Calm under fire

Posted on 6 Jul 2011

Just after The Manufacturer last spoke to Seven Seas, a catastrophic fire broke out at their finished goods warehouse, destroying all of its stock. By following an established emergency plan the company was not only able to establish effective short term solutions, but also seize long term benefits for the site. George Archer talked to Andrew Shaw, director of operations, supply chain and R&D at Seven Seas in Hull.

Seven Seas is an iconic brand in the UK. Not only does the company have a large domestic market, it also exports around half of its consumer healthcare products abroad – to the Republic of Ireland, Middle East and the Caribbean. With a history spanning just over three quarters of a century, its brand possesses a clear aptitude for staying-power in the minds of British consumers and is successfully increasing its presence abroad.

Assessing the damage
The fire in May last year completely gutted the finished goods warehouse at the site, leaving the factory with virtually nothing in terms of finished products. “The production lines weren’t in operation at the time because it happened on a Sunday morning. No one was hurt – there were only security personnel on site at the time.

However, we lost all of the goods in the warehouse. As well as all our domestic market products, a significant proportion of our export stock was also lost,” says Andrew Shaw.

The finished goods warehouse was separate – but only just – from the factory, so the actual production facilities escaped damage from the fire.

Shaw ruefully explained that prior to the fire Seven Seas had carried out a lot of work in terms of stock reduction, which meant that extra space was available in the finished goods warehouse for components. After taking advantage of the extra space and storing the components there, they were destroyed in the fire. This meant that resuming full production after the fire was potentially very difficult because of the lack of crucial components such as bottle caps.

Every manufacturer, and indeed company needs to have an emergency recovery plan, and Seven Seas is no exception. “We had a plan, and we implemented it immediately. There are two parts to the plan; one is how to deal with the crisis on site, i.e. the question of who does what.” The second, Shaw says is how to manage the customers and other external stakeholders. “You have to manage the brand externally, all your customers and their expectations.” “We established a crisis team an hour and half after the fire, in the early hours of Sunday morning. When you follow our emergency manual, you’re able to take control of the situation and you switch from your everyday managerial role to a command and control role. The extraordinary thing was that people responded to it, and I would go as far to say some of us actually enjoyed solving the various problems that constituted the crisis.”

The new refurbished warehouse
The new refurbished warehouse

On the rebound
Arguably, the most positive thing to come out of the crisis was an opportunity arising from another Seven Seas owned site that previously housed another business. The site wasn’t far away, and had an empty storage and production facility.

During the crisis meeting on Sunday morning the team decided that Mark Bough, the leader of the Customer Service and Warehouse team at Seven Seas would go to the site that day to see what was possible in terms of an interim storage solution. They concluded that they could use the warehouse on the site to store any finished goods produced by the factory. What was initially a severe problem was solved, and transformed into a long-term solution. The building was stripped and refurbished, and to this day serves as the new finished goods warehouse.

Shaw proudly talked of the effectiveness of the crisis team at Seven Seas: “They were so successful on the rebound, that to this day we use the building as our main storage facility.

What was an interim warehousing measure designed to keep the factory running at some sort of capacity turned out to be a really fantastic long-term solution. We’ve even consolidated a 3rd party storage facilty into the building, saving costs.” Following emergency plans rarely provides anything near solid answers to the various problems that a crisis throws at a company, but in this case the plan gave clear assignments and roles to different people on the crisis management team. After this, the team was able to go about their tasks and adapt to the situation. “It provided the basis for a pragmatic and comprehensive solution, based on the ideas of all members of the crisis team,” says Shaw.

Assuring the customer base
It could be argued that one of the most impressive things about Seven Seas and its reaction to the crisis was the way in which they handled customer demands in the period after the fire. The company contacted all of their major customers to tell them that deliveries wouldn’t resume in that week. However, the customer services team at Seven Seas kept talking on a regular basis, updating them on the situation periodically, and ensuring they knew when the supply was likely to resume and what products would be available.

The company had planned a major promotion for their MultiBionta product that was due to go live in store within a month, but the fire had destroyed the stock. However, the option to pull the plug was never considered.

Instead the Seven Seas teams replanned resource, leveraged supplier relationships and used their strong business spirit to meet the launch challenge. Thanks to their efforts the promotion was delivered on time and in full.

Seven Seas' JointCare range
Seven Seas' JointCare range

Ingredients for innovation
When asked about the focus on innovation and R&D for product lines at the company, Shaw says that despite the crisis, the company has continued to develop its range.

“With regard to our JointCare product range, we’ve reformulated the capsule ingredients, and we’ve changed the packaging.” “We’ve managed to reduce the size of the capsules, and we now have more attractive colours on the capsules, but, at the same time, we’re not taking away from the actual ingredients. At this point in time, no one else in the sector is doing this,” he says.

