Get by with a little help from your friends

Posted on 12 Nov 2010 by The Manufacturer

Mark Young hears how a commitment to comprehensively aligning its business with that of its customers is proving a successful strategy for BCM.

With a 1,200 strong workforce at its Nottingham factory, BCM makes health and beauty products. Although over half of its products are purchased by sister company Boots UK, BCM also supplies to some of the world’s biggest pharmaceutical and healthcare brands.

Until last year, BCM was the manufacturing arm of the retail chain. Now it is a completely standalone business within Alliance Boots.

Boots opened its historic D10 ‘wets’ factory on its Nottingham site in 1933, and quickly set about building an output level of 800,000 units per month. Almost three quarters of a century down the line, that output has increased to around 26 million per month. The company has further sites in France and Germany which make colour cosmetics, employ around 300 people each and have a combined output of around 120 million units per year. There is also an associate assembly plant in Poland.

BCM makes a huge range of products – over 5,000 different ones in all – across healthcare, skincare, personal hygiene, cosmetics, dental care, baby and toddler, fragrances and sun cream. The flag bearers among these include Boots’own brand cosmetics and skincare line, No7; its own brand sun care range, Soltan; and a huge range of products which it makes for famous designer labels including Ted Baker and FCUK.

The company operates 52 manufacturing vessels, where it mixes up formulas for its products in batch sizes between one and nine tonnes. It has 40 packing lines which support a vast array of packaging types, including tubes, jars, bottles, cartons and pumps. The company has its own dedicated team of packaging developers too, working primarily with fine fragrance products.

Stars are aligned
Since The Manufacturer last spoke to BCM, the business has implemented a number of measures to reinforce its commitment to quality, cost and service. These are overseen by general manager Phil Lund. Having previously held the role of operations director, he is now responsible for all business activity in the UK, including commercial. Previously, he spent a number of years working in the automotive industry and this has placed him in good stead to drive the efficiency programmes at BCM – bringing many of the lean initiatives usually confined to car makers into the fast moving consumer goods environment.

One of the biggest initiatives which BCM has implemented is a new IT system which allows it complete visibility over its customer’s stock levels and forecasts, allowing the company to initiate an automated replenishment service which is known as Vendor Managed Inventory.

“We look into their portal or warehouse and we keep them in stock within a minimum and maximum stock level,” explains Lund. “It allows us to respond to our customer’s fluctuations in demand and takes away any chance of major unexpected fluctuations in demand coming in to us.

This means we can flat-line our production and improve our efficiency. For our customers, it means that we can manage their stock volumes for them so that they can concentrate on their core business, making sure forecasts are accurate and that they understand the dynamics of the markets.” By having a better insight into what its main customers are going to need, BCM can schedule its production better to take advantage of economies of scale – producing for multiple customers’ markets from one batch for instance – and it can then benefit from less changeovers, lower inventory levels and plan its own supply of raw materials more effectively too. “It gives us far greater control and we can plan better than if we were relying on fluctuating demand signals,” he adds.

The IT system provided by Orchestrate was brought into service in three years ago, and the facility is now offered to all of BCM’s customers.

In fact, this initiative can be viewed as emblematic the very thing that Lund says gives BCM the edge over its rivals. “Our growth is completely in alignment with our key customers and we pride ourselves on not only being able to deliver on a day to day basis in line with their expectations but also embodying their future project work as they begin to expand themselves,” he says. “We have a great focus on innovation throughout our supply chain and the customers really value that – almost as a niche offering.” Its service levels are testament to the success of this approach. “We align our value chains in the business completely with our supply chain. It’s exactly what the car industry did two decades ago, align the supply base with manufacturing to take waste out and working capital and inventory out.” The new IT system has undoubtedly contributed heavily to an improvement in Overall Equipment Effectiveness around the plant. Three years ago, OEE was 45%, now its up to the mid sixties. BCM will continue to invest in its infrastructure to drive productivity and offer great cost benefit to its customers.

Time is of the essence
BCM prides itself on its speed to market as one of its key services, and a key point of differentiation between itself and its competitors. Most of its briefs come with predefined product concepts and packaging requirements, though, and where this is the case the company can turn the job around in as little as four weeks. “This is hugely beneficial to both us and our customers,” says Lund. “We can convert raw materials very quickly and the quicker you can get them through the facility and get the product packed, right first time, the less cost you incur. It means we don’t have cash tied up in work-in-progress. It also means that our customers can react to trends very quickly. It also means customers can come to us when they’ve been let down by another company and still get their order supplied on time.

