Too many fish in the sea

The number of UK-based systems
companies is slowly being whittled down and
with fewer larger system companies and in
a more competitive market consolidation is
inevitable. There are simply too many fish
in the pond for all of them to survive we can
expect to see more mergers & acquisitions
as well as other forms of market exit as
weaker firms run out of road.

It's a question of when, not if, these changes
happen. The sector is evolving. And only the
fittest, best prepared and strongly resourced
will survive.

At every level, companies determined to
survive and prosper have got to get in shape.
There's no magic solution to improving
corporate fitness levels. There are many
different factors to consider but getting
distribution and logistics right ought to be
at the top of everyone's list.

You can have the best product in the world but if you can't get it to your customers
when they need it and in the quantities they demand, you're simply not in a position to
compete. Great products demand great distribution. This is something Spectus
really understands. Why? Because we've learned it the hard way.

Feeling the pain

Five years ago HW Plastics opened a new distribution centre at Trentham,
Stoke-on-Trent. The effect on Spectus, which at that time was still part of Heywood
Williams, was close to disastrous. It soon became clear that initial teething problems
experienced when the centre opened were just the tip of the iceberg.
Products would arrive at the centre… and then simply disappear! Stock that wasn't
getting lost, was getting damaged. It was a nightmare for both our customers and our
company. We had great products but were falling down time & time again on delivery.
Between February and June 2002 the number of orders we were able to fulfil on time
and in full dropped from just over 94% to 74%. By undermining our ability to deliver,
the problems at Trentham were undermining our ability to compete.

Fixing the problem The problems at Trentham were many and they went deep. Left unchecked they would quickly have threatened our survival. Spectus had to find solutions. The recovery began in 2003 with a complete re-structuring of the management team at Trentham. Spectus had the resources it needed to create the state-of-the-art facility that Trentham could and should have been. The project represented a massive financial investment. Undermined by subsidence, much of the concrete flooring had to be repaired. Racking had to be moved to create more capacity, new and more robust systems introduced and many miles of underground tracking cables had to be dug up from the existing concrete floor. People with the experience and expertise needed to drive through the

required improvements in customer service had to be found and put in position.

Building a competitive edge

Despite the size and complexity of the task it faced, the new team have succeeded
in re-establishing customer focus and have steadily improved performance. In 2004
the layout of the warehouse was re-designed. The result was an increase in the
capacity of the internal racked area by 40%. Around 95% of the internal warehouse
racking is fitted with cantilever racks and Trentham boasts the highest cantilever
storage capacity of any facility in Europe. Over 3,500 different products are currently
stored inside the facility. All products now have "fixed" pick locations, each labelled
with bar code product details. Heavy items, such as steel, are located in dedicated
aisles at the beginning of the pick order. This ensures that they are placed at the
bottom of the stillages to avoid crushing more fragile plastic profiles.

All told, Trentham holds around £5.2 million worth of stock, operating 24/7 with
70 employees on site at any one time. On average 250 orders are picked per day with
95% of these delivered the following day. What's more, before despatch a series of
standards are checked including: waterproof protection over cardboard boxes,
a minimum of four bands applied to a set tension using electronic banding guns,
double layered polycarbonate protection to ensure bands don't indent product,
all product placed within the dimensions of the stillage and all stillages photographed
before despatch.

Survival of the fittest

Trentham was turned around three years ago and the figures for orders completed
"on time and in full" are now consistently 98% or above. Now part of the Latium Group,
Spectus has taken the warehouse from being an embarrassing disaster to a key asset
of which we are extremely proud. Once it threatened the survival of our company; now
it is helping to differentiate our service and support our customers' growth and our
future as a leading systems company. We can now look forward to the challenges
and opportunities that face the industry confident that we can deliver the goods.

We've been through the pain barrier of introducing a state of the art distribution and
logistics system that will enable us to add another 50% to our volume without putting
the brakes on. Other systems companies and their customers have yet to go through
that turbulence. Trentham is back in business giving Spectus and Spectus fabricators
the edge to grow faster than their rivals in a more competitive market.