the same extent. and a comprehensive section on quality awareness also form part of the course. The achievement of rationalization and increased productivityobjectivesare sought through a It lasts one week and is held during the day during specialized division of the workforceemployees normal working hours. The programme is sched- havefixedworkposts and do notalternate uled in one-hourly lessons ranging between group between jobs. teaching, demonstrations and individual tasks. At the end of the course there is a test. Tasks requiring a higher degree of know-how and/or training are carried out by specialists; for The trainees receive a certificate confirming theirexample: participationinthe course.Tuitionismainly handled by the external consultant and a teacher Production controlis undertaken by laboratory from the Danish Meat Trade College in Roskilde. technicians, machine adjustments by technicians and planning by the foremen's assistants, etc. The company has purposely chosen externalThese tasks are carried out by employees with trainers.Their own employees onlyprovideformal training whilst employees in production instructiononalimitedscale.Furthermore, and supervisors are to a large extent unskilled. The experts have been invited to provide training oncompany's merit rating points system highlights several subjects, e.g. employees from packaging what is important.Itis essential that the hourly and machinery suppliers. paid employees make a rational and reliable input and are able to carry out their work independently Cost of training and satisfactorily in order to avoid unnecessary ThetotalcostoftrainingamountstoDKK waste and costs. 200,000; this covers development costs and the assistance of the consultant and teachers, andThe training course appears to be appropriate as remuneration forthe course participants. Thethe employees are mainly unskilled and many of courseisheld on company premises and allthem are relatively new tothe company. By expenses are borne by the company; no public instructing the employees in specific production subsidies are received. The employees receive processes and conditions they are likely to obtain their normal remuneration during their participa-the knowledge and background to enable them to tion in the course. carryouttheirdaily workcorrectly,detect production faults and take the necessary steps. 4. Training assessment At the time of writing this report, the training The general assumption is that the shop stewards course had not yet taken place, evaluation was and employees are not interested in these courses therefore not possible. Thus, it is not possible to or training matters in general. make an evaluation at present. The nature of the work does not promote a sense 5. Summary of need for training; courses are not considered Loven Petfood A/S is characterized by growth, necessary to carry out jobs. Observations in the considerable rationalization and increased pro- company support this and it is further supported by ductivity. Production in Vro has been concentrated the fact that management prefer courses specifi- on one specific production process. A number of cally designed for the company; it was stressed by investmentshavebeen madeinproduction several people that the company would like to see machinery, particularly in the Packaging Depart-more active, participative attitudes. ment, which have resulted in a reduction in the number of employees.Itisessential that the In addition to employees possessing the relevant factory runs continuously, therefore, there has knowledge and background, attitudes and motiva- beenareorganizationoftheworkforceto tion are also important and the course may play a integratetechnicallyqualifiedemployees. In useful role in this respect although other factors addition it is essential that the employees operat- may also influence this. One of these is the fact ing and controlling the machines have a sense of that the company is contemplating the introduction responsibility. Further rationalization, particularly of a more stimulating remuneration system with, inthePackagingDepartment,islikelywith for instance, allowances based on skills. additional job losses.

52 52 APPENDIX 1

The Laven Petfood A/S case study is based on interviews with the following:

Works Manager -Leif Kuno Jensen Production Development Manager Leif Madsen Head of Production Department -Poul Jordansen Shop steward for unskilled male employees Frank Hoj Production employee Dorte Nielsen

APPENDIX 2

Loven Petfood A/SOrganization chart

Managing Director

Product development Quality control

Export sales Domestic sales Vra factory EUROPETFOOD

Production planning Work study

Finance Manufacturing Technical Order handling, Purchasing department shipment, transportation, manufactured packaging goods stock

Packaging Production day shift day shift

Packaging Produktion night shift night shift

Autoclave department

53 APPENDIX 3

Company data 6. Temporary employees: information not available Company overview 1.Current total sales DKK 180 million 7.Arrivals and departures information not 2. Current total payroll classified information during last three years: available 3. Current value added DKK 3 million 8. Remuneration policy: Employment/human resources With respect to 4. Current total workforce (1992) The local labour market lower Salaried employees 40-50 The sector as a whole lower Hourly paid unskilled employees 110 9.Total annual cost of Technicians 8 continuing vocational information not TOTAL: 160 training: available

5. Permanent employees, 1988 and 1992 figures10. Percentage of total 1992 training expenses 1991 1992 subsidized by various information not public institutions: available Salaried employees 34 42 Hourly paid unskilled 11. Number of employees employees 160 110 participating in the Technicians 8 company's 1992 information not TOTAL: 200 160 training programme: available

APPENDIX 4

Schedule for training course

Monday Tuesday Wednesday Thursday Friday

07.00 Welcome Minced meat Calculation Quality awareness Internal control system Materials production Course reading

07.50 Break Raw materials Minced meat Analyses Quality awareness Internal control system fresh, frozen production flow

08.50 Break Raw materials Recipe reading Law Quality awareness Product development types, hygiene

09.50 Break Raw materials Minced meat task Task Quality awareness Final test task

10.50 Break Meat chemistry Mechanical Quality awareness Test Conclusion engineering

11.50 Lunch Ancillary materials Heat treatment Quality awareness Production hygiene

13.20 Ancillary materials Packing Quality awareness Production hygiene function

14.20 Ancillary materials Packing Quality awareness Complaints 54 function control

54 2. NR. VIUM MEJERI

The case study is based on interviews held with where the Human Resources and Training Depart- key company personnel on 9th December 1992 ments are also located. Transport is planned at the and carried out by Jette Bang Jensen MA. Nr. Vium Dairy but centrally organized by MD Foods' Transport Division. Introduction MD Foods is Denmark's largest dairy company Raw material and is centralizing its production of self-pressed The dairy receives milk seven days a week from cheese with irregular holes on the Nr. Vium Dairyapproximately 1,000 milk producing farms in in Western Jutland. West Jutland; the milk is collected daily by MD Foods' own tankers. The dairy has, therefore, been enlarged, production equipment renewed and during the last two Products years progressive production transfer has takenThe company produces about 25,000 tons of place. ordinary yellow cheese each year; this is in the form of two traditional Danish cheeses: Esrum and The number of employees has increased consider- Havarti. These cheeses can be produced, on the ably and there is still a requirement for hourly paid whole, using the same production process and employees. apparatus. The two types of cheese are produced with different fat content and some of the cheese This case study comprises two interlinked training has different spices added. The cheeses are partly programmes. made in cylindrical form and partly in square block and undergo different kinds of ripening The aim of one is to both generally and technically processes. They are cut up into retail pieces of qualify three teams of 14 unskilled people forbetween 200 g to 4.2 kg, wrapped in foil and employment in the Nr. Vium Dairy. This will enable labelled. Esrum cheese was previously sold as the release of existing unskilled employees towhole cheeses but today, approximately half is participate in a general adult training course. sold cut and packed for sale on supermarket shelves.Takingintoaccountallthecheese A distinguishingfeatureof thetrainingpro- varieties,the dairy produces atotalof 500 grammes is that they result from a joint project items/trademarks. A recent rationalization in the developed between the company, the local public number of products from one of the varieties has labour exchange, the unions and three differentbeen carried out and the number of items/ educational institutions. trademarks has been reduced. 1. Company overview Market 60% of MD Foods' total production of ordinary 1.1 General description of the companyyellow cheese is sold to the worldwide export market, the principal markets being Germany, the 1.1.1 General company data United States and Italy. MD Foods generally has a The Nr. Vium Dairy is the largest producer ofsmall share of the large foreign markets which ordinary yellow cheese, employing over 200typically varies from 1-2% to 8-9%. Foreign people and handling 230,000 tons of raw milk. consumption patterns for self-pressed cheese with The company is located in Videbwk, a small town irregular holes are that national cheeses are eaten inthemid-west Jutlanddistrictof Videbwk, regularly and imported yellow cheese considered approximately 20 km from Herning, the nearest as a speciality cheese. There is an increasing large city.It is situated in a large milk producing consumer trend toward openness to new products. area which means that raw material transportApproximately 40% of MD Foods' production of routes are relatively short and in an area with this cheese is sold on the Danish market where it some dairy manufacturing. The Nr. Vium Dairy is holds a leading position with a 60-80% market part of MD Foods, one of the two largest dairy share.The company'sdirectcustomersare companies in Denmark. MD Foods is a coopera- primarily the retail trade, major foreign super- tive owned by approximately 12,000 members, markets being the main export customers. There is all of whom are milk producers. Nr. Vium Dairy is a general trend to change from the sale of whole attached to MD Foods' cheese division which ischeeses to prepacked shelf-ready products. made upof anumber ofproductionunits characterized by a high degree of division ofMarketing policy labour.Thus,theNr. Vium Dairy exclusivelyMD Foods sells cheese under its own trademark produces ordinary yellow cheese, another unit and under private brand names. Thereis an produces feta cheese, a third unit produces cream increasingtrendforsupermarketchainsto cheese, etc. demand private brand names. In relation to the retail trade, a substantial advantage is a high The Sales, Marketing and Development Depart-quality, broad range of goods and high degree of ments are centralized in MD Foods' head office atflexibilityinrelation to consumer demands for Aarhus, approximately 100 km from Videbwk, packaging, bar codes, etc. The Single Market is 55 55 not expected to have any direct influence on the 1.2 Technology, organization and company but the current GATT negotiations, noqualification requirements matter what the concreteresultwillbe,are expected to increase competition in the long run. The production process and technology Since ordinary yellow cheese is an important, Given that a large part of the company is newly price competitive product it will be necessary to built, the production equipment consists mainly of rationalize and improve productivity in order to new technology. In areas where older equipment is keep abreast of international competition. A major used, the electronic equipment has been improved. competition parameter relates to final consumer The two main elements in cheese production are demands forhigh and uniformquality.Itis milk treatment and cheese manufacture. planned for the Nr. Vium Dairy to achieve ISO 9000 certification during1993; one of MDMilk treatment Foods' cheese companies has already obtainedWhen the raw milk is received, itis cooled and certification and others are due to follow. treated so that the cream can be separated, fat standardized and pasteurized so that is ready for 1.1.2 Company history, development the cheese production process. The milk treatment and strategy is a fully automatic process which takes place in closed tubes and systems controlled by PLC control History systems. There has been a Nr. Vium dairy since 1907 at which time it was one of approximately 1,600Cheese production and curing traditional dairies in Denmark. In 1962 the dairy Rennet and various chemicals are added to the was purchased by the Hong Group in connection finished milk. The formed cheese is salted and with the drive for cattle to be moved towards thecured. This process is also automatic and con- west of Denmark. The present dairy was built introlled by PLC. A few process plants are controlled 1963 and extended in 1968. In 1970 the dairy by decentralized PLC controlsystemsbut,in became a member of the newly formed MD which general, the entire plant can be operated by was interested in the dairy because of its sales displays and keyboards at three different points in companies and outlets. Over the years a regular production(multi-usersystem).Thecleaning increase in production has taken place and during processes are also automatically controlled. The the 1970s, MD centralized cheese production and cheeses are cured in climatically controlled stocks. Nr. Vium became a producer of Esrum cheese. During curing the cheeses must be attended to and handled according to the ripening process of the The Nr. Vium dairy is expanding cheeses and the climatic conditions controlled. MD Foods' policy is to unify the production of The turning of the cheeses is carried out manually. special cheese at the Nr. Vium Dairy. These plans took shape during the 1980s and a final decision Cutting and packaging was made in 1990. Physical enlargement of theThe finished, cured cheeses are rinsed, cut up, dairy commencedinDecember 1990, and packed infoil, weighed, labelled and packed between 1991-1992 the dairy area has doubled ready for despatch. For some cheeses the final from 8,500 sq. m. to 17,000 sq. m. Production ofcuring takes place in the retail packaging. Six to the round Havarti cream cheese was transferred in seven years ago a large part of the work was January 1991, and Havarti production from the donemanually,todaytheentirepackaging MD Foods' Bnarup Dairy near Ribe will be process is mechanical, the manual work consists transferred in January 1993. The centralization offeeding and removingcheesesfromthe and extension of cheese production should bepackaging machines. The latest packaging lines considered in the light of increasing international are computer controlled and weighingisby and price competition. Rationalization and pro-automatic weighing machine. ductivity improvements are promoted through the specialization of production units. At the sameProduction process time, there is a need for large production units inThe first stage of the production process,i.e. ordertosupplythenecessaryquantitiesto treatment of the milk and cheese production, is international supermarket chains. Simultaneously, normally carried out as a mass production process. on the retail customer's side, there are demands Cutting and packaging are carried out upon receipt forhighflexibilityregarding packaging and of a customer order. Cheese sales fluctuate during product marks, which require a high level of the year; on a weekly basis production can vary adaptability in the dairy's cutting and packaging between 30 and 130 tons of cheese. divisions. Approximately half of Nr. Vium Dairy's products are consumer-packed today. 1.2.2 Company organization See Appendix 2 for organization chart.