We are very adept at stepping in and getting them supplied at very short notice.” Essential to this way of working is an engaged workforce that shares the vision of the company, knows what is expected of it and can respond quickly when the goalposts are moved. BCM ensures through complete transparency, communication and employee empowerment.

“We have dedicated communication channels including quarterly briefings for all of our people and we’ve just introduced our own intranet,” says Lund. “We have a staff council and committee in place and we see regular face-to-face meetings between every operative with their line managers as vital part of our first line communication. Cross functional working groups are used to consult on anything from what’s on the menu in the canteen to major efficiency programmes on the lines. We see being completely transparent with our employees as a key way of engaging our force in our shared ambition.” The company has also invested in new technology on its production lines which puts the responsibility for efficiency in the hands of the people that actually make the products. It’s a system which shows in real time how efficiently the line is running, when and for how long any downtime has been, what shortages there has been, and what compliance measures need to be adhered to. “It’s very visual; there’s computer screens on the line and it drives real time improvement by putting the responsibility and the awareness with the operator,” says Lund. “It also helps us react much quicker. It gives us the ability to see how each line has performed, what some of the issues are and implement immediate corrective actions where needed.” The management of the production facility is organised by value stream and value stream leaders look after a shift of anywhere up to 200 people.

Local production managers oversee the day-to-day running of the line and the mixing vessels and serve as a link between management and the line, communication the continuous improvement initiatives up as well as managing their teams on the line. The company has introduced an employee recognition system called BCM Stars through which it rewards its people on a monthly basis when they go above and beyond their role. The annual employee bonus scheme is based on a range of quality, cost, safety and service targets.

This commitment to open communication isn’t confined to suppliers and employees either. BCM has recently initiated a programme to create a network of suppliers of major equipment so that it can consult them what the latest additions to the market are and how they can become even more efficient. “We are absolutely resolute in the concept of getting product through our facility right first time and being competitive on price and we’ll always search out ways to stay ahead of the game,” says Lund.

“Given the value of our products to our customers, it’s massively important that we keep these values front of mind.”

The right environment
Lowering its environmental impact has also been a key consideration for BCM over the last few years and chief among its achievements is the fact that it now sends less than 1% of its waste to landfill. Two years ago this was 37% – enough to fill eight Olympic sized swimming pools.

Its primary charity is East Midlands’ children’s hospice, Rainbows, to which it donates both cash raised by charitable events and product which it manufactures. BCM also holds fund raising activities. In all, £300,000 worth of stock was sent to different charities and good causes last year, and BCM employees clocked up over 600 hours of volunteering including manning phones for the BBC Children in Need appeal and participating in reading programmes at local schools.

The business reduced its carbon dioxide emissions by 9.5% in 2009/10, in real terms, taking into account its growth. Initiatives to this end included the introduction of ‘X Block’ technology which recycles compressed air, and using ultrasonic equipment to find leaks in pipes, installing thermal imaging equipment to identify and reduce thermal and water waste. Collectively, these three initiatives saved over 1,500 tonnes of CO2. Water waste from cleaning tasks has been reduced by 20%, an achievement Lund says is extra meritorious given the prescriptive conditions imposed by the Medicines and Healthcare products Regulatory Agency (MHRA) in this area.

Safety of its employees is paramount. “People don’t come to work to get injured,” he says. “The safety and wellbeing of our people is crucial and everyone has a part to play in ensuring the workplace is safe, as such one of the key performance indicators for our annual bonus is ‘Safety’.

The company’s attitude toward rewarding its workers along with the success of the initiatives to make the business more efficient are no doubt enough to make BCM’s employees content in their vocational endeavours.

However, it is the culture of care in BCM which is most rewarding.

The benefit to BCM of being closely linked to a health & beauty retailer that has the presence and magnitude of Boots, Lund says, is that the organisations can share in their growth strategies and commitment to exacting standards of quality. The benefit to Lund on a personal level is that he, because of that unwavering commitment to quality, is proud to say that BCM is instrumental in making products that help people feel better about themselves and which can be found on almost every major high street and local community across the UK.