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When Do Returns Diminish?


We have all heard of the (so-called) Law of Diminishing Returns.  This is often held to be a fundamental principle of economics although the concept can be, and often is, applied in other disciplines.  Broadly the idea is that applying increasing resource to an activity will not, after some arbitrary point is reached, bring proportionate benefit.  Put another way, the cost of additional inputs bring about a decreasing relative advantage or improvement.

This effect came to mind recently when a friend of mine, then a practicing dentist, reminded me of the time when we became involved in attempting to reduce the impact on dental practices of proposed Government legislation. In 2010 the Department of Health commenced the process of introducing regulations known as HTM01-05.  This was prompted partly by the feared consequences of ‘Mad Cow Disease’ and the possible spread of the related human condition known as Creutzfeldt-Jakob disease (CJD).  Setting aside the over-zealous pursuit of precautions against CJD which itself has not lived up to the perceived threat, the requirements of HTM01-05 were plainly in excess of reasonable requirements in a properly (hygienically) managed dental practice.  I, along with another microbiologist, co-authored a letter to the journal of the British Dental Association (BDA) pointing out that diminishing returns, in terms of patient safety, would certainly apply to the vast expenditure required to comply with HTM01-05.  The response was astonishing.  Not only did the editor of the BDA Journal promote the letter to ‘Letter of the Month’ status but also commented on the editorial page.  Publicity that followed ensured that every dentist in the UK was aware, and the legislators backed down to some extent.  Diminishing returns were eventually recognised.

Why, you might ask, have I raised this issue in this way?  The introduction of another edition of the BRC ‘Global Standard – Storage and Distribution’ might provide a clue!  When, one wonders, will this Standard and its stable-mates stop growing in size, complexity and bureaucracy?   Have the requirements of these standards passed the point of diminishing returns?

Both the requirements of the BRC Standards and the process of certification may well benefit from simplification.  Even the first issue of the ‘Packaging’ standard was considered by some to be over-prescriptive – things have moved in the direction of increasing prescriptiveness thereafter.  It might be that the ‘returns’ are not merely diminishing but are actually reversing as a result of the time and cost of the all-prevailing preoccupation with assuring compliance with vast amounts of technical and procedural detail.

The contrast between the BRC Standards and, for example, ISO22000 (which applies to any organisation in the food chain, and has been unchanged since 2005) is striking.  The substance of ISO22000 occupies 20 pages; Storage and Distribution (that is, Warehousing and Trucks) requires 32.  The BRC Standard might be defended on the basis that a large proportion of the provisions have caveats as to applicability to differing circumstances.  These however often call for subjective judgement such as would be employed whichever standard was being applied.  Time for a re-think, perhaps?

As always, any thoughts or comments would be most welcome.

 Matt Ewart 

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