With a heritage dating back to the 1840's, British Rototherm is a world-leader in the supply of industrial instrumentation and services. Jonny Williamson reports on the 170-year-old manufacturer with the heart of a start-up.
British Rototherm can trace its history back to 1847, when Sydney Smith Dennis of Nottingham invented and patented the world’s first steam pressure gauge. Incidentally, he also worked together with George Stephenson to measure the pressure on the infamous ‘rocket’ steam locomotive.
Since then, Rototherm has grown to become globally celebrated for its temperature, pressure, level and flow measurement solutions, serving a wide variety of sectors including energy, beverage, oil & gas, pharmaceuticals, water, transport and defence.
Any business that’s been around long enough to see six monarchs on the throne risks inertia, and it’s fair to stay that an air of complacency had permeated the atmosphere at Rototherm’s Port Talbot facility.
To say that Rotoherm has undergone a change since being bought by brothers Oliver and Tarkan Conger in 2010 would be an understatement. The cultural ‘root and branch’ transformation the pair have instigated has been nothing short of exceptional.
While previously every decision had to be funnelled through one individual – a significant inhibitor to flexibility, agility and innovation, the Conger brothers have created a far flatter hierarchy comprised of a dedicated, knowledgeable workforce who’ve been given the autonomy to make decisions and suggest changes.
A core pillar of Rototherm’s recent success has been the adoption and integration of a robust, structured, modern ERP system. Upon arrival, the brothers found the previous system was “effectively obsolete” and “in desperate need of replacement”.
“Implementing our new system is probably the hardest thing either of us have ever undertaken, but also the thing that has created the greatest benefit” Oliver explains. “It forced us to implement some proper processes and we effectively went from documenting nothing to documenting everything.
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“We were truly starting to understand the business for the first time and it was terrifying what we were discovering. We wouldn’t want to go through that experience again, but it was so useful for us; we learnt so much in such a short space of time.”
As important as selecting the right system was, gaining employee buy-in was arguably even more vital, adds Tarkan; “Whatever anyone says, it always comes down to people. With hindsight, we could have been a lot braver, we were too slow at making the necessary cultural change which extended the timeframe.
“Our next technology installation – a CRM system – ran far more smoothly and quickly because of a combination of our own increased knowledge, having a generally more tech-focused workforce and the next-generation coming through being far more digitally savvy.”
Instrument of Things
The business is now almost entirely paperless and has recently entered the heady world of IoT. Its SMARTHub provides remote monitoring of level, pressure, temperature and density – information which is essential to effectively managing inventory, delivery and continuous operation.
The SMARTHub takes measurements and transmits the information to Rototherm’s secure, online data portal which lets customers monitor their sites remotely, 24/7.
“We manufacture sensors and instrumentation, so it makes absolute sense to collect that data via a proprietary cloud-based telemetry system, package it up and monetise it,” says Oliver. “The opportunity this represents is absolutely huge. We launched our first product this year, targeted towards LPG, and we’ve already got a handful of big end-users in the US and Mexico.”
Across North and South America, the monetisation of data has become an accepted principle and growing numbers of businesses are benefiting from the value and insights it brings. However, the UK is largely at the bottom of the growth curve, according to Oliver.
“The next step for us is to move beyond monitoring and use intelligent algorithms to interpret this data in order to offer predictive maintenance services,” Tarkan adds.
Alongside providing the business with a predictable, stable and reoccurring revenue stream, this data analysis is also helping Rototherm to better design and manufacture the next generation of its own products – many of which operate in remote, hostile environments.
As a qualified mechanical engineer, Oliver previously held senior roles within Elliot Group, a leading manufacturer of rotating equipment for the oil & gas and power generation market, and AEA Technology. Tarkan was previously a merger & acquisitions director at Kaupthing Bank and has also held positions at Goldman Sachs Investment Banking and UBS.
It’s a unique internal skillset that allows the entrepreneurial business owners to not only accurately assess viable, strategic opportunities, but react to them much faster than most.
“For an SME to expand through acquisition, you’re probably talking around £100,000 in associated fees per business; whereas we can do it for £5,000 in legal costs,” explains Tarkan. “When we spot an opportunity, we can move at speed and, in some cases, have closed deals in weeks.”
The approach has seen the creation of the Rototherm Group, which comprises a growing portfolio of complementary subsidiaries, including Bentley Instruments (Northern Ireland), HNL Engineering (Stockton-on-Tees), RTD Products (Southport), Canongate Technology (Edinburgh), and Digitron.
Aside from a couple of sales offices (in the US and Singapore), all the acquisitions to data have been UK-based. I asked the brothers whether they would ever be tempted by an overseas venture.
“We’re open-minded, and I think that we could competently challenge ourselves now as opposed to four or five years ago,” notes Tarkan.
Taking on a challenge also appeals to Oliver, but not as much as supporting British industry; “We’re very proud and passionate about manufacturing everything domestically. We pay British taxes, create British jobs and support British communities; that ethos runs through everything we do.”
“This business embodies the values Tarkan and I hold dear, and what I love about this business is that there’s still so much we’re not utilising. Rototherm products have been around for three-centuries and if you go to the most remote corner of the globe, I’ll guarantee you you’ll find a Rototherm product.
“Rototherm is on almost every known approved vendor list, including dozens of state-owned enterprises; whereas businesses 100-times our size aren’t. That’s tremendously exciting and as we gradually get to where we want this group to be, we aim to increasingly leverage that unique capability.”
It only takes two seconds
Aside from IT, the other core enabler of Rototherm’s transformation has been its wholesale adoption of lean – and you won’t find a more fervent advocate than managing director, Oliver Conger:
“We started our lean journey about four years ago and we really struggled to begin with to get any improvements to stick. Then I became really inspired after reading ‘2 Second Lean’ by Paul Akers and it totally transformed the way we approached lean.
“Now, every day, every one of our people from the shop floor to the board room makes a two second improvement to whatever they’re doing and to fix what bugs them.
“We document all those improvements through short ‘before and after’ videos and we get everyone together on the site twice a week to learn and see those improvements and to teach them about other lean practices and techniques.
“Alongside the operational benefits, it also helps teach our employees useful skills they may never have developed through their day jobs – skills such as presenting, collaboration, problem-solving and leadership.
“We had this big internal debate about whether we should share these videos on YouTube and whether competitors could view them and try to imitate what we were doing. My feeling was ‘sod it’, if it pushes us to get even better, then brilliant. Rather than being secretive, let’s show off how far we’ve come in eight short years, it’s something I’m personally very proud of.
“We’ve still got a long way to go, but ‘2 Second Lean’ will absolutely help us to get there… and get there faster!”