Iracroft Ltd, specialists in the manufacture of rigid tube assemblies for pneumatic, hydraulic and coolant applications, focuses on rapid delivery and is exploring new markets, Ruari McCallion learned from Tom Maddocks.
It is, as they say, something of a ‘no-brainer’ that when customers want something, they probably want it immediately – if not sooner. It isn’t always possible or practical to achieve, especially if the product is low-volume or something special. However, Iracroft Ltd, which is based in Blandford Forum, in Dorset, has made a habit of striking that delicate balance – providing high-quality engineering services in a fraction of the norm in its business.
“We are very responsive, fast reacting and our lead times are much shorter than the industry standard of four to six weeks,” said Tom Maddocks, business development manager. “We seek to deliver – and to higher standards – within a week.” The centre of Blandford Forum looks like the sort of place a film company would select for the setting of a costume drama.
Its Regency and Georgian terraces hark back to the time when it became an important base for the Army, during the Napoleonic Wars. But the Blandford Heights Industrial Park, on its outskirts, speaks of a different future for the town.
Iracroft specialises in the manufacture and supply of rigid tube assemblies for high pressure pneumatic, hydraulic and coolant applications. While its customers are all located in the UK, its products are likely to be found on equipment, such as diggers and backhoe loaders that are exported across Europe and further afield.
The company is quite large in its field, with annual turnover around £13-£15 million. At core, it specialises in bending tubes and fabricating assemblies, which sounds simple enough but there is more to the company than that.
“Over the past 30-odd years, we have become very skilled in tube work, in bending and treating to cope with the needs of hydraulic systems,” said Maddocks.
“When you simply bend a tube you get a condition called ‘necking’ – the diameter reduces and that affects pressure levels.
Flow rates are also affected by internal welds. We have developed techniques that greatly reduce those changes – including eliminating internal welds – and enable pressures to remain constant.” The company has invested significantly in automated welding systems, which keep production costs down, are more reliable and give better flow. It holds ISO 9001:2000 and 14001:2004 and, not surprisingly, the combination of high quality and short lead times has attracted some high-profile customers. Managing supplies and production so that it can respond, but without tying up working capital in excessive stock levels, requires quite a lot of thought and management.
“We do hold some stock but not an overwhelming amount,” he said. “We operate kanban systems for our larger customers and hold partially-finished products for others.” Iracroft has been working with its suppliers to develop a chain that is responsive itself, and an adaptable workforce to flex to meet demand.
“We get the bulk of our work done in standard hours but we use overtime during periods of high demand,” said Maddocks.
“A lot of our work is linked to the construction industry and that has obviously taken a hit during the downturn. What we have done is to transfer skills and people from the core business to my division.” Maddocks’ division was established as a consequence of his secondment in a knowledge transfer partnership (KTP) with the University of Portsmouth. The project sought to identify ways in which Iracroft could best leverage its existing assets to diversify its activities and enter new market sectors. He found that it excelled – and differentiated itself – in three areas. The first was its ability to react quickly and achieve rapid turnaround, which is based on the fact that it is quite vertically-integrated. It outsources virtually no manufacturing, with the exception of volume components. It even invested in its own plating facility in Poole, a few miles away.
The second area of differentiation is prototyping and new product development. Not only is this essential in bringing new lines to market, it benefits existing customers because the habit of building-in correct specifications from outset is ingrained in Iracroft and it is second nature for it to design and engineer for cost-effective manufacture. The approach is so embedded that the company didn’t realise what an advantage it is. Its third advantage is its strong customer relationships, which come through a variety of channels, including logistics, quality and production, as well as sales. While this can present management with some hurdles to overcome it is, again, so well established that the company takes it in its stride.
Building on these three areas of strength, the recommendation was to extend operations into stainless steel, initially into the marine leisure industry, by which is meant premium-level boats – a particular niche in which the UK has a very strong presence. Items such as ladders, gates, hand rails and radar masts represent a small – and relatively straightforward – selection of the potentially hundreds of applications for tubing in that industry. Combining Iracroft’s enhanced material capabilities with its established expertise means that the expansion has led to further opportunities.
“We investigated the gas industry and other high-specification sectors, as well,” said Maddocks. “The recession has meant that marine leisure has shrunk but we’re doing well with the semiconductor industry and in supplying equipment connected to environmental legislation.” As these industries need stainless steel, Iracroft has invested in equipment, premises and training of personnel and the experience has been something of a two-way street.
“We took the time to learn about these industries but we were able to take new technologies and techniques into them, too,” he said. “We’ve been active in our new markets for only 18 months but we have found a lot of success in focusing on the exhaust gas treatment industry.’Necking’ isn’t such an issue our technique of avoiding internal welds helps in this industry, also.
We have been able to build a complete assembly unit in one hit.
As we use a lot of automated welding systems, we’re able to deliver cheaper and, at the same time, enable our customers to sustain better flow rates. CO2 gas levels are being regulated and companies have environmental targets to hit. The systems we provide pipework for help to achieve them.” If you are involved in cleaning gases then there are other openings, as well, and that’s how Iracroft found itself supplying the semiconductor industry.
“A lot of our products have ended up on treatment machines for people like Intel,” Maddocks explained. “Atmospheric quality is vital in the manufacture of computer chips. The products we supply to our customers are used to filter the air in clean rooms – these are very high specification and high quality products. It’s not just in semiconductors that clean air is needed, of course; there are opportunities in other industries, as well.” Exactly what those new markets will be is not for public consumption as yet but one can speculate and one wouldn’t be far wrong, with the more obvious candidates.
Iracroft’s capabilities extend from quarter-inch pipe to four inches and on to 10, in the case of straight assemblies. While its traditional markets may be going through their difficulties, the company’s flexibility and responsiveness – and its courage in investing in stainless steel capabilities – are enabling the new division to show some very encouraging results.
“My segment contributed just shy of £200,000 in its first year.
We expect that will increase by probably 25 per cent this year,’ said Maddocks. “It’s very much about quality, rather than quantity; the batches are very small – rarely into double figures.
The market is likely to grow further. We have taken on a couple of new people and we are doing really well – our order book has grown 100 per cent in the last couple of months. We’re looking strong up to Christmas this year and we hope that will continue into 2010.” Realistically, Iracroft has barely scratched the surface of its potential in stainless steel tubing production. “We’re looking for the growth to come initially from expanding our existing gas treatment accounts, rather than from new customers.” A lot of its competition is really very small – jobshops, rather than the comprehensive services Iracroft offers.
“We’re winning where our competitors simply can’t fulfil orders.
We will be using our responsiveness to develop new orders and to look across all the sectors in which we’re active,” he said.
“The stainless steel project was established as an 18-month investigation to assess the potential. As things are going well we expect to reassess and re-establish our business plan over the next 18 months. Our arms are open: we are looking for and welcome new customers.”