The organization of the dairy is based on the following functions: milk treatment, cheese pro- 56 duction, cutting, packaging, despatch and the 56 engineering workshop. Furthermore, there is a General project organized structure which handles the The dairy thus employs both skilled and unskilled transfer and establishment of new production to employees. The training programme described in the dairy. Each department at level 2inthe this case study is based on the training of future organization is divided into sub-divisions which, and existing unskilled employees. Some of these in most cases, are led by an hourly paid team employees work in the cheese Production Depart- leader or foreman. ment but the main number are employed in the Cutting and Packaging Departments. Therefore, a In the Packaging Department there is a foreman, more thorough description of work tasks and per division, and a joint foreman. Each foreman quality demands are required for this area. has between 15 and 20 employees under him. The Packaging Department Manager expects the An unskilled employee's tasks in the Cutting and organization will level out and the foremen will Packaging Departments consist of the following: become more familiar with the products and product planning. He also expects the foremen In the morning the machines have to be assembled will ensure employees are placed in the correct and disinfected followingprior cleaning. The positions, and anticipates that there will be a need packaging line is then started, foil is loaded and for employees to alternate between the positions. the number of cuts,sealing temperature and tightening of the foil, etc. have to be regulated. Milk treatment When the line is running the packaging machines Only a limited number of employees are involved have to be fed and the cheeses removed and in milk treatment due to the level of automation. packed ready for transport. Large quantities of milk are handled and the quality hasto be supervised and processes Cleaningis an important task; the packaging controlled. The department is staffed, around the machines and conveyor belts have to be cleaned clock, by a totalof six dairymen and dairyand disinfected at each break, i.e. 5 times during apprentices. The department head is a traineda working shift and 18 times a day. dairy technician; in addition to supervising the milk treatment process he also plans the milk Automatic weighing machines form part of the collection with 21 drivers. new equipment on the packaginglines.The employee's job is to key in the labels incorporat- Cheese production ing price, durability and brand name information The cheese master heads the department and is a etc. This is done by calling up built-in programmes trained dairy technician. Work in this department or, in the case of new products, the employee keys covers thecontrolofthe cheese production in and supplies the labels with the appropriate process and is carried out by dairymen and/orinformation. Correct labellingis an important dairy technicians. Manual tasks, such as turning product parameter. In order for the labels to be the cheeses, driving trucks, etc., are carried out by formulated it is essential that the system, manual unskilled employees. display and commands are handled accurately and in the correct order. Packaging The Cutting and Packaging Departments account Development of the packaging lines, in the form of for the largest number of employees. The depart- more machines, requires more accuracy and less ment is divided into four packaging rooms and a manual labour. There are computer controlled rinsing room with a total of 14 packaging lineslines with different programmes which require and 1cheese rinsing line, each with their ownspecial training for each line. At the same time, foreman. The packaging lines are mainly staffedthere is an increasing need for the employees to by unskilled employees, 71 of whom are female rotate amongst the lines in order to fulfil require- and 50 male. ments for multi-skilling and optimal utilization of resources, including human. Inthe Packaging Machinery Department Department thereisa move towards greater This department is managed by the Chief Engineer individual recording of production, for instance who has three technicians and one carpenter under productivity control is recorded individually. The him. The reason for the department being so small is future ISO 9000 certification is expected to make that servicing and repairs are carried out by private further demands on new employees. companies, therefore, one of the main tasks is the. ordering of external assistance, partly from machine suppliers and partly from local workmen. The Qualification requirements machines are special purpose machines and the A basic knowledge and understanding of the knowledge associated with them is easier to buy-in importance of hygiene and cleaning in a dairy are than maintain as an integral feature of the dairy.essential requirements. The work today requires a Current developments mean thatthereisan strong physique although the physical aspect of increasing need for more knowledge of electronics the work is now disappearing; increased under- in the Machinery Department. standing of EDP and its operation, for example the r57

EST COPY AVAILABLE automatic weighing machines, is a further require- Employee development and numbers ment. Technical ability and understanding areThe expansionofthedairyhasledtoa necessary in order to be able to assemble and considerable increase in employee numbers. The lubricate the machines. In addition, demands on table below shows the change between summer literary skills are increasing as the employee has 1991 and Christmas 1992: to complete production reports, etc. and has to participatein the declaration process.Further- more,the head of the dairy attaches great Employee group SummerChristmas 1992 importance to the employees' ability to work 1991 independently and as a team. Hourly paid employees 88 224 + 14 trainees Human resources Middle managers 12 16 Drivers 22 22 Workforce structureIn December 1992 the Nr. Vium Dairy employed a total of 16 middle managers and 230 hourly paid employees. The workforce has, thus, increased by 4 middle Management managers and 136 hourly paid employees, plus

