Reducing market share while increasing revenues; an oxymoron, surely? Not so, says Simon Stott of Remploy Furniture, a part-government-funded employer of disabled people. TM is all ears…
Remploy was established in 1945 to provide work for people injured during the Second World War. Fast forward more than half a century and Remploy Enterprise Businesses remains the largest specialist employer of disabled people in the country, with 3,000 employees at 54 sites across the UK.
Remploy’s diverse portfolio of businesses includes automotive, electronics, healthcare, e-cycle, packaging and the manufacture of specialist protective clothing for the police and armed forces. Remploy Furniture, with factories in Sheffield, Neath and Blackburn, has been undergoing a period of modernisation since 2007 to ensure that it continues to carry through the company mission — i.e. to provide sustainable employment for people with health conditions and disabilities.
Show me the money
Stott says: “The industry has suffered in the past from being poor at introducing new products to market: over-budget, late or off-spec. As part of our drive towards sustainability, therefore, we have now budgeted for a significant amount of R&D expenditure. We haven’t had this before, so it means that we can begin to review all aspects of our original product base, and also those that we buy in at a margin.” Remploy’s business model is built around two central features, says Stott: development and delivery. “While facets of a commercial operation such as bids, quotes, installation or delivery might seem self-explanatory to management, we sought to include our staff in the company’s journey from the outset to help them understand exactly how Remploy is aiming to reach our goals.”
Given that the company is placed to create a considerable number of new jobs, such investment is not necessarily limited to Remploy’s manufacturing requirements; there will be a need for increased parking and general facility space, for example. With monies budgeted for the next three years, however, Stott urges a degree of caution. “We mustn’t get too far ahead of ourselves, and continued spending is very much dependant on the volumes of work being won. That said, if the sales continue to come in I will be absolutely delighted to secure more expenditure, thus helping the business grow towards our dream of true independence,” he says.
As a leading supplier to the UK’s largest school investment programme, Building Schools for the Future (BSF), and with one in three school children sitting on the company’s chairs, Remploy justifiably targets this programme as representing the key feature of its sustainability drive. While the downturn saw capital projects grind to a virtual standstill during last year, “Government and the financial institutions are once again releasing money to major contractors within our industry, hence the pick-up,” says Stott.
Indeed, Remploy’s pipeline for 2010 shows a 400% increase on 2009, with a raft of contracts set to ‘drop’ imminently, including a £5m project in north Larnarkshire, the New Line Learning Academy in Carillion and Balfour Betty’s Park View Academy. 1200 schools are ring-fenced for BSF until 2014. Says Stott: “Remploy aside, there are but a handful of manufacturers capable of supporting BSF’s furniture needs. So, while our market share will decrease initially, such is the size of the playing field that Remploy can both enter profitability and position ourselves to accumulate a greater share of the pie as we go along.” Although these are exciting times for those at the company, “The guys in the factory often question what will happen after 2014, and we have to say that honestly we can’t set promises in stone,” says Stott. “However, there are not many businesses which can speculate that far in advance, and we have a host of contingency plans to ensure the work continues to flow.”
Given the nature of Remploy’s mission, health and safety considerations remain its number one priority. “Absolutely, the business — both at corporate and local levels — is driven by a safety culture that includes a greatly heightened appreciation of the potential risks that manufacturing can entail. Indeed, while our drive towards sustainability remains fundamental to the business going forward, to do so without ensuring the safety of the guys and girls on the floor would be wholly improper, and running counter to the principles upon Remploy was founded,” says Stott.
Driving to reduce and eliminate accidents, near misses and affiliated concerns, the company runs a comprehensive safety management system which undergoes auditing on an annual basis. In looking at the gamut of work safety issues, and increasingly environmental processes, dedicated health & safety officers are employed on-site, ensuring that the company’s audits are continually being driven by risk assessment, work-time lost and operational safety reviews.
To further ensure a working environment which emphasises employee wellbeing, Remploy enjoys a burgeoning culture of Lean in the factories. “Since our drive towards sustainability in the business we have sought to implement best practice wherever possible — a great deal of visual management and 5S principles around the sites, for example,” says Stott.
The foundations in place, Remploy was ideally placed to introduce business improvement training to its teams, with the mantra of ‘work smarter, not harder’ very much the over-arching theme.
A dedicated CI (Continuous Improvement) team was established to track the company’s progress on a monthly basis. “We are beginning to see the ‘real’ benefits of a Lean culture in Remploy Furniture, rather than improvements being directed by fiscal considerations alone,” confirms Stott. “When Lean is introduced to manufacturers, regardless of sector, many struggle to get their heads around these seemingly abstract concepts. However, and especially for our guys, when you break it down to housekeeping, health & safety and KPIs they suddenly say ‘well why didn’t you explain it like that before!’”.
Ultimately, says Stott: “When Remploy quotes for business I cannot charge premium rates simply because we are providing important social value in our manufacturing.
Commercial viability is paramount, given that when dealing with building contractors, money is seldom anything but extremely tight — quality, cost and delivery are the languages they speak.” “As long as we are competitive on costs, our history of industry-leading quality and delivery means that the CSR aspect of what we do offers a unique selling point that is truly distinctive.”