Far from cosmetic

Posted on 22 Mar 2012 by The Manufacturer

In the current climate it might be imagined that optimism would be pretty thin on the ground at a UK manufacturing SME with a predominantly domestic market and working in a highly regulated sector. Not so for Hampshire Cosmetics. Jane Gray visited the company to hear how dedication to ethical business and a clear development strategy is helping to carry it through troubled times.

Arriving at the Hampshire Cosmetics Waterlooville plant I was woefully misled into thinking I had happened on an episode of Ground Force  as I watched 10 or so enthusiastic individuals with wheel barrows descend on a small patch of ground outside the reception and transform it into a burst of flowery colour. Alas, I am yet to meet Mr Titchmarsh and his crew.

Managing Director Peter Darke explained the possible misunderstanding. “It’s part of our arrangement with the local council,” he says. “We recycle our waste glass, plastic and cardboard, for financial gain wherever possible. With the money that brings in we help to support a local council run project for unemployed 18-25 year olds with an interest in grounds maintenance. They come in twice a month to manage the gardens on the site”

It is an appropriate introduction to Hampshire Cosmetics, where the importance of innovating around environmental need for business benefit is a well ingrained culture which develops ahead of regulatory pressure. The recent installation of photovoltaic solar panels on the roof of the Waterlooville factory is a perfect demonstration of the way Hampshire Cosmetics takes cost, expected returns and the political context into account when considering eco-friendly developments.

Hampshire Cosmetics“We looked into the possibility of solar panels ourselves a while ago,” says Mr Darke, “but at the time the cost was high and the payback was going to take something like 120 years.” It didn’t make sense. However, Hampshire has now rented out its roof space and installed a 277KW solar farm. The installation has been classified as the largest zero capital venture of its kind in the UK. Hampshire benefit from the rent income and an immediately effective 20% discount on their energy bill while also boosting environmental credentials and providing green energy for the national grid.

Mr Darke is clearly pleased with the new installation but gives due credit to his environmental manager Karen Taylor, for arranging the nuts and bolts of the project. “Karen is immensely committed to help make our environmental and ethical agenda work. She recently won an award for Environmental Manager of the Year, a huge achievement coming from a company of our size,” he says. “We have recently placed responsibility for quality under her as well as we believe this fits well with the environmental and ethical elements of the business,” adds Darke, showing that traditional manufacturing concerns and new business expectations are becoming ever more aligned at Hampshire.

And alignment as well a clearly communicated strategy are an urgent requirement. Hampshire has been engaged for the last four years and more on a significant programme of change to re-invent itself as a full service provider, rather than a traditional contract filler. Part of this has included a complete rebranding for the company and a new emphasis on PR and marketing. The interactive website, previously a simple web page, was launched last year and the company has actively promoted its newly increased capabilities and service orientation through attendance at a variety of tradeshows and exhibitions.  Even the activities of the council gardening crew contribute to strengthening the new company image – the colour schemes and layout they use in the grounds are designed to support the new brand.

But what does Hampshire’s new image as a ‘full service provider’ mean in terms of changes to the company’s operations and plant and why has the change been necessary?

“We felt we looked traditional,” say Darke in answer to the latter part of this question. “The cosmetics industry is significantly fashion led and our old web page and branding was not supporting our ambitions or clearly promoting our skills and capabilities.”

Another influence has, unsurprisingly been market demand. Darke says there is a great deal of activity, even in a difficult climate, with customers wanting to launch new product portfolios or fill gaps in current offerings. Identifying an opportunity to provide services around these needs has meant a lot of investment, recruitment and education.

Hampshire cosmetics at a glance

Location: Waterlooville, Hampshire.
Number of employees: 166
Turnover: £19m
Established: 1972
Moved to current site: 1991
Major markets/customers: Major international retailers, UK multiples and a wide range of brand owners
Key products: Skin, hair and body care together with personal and home fragrance, bathing and personal care products.
Proportion of domestic sales to exports: 80 % UK and 20% export.

The major areas of expansion in terms of capability have centred around research and development. New staff have been recruited for the laboratory and this year around £70,000 was spent on a new pilot cell where product innovations can be produced in prototype quantities – 50-60 kilos. There has also been investment in IT infrastructure to speed up product development. The Coptis lab management system is the first in the UK and it assists in speeding up the creation of product formulations as well as analysing product toxicology and even materials sourcing.