Head of dairy 1 14 trainees. 5 or 6 of the 136 hourly paid Managers and department heads 9 employees are trained dairymen, the rest are Administration 6 unskilled.In January 1993, when all planned production is transferred to the dairy, a further Hourly paid employees requirement for 20 to 30 hourly paid employees is Skilled dairymen (of whom 8 act as foremen) 22 anticipated. After that time no further increase is Dairy apprentices 12 expected. Unskilled employees 157 Unskilled trainees 14 Skilled artisans 4 Recruitment policy Drivers/mechanics 21 All employees at the dairies which have been closed have been offered employment at the Nr. Vium Dairy, but only a few have accepted the offer. The last production unit will be transferred As shown in the above table, unskilled employees from the Brorup Dairy near Ribe (100 km from account for more than two-thirds (171) of the total Videbwk) and another is located in Vejle (65 km workforce. The employees are characterized as from the dairy). Very few employees have opted to first generation manufacturing workers in the dairy move to Nr. Vium. The company describes the sector, a traditional agricultural area. The head of hourlypaid employees asbeingoflimited the dairy considers thisisa strong point of geographical mobility. The location of the dairy particularimportancefor work attitude,e.g. and the fact that it operates night and day mean absence owing to illness, stability and motivation that it is necessary for the employees to have their towards flexibility. Scheduling the extra work in own transport. In addition, the head of the dairy peak production periods is covered by weekend has given examples of potential employees who and overtime working. The company findsit have calculatedthattheirremuneration less difficult to maintain a reserve workforce to meet travelling costs is no more than unemployment these situations. benefit. The fact that a large number of the Employee composition unskilled employees are female is considered to be an important factor relating to geographical The skilled dairymen are mainly men although mobility. The company would liketo employ there are female apprentices. The majority of the skilled dairymen, although this is not necessary, unskilled employees are female, especially in the forexample,in thePackagingDepartment, Packaging Department. The company would like because their attitude and knowledge of hy- to alter this to a more even distribution, partly due giene,forinstance,permeate throughout the to the fact that the work is physically demanding. workforce. There is, however, a shortfall in the A major part of the workforce is young people, supply of dairymen, partly because they are able recently recruited, due to the extension of the to find employment in other sectors within the food dairy. The average age of unskilled employees is sector where remuneration is often higher. The 30, although the drivers and maintenance employ-Videbk district has an unemployment level of ees are older and the management group is more approximately 8%; the head of the dairy does not evenly divided. considerthisislarge enoughtoprovide a Employee turnover recruitment base, as a proportion of the unemployed are, in actual fact, not considered to be Employee turnover is so small that it cannot be available on the labour market. measured as a percentage. The fact that the company has a comparatively steady workforce is linkedto itslocation.Therehave been no dismissals during the last five years. Recruitment maintained ofallcourses attended by each The head of the dairy is seeking a reasonable age individual; from foremen down this information is group distribution amongst the workforce and as notrecordedalthough MD Foodsplansto the company previously had a large number ofimplement this. Company managers attend ap- older employees, preferenceisgiven to new proximately two courses per year. recruitsbetween18 and35years of age. Similarly, there is a predominance of unskilled With regard to hourly paid employees there is no female employees and, because of the need for information recorded but the following training physical strength in the dairy jobs, more male programmes should be noted: employees are required. Applicants with some formofprevioustraining,evenifitis not The training programme described in this case specificallyrelatedtothedairysector,are study aims at upgrading future employees' skills in preferred. Former slaughterhouse employees are relation to the expansion of the dairy. At present not recruited due to that sector's tradition of piece- this programme involves three classes of 14 work and adjusting productivity to remuneration unskilledemployees. InJanuary1992two levels which do not fit into the dairy's hourly paid classes, each of12unskilled employees, partici- system. The dairy prefers to employ people from pated in EDP and hygiene classes. The head of the Western Jutland due to their sound attitudes: they Packaging Department estimates that approxi- are often from farming families which has given mately30unskilled employees from his depart- them a somewhat different approach to work to ment have participatedincoursesthisyear, that of townsmen. Furthermore,the companycovering subjects such as lorry driver's licence, wants to employ local people because this helpscleaning, hygiene and EDP. Normally the number maintain astableworkforce.The Packaging of Packaging Department employees participating Department Manager stressed the need for a in courses will be between10-12per year, the good physique, flexibility in working hours and large attendancethisyear was duetothe attentiontopersonal hygieneinadditionto expansion. experience with machines. Type of course Working conditions and trade union The company generally makes use of dairy sector membership courses provided by AMU. There are a number of The dairy operates night and day; day shifts are, courses aimed at skilled dairymen and unskilled however, often longer than night shifts. The dairydairy sector employees. Courses for unskilled belongs tothe Dairy Employers' Association. employeesincludetwobasiccourses,each Unskilled male employees belong to SID (un-lasting 14 days, and a number of week long skilled male workers' union) and female employ- courses with more specialized content. The public ees to KAD (unskilled women workers' union), the authorities cover the training expenses and a large dairymen are organized in their own union. The proportion of participants' remuneration for these various parties have agreed on a contractualAMU courses. The courses areheldat The wage; unskilled employees are paid on a fixedTechnical Dairy School in Funen, approximately hourly rate of DKK 88.00. There is no piece-work 200km from the dairy. contract or bonus arrangement, but there is pre- arranged payment for work after normal working Course access and motivation hours. The social partners negotiate remuneration The management encourages hourly paid employ- rates. The dairymen are paid DKK95.00per hour ees to participate in courses each year when AMU and if they act as foremen they receive an extra publish their annual course programme. However, bonus. Managerial level employees are employed they find that the employees lack motivation and middle managers and receive a fixed monthly rate do not seem to feel the need for training. The which is negotiated individually. This means that departmental head's success in attracting partici- theentiredairy sectorhasthe same fixed pation hinges on his skillin integrating courses remuneration levels for hourly paid employees. withthe work programme andtheholiday Company remuneration levels for unskilled em- schedule. A union representative for the women's ployees are below average,in comparison to union stated that motivation is not great among the local levels. unskilled female employees and that she is not aware of any employee being refused permission to participate in a course if they so wished. The 2. Continuing vocational training fact that courses are held at Funen is put forward as an obstacle for women attending as they do not 2.1 Company training policy wish to be away from home for several days at a The Nr. Vium Dairy does not have a formal time. The union representative considers that the training policy for hourly paid employees but thecompany encourages employees to participate in following illustrates central elements by which thecourses but believes that the company should company handles training. Which groups ofdirect their efforts towards making the employees employees are trained? From departmental headsaware of the importance of increasing motivation to the top level of the company, records areand training for the future. On being questioned 59, 59 about which courses were important, the union 3. Description of a specific training representative replied that there is a need forprogramme training in communication, planning, interaction and cooperation. Annual interviews are held with3.1 General description of training the supervisors and managers during which the programme question of training arises. The practical startingThe programme consists of two training courses point for selecting training courses is MD Foods' linked together; one involves the training of three trainingcatalogue whichdetailsallrelevant courses of14 unemployedlocalpeoplefor courses. The TrainingDepartment intendsto employment in the dairy, the other is aimed at implement interviews for hourly paid employees. offering existing unskilled employees the opportu- By doing so they hope to demonstrate that thesenity to improve their education. 41 employees employees are an important company resource have enrolled in the six week course. The link and improve employeemotivationandskill between the coursesis made by offering the awareness. trained unemployed people either permanent or temporary employment in order to release existing Training Committee employees to participate in courses. There is no special forum in the company at which training matters are discussed. Should a need for3.2 Reasons for training programme training arise it is discussed at the Works Council,In recent years Nr. Vium Dairy has carried out an on which both the management and employeesextensive expansion programme and production are represented. The head of the dairy considers it has been transferred from other dairies and further is more practical and less time consuming for all production will be transferred in January 1993. cooperation issues to be covered by one commit-Employee numbers have consequently increased tee. and there is further need for more, particularly hourly paid, employees. However, the dairy is MD Foods' Training Department unable to rely on employees from the closed MD Foods has a central Human Resources and dairies transferring to Nr. Vium. There is a lack of Training Department with a total of 10 employees, skilleddairymen on thelocallabour market four of whom are involved with development and although the unemployment rate is between 7- training. The department examines the range of 8%. The dairy is, therefore, faced with recruiting courses available and issues a catalogue for use20-30 unskilled people with no experience in the byallthedairieswithinthe company. This dairy sector. The shop steward drew attention to a catalogue mainly covers managerial level publicly funded scheme which has recently been courses. The central Training Department investi- introduced in Denmark to provide basic general gates training requirements within MD Foods by training for adults with a low educational level. comparing the overall results of the managerialWith the expansion of the dairy new technology level annual interviews with the training needs has been introduced and this development has led expressed by the Works Managers and overall to more demands for employee skills. At the same company strategy. The Training Department istime the dairy is planning to achieve ISO 9000 currently working on a comprehensive manage-certification and implement a total quality man- ment development programme as it is considered agement scheme; these will also make additional that the dairy management require more extensive demands on the employees. managerial skills in addition to knowledge of the product, production techniques and economics. In Both the management and union representatives future the management's main task will be toare aware that there will be increasing demands instruct and motivate the employees and to act ason employee skills in the future and that there is a anintermediaryduringreorganization. Itis lack of motivation on the part of the hourly paid important that the hourly paid employees consider employees with respect to training. The Danish product quality and, as cooperation and organ- trade unions and employment services are currently ization models change, there will be a shift in skill aware of the necessity for temporary employees, requirements. particularlyifunskilled employees are to be released by their companies to participatein Cost of training retraining. A public pool has, therefore, been Training expenses are met by theindividual created to overcome these problems. production unit in MD Foods. The head of the Nr. Vium Dairy states that training expenses for3.3 Initiative and decision-making the dairy are comparatively low, this is related to process thefactthat AMU and VUS (public funded The local employment service held a conference in programmes for adult training) courses are used January 1992 relating to the introduction of public for both skilled and unskilled employees and thus, funded general training for adults with a low training expenses and a major part of remunera- education level at which they advised on training tion costs are met. Training costs for supervisory opportunities. The conference was also aimed at level employees were, on average, DKK job rotation. The company devised a question- 60 8,000.00/per participant in 1992. naire for the unskilled employees in order to 69 establish whether the employees were interested 9000 certification process as this makes certain in general adult training and in what particular stipulations regarding provision of training plans. 2. subjects. From the outset it was emphasized thatAt the same time,the dairyisplanningto training could take place during working hours. implement a total quality management process The study revealed that approximately one-third of which includes training plans for supervisors who theemployees wereinterestedand subjectswould be responsible for training other employees included Danish, EDP and languages. The major- on-the-job.This process,too,isexpected to ity of the interested employees were the younger become easier. The firm expectation is that there women. Those who did not display a great deal ofwillbe fewer productionfaults,for example interestconsideredthatastheyhadbeen labelling mistakes, despatch errors. employed by the company for several years they had job experience and, therefore, did not need Itis also anticipated that when an employees additional training. If existing employees were to knows what he is looking for it will be possible to participateinlong-termtrainingcoursesthe achieve higher productivity without increasing the company would need to engage temporary staff. work rate. From the beginning discussions revolved around alternance arrangements and the trade unionsUnion representatives: and employment services came up with the idea ofThe female union representative anticipates that training the unemployed to provide a temporary41 employees will be generally upgraded but she workforce. also hopes that the project will increase the overall interest in training amongst the employees as she A series of meetings were held between the dairy, considers this will be of importance for the future. the local employment service, trade unions and local training departments.Inthe meantimeit Specific training objectives became apparent that the possibility of employees The aim of the training programme is to upgrade transferring to Nr. Vium from the closed dairies the general and vocational skills of 3 classes, each was very limited. The initial aim of the training comprising 14 unemployed people to enable them programme was, therefore changed; the mainto be employed in the Nr. Vium Dairy. This will goal was then to maintain the company workforce subsequently make it possible to release existing followed by upgradingtheskillsofexisting employees to participate in the VUS scheme. employees. 3.5 Training programme 3.4 Course objectives and expectations Upgrading of unemployed people Head of dairy: The course lasts for 17 weeks, during which the The head of the dairy anticipates the programme first13 weeks are spent at various training will solve problems concerning the need for new institutions and the last 4 in the dairy. It comprises employees and will make it easier to integrate a a period on general qualifications, a period of large number of new employees. Furthermore, the vocational training and one month's practical programme is expected to have a positive effect experience in the Nr. Vium Dairy. on the dairy which will help to interest existing employees in training. General training This aspect of the course comprises four weeks of Itis hoped that the 41 employees who havegeneral training for adults whichis aimed at enrolled on the 6 week adult training course will employment conditions in the company, but the want to continue forthe additional 8 weeks main aimisto provide participants with the offered by the scheme. In addition it is hoped to opportunity to: extend the scheme with more sectorrelated recognize their own situation; subjects. The technical college for the sector recognize their own potential and resources; could do this by holding courses in the dairy in acquire the necessary general skills; order to overcome the obstacle of trainees having acquire an understanding of the company to travel to Funen to participate in a course. culture; Moreover,itis anticipated thatitwill become acquire an understanding of the work and the easier to involve employees in the future ISO connection between family and working life;

Description of course

4 weeks 1 week 3 weeks 5 weeks 4 weeks

Training of adults Introduction Stock and the Introduction to Practical experience at dairy sector dairy sector control Nr. Vium Dairy Training centre for Hostebro Technical AMU Centre Holstebro Technical Nr. Vium Dairy adults College College 61 61 develop the ability for adaptation and coopera- ally only contained one week of practical work but tion; in accordance with company wishes this was extended to four weeks. It therefore provides the The course contents are based on the followingcompany with the opportunity to get to know the subjects: individuals before they are employed. Danish, communication, family and occupational psychology and personality developmentUnemployed people's access to the EDP in relation to society training programme Techniques, environment and people The dairy selected participants for the course on Mathematics, family and company economics. the basis of applications received via the employment service from interested, unemployed indivi- Vocational training duals together with details regarding age, sex, The vocational part of the course consists of two previous employment andeducationalback- main areas: stock room duties (3 weeks) and ground. introduction to the dairy sector (5 weeks). The 3 week course covers stock, internal transport, stock Employment of course participants organization and stock control. The main aim ofRecruitment will be effected upon completion of the 5 week course is to provide participants with: the practical section of the course. The first class is a basic knowledge and understanding of thedue to complete their course at the end of sector and the specific company; December and will be advised of their employ- increased knowledge of specialconditions ment in mid-January. At the same time the dairy relating to working with foodstuffs in generalwill be taking over thelastof the external and the dairy sector in particular. production. The head of the Packaging Depart- ment, who will be involved in the recruitment of The course content comprises the following employees forhis own department, currently subjects: anticipates that, with a few exceptions, everyone sector knowledge will be employed. Recruitment criteria are de- company knowledge scribed in Section 1.3. cleaning and hygiene chemical and physical processes at the dairy Planned rotation bacteriology 14 participants have been planned for each of the composition of milk three classes.Itis envisaged that there will be dairy production employment for the participants from the first two cheese production classes and that those from the third class will technology/understanding technology operate as a reserve workforce. This will enable quality/quality awareness the existing unskilled employees to attend the adult training course planned for March. Practical training The practical part of the course comprises 4 weeksWhen these employees return to the company on of practical experience in the Nr. Vium Dairy. This completion of their course itis anticipated that is arranged in such a way that during the 4 weeksthere will be a need for temporary employees to the participant alternates between a number ofcover the summer holiday period. At the end of the workposts. The participant interviewed had, there- summeritis hoped that some of the course fore, alternated between 9 workposts during the 4 participants will enrol for a further 8 week course weeks, after which he was able to fill a job. (public funding for adult training is granted for a total of 14 weeks).

3.6 Training organization Training costs The Industrial Council's (public authority) fund to Cooperation project assist bottleneck problems financed the training The programme is a cooperation project between coursesforunemployedpeople. MD Foods the Nr. Vium Dairy, the respective trade unions, incurred no expenses for the project, course costs the employment service and three different train-being borne by the authorities. The unemployed ing institutions. The overall project is coordinated course participants receive unemployment benefit by the employment service; one of the trainingat the same rate during theoretical and practical institutions, with knowledge of the dairy sector, is training. responsible for the management of the project and the coordination of course contents. The training 41 unskilled employees have enrolled for the 6 institutionspropose and develop the training week adult training course. This course will take course content followingdiscussions withthe place during working hours and is currently at the head of the dairy. A large proportion of theplanning stage. The course content will cover course content is made up of courses offered bygeneral training in Danish, arithmetic and EDP. the institutions and specifically adapted to this The training course costs and a major proportion 62 particular training programme. The course origin- of the participants' remuneration will be covered

62 by the public funded scheme for adult training. Theorder to overcome the fears that the unemployed public fund only covers 80% of the daily rate (DKK trainees might replace the existing employees. The 67.00) and the employees and union representa- union representative hopes that the 41 employees tives are seeking full remuneration, this has yet towho have enrolled for the 6 week adult training be agreed but the union representative is hopeful course will continue on to the additional training thattheywillbe successful and obtainfull course. remuneration during the 6 weeks of the course. During their attendance on the course the employ- An unemployed course participant ees jobs are undertaken by the newly trained The central element for the unemployed people is unemployed individuals. the fact that most of them have the prospect of a job in the near future. This has been the main The union representativeisseeking a formal incentive for enrolling and participatingin the agreement on training to guarantee the employ- training programme. ees will be able to return to their old jobs after completingthecourse.Allexistingunskilled Those who are employed in the dairy state that employees have been offered the opportunity tothey could have undertaken the work without take part inthe course which commences in trainingbut thatitisusefulto have learned March. something about hygiene and cleaning. They have also learned about the cheese production process, although this is not directly relevant to 4. Training assessment their actual jobs. It is considered to be a good way to begin for people who have been unemployed Management assessment for some time.It has also meant that the new The head of the dairy initially suggested that more employees have got to know one another better. than the three classes of 14 unemployed people The participants general assessment of the course should be training at once, for instance 100 in all. is that it should either be improved or could be There are 5 dairies in the Vidbk district and there discarded;it would be useful, for example, to are dairy farming and food sector companies in reduce the general and stock related aspects of the neighbouring districts and it is estimated that any course by half. The unemployed individuals have surplus of trained unemployed people would be had no role in the planning or development of the absorbed into the West Jutland food sector. course contents.

