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Hozelock, Fit for all seasons

Manufacturing in Action, Source : The Manufacturer
Zone : Leadership and strategy
Published : April 2008

Martin Marron, director of manufacturing at Hozelock, the UK’s leading supplier of garden hose, watering accessories, sprayers and pond equipment, talked to Jayne Flannery about the radical adaptation of the company’s business model

Three years ago, Hozelock faced a number of serious challenges. The core UK market was threatened by a series of climatic extremes in the form of hosepipe bans, flooding and disastrous summers. Meanwhile, the company also had to contend with cheap imports from the Far East, coupled with rapidly rising material and energy costs.

In addition, there was the complexity and cost of working from five distinct sites across the UK.

“Although we had a strong brand and a market-leading position in the UK, we realised we had to do something radically different to address our cost base, the seasonality of the business and the impact of climate change,” stated Martin Marron, director of manufacturing.

The answer was a major programme of restructuring and a re-evaluation of Hozelock’s market position in an increasingly volatile market environment. To reduce the cost base, six months of meticulous preparation preceded the closure of two injection moulding plants and transfer of all activity to a single consolidated site at Minworth, Birmingham. “The project ran with military precision and was a credit to everyone involved. We were extremely sorry to lose some highly valued employees, but the need to significantly reduce our cost base provided no other solution,” he continued.

Further rationalisation and the creation of an Engineering Centre of Excellence were completed in August 2007. This left Hozelock with a single, world class 33,400 square metre consolidated site that covered every function from design through to distribution. A further £1 million was spent on state-of-the-art product test facilities and new equipment, including 210, 125 and 80 tonne Demag Systec moulding machines and a pair of Arburg 35 tonne machines. This boosted capacity to accommodate future growth and set new low energy consumption standards for the site.

Operating from a single site has brought many other benefits, including big savings on transport, better communications and a simpler, more agile operation. From a manufacturing perspective, it has enabled Hozelock to move to a pull system, reducing work in progress by 25 per cent and slashing lead times.

It has also eliminated the need for third party warehousing. Suppliers are now expected to conform to just-in-time delivery schedules. “We expect our main suppliers to reflect our own agility when it comes to making just-in-time deliveries. For example, one of our key suppliers, the packaging company Smurfit Kappa, is based in Holland, but they still hold strategic stock on our behalf in the UK at a warehouse which is only five minutes from our manufacturing facility,” he added.

Perhaps most importantly, consolidation has allowed the company to give full rein to its creative talent. Innovative new product development was identified as a key facet of the strategic plan to transform Hozelock’s outlook. “As a result of the consolidation, all relevant cross functional team members are immediately available to work together, whereas previously people had to travel from other sites to attend meetings and production trials,” he explained.

“March 2006 saw 13 million of our customers in the south-east facing a hosepipe ban. Then the following year there was severe flooding across the country. Our business had always been highly seasonal, but demand was becoming totally unpredictable. We had to start thinking beyond the box,” he said.

Hozelock responded with the launch of 14 new products, including a range of ‘water-wise’ innovations to counter the threat of hosepipe bans. Award-winning products such as the AquaPod drip watering system, a Water Butt Pump and Water-Storing Gel and Feed have more than doubled sales of water-saving irrigation systems. The AquaPod and Gel were the first gardening products to win the UK water industry’s new Waterwise Marque in recognition of the significant contribution they make to reducing water wastage around the home.

These were followed with the introduction of a new range of hose accessories for effective watering, including hose guns and the Aqua Control Pro Electronic Water Timer with the option of a rain sensor, so that gardens are only watered when needed. Building on the success of the Water Butt pumps, Hozelock launched a Flood Pump to address the needs of property owners with flooded homes and cellars.

To counter the seasonality of the domestic market, Hozelock simultaneously launched a renewed drive into export markets, which now account for 45 per cent of sales. “The beauty of our international element is that it smoothes out demand fluctuations. Australia, for example, has a totally different season pattern. We are also seeing a big rise in demand from Russia, Poland, Greece and Spain. Each has a slightly different weather pattern which protects us from the vagaries of the British climate,” he explained.

The results of the consolidation and strategic shift in direction have been stunning. Last year profits increased, even accounting for a significant increase in raw material and energy costs. Hozelock won industry-wide recognition with the prestigious MX2007 award for Business Development and Change Management from the Institution of Mechanical Engineers. It was also shortlisted for the Innovation and Customer Focus awards. The judges commended the “truly outstanding” way that Hozelock had driven through change and moved towards a sustainable long-term future.

“It was particularly gratifying because we were a first time entrant. Past award winners have included some of the biggest names in British industry, among them British Steel, Dunlop Slazenger, IBM (UK), Jaguar Cars, Rolls-Royce and Westland Helicopters,” he added.

“The last couple of years have been seriously challenging,” he continued. “Our biggest regret is that not all our staff were able to accompany us in the move to Birmingham, but we were delighted at the goodwill they showed. Many former staff were instrumental in the successful launch of the new operation.

“But what we have now is an excellent platform for future growth. Simplicity, flexibility and innovation are at the core of all of our operations. This benefits our end users, our trade customers and our employees, while improving the profitability of the business and securing its future.”

The Hozelock brand is stronger than ever, underpinned by a very robust business model. Next year marks the 50th anniversary of the company, which invented the plastic hose connection and went on to win the Queen’s Award for Exports. “We recognise that the UK economy will not improve overnight, but we have shown that we can continuously refine and improve the way we work to adapt to changing circumstances. I have no doubt that we will be a major force in 20, 30 or even 50 years’ time,” he concluded.

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