Hampshire CosmeticsBeyond these technical developments Hampshire has also recruited more sales and customer support staff to build its reputation as an industry service provider. Existing staff and new recruits have received training and there are now 30 Hampshire employees with NVQs in Customer Service. The newly developed skills are applied in two major areas; gap analysis and portfolio design. Darke explains: “We can carry out a gap analysis on a customer’s whole range and suggest new products to fill those gaps or perhaps suggest new ranges that would complement the existing range. Alternatively, a customer might approach us with an idea, maybe a new skin care or hair care range, and they want it to do a variety of things or include a certain natural ingredient. We can build a story and a range of products around their concept.”

Having gained confidence and expertise in these less traditional areas of the business Hampshire has not failed to remember its core production and contract manufacturing capabilities. As the lab and design side of the business has gathered pace it has meant increasing complexity for the shop floor. “We do short runs all the time and we might have square bottles followed by a jar, followed by a very tall bottle coming through production one after the other,” says Darke. “Our labelling equipment has to be flexible enough to allow for that and the technology is getting cleverer and faster all the time. We have to keep up.” In the last 12 months several new capping machines and labellers have been purchased and the company has a programme of ongoing investment in additional plant and equipment to further support its process improvement plans.

In addition, since Hampshire’s customer bases spans everything from major international companies to small, niche brand owners workflow on the shop floor is complex. Darke comments “We can have small batches of highly exclusive product on one side of the factory while big volume production for a major international customer is running down the other.”

It is a situation which has prompted some major restructuring in production. Describing the alterations Darke says: “Just around three or four weeks ago we did a complete factory floor turnaround. The workflow used to run north to south and now it runs east to west. We’d been wanting to do this for some time in order to make the workflow more logical. But it also supports a number of health and safety initiatives, and internal logistics issues. We can deliver components and bulk materials to the start of the line more easily now.” The reconfiguration has also brought in more cell based assembly structures to help cope with diverse short runs and the benefits from this alterations are already beginning to show in terms of line efficiencies.

What has the staff reaction been to all this change? The move to cell production has meant some significant changes to roles and responsibilities and has broken down demarcations between engineering professionals and front line staff. Shift patterns have also changed

“Staff have risen to the challenge and accepted it well,” says Darke. This acceptance might largely be put down to the careful training and development which has been invested in over the last few years. Of Hampshire’s 166 staff around 130 have now achieved NVQ level 2 in Business Improvement Techniques, helping them to handle quick changeovers and become comfortable with a range of other lean-type efficiency methods around 50 staff have also gained NVQ level 2 in Performing Manufacturing Operations. Hampshire has funded this skills development through grants from the train to gain scheme, though this pool is now running dry. “We are looking at the availability of apprenticeship funding now,” says Darke.

Hampshire CosmeticsTo sustain the value of its training investments Hampshire has also made sure to develop detailed skills matrices for all areas of the business with performance targets and KPIs. “It’s all part of the culture of moving forward,” says Darke. “People can measure their own progress, and are motivated to up-skill. The line leader can see what resource they need. Engineering has become more a more developmental, training type function and there are less communication barriers between staff from different areas.”

In addition to these overtly business related training and development packages Hampshire has also invested in rounding off the more general skills of the workforce. There is an ongoing programme for adult literacy and numeracy which has, according to Darke, been very actively pursued with over 100 of the staff gaining qualifications in these skills. Furthermore, to back up the ambitious environmental agenda already mentioned, over 100 staff have gone through a day of environmental training. An important commitment to accreditation in an industry where customers are pushing harder every day for ethical transparency and confidence in their supply chain.

Darke speaks positively of this trend despite the regular audits, need for accreditation and compliance pressure which it has brought about. “Ultimately it is a good thing,” he says. “Our customers want a way of benchmarking and being sure that they are comparing apples with apples when looking at their suppliers – standardised accreditation models help here. We have gone through a lot of accreditation in the last four years.” On regulatory compliance Darke says: “There is more and more regulation all the time and dealing with the administrative burden is a challenge. REACH and RECAST have a particular impact on us but they do also help us to provide the transparency which customers are looking for.”

I try to draw Mr Darke out into saying something more conventionally negative about conditions for manufacturing in the UK but the best I can get is ‘challenging’. This word applies to all the usual gripes from regulation through to materials sourcing – in an industry where the availability of ingredients like jojoba oil from month to month are a key issue, you’d have thought ‘challenging’ would be a mere baseline.

But, it must be admitted, that with 30% growth over the past four years in which Darke has been MD it would seem churlish if he were complaining. It looks as though the company’s far from cosmetic commitment to its ethical standards and identified development strategy are standing it in good stead.