The head of the Packaging and Cutting Depart-Assessment of the actual course is mixed, single ments considers that the upgrading of unemployed units of the course are assessed as follows: people has worked well. The course participants, who are currently undertaking the practical part ofGeneral training their course, show an understanding of hygiene and the manufactured product. An overall expres- This has providedlittle vocational benefit, the sion, throughout the company, of satisfaction with common motivation for the participants being the the course participants demonstrates that theyprospect of a job. This implies that motivation for have achieved a general understanding of the general vocational training has been mixed. The production processes. Furthermore, the 4 weeks participantinterviewedconsideredthatthe practical training in the dairy have provided an physics and chemistry elements were useful and adequate period to get to know the individualrelevant for the future working situation. Satisfac- participants before the actual recruitment process tion regarding EDP training was expressed but the takes place. psychological part was considered irrelevant. In general it was considered that too much emphasis Itis essential to note that during the practicalwas placed on thesocial,pedagogical and period the trainees have not been filling an actual psychological aspects of the course which many job. In retrospect it is considered that it might have participants found boring. been useful to interview the unemployed individual with regard to the application for participa- Vocational training tion in the course. However this would have been atime consuming exerciseinatight work The evaluation of the stock room part of the course schedule. was negative. The participant interviewed criticized the limited course content; there was not The female union representative enough to do; the participants were bored and the It is felt that the newly recruited employees actually trainers were criticized unfavourably. have a far better training background that the existing employees. The union representative feels Introduction to the dairy sector the existing employees should have received better information about the new initiative and This part of the course was positively evaluated. expressed a wish for the introduction of a planned The participants have benefitted by learning about training programme for the unskilled employees in the whole of the cheese production process: from 63 63 milking the cow to the final consumption of the course and the trainees gain experience in the cheese by the consumer. The advantage of the dairy before they are actually employed. This is a participants having the opportunity to producecost-free, efficient way for the dairy to obtain a cheese themselves at the pilot plants was empha- large number of well-trained employees. sized. Furthermore, it is considered that a knowledge of hygiene is useful in dairy production. As far as the unemployed people are concerned, However, the comment was made that, whilst it isthe training programme is seen as a compulsory good to know something about cheese produc-activity through which they canfind ajob. tion, this knowledge is not directly relevant to theAlthough participation in the course is seen as job as it is the dairymen who actually produce the essential in order to successfully find work they do cheese. The course participants consider they not consider the training provided by the course as could carry out the actual work required without necessary for them to be able to carry out the work attending a training course. in the dairy. This view obviously results in mixed motivation and interest regarding the course. Practical training at the dairy The existingunskilleddairy employees, who The participants are dissatisfied with working for 4 originally took the initiative for the implementation weeks for the dairy and only receiving the daily of the programme, perceive the new recruits as a unemployment benefit rate. They consider that 1 threat since the latter have stated that they are now week would be sufficient and, moreover, suggest better trained. The target training for the former that the practical training should take place earliergroup has not yet started. inthe coursesothat theywillhave more experience of the dairy before undertaking the Linking the training activities together presupposes theoretical introduction to the dairy sector. a sufficient number of employees in order for a courseof some durationtobe established. Cost evaluation Training a reserve workforce means that the The dairy has not borne any costs for the training company have the opportunity to economize by programme. The head of the Packaging Depart-using numerical flexibility inits production plan- ment estimatesthatthetrainingcourse has ning. This means that the opportunity for some reduced the normal costs of starting a new employees to undertake training courses of long- employee by approximately 25%. The participant term duration has been created but, at the same interviewed is dissatisfied with the fact that the time, job competition has also been created. trainees are only paid the daily unemployed benefit rate as opposed to the full daily remunera-The factthatthistrainingcourse has been tion rate during the 4 weeks practical training in implemented is due to the interaction of several the dairy as itis considered that the traineesfactors: government initiativesinthe fieldof undertake full production jobs. training for the labour market (e.g. the Educa- tional Aid to Adults from Public Funds Act) and the 5. Summary establishment of funding to overcome training The expansionoftheNr.Vium Dairy and problems are fundamental to the existence of this increased cheese production are a result of MD training programme. The question is: how would Foods' decision to concentrate specific production the company have overcome the problem if it had at Nr. Vium. An important task is, therefore, to to cover all the expenses on its own? adapt employees to the increased production, i.e. a considerable number of additional unskilled In addition the employment service and the unions employees will be required. The dairy's usualhave made considei-able contributionsinthe recruitment procedure is inadequate to cope with educational field to the implementation of this a large number of new recruits, therefore the skills programme, especially in their experiments with upgrading of unemployed individuals,as de-and publicising of rotation schemes. scribed in the case study, is an ideal solution to the dairy's problem. The employment service All those involved agree that the implementation of provides interested unemployed applicants. The the project is due especially to an enterprising and dairy selects course participants,public fundsexperienced educational consultantintheun- meet the cost of a thorough 17 week training skilled women's union.

64 64 APPENDIX 1

The Nr. Vium Dairy case studyisbasedon interviews with the following:

MD Foods' head office: Production manager Klays Toft Training manager Teddy Andersen

Nr. Vium Dairy: Head of dairy Jens Cristian Holm Head of Packaging Department Palle Jellesmark Head of Administration Birgit Schmidt Sorensen Female union representative (unskilled female workers) Lisbeth Knudsen Participant in course for unemployed people Hannah Kjwrulf

APPENDIX 2

Organization chart

Head of dairy

Quality manager Office

Milk treatment Cheese Packaging Engineering Project department department department department administration manager manager manager chef engineer

Milk treatment Stock Despatch

Transport Salting house Cold store room

Milk planning Creamery Cutting

Packaging

Laundry

65 65 APPENDIX 3

Company data 5. Permanent employees (1988 and 1992) Company overview 1991 1992 1. Current total sales classified information Hourly paid employees 88 238 2. Current total payroll classified information Management 12 16 3. Current value added classified information Drivers/mechanics 22 22

Employment/human resources 6. Temporary employees None 4. Current total workforce (1992) Management 7. Arrivals and departures

Head of dairy 1 during last three years: Managers and departmental heads 9 Management arrivals: 4 Administration 6 Hourly paid employees arrivals: 150 16 8. Remuneration policy: With respect to: Hourly paid employees Local labour market below average Skilled dairymen 22 Sector as a whole average Dairy apprentices 12 Unskilled employees 157 9.Total annual cost of Unskilled trainees 14 continuing vocational classified Skilled craftsmen 4 training information Drivers/mechanics 21 230 10. Percentage of total 1992 training expenses information not Total 246 available

11. Number of employees participating in the company's 1992 training information not programme available

L 66 66 3. CARLSBERG A/S

The case study is based on interviews with key(1991/1992). The factory produces beer and soft company personnel held on 30th November and drinks. Only beer is produced at the subsidiary 2nd December 1992 and carried out by Jette whichisthesubject of the case study. The Bang Jensen MA. Carlsberg and Tuborg Breweries each produce 5 millionlitres of beer per day and production Introduction comprises some 40 to 50 different types of beer Carlsberg A/S (Carlsberg Ltd.), the subject of this which are sold on both the domestic and foreign case study, can be generally characterized as amarkets. Beer produced for the home market is company in the process of growth which, through bottled and packed in one type of packaging, its development strategy, maintains daily produc-whereas beer for export is bottled in three different tioninline with immediate market demands. types of bottle and six different types of packaging Furthermore, the company aims to rationalize the for more than 100 markets. Beer sales are subject work process with a view to increasing productiv- to seasonalfluctuation and are considerably ity and reducing the number of production units. higher in the summer than inthe winter. The product may be storedfor up to one year. This objective has intensified demands on the Carlsberg A/S in Copenhagen primarily supplies flexible use of production equipment and optimum beer to East Denmark; West Denmark is supplied use of human resources. by a Carlsberg subsidiary in Fredericia. The beer is distributed via two channels: in Copenhagen it As a direct consequence of this development trend is delivered direct to retailers, supermarkets and the company employs fewer people. In addition, restaurants by Carlsberg drays, distribution to the the company's demands with respect to the existing rest of the country is via 59 Carlsberg depots employees' skills have changed considerably. located throughout the country.