Since TM last spoke to the company, they are now working closely with their parent, Merck on a 10-year capital investment strategy for the site.

Commenting on this investment plan, Shaw says: “A really exciting thing for us at Seven Seas is deciding what areas our money is being invested long term, and over the next two years. We’re deciding how we’re going to become more flexible in terms of being able to handle new and more complex processes, so as to remain competitive domestically and internationally, while driving down costs.” Seven Seas has previously relied heavily on continuous improvement techniques and has demonstrated a great deal of success in this regard. Now however, the focus is on investing in the actual factory itself in terms of machinery and improved production line technology.

Lean skills
In previous talks with Seven Seas, the company was employing engineers to train operators at the plant to take on the various tasks involved in product changeovers. This training is now complete, and results are clearly evident. “We’re seeing instantaneous results in efficiency after the implementation of the lean programme. We’re doing changeovers quicker than we’ve ever done them before,” reports Shaw.

“It gives the operators on the line the ownership of the changeover. With the operators leading more of the changeovers, the engineers are freed up to work on technical improvements. It’s about taking ownership – basically, now it’s our changeover. When the line is running well, operators on the production line have the satisfaction of saying; ‘I did that, I’m responsible for my line running efficiently and I’m getting good results’,” Shaw adds.

The green agenda
As a manufacturer not classed as an energy-intensive user like those producing steel, ceramics and glass, one might jump to the conclusion that the focus on emissions might be low on the priorities list for Seven Seas. However, rather than see it as another legislative burden, it has begun to see it as a benefit rather than a curse.

Shaw explains: “We’ve moved away from the position of seeing the government’s environmental agenda as a threat just because it’s complicated and legislative, and we’ve started to find some opportunities in how we manage waste. We are now recycling on a much bigger scale than I thought we would be at maybe two or three years ago. We’re heading towards eliminating any land-fill waste, which is an achievement of which we at Seven Seas are immensely proud.”

Seven Seas' HalibOrange product range
Seven Seas' HalibOrange product range

Capping issues
A commonly discussed concept in manufacturing is lean. Seven Seas is no stranger to this, and on asking Shaw about lean initiatives in place at Seven Seas or in the pipeline, Shaw uses an example of a faulty capper device in the bottling section of the factory to demonstrate the company’s lean practices.

For a period of months, the capper device was causing quality defects and dropping over 100 caps onto the factory floor every day, and hitting line OEE. Engineers were called in to fix the device, and a lot of the time the capper seemed to react positively to the repairs. However, it kept continuing to revert back to the same fault.

“The lean team at Seven Seas came in and using systematic CI tools found the correct variables that were causing the performance issues,” says Shaw. “The team used lean techniques to separate myths and rumour from hard facts and evidence.” The team that solved the problem found that in the previous months even the equipment manufacturer had been fixing the wrong problem. The end result was a capper with increased efficiency and quality and decreased waste. The fundamental thing according to Shaw is that three months ago, the team at Seven Seas were making initial plans to buy a new capper. But the initiative put in place transformed the capper, eliminated the quality defects, and the company saved money, as well as increasing the overall productivity of the machine. The downtime has dropped from around 90 minutes per day to 30 minutes per week.

Meet the parents
In the past year the company has joined a Global network of factories in the pharmaceutical division of the parent company Merck Serono. This has proved to be hugely beneficial, according to Shaw. “Now that we are part of this group, we’re finding real opportunities, because there are a lot of things to talk about in terms of shared problems and shared solutions. In the past several months, the continuous improvement and operations managers have been on black belt sigma 6 courses, where lean practitioners from different manufacturing cultures meet and share best practice.” Seven Seas now has access to experts within the group, which they never had before. They can now bounce ideas off each other, and share the challenges and solutions they have experienced.

Shaw dispels the common misconception that these groups just want positive reports and promising statistics. He says that through the group Seven Seas has actually found they now have access to the resources of a modern, global organisation.


Seven Seas – at a glance

Group structure
Seven Seas is part of the technical operations division of the German-based Merck KGaA, a global pharmaceutical and chemicals group.

Seven Seas UK

Hull, East Yorkshire

A range of consumer healthcare supplements: cod liver oil products, pro-biotics, multi-vitamins and herbal remedies, along with a range of supplements aimed at children under its Haliborange brand.

Key figures
John Redman, managing director; Andrew Shaw, operations, supply chain and R&D director; Grant Forbes, operations manager at Seven Seas; Barry Hilton, site engineering manager; Mark Bough, customer services and warehouse manager.

Boots, Tescos, Morrisons, Sainsburys. 50% of goods go to the UK domestic market, with an export market comprising 50%.

Employees 285