Changing the face of the operation

Posted on 7 Apr 2010 by The Manufacturer

Mark Young talks to Hampshire Cosmetics’ MD Peter Darke to hear how widening its horizons has kept the company on course to meet ambitious growth targets despite the downturn.

The subject that has dominated the media over the last eighteen months has not bypassed Hampshire Cosmetics Ltd. Like many other manufacturing companies they have experienced first hand the challenges of rising costs and reduced forecasts. However they have remained undeterred and pressed ahead with an ambitious plan to redefine and grow the business despite the gloomy market predictions. Considerable efforts by the staff and changes in the way the business operates have both played a key part in helping the company to grow and develop over the last two years.

The company hasn’t changed its core market; it still focuses on producing and supplying a wide range of products which are sold in supermarkets and on the high street under a number of household brand names. However, the firm has come a long way since its inception almost 40 years ago. And it’s the developments that have taken place over the last three years that have arguably had the most influence over the way it now operates and its ability to respond positively to the demands of the ever changing market. From its 55,000 square foot premises in Waterlooville, Hampshire, the company has embarked on bringing about a cultural change across the organisation to support its transition from contract manufacturer to a full service provider within the cosmetics, toiletries and personal care industry. This change encompasses all areas including R&D, formulation, manufacturing and assembly as well as market research.

The changes were instigated when Peter Darke took over as managing director in January 2007. The privately owned limited company firm had changed ownership nine months previously and Darke, together with his team of six senior managers, was given a free reign over the strategy he felt best to take the company forward. “The company had been trading successfully since 1971,” he says. “As a traditional contract manufacturer companies would approach us to produce specific products and volumes to meet their particular demands within given timescales. In some instances they would present us with their own formula and ask for support in further developing it. This arrangement had worked well for a number of years and we had built up a reputation for good quality and a flexible and supportive service.

“My view was that we needed to extend the scope of the business and develop the full service provision as an integral part of the company offering. This would mean that customers – potential and existing – would be able to discuss projects on a much wider scale with us and we would provide input and support from the initial concept through to the production and delivery of the finished article. We now work with a much wider range of customers, many of whom require the flexibility of regular range reviews and changes which means that we do not have the luxury of long runs of specific products and we have to develop our ability to deliver a more varied product range in smaller batch sizes within shorter lead times. At the same time we are developing ideas and concepts in-house that we are able to proactively offer to customers to support them in enhancing and developing their overall product offering”.

Having put considerable effort into the overall concept of how the business should move on, the company worked closely with transformation consultant, TotalFlow Ltd, to refine their plan and strategy for the next three to five years.

From this process Hampshire were able to create a solid framework to support the growth plans of the business. “Working with TotalFlow encouraged us to take a different view of what was possible and how we could approach the changes we needed to make. As a result we now have a flexible but practical strategy to move the business forward,” comments Darke.

Under the head of creativity, the company now employs four research and development chemists who focus specifically on the creation and delivery of innovative product ranges. With the support of an in-house packaging technology team and the ongoing ability to internally provide full product testing and regulatory support Darke believes that the company is correctly structured to provide customers with the support they need to fully develop products. Speed-to-market is a key concern for the company. “Cosmetics are, in many ways, comparable to the fashion industry,” says Darke, “consumer trends change quickly and there is always a strong demand for new and more efficacious products. One of the ways to succeed is to become adept at getting products through development and onto the shelves quickly.” Under the company’s new full service philosophy greater emphasis and effort is being directed towards researching market demands and investigating new developments. The commercial team is constantly reviewing market trends and patterns and, where required, performing Gap analysis on customers’ ranges to ensure that any offerings are focussed and relevant. With this new emphasis, the business development team is suitably resourced to proactively seek new business rather than taking the more reactive approach it had tended to do in the past.

In January 2007 Darke set the business the objective of doubling its turnover within 6 years – while remaining profitable of course! At the end of the 2009 financial year the company was well on the way to achieving this target, despite the downturn, having added 30% to its turnover, and Darke says this year’s figures should deliver evidence that the business has maintained that increase ready for further growth in the coming period.

One of the key factors in the company’s successful move to full service supply, according to Darke, has been employee support. “I have always strongly believed that the staff are a fundamental part of this organisation and to a great extent it is their company they are helping to develop and improve,” he says.

The company is working through a programme which will see all members of staff provided with a cross section of training that is relevant to each individual’s work and own personal development.

Darke envisions all employees on site able to problem solve within their own areas, contribute more to the overall operation and generally make their own jobs easier yet more productive and, most importantly, more fulfilling. In addition Darke has set up a number of cross functional teams to work on specific core projects. Each group is led by a member of the senior management team, working outside their normal area of functional expertise, and supported by a number of staff from across the business. The idea is to minimise the organisational barriers within the organisation and encourage staff to participate in the process of change within the company.

The company has worked with external skills provider Business Impact Ltd to secure Train-to-Gain funding for a large part of this project. Darke set up a Centre of Excellence unit on site and with Business Impact’s support established a company wide scheme to provide NVQ Level 2 BIT (Business Improvement) training. Over the last 18 months 40% of staff have attained the qualification and then implement improvements across all areas of the operation. The scheme has now been extended to include other NVQ qualifications, once again with the support of Business Impact. This has resulted in a further 40 of the 246 strong work force attaining NVQ Level 2 within the last six months in both production and warehousing disciplines. Darke also offered staff Numeracy and Literacy training with the help of a local college. In 12 months 35 staff entered the scheme and gained the qualifications on offer.

Such has been the level of interest that the company is continuing to run the two courses over 8 to 10 week cycles involving around 16 members of staff at a time.

Via the training programme and becoming involved in new areas, Darke says the staff are “finding capabilities they didn’t know they had and increasingly becoming aware of the impact they can have on the company’s performance.” As a result they feel more motivated and output has increased. Through monthly communication briefings and a staff-run news sheet employees are now better informed in terms of the company’s operational and financial performance and this means they are generally more supportive of the process of change. “In many cases, the staff themselves are instigating the changes,” says Darke.

Hampshire is also committed to best environmental practice – both because it suits the ethical mindset of the firm and also because it acts as an effective driver for efficiency. The firm achieved the ISO14001 environmental accreditation in less than a year which is no mean feat by anyone’s standards. Yet such was the company-wide support of the initiative that the auditor from the International Standards Organisation commented that the program looked as though it had been in place and fully operational for at least two years.

Says Darke: “We’re strong on the environment, strong on ethics and while we’re not perfect, we recognise where we make mistakes and do our level best to improve them and work with the staff to put them right. Our objective is to grow the business on a sound commercial basis and achieve our development goals. We have still got some way to go but firmly believe we are heading in the right direction.”