The aim of this case study is to describe and assess Carlsberg A/S holds a market share of 70% in the method adopted by Carlsberg A/S in order to Denmark. Its market share fell slightly a few years prepare for this development, especially with a ago, due to the introduction of a number of low view to illustrating company initiatives with respect priced brands of beer on the home market, but it is to upgrading existing employee skill levels. now steady. Consumption of beer on the home market is lower than in previous years and this One company innovation is its decision to offer 50 means that the home market and Carlsberg's brewery workers a 12 week course at lower production for the home market are stagnant. secondary school level in general subjects, e.g. Danish, mathematics, etc. Carlsberg A/S exports beer to over 100 different countries. When a new market is being built up The actual training programme is aimed at raising beerisexported from Copenhagen but once thegeneraleducationlevelofthebrewery Carlsberg has gained a certain share of the workers and creating an educational base to market it enters into a licensing agreement with work from. A scheme has recently been intro- a foreign brewery. Once the market is sufficiently duced in Denmark offering adult employees with a developed, a private brewery is either built or low educational background financial support for bought, or a joint venture agreement is made with general adult education. a local brewery. In addition, the export unit in Copenhagen produces bottled beer for cross- The educational programme has been positively border trade which provides a fairly high level of evaluated by the social partners. sales.Both home and export production are stagnant. Carlsberg's products are sold under 1. Company overview the brand names of Carlsberg and Tuborg. Quality and brand names are important sales 1.1 General description of the companyparameters and in this connection it should be noted that Carlsberg A/S expects to achieve ISO 1.1.1 General company data 9002 certification in spring 1993. Carlsberg Breweries is an old company, established in 1847, located in the centre of Copenha- gen. Today the company is called Carlsberg A/S 1.1.2 Company development and and includes the Carlsberg Brewery in Copenha- strategy gen and the Tuborg Brewery on the outskirts of Copenhagen. Carlsberg and Tuborg are amongst A demand oriented company the most well known brands of beer in Denmark. Infuture Carlsbergwillbe a more demand Carlsberg A/S belongs to the Carlsberg Group oriented company. The market will be character- which includes 81 subsidiaries companies, mostized by product demand differentiation, more of which are located outside Denmark. types of beer will be produced in different types of bottles and increased demands on packaging are Carlsberg A/S employs a total of 2,900 people anticipated. This,inturn,will lead to greater and has an annual turnover of DKK 854 milliondemands onflexibilityrelatingtoproduction I 67 equipment and organization, bothin terms oforganization. A more detailed description of the human resources and skills. Demands will be internalstructure of the Carlsberg Brewery is made on greater mobility, flexible working hours, restricted to the Bottling Department. new qualifications, the division of labour, etc. The existing traditional company culture will have toThe Bottling Department change and innovation will influence the future ofThe Bottling Department currently consists of three the company. slightly different bottling units operating on a two or three shift system. The largestunit has a Amalgamation of the Carlsberg and production capacity of 78,000 bottles per hour Tuborg Breweries and another produces 48,000 per hour. One of During the period up to 1996, the beer production the units produces to specific order whereas the which now takes place at the Tuborg Brewery will other two produce for stock. Seasonal fluctuations be transferred to the Carlsberg Brewery and the are partly dealt with via production planning for brewery in Fredericia. This means that production stock and partly by weekend work and temporary capacityatCarlsbergmust besubstantially employees during the summer. The department is increased. The main part of production will becentrally organized in line with production. transferred in 1996. On the brewing side the units that prepare the wort and carry out fermentation Organization of the Bottling have to be extended. On the bottling side a new Department unitistobe establishedincorporating new technology.Thiswillleadto a reductionin Organizational structure (cf. Appendix 2) employee numbers, new job functions, reorgani-The organization of the department is built around zation of the workforce and new qualification three bottling units. There is a relatively hierarch- demands. ical structure with the production manager, works inspector, bottling manager and bottling super- Increased productivity visors and foremen over the brewery hands. The For a number of years the company has been communication network is long; there are many rationalizing production to increase productivitylinks in the organization chain. and has reduced the number of employees. In 1985, 785 hectolitres of beer were produced in The new bottling system, which will be introduced the Danish brewing sector per employee. Den- in1996, will be characterized by advanced mark ranked 12 in terms of productivity in thetechnology both in production and information European brewing sector. In 1990, 1,961 hecto- terms. litres per employee were produced and Denmark wasin5thpositioninEuropeintermsof The implementation of new technology will have a productivity. This aim for higher productivity is a considerable effect on the workforce. In the 1970s constant feature in the development of Carlsberg 3,000 people were employed inthe Bottling A/S. With the amalgamation of the breweries, Department. By 1985 the workforce had been investmentin new works and a reductionin reduced to 500-600, appointed on a group employee numbers, increased productivity and contract basis, with approximately three times as quality are two keywords central to future devel- many managers as there are today. 250 people opment at Carlsberg. are currently employed, on a group contract basis, in the Bottling Department, with some 15 foremen, 1.2 Technology, organization and 10 bottling supervisors and 2 storekeepers. A qualification demands bottling unit is now run by 14 to 20 employees and 2 mechanics per shift. The new unit, which Beer production consists of brewing and will be introduced in 1996, will be operated by a bottling total of 6 employees. This underlines the fact that The brewery side comprises the malt house, brewcontinuous development will be accompanied by house and beer treatment. The production process considerable staff reductions. is highly technological with computerized production control. Bottling covers the sorting, rinsing Changed qualification demands and washing of bottles, bottling of the beer, the The work in the bottling units currently consists of pasteurizationprocess and thelabelling and operating the machines and overseeing the work packagingof thebottles.Technologyinthe plus a number of manual tasks. When the line Bottling Department is more mechanical and is does not function correctly a technician is called the part of beer production which involves the in. Tasks in the new bottling unit will be extended most employees. Itis, therefore, on the bottling to include the planning and control of the unit plus side where future reductions have to be made in easier maintenance. For example, the employees production and labour costs. With the amalgama-will be able to undertake line control, correct tion of Carlsberg and Tuborg a new Bottlingelectronic control faults and locate faults via a Department, incorporating new technology, will visual screen. The operations manager considers it be installed. This will lead to a reduction in the is important that some employees should be able 68 workforce, and alterationsintasks and workto undertake these tasks during a shift, others 68 should understand the principles of operatingEmployee numbers computer controlled machines and be capable of As previously mentioned, Carlsberg has been moving from one screen to another. Thisis a undergoing a process of development for a considerable extension of the job, demanding number of years which has required a consider- extra vocational qualifications, attitudes and the able reductionin employee numbers and will ability to act as a trouble-shooter. The fact that the continue to do so with the future amalgamation jobsare changing also means that existingof the Carlsberg and Tuborg Breweries in 1996. demarcation lines between the technicians and The following table shows how this development operators will have to be broken down in order to has evolved since 1987 and the anticipated avoid barriers to development. These changes will situationin 1996 whenthe amalgamation also lead to changes in demarcation and the role becomes reality. of the foreman will be partially redundant. This means that the number of brewery workers Organization, communication and will have to be reduced by approximately 500 by cooperation 1997.Future workersinthis group willbe Reorganization of the workforceinthe new recruited from both breweries; although produc- bottling unit will,in addition to a demand fortion will take place at the Carlsberg Brewery increased and new skills, also introduce new tasks individuals from each brewery will be offered an and moreresponsibilityfortheemployees. equal opportunity. The technicians group has Employees in some units are already dividing already been reduced by 91 from 350 to 259, into groups of 5 to 6 employees who allocate the but it is a group with growing importance because work amongst themselves. A larger distribution of of technological development in the work. The work tasks and responsibility will affect demarca- number of salaried employees also has to be tion and leadto a more decentralized,less reduced; in the Production Department 200 jobs hierarchical, organization with shorter communi-will be lost partly due to the amalgamation but cation paths. At present all communications arealso due to the decentralized organization. via the shop steward but a process is underway involving more visible management and more direct communication between the managementBreakdown of the current workforce and the employee. Accordingtothe works 74% of the present brewery workers are male and inspector, the future foreman should be able to 26% female, this 3: 1ratio corresponds to that in understand technological processes, read and 1987/88. In the past, certain jobs were, typically, understand manuals,including thosefor ISO carried out by men and others by women but new 9000,communicatewithforeignmachinery developments have causedthesebarriersto suppliers regarding faults, cooperate with other disappear. The technicians are male, whereas foremen and have a knowledge of the process ofthe salaried employees group comprises 60% beer manufacturing. The foreman should be a men and 40% women. The average employee sparringpartner and an equalintermsof has, generally, been employed by Carlsberg for communication. This is where some of the present several years and the average age, 45 to 50 foremen fail and, therefore, retraining and/or years, is relatively high. This is due to the fact that continuing training are being considered. over a number of years Carlsberg has been reducingits workforce and there has been no 1.3 Human resources recruitment. In the past no specific qualification demands were made for the workers and a recent Workforce structure study showed that only a small number had a The Carlsberg and Tuborg Breweries employ a skilled,butwidelyvaried,background,the total of 2,900 people, comprising approximately remainder were unskilled. This study also showed 1,300 workers, 150 foremen, 250 techniciansthat approximately 50% of the brewery workers and 1,200 salaried production and administration had completed 7 years of formal education. The employees. Despite the fact that beer sales are background of the foremen is similar since they subject to seasonal fluctuation the company does are all recruited from this group. 70 of the 239 not engage a significant number of seasonaltechnicians are trainedelectricians and 169 employees. mechanics.

Group Year Planned 1987/88 1991/92 1995/96 reduction

Brewery workers 2,230 1,198 800 500 Technicians 350 259 Salaried employees 975 778 300 Production Department 385 180 200 69

69 Employee turnover the CO metal trade union. The catering sector and Employee turnover in the company is very small, brewery workers unions were recently amalga- only a few percent. A certain number of natural mated as a consequence of the fall in brewery retirements have taken place amongst the brewery worker numbers. workersbut thesehavenotgenerally been replaced and there have been no new employees for a number of years. This also applies to the2. Continuing vocational training foremen and maintenance employees. A limited number of maintenance employees have been2.1 Company training policy recruited from the machinery suppliers due to theirCarlsberg A/S does not have a formal training specialist knowledge of the new equipment. The policy for its brewery workers but the following company only recruits salaried employees with will provide a description of the main elements of specialist knowledge, e.g. the recruitment of a the way training is handled by the company. product manager for the Marketing Department. New employees are onlyrecruited when aCollective bargaining agreement vacancy cannot be filled internally. regarding training A framework agreement, including a section on Recruitment and internal promotion training, has been drawn up between the manage- When the present brewery workers were recruited ment and employeesinconnection withthe there were no demands on educational back-amalgamation of the breweries and the corres- ground; employees were mainly recruited for ponding reductionin employee numbers. The physical jobs and promotion was by seniority.agreement covers the new role of the brewery Today there is an increasing need for replacementworkers plus the training which will be offered in and appointments are made on the basis ofthis connection. The new technology and reorga- qualifications. Vacancies are advertised internally nization of work will make the traditional demar- after a jobprofile has been drawn up. An cations unnecessary. The agreement recognizes applicant's qualifications are assessed by thethat the work of the brewery workers is to be departmental head in conjunction with the shop extended to include simple maintenance tasks but steward and the following factors are taken into it has not yet been decided how this will be account: undertaken. It has been agreed that the brewery workers will be provided with training in general sense of responsibility subjects in addition to training aimed at individual ability to cooperate jobs. Agreement has also been reached with quality awareness regard to employees who leave the company: ability and desire to acquire the necessary theywillbeofferedtraininginarelevant vocational qualifications programme drawn up in cooperation with the education publiceducationsystem.Duringthetraining technical knowledge and skill period (maximum 3 months) the employee will initiative receive full remuneration from Carlsberg. creativity interest in results There is currently no link between participation in experience as a brewery worker training courses and remuneration, due to the fact that the union representatives do not want this Thislistisdrawn from awritten agreementconnection to be made. The management, how- betweenthemanagement andtradeunion ever, would like to reward participants andit representatives. The production manager attaches anticipates that this will be reflected in remunera- great importance to low rate of sickness absence, tion in the future. temperance and,inpart,age.The present foremen were allrecruited from the brewery 2.2 Target groups worker group. They are employees who haveThe brewery workers each undergo an average of shown interest in and ability for leadership. 3 to 4 days training per annum. Maintenance Department employees undertake an average of 7 Working conditions and trade union to 8 days training per annum and this reflects membership technological developments. Foremen receive little The basic remuneration for a brewery worker is training since itis anticipated that this role will DKK 65 per hour. Furthermore, a piece-work disappear. bonus is paid depending on unit productivity, this varies from DKK 32 to 50 per hour. In addition 2.3 Training development and planning there are various inconvenience allowances and The Production Department manager has overall shift bonuses are also paid. The remuneration level responsibility for employee training, although in is high in comparison with other unskilled employ-practice a large part of this responsibility is given ees on the Danish labour market. The breweryto the bottling supervisors who know and are in workers are members of the catering and breweryregular contact with the individual employee. 70 workers trade union and the technicians belong toOnce a year the shop steward and a representa- 70 tive from the Training Department meet to discuss Supplier courses training for the following year, i.e.itis decided When new machines are purchased the suppliers whichemployeeswillparticipatein which prepare and carry out employee training as a courses. The shop steward theninformsthe recognized part of the delivery service. The employee, having previously discussed which company views this an expensive but essential courses the employee would like to attend. The training activity. company follows the principle that trainingis voluntary. There is a folder in each departmentOn-the-job training containing details of the content and duration of Employeesundertakeatrainingprogramme coursesavailable.Thisprovidesa practicalbefore they are made responsible for the operat- starting point for course selection. Course partici- ing of a machine. Four working trainers are pants are selected by the management and it is the permanently attached to the Training Department Training Department's task to provide the Produc- and their sole functionis the preparation and tionDepartmentswiththenecessary coursecarrying out of on-the-job training. The individual information and implementation. departments maintain a record of which employees are qualified to operate a particular machine; The training committee the training is valid for one year. The company has a training committee for the brewery workers, made up of the productionGeneral training managers, shop stewards, the training manager, A recent training innovation is the company's offer wages manager and a special training expert. Theof continuing training in general school subjects to committee maintains an overview of the training 50 employees. This programme will be described needs of the various departments in order to plan in detail in the case study. and provide the optimum level of training. Future training plans The Training Department Itis planned to provide compulsory language The Training Department provides a service for all lessons in German and English,in addition to theother departments,directingattentionto general subjects. During the last six to seven years course opportunities and fundingpossibilities, voluntaryclasseshavebeenheldinthese e.g.publicsubsidies, and organizing course languages for the brewery workers. participation. In addition, it maintains links with institutions and trainers and labour market educa- Furthermore, it is hoped that managers, brewery tional requirements. workers and mechanics will participate inthe same courses in the future with a view to this being 2.4 Type of training courses instrumental in breaking down existing demarca- Within the framework of this case study it has not tions. been possible to record the overall training activity of a group of employees in the course of one year, 3. Description of a specific training but the following types of course are available forprogramme the brewery workers: 3.1 Carlsberg's tasks until 1996 and Courses for semi-skilled employees the purpose of general education for These courses are offered by the AMU system.the brewery workers The courses include a number of modules lasting Carlsberg is facing a considerable reduction in its one to three weeks and qualify the individual forworkforce whilst at the same time developments the job of line operator in the manufacturing withinthecompany aremakingincreased sector. In addition,morespecifictechnical demands on qualifications and organization as courses, tailored to the company, are offered in technology is introduced into the departments. The brewing and bottling. More general courses inpresent workforceischaracterizedby older quality awareness and company knowledge are employees who have been with the company for also held. The courses offered by AMU are many years and have had a limited education. mainly financed from public funds but itis the During the next few years the company will have partners in the labour market who have the skills to select and qualify employees for the new and know-how regardingtheplanning and production equipment and, furthermore, establish content of the courses. Carlsberg A/S hasit a form of work organization and cooperation own school which comes under the AMU system equivalent to the qualification level which these where technical courses in brewing and bottling employees may have or may achieve. areheld. These are of one tothree weeks duration and are approved by the AMU TradeThe company is,therefore,inthe process of Committee. Carlsberg A/S also cooperates with selecting employees who willbe needed at the Process and Metal Industry Trade Committees Carlsberg in the future and upgrading their skill in order to hold more specific technical courses levels.Withinthe framework of thetraining and these are run in Carlsberg's own school or in committeethe shop stewardsinterviewedall an AMU centre. brewery workers regarding their future wishes. 71

71 Theresultoftheirinvestigation,which was the courses are held at a school run by the public anonymous, showed that 415 people wanted authorities. The adult education course runs for a early retirement, 545 wanted to continue working total of 12 weeks and is organized in four sessions and 528 were willing to undertake training (39 ofof three consecutive weeks over a period of 6 these wanted training for another job). This study months. Two classesof 25participantsare also highlighted the educational background ofcurrently underway and the participants all come the employees: 50% had completed seven years' fromthevariousProductionDepartmentsin schooling. Carlsberg, therefore, expects a con-Carlsberg and Tuborg. siderable natural wastage within the next five years, avoiding the need for redundancies. Course content The course comprises tuitionin Danish, mathe- During the company's strategic discussions onmatics, science (chemistry, physics and biology) staffing the new production works in 1996 severaland information retrieval (EDP). The content and possibilities were discussed: one was touse standard is equal to that taught in the 8th and 9th employees with a craftsman background. Thisyears of a lower secondary school and is set by would, however, lead to the dismissal of thethe Danish Centre for Adult Education. brewery workers. Another possibility consisted of training the present brewery workers; approxi-Training form mately five years ago a group of brewery workers Trainingisbased on a traditionaltimetable was trainedtooperate advanced technicaldivided intoskilledtraining lessons based on processing equipment via a long-term trainingtraditional group teaching with additional home- course with positive and satisfying results for all work. A three hour workshop is held once a week concerned. However, not all the brewery workersbased on self-tuition. A voluntary test rounds off are considered suitable for such a programme. In the course and the company, feeling that this order to upgrade the brewery workers' skills it iswould lead to more commitment to the course, considered they need a better educational basewould like this to be a definite part of the course. on which to build their retraining. Thisis an In general the employees, having participated in importantreasonforofferinggeneraladult the course, do not take the test. The shop stewards education. want the test to remain voluntary.

For a long time the shop stewards have sought toTraining costs implement continuing training for brewery wor-The school and teachers' expenses, as well as a kers in order to qualify them for the future. Themajor part of the employees' remuneration during introduction of grants by the Danish Governmentthe course, are financed from the public sector. for general adult education for individuals with a Carlsberg bears the cost of the difference between poor educational background has provided the the subsidy and the employee's actual pay.Its necessary stimulus. expensesforthetwo classes(eachof 25

participants)were DKK 1 million,i.e.DKK 3.2 Access to general continuing 2,000 per participant. The employee receives training full pay during the course but has to spend time All brewery workers received information aboutcompleting homework inconnection with the the general adult education programme.If an training. employee was interested he advised the shop steward, whereas other employees have had to be 4. Assessment of the training encouraged to enrol. The departmental managerprogramme by the various parties and shop steward decided who should attend theinvolved first iwo courses.It appears that the employees realize that continued employment at CarlsbergThe management's assessment requires training and that the management is Itis important for the manager that through the considering the future when selecting coursecourse the employees are taught how to "learn to participants. However, thereis no recognized learn", i.e. are trained to acquire new knowledge. linkbetween courseparticipation andfuture The aim is to give the employees the feeling that employment. new tasks can be handled easily, giving them, for instance, the confidence to start reading machine 3.3 The training programme manuals. The general belief is that the course enhances all round education, for instance read- Programme objective ing a newspaper, also respect for the theoretical The training programme aims to raise the general knowledge of the technicians has increased. The education level of the course participants from amanagersfeelthatthecourseremovesthe 7th class to 9th class level. pressure of everyday life from the employees. When they return from a course their view of day Training organization to day problems has changed. The fact that the The courses are developed within the public sector courseisdifficultto keep up with enhances 72 framework. Teachers are publicly employed and company spirit/cooperation. The homework in- 72 volved lends a more serious image to the course The teachers are popular although the employee than others which involve less commitment. The interviewed questioned whether they had experi- course is considered to promote better commu-ence of teaching adults. The teachers will, there- nication between the different levels within the fore,possibly need to improve theirtraining company and a good foundation. methods.

The union assessment The interviewee does not wish to take the final test The shop stewardis pleased with Carlsberg's at the end of the course although he thinks that general aim to upgrade the brewery workers. At most of the participants will do so, since the the same time,it was stressed that the training company expects this. activity should be useful both in connection with further company training and within society as a Regarding other courses, the comment was made whole. Thereisno recognizedlink between that although you follow a course and gain new participation in the course and continued employ- knowledge itis of little use when you return to ment, but taking the future into consideration, it iswork, since you return to the same job. an offer thatisdifficulttorefuse. The shop steward's openness towards the courses is based 5. Summary on feedback from colleagues. He believes that theThe employment situation at Carlsberg Breweries courses have placed the employees in a learning can be summarized as follows: process, therefore, providing them with a positive attitude towards basic training. From the start theWithin a limited number of years the workforce employees have had a positive attitude towardswill be considerably reduced and major efforts are the programme. He feels that participants arebeing made to train the brewery workers and satisfied with the courses and are generally more maintain their employment. This is partly due to self-assured. The fact that training is organized in the introduction of new machinery and partly to preparation for a test has been discussed but it is the composition of the present workforce. General voluntary and this is considered satisfactory. adult education is essential for both those who will continue to work at Carlsberg and those who are The employee's assessment likely to undertake continuing vocational training. In general the employee interviewed considered Itis also essential for those employees who will that the course broadens one's outlook and have to seek alternative employment on the improves communication skills. She also felt that general labour market. As a consequence, this she would be able to make use of the data trainingtraining activity is being supported by both the in her everyday work in the Bottling Department. management and the employees. Danish and information retrieval (EDP) were of particular use to the employee. She found scienceThe Educational Aid to Adults from Public Funds and mathematics interesting but not so relevant toAct is an important factor in Carlsberg being able his everyday life. She would have preferred toto offer general adult education courses toits followscheduledscienceclassesinsteadof employees.Itis an unspoken, although recog- chemistry butthetrainingofferincludedall nized, fact that the training programme, apart subjects or none atall.She felt that foreignfrom upgrading the level of the employees in language lessons would be useful; she often felt question, is also of importance in the selection at a disadvantage when dealing with the foreign process for future employment with Carlsberg. The machinery suppliers, although the 12 week course company islarge enough to cope withthe did not provide sufficient time to learn general absence of the course participants during the 12 skills let alone another language. However, sheweek programme. considered the course was a valuable starting point. A general characteristic of this case study is the consensus amongst the interested parties regard- The course requires the participant to spend some ing the expediency of the general nature of the two to three hours a day doing homework. The training programme. Management emphasizes this interviewee considered the fact that the courseas a prerequisite for the implementation of the was arranged in full-time units of three weeks continuing vocational training necessary to devel- duration was good since it did not detract fromop the total human resources of the company. A family life for too long a period. The length of the decisivereasonfortheemployees'positive training course means that the participants have to attitude is the fact that the course not only qualifies follow the training closely and this was considered the individual for a job in the company but also to be a positive aspect coupled with the class improves their general employment possibilities. atmosphere which encourages the participants to make an effort.In general the participants are highly motivated.

73 73 APPENDIX 1

The Carlsberg A/S case studyisbased on interviews with the following:

Training manager Torben Dahl

Bottling Department works inspector Kasper Madsen Shop steward Kai Sillemann Brewery worker Barbara Jacobsen

APPENDIX 2

Production manager

Works inspector Works inspector

Bottling Department Work Shop

Bottling manager Bottling manager Bottling manager 3 Bottling managers Bottling Unit H1 Bottling Unit N5 Bottling Unit E

10 Bottling supervisors Bottling supervisor Bottling supervisor Bottling supervisor 2 Warehouse supervisors

Foremen Foremen Foremen 15 Foremen

250 Employees appointed on a group contract basis

74 74 APPENDIX 3

Standard data sheet 6. Temporary employees Not significant

Company overview 7. Arrivals and departures duringlastthree 1. Current total sales DKK 854 million years: (1991-1992) Brewery workers departures: 1,032 2. Current total payroll classified information arrivals: 0 3. Current value added classified information Technicians departures: 91 arrivals: 0 Employment/human resources 4. Current total workforce (1991-1992) 8. Remuneration policy: With respect to: Brewery Local labour market wages higher workers 1,198 (886 male/312 female) Sector as a whole wages higher Technicians 259 (259 male) Salaried 9. Total annual cost of employees 975 (approx. 816 male/ continuing classified 544 female) vocational training information Production 385 10. Percentage of total Total 2,817 (1,961 male/ 1992 training 856 female) expenses subsidized classified by public institutions information 5. Permanent employees (1988 and 1992) 1991 1992 11. Number of employees participating in the Brewery workers 2,230 1,198 company's 1992 400 brewery Technicians 350 259 training programme workers Salaried employees 975 778 Production 1,385 180

75 75 4 STEFF-HOULBERG

Introduction During the period between 1988 and 1992 the This case study islimited to the Steff-Houlberg employment rate at group level has fallen slightly, slaughterhouse at Holbk. In 1992 this was thefrom 2,400 in 1988 to 2,350 in 1992. first meat processing factory in Denmark to obtain ISO 9002 certification as part of Steff-Houlberg's The individual companies within the group frame- quality development strategy. The unit at Holbk work have relatively wide ranging and autono- operates as an independent profit centre within mous powers for training policy and organization. the guidelines laid down by the management of However, the Steff-Houlberg ISO project differs in the Steff-Houlberg parent company. The Holb,mk that it forms part of the group's development policy slaughterhouse is, thus, an autonomous unit. strategy and ajointaction programme and schedule has been decided on by the group for It has not been possible within the framework of all the individual companies. this report to study the relationship between the ISO project and primary production, a relation-Steff-Houlberg Slaughterhouses, Holbk,isa ship which has been established and is certain to medium-size company,establishedin1986, have an effect. producing non-perishable goods. The company forms part of the manufacturing process and The study was carried out on the basis of a series provides a link between the slaughterhouses and of interviews held in the company. An importantshops, retailers, etc. with "ready-to-use" products. principle was toensurethatallemployees concerned were involved. Assistance was givenThe company is made up of two departments: a by Professors Birger Jacobsen and Ebbe Lauritzen Sales Department and a Production Department. of the Danish Meat Trade College. Thedepartmentsarecloselylinked asthe company produces to order and coordination The aim of the case study has been: between the departments is essential. The company was the first in Northern Europe to gain ISO to identify continuing training activities estab-9002 certification (on 29 April 1992) and has, lished in connection with the ISO project; thus, undertaken an employeetrainingpro- to examine the extent to which it has beengramme. possible to involve several groups of employees in the same training programme; The company is located in factory buildings which to examine the extent to which it can be saidwere taken over in 1986 and formerly housed a the ISO project has influenced the generalcondensed milk factory. It employs 114 butchers, attitude to continuing training activities among engaged on a group contract basis, and 20 the different categories of employees; salaried employees. It is situated in an area with to examine the various participants' assess-no other meat factories. There was a previous ments of the immediate results at the end of the cooperative meat factory in Holbk which means ISO project. it is possible to recruit skilled people from the area. Production and markets 1. Company overview The company supplies products to the penultimate The Steff-Houlberg Slaughterhouse at Holbk deals link in the "ready-to-use" chain. The market is in the cutting and packaging of meat products and based on the customers as linksin the "value supplies supermarkets, catering companies andchain",i.e.catering companies, supermarkets export markets. The Holbwk company, which and supermarkets with their own butchery depart- specializes in boning and packaging fresh meat, ments. is the connecting link between the slaughterhouses (including the parent company) and other compa- The products processed include cor-vac packed nies that use cut meat and meat packed for the meat, which the butchers/supermarkets can use to retail trade. The product range includes primal rationalize shop operations and create the image cuts,minced meat and meat cut to customerof a traditional butcher's shop. In addition the specifications into single portions. Whole andbutchers are able to maintain a stock of non- part-carcases are cut into primal cuts and into perishablegoodsthat preventunnecessary retailportions, according to customer require- wastage. The cor-vac packs are also sold in bulk ments, for supermarkets and other outlets. The packs for freezing by the consumers themselves. Steff-Houlberg Slaughterhouse at Holbk is a subsidiary of Steff-Houlberg Slaughterhouses, a The company also produces packed and price- cooperative company employingsome 900 marked goods for direct display in accordance people,theparent companyis situatedat with individual retailers' requirements. Ringsted and slaughters pigs from Zealand and Bornholm andmostfatstock. A numberofThe company deals with both small and major European and Danish companies are linked tocustomers, the latter being large chain stores. The the group. price is fixed according to output demand: the discount shops, for example, have price labels on 77 their display cases and, therefore, the goods are labour inthe production groups. Each group not price-marked. The large chain stores distribute will, thus, have greater responsibility for cutting goods to their shops intheir own vehicles or to order and the group itself will organize the work through fresh foodstuff depots. The area of rapid within the group. growth is the discount markets whereas purchases by traditionalshopsislower. The companyWork is carried out according to expected order exports to Sweden and Germany.Ithas not, volumes;thegoods arethusproduced in however, been possible to establish the extent ofadvance. Since the products are processed with this market, as Sweden is an unstable market. a non-perishable, long-life concept this permits a certain amount of flexibility in terms of production Product strategy arrangements. The company operates in accordance with the concept of long-life products. This is achieved byOrders from large supermarket chains are typi- ensuring a high quality in materials received and cally received at 18.30 and then packed for the an efficient production flow at low temperature; individual stores by the Despatch Department. the products are packaged the same day. This production process ensures a low level of germs. The goods are transportedtoKlover'sfresh foodstuff depot which distributes the goods to the In addition to non-perishable meat production a individual stores so that, at the latest, they are number of other products are manufactured, e.g. received before noon. fresh and hung beef. A high standard of hygiene is maintained by the company's control proce-Meat is cut, processed and packed during normal dures: upon receipt of the product, control by theworking hours, i.e. between 06.00 and 17.00. butchers, good processing conditions and low production temperatures. The Despatch Department packs for the individual shops from 19.00 to 03.00. In periods when there In order to ensure high quality, in future, all sub- are few orders the products are stored in cold suppliers will be inspected once a year. Goods stores. delivered from the parent company are also subject to current controls and any problemsHuman resources arisingare handleddirectly by thebutcher 80% of the employees in the boning rooms are concerned. The factory manager is only involvedskilled, i.e. either pork butchers, sausage makers in cases where the problem cannot be solved. or retail butchers. There are no skilled employees inthePackaging Department.The company Current assessment of goods received is carried places great store on the flexibility of its employ- out systematically by means of enquiry forms and ees to be able to cut different products and switch documented with polaroid photos. between production in the industrial and retail cutting units. When there are insufficient orders to Organization and technology occupy the employees full-time, cutting is carried The raw materials are received as whole and part out for cold storage. carcases from other Danish companies. These raw materials are processed into finished retail packs Coordination between the industrial packaging for supermarkets. All pork supplies come from theand cutting rooms is undertaken by the same parent company atRingsted,whilebeefis foremen, avoiding the need for several people to supplied by several Danish slaughterhouses. be involved.

Retail trade and supermarkets Recruitmentiscarriedout by advertisingin There are separate production flows for fresh and papers. Employees are laid off when there is a hung meat in order to avoid cross contamination. fall in orders. The company has experienced no recruitmentdifficulties;inthisconnection the The equipment used is familiar and in common use relatively high remuneration level and the gener- throughout companies in the meat sector. ally highlevelof unemployment inDenmark should be considered. Internal organization The production processis organized on three Recruitment selection avoids the re-employment of levels: production employees, foremen (butchers) undesirableindividuals.The employeesare involved with industrial and retailcutting and trained in the slaughterhouse sector and are the packaging and the Despatch Department. A responsibilityofthebutcher/foreman,whilst Production Manager oversees the foremen. production responsibility rests with the factory manager. Work is carried out on an individual piece-work basis but a reorganization process is currentlyThe relationship between the social partners is being carried out with a view to introducing a characterized as relatively good. Both remunera- 78 group piece-work contract and a divisionof tion and working conditions have been set by 77 collective bargaining agreements in accordancetake an activepartinthe ISO project. The with which coordinating bodies were set up. conceptual starting point was that ISO certification would require homogeneity with regard to the 2. Continuing vocational training product, and an increased sense of responsibility Following a resolution of the Federation of Danish on the part of each employee. The establishment Pig ProducersandSlaughterhouses,itwas of the ISO project thus became the basis for a decidedtoimplement a quality developmentnumber of continuing training activities for all project for the whole of the Danish pork slaughter- company employees. In this connection particular house sector which would be implemented by the mention should be made of a one-week, compul- Danish Meat Research Institute in cooperation with sory, quality awareness course which all employ- PA Consulting Group. ees attended.

With a view to ensuring an effective transfer of theThe prime aim of the course was to establish a results to all pork slaughterhouses, it was decided common attitude towards the concept of quality tostartthisquality development by,initially, across occupational barriers and organizational carryingitout as a demonstration project in structures. An interesting result of this process was Steff-Houlberg Slaughterhouses. It is the intention that different groups of employees gained know- to provide all Danish pork slaughterhouses withledge of other aspects of production from that of access to the results of this project at a later date. their daily work. Several employees stated that This model has been successfully used in a number after the course they felt that they had been of other projects within the sector. integrated into the strategic development of the company and, thus, felt responsible to a greater The background for this sector resolution is notdegree for the common goal, namely the future of unambitious, but the decision must be seen in the the company.Inorder to maintainthislink, light of the raw material strategy referred to in the systematic continuing training activities will be main report; a strategy which, in accordance with implemented. current market trends, focuses on raw material quality.Furthermore,thechosensub-supplierSystematic continuing vocational traininghas, strategyfor export marketswillalsorequire thus, become an integral part of the company's production quality to be raised with a view todevelopment strategy. meeting the international trend for an internationally recognized foodstuff production quality standard. Training organization and funding In order to carry out the firm certifying project a Thismeatsectordemonstrationproject was control group, comprising five salaried employees carried outinseveralstagesinthe various and two production employees, was set up in the departments of Steff-Houlberg Slaughterhouses. Holbwk company. This control group implemented The case studyis,however,limitedtoSteff- a process in which employee training played a Houlberg, Holbwk, since the responsibility for its central role. Merit rating was undertaken through successful accomplishment has been placed with internal meetings and training activities for both the strategic management of the company. It falls employees and foremen. As previously men- outside the frame of this study to describe the role tioned, the central activity was a common one- played by the Danish Meat Trade Research week duration quality awareness course set up in Institute and otherprivateconsultantsinthe cooperation with a local AMU centre. The course accomplishment of the project. was held in-house but financed by the government in terms of fees and remuneration for loss of The management atSteff-Houlberg,Holb.mk earnings. However, the company paid DKK 800 implemented a number of training courses (cf. per week as compensation for the participant's below) with a view to motivating the employees to loss of earnings.

Subject operation Aim Duration No. of trainees Evaluation Method

Quality awareness Quality promotion 1 week 1 1 4 None Internal training Flexibility 2-3 hours As required None Dept. meetings/ seminar Information/ procedure 2 hours As required None Information meetings Knowledge/interest 1 hour As required None Key personnel seminar Upgrading 4 hours x 4 days 15 None Training plan Wishes/needs 2 times/year Selected None Internal audit Quality control 3 days 5 79 78 With regard to continuing vocational training of training wishes and needs has been kept and programmes relating to the ISO certification, thethese form the basis of the development of a control group has developed a training plan fortraining plan for each individual employee. the certification process. This plan includes two- hour information meetings and four-hour courses It appears that the ISO project at Holbk has for key people. These activities combine both resulted in a change in attitude on the manage- internal and external courses. Courses for foremen ment's part with regard to continuing vocational are organized by the Danish Meat Trade College. training. Thisissignificant, particularly as the It should be noted that activities in the departmenteffects of a course, such as that on quality meetings category are developed andlater awareness, are difficult to assess. The consensus, provided by the management. Training in these amongst employees and management, that con- activitiesisthus considered as self-teaching. tinuing vocational training pays, seems to have Selected employees participate in an "inter audit gained a firm foothold. In future, new recruits will and quality control for the food sector" course, thehave a contractual obligation to participate once planning of which is coordinated with the Produc-a year in continuing training courses for a period tion Department to ensure that the courses are held of at least a week at agreed rates. during low production periods. The quality awareness coursea 3. Description of a specific training precondition for ISO certification programmequality awareness As mentioned above,thecourseinquality awareness played a central role in the whole Aim ISO project. The fault limitation aspect of the The aimof the courseistostrengthenthe course was especially conclusive. The course participants' wish to respond to the company's aimed at crossing occupational barriers in the quality requirements and improve their coopera- manufacturing process and its particular aim was tion and problem solving skills. to create a common attitude to benefit the daily running of the company. Content Quality awarenessawareness of own demands,A number of personal contacts have been made problem solving techniques, knowledge of qualityamongst the employees who would otherwise not control methods, economic computing of qualityhave known each other or each other's working control model and evaluation of own work. tasks. The course was run by an external trainer, which was considered particularly important by Objective the participants, as they found that communication On the basis of the individual preconditions, to was better and not marked by the familiar, well- become able to respond to quality demands. defined occupational and organizational barriers.

Duration 1 week (37 hours) Theopportunity was created,therefore,for everyone to view and experience their common Organization workingenvironment withoutprejudice,and The teacher is mainly expected to act as a guide enabled new and different methods for solving and consultant so that the course is basically built a number of working problems to be evolved. on the participants' own ideas. A large part of the During the group sessions of the course a high courseiscarried out in groups and in open degree of interaction was achieved amongst the discussion. various categories of employees. Groups who in their everyday working life are often set in their 4-5. Summary including assessment attitudesagainstoneanother.Thegeneral by the social partners opinionisthat thelevelof cooperation has ISO certification creates a change in attitude, with increased considerably through the development a view to conveying to the employees a general of these activities. idea of company strategy and their roles in this development. Assessment of the training course It is very difficult to assess the effect of a course The ISO certification project in Steff-Houlberg, that chiefly concerns attitude. However, the senior Holbwk, has led to the company implementing a management has commented that remarkably few number of systematically arranged continuingcomplaints are now made to the department vocational training courses, and has meant a involved in the training programme and that the decisive breakthrough with regard to attitudes and department has succeeded in establishing contact understanding of the importance of continuing witha new,interesting customer a major vocational training and its strategic developmentsupermarket chain which has recently achieved potential. great success in selling meat on a discount basis.

As a direct consequence of ISO standard require- The master butcher and internal supervisor have 80 ments for continuing vocational training, a record likewise stressed the great difference in the work 79 before and after the course. They have, however,employees now accept this type of situation and difficulties in providing concrete examples, but are prepared to work overtime. 2. simply state that "everything is just going better". Future training and strategy It is worth noting that both the management andThe most essential result of the ISO project has employees have shown great interestin andbeen the fact that the company now has a motivation towards the ISO project. The reasoncomplete overview of its strategic goals and the for this is to be found in the fact that they both, development of its employees' skills. The manage- obviously,haveanobjectiveinterestinits ment systematically identifies "grey areas" in the implementation. The official justification appears production process where, after a number of to be the good quality of the project. The Factory objectives are set, various forms of continuing Manager sets great store by the employees' training are used to achieve them. greater understanding of management problems and provided the following example: Itis particularly interesting that, through the ISO project, the company has become aware of its Before the course the company ran the risk of own in-house resources with regard to continuing temporary work stoppages in connection with training. Thus, managers are used as trainers and, dismissals, following a continuing fall in demand as a result, the company has arranged a number and a sudden subsequent shortage of labour of "training the trainer" courses. Thus an important when a single large order was received. Thecoherence between productive goals and the training effort has been achieved.

80 81 APPENDIX

Company data 7. Arrivals and departures during classified Company overview last three years: information 1.Current total sales: classified information 2. Current total payroll: circa DKK 498,000 8. Remuneration policy: per week In line with overall sector: piece-work 3. Current value added: classified information 9. Total annual cost of Employment/human resources continuing vocational classified training 4. Current total workforce information Male Female 10. Percentage of total Skilled 62 4 1992 training expenses Unskilled 15 33 subsidized by various classified Total 77 37 public institutions information

11 Number of employees 5. Permanent employees (1988 and 1992) participating in the Classified information company's 1992 training classified programme information 6. Temporary employees, (1988 and 1992)

Seasonal employees: average length of sea- son 3 months holiday relief approx. 15 Other fixed term contracts: none

81 82 PART 3:

Conclusion

82 CONCLUSION

It should be noted that the area of this study has within small- and medium-size companies. Train- been limited to two sub-sectors: the slaughtering initiatives for this target group should, first and house and dairy sectors. As mentioned in the foremost, relate to "tools". introduction, the reason for this choice is due to the fact that these two sectors are particularlyAs the Danish food sector has chosen to commit important and of great interest in terms of theitself to a predominantly primary produce and Danish food sector's potential and in terms of sub-supplier strategy, the subject of quality control economics they are of immense importance forwill be a special area of commitment in the years both employment and exports. ahead.Itisinteresting to note that a Danish slaughterhouse was the first in the world to obtain The beverages sector is included to comply with ISO certification and even more so that this ISO therequirement tocarry out a comparative projectinvolvedtheprimary producers,thus analysis on a European level. creating an inter-connection within the chain of values, which might almost be termed a quality Therefore,thisanalysis doesnot provide a chain. thorough overall view of the Danish food sector, primarily due to lack of available resources. The The Steff-Houlberg case study permits a number of overall Danish food sector is only dealt with on ainteresting observations.Itis notable that ISO superficial level and on a statistical basis. Atten-certificationiscarried out as ajoint project tion was drawn to this fact by the social partners at involving all company employees. In this connec- the first evaluation meeting on 10 March 1993. tion itis striking that the various projects are all instrumental in conveying an overall understand- However, thereisan overall consensus with ing of this quality concept. Thus, it is not a one- regard to the social partners' attitude to observa-sided behaviour therapy, but rather a change of tions, descriptions and part conclusions inthis attitude resultingin changed behaviour. More- report. The choice of the four case studies as being over, it is remarkable that all the employee groups representative of interesting continuing vocational generally displayed great interest in the project. training cases, was, thus, made on the basis of aTypical reasons given for this interest were that procedure at the initial meeting with the social they were able to immediately grasp the sense and partners. soundness in the management's presentation of a project which so strongly stressed "quality control" The following is only a superficial observation and as a development strategy. It has certainly proved a number of concluding recommendations based profitable intermsofcontinuingvocational on the study. training activities; already, after the first year,it has been possible to demonstrate a number of Regarding the methodological procedure, please economic improvements. The Steff-Houlberg ex- refer to the introduction and the methodological periences will eventually be placed at the disposal papers and presentation of the central FORCE of all Danish slaughterhouses. From the very start team. In addition, we refer to "G issues" in which the project was planned in such a way that the the different aspects of the case studies are results could also be used in other companies. discussed in detail. This study proves that total quality control is of A long-standing tradition exists in Denmark that decisive importance to the continuous develop- initialand continuing vocational trainingare ment of the Danish food sector, especially in public matters, this is based on a political census relation to the internal market. It is, however, to be of the social partners. noted that the introduction of total quality control cannot be limited to the food sector alone. The fact The present study substantiates the views on that the sector handles biological material makes it continuing vocational training of all the partiesnecessary to include the primary producers on involved in the individual case studies, particularly equal terms. Major difficulties are to be antici- the companies use of the AMU system. Inthis pated when integrating these two sectors into the connection, however, itis important to note thatprocess, but the Steff-Houlberg case study pro- the existence of the AMU system and the technical vides,inthisrespect,an example of"best colleges has meant that responsibility for training practice". planning does not lie with the companies but, on the contrary, with the public system. Itis recommendedthatfutureprojectsare specifically aimed at developing quality control There is a risk, therefore, that small-size compa- programmes for the different food sub-sectors, nies are unable to include training efforts within namely programmes which emphasize the con- their individual company development strategy. nectionbetweenmanufacturing and primary This study recommends that continuing training production. Projects and studies which involve schemes should be particularly addressed tothe opportunity of transferring to other types of people with responsibility for training, especially company should be given a high priority. 83

83 The growing unemployment rate in Europe is a arrangement of continuing vocational training serious threat to the continuous development of programmes adapted to companies. European expertise. The fact that the future intake on the European labour market will be reduced, Itis recommended that future programmes con- combined with a falling youth population willcentrate their efforts on studies and continuing create problems if the in-house training of the vocational training programmes which focus on existing workforce or the retention of the skill levelstraining as a lifelong process. In this respect it is of those currently employed is unsuccessful. extremely important to involve elements from what couldbecalled"basicskills".Studies and An interesting Danish approach isthe current continuing vocational training programmes endeavourtoimplementsystems whichwill should, to a considerable extent, be aimed at connect initiatives for the unemployed with the companies who employ people with no or a poor need for increased continuing vocational training educational background. The Danish rotation and efforts. VUS systems could serve as an inspiration in this respect. There is a strong political desire in Denmark to change the unemployment system so that theIt was apparent throughout this study that the unemployed individualis no longer a passive Danish food sector is highly aware of the many recipient of public assistance but is activated either iniatives taken in recent years by the Commmis- by means of training or a job of, albeit, limited sion regarding the food sector. This highlights the duration. The goal is for the unemployed indivi-numerous directives with direct relevance to the dual to either improve/change his/her occupa- food sector, the vast majority of which have been tional skills or at least keep in touch with the labour followed up by national legislation and which market. The newly implemented VUS scheme is a have been thoroughly discussed. publicly financed scheme enabling employees withlittleor no educational qualificationsto Danish food sector companies have directly and participate in courses during working hours. systematically aimed to incorporate the directives into the planning of company strategic develop- VUS course subjects are aimed at improving ment opportunities and have also demonstrated a general skills, (e.g. language, spelling, reading, willingness to earmark resources to provide the etc.). However, the subjects may, to a certain necessary continuing vocational training involved. extent, be sector oriented. Several case studies undertaken have revealed great interest in the The general attitude amongst the social partners VUS scheme which is considered to be directlyand the companies is in favour of an open and applicable to the fulfilment of strategic companyfree European market for foodstuffs. Initiatives to goals.Inaddition, the schemeisparticularly create equal competitive conditions with the EC relevant to the food sector, as many employees are supported. have a poor educational background. A general up-dating of the employees' general education It is recommended that different kinds of initiatives level is considered a prerequisite for a subsequent, shouldbeintroducedwiththeobjectiveof targeted continuing training programme. The VUSensuringtheimplementationoftrainingpro- scheme appears to offer a number of interestinggrammes linked to the numerous food sector possibilities with regard to the endeavour to directives. integrate initiatives to relieve unemployment and raise educational levels; the possibility of estab- Theseprogrammesshouldhave a distinct lishingrotation schemes seems tooffer great European base. One could imagine the establish- potential. ment of a common European cooperation network amongst food sector training bodies identified Rotation schemes are an arrangement whereby a by the Commission as "centres of excellence". previouslydeterminednumberofemployees Following the developmental stage, these centres undertaking a permanent training programmewould regionally offer different types of continuing are replaced temporarily by unemployed individ-vocational training with the aim of ensuring a uals. standardized educational implementation of EC directives on a European level. The advantages accruing from this scheme are that the unemployed keep in touch with the labourA typical feature of many of the directives is the market and, at the same time, the company skillaim to raise the quality of fully processed foods. levelis raised. These schemes seem to offer aThese directives, which are oftenjustified by great deal of potential, particularly in the foodconsumer preferences, thus encourage the indivi- sector with its many simple work tasks. Further-dual company to be able to certifyits quality more, the company itself takes an active role in control and production process. Assessed from the identifying the content of VUS programmes.It continuingvocationaltrainingviewpoint,this should be noted that the law imposes severe initiative has frequently tended to impart a joint 84 restrictions on the VUS scheme regarding the attitudetoallemployees, e.g.hygiene and 84 quality. It is interesting to note that in this context employee skills can be expected in the Danish the social partners clearly feel that they have a food sector. New skills will gradually be added to common interest. This is concretely reflected in the traditional occupations, preferably from the com- fact that companies arrange continuing vocational mercial field. training programmes involving the adaptation of both attitude and behaviour, activities which are Itisconsidered that "manufacturing change" often joint arrangements regardless of working withinthe food sectorwillbe of significant tasks and statusinthe company. TheSteff- importance in the near future. Houlberg case study substantiates this trend quite clearly. In this connection it is recommended that analyses and studies are commenced with the objective of A problem raised by Commission initiatives inthrowing light on the workforce skills relating to relation to the food sector lies in the fact that theythe production and automation process which the do not set aside resources to implement the food sector is undergoing; it is assumed that the necessary national continuing vocational training sector will demand further and more hybrid skills, but leave this to national legislation. especially of a technical and commercial nature.

Another interesting feature of the case studies is Projects and analyses, whose object is to empha- the high demand for skills. There is a distinct trend, size continuing vocational training as the individ- much higher than previously, to seek qualification ual company's potential development strategy in of a hybrid or general nature. The explanation forthe face of this change, should be given a high this is likely to be found in that fact that increased priority. process automationnecessitates a completely different work organization which breaks comple- Despite preliminary expectations, an increased tely away from traditional specialities and skills. It interest in continuing vocational training courses is, therefore, important to the companies that the has been identified throughout the study in terms individual employee is multi-skilled and able toof both the social partners and the companies. A take a comprehensive view of production. The clear tendency to regard continuing vocational trend applies to the companies' introduction oftraining as an investment in the future is eclipsing new production technology. It has been found that the view that continuing vocational training is an to a greater extent than previously, companies areadditional company cost. Continuing vocational demanding more general skills, e.g. managementtrainingis an investment in the future that will and cooperation and communication, together strengthen the competitiveness of the individual with an overall understanding of the total process company. flow. Inthe immediatefuture,a changein

85 85 CEDEFOP - European Centre for the Development ofVocational Training

Training in the food and beverages sector in Denmark

Ole Hoist

Luxembourg: Office for Official Publications of the EuropeanCommunities

1996 - 85 pp. - 21 x29.7 cm

ISBN 92-827-6730-2

Price (excluding VAT) in Luxembourg: ECU 8

Myynti Farad lining Yenta Sa Ig Vericauf Alp:mg Sales Verde Vendita Verkoop Venda

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