In bloom

Posted on 2 Mar 2010 by The Manufacturer

Like a mature tree that has been nurtured from a solitary seed, gardening equipment maker, Hozelock, has grown from a company with a single product into a blossoming business. With strong product roots that are providing the basis for future expansion, Tim Brown discusses with managing director, Peter Rush, the importance of planning.

Last year was certainly one to remember for Hozelock.

Not only did the company celebrate the passing of a half century since its foundation in 1959, but also received its third consecutive Manufacturing Excellence Award and rounded out the year by claiming this magazine’s Manufacturer of Year Award.

While clearly such accolades are a testament to the company’s triumphs, it is the hard work of staff and strong managerial preparation behind the scenes that is truly credible. Forward planning choices, in the name of ensuring a sustainable future, have been the key to Hozelock’s success in recent years. Perhaps the most notable decision occurred three years ago, when the company chose to consolidate five separate UK factories in to one central hub at Minworth in the West Midlands. However, the company has also undertaken a number of other long-term customers and production-focused operational projects. Such developments have not only helped to differentiate the business from its competitors but, moreover, provide Hozelock with a competitive edge.

Customer communication
Within the UK, Hozelock has employed a system which engages closely with customers and not only assists the company in maintaining shelf stock, but also minimises excess purchasing. This level of service is a great differentiator, says Rush, especially when compared to foreign competitors. “Being able to manage customer stock and provide them with very high service levels off a shelf is something that Chinese suppliers cannot do. This has been a real area of focus for the business and, from my point of view, is a real area of competitive advantage.

Hozelock has set up systems so as to monitor, on a daily basis, its key customers’ in-store stock levels, and is able to distribute stock accordingly. By doing so, says Rush, “The company has been able to maintain a shelf availability for its products of greater than 99%. We receive daily reports from our retailers directly and EPOS data which is fed through automatically.

This system is great, and has worked absolutely fantastically for us. The reason that that is important is because retailers over the last years have actually taken stock out of the supply chain.” Appreciating retail businesses wish to reduce excess stock, Hozelock has devised a two-tiered approach to satisfy this requirement, providing not only very short delivery lead times, but also personalised delivery.

“The whole point,” says Rush, “is that they don’t have to hold loads of stock. We deliver direct to store rather than to a regional distribution centre, and have approximately 1000 major store outlets that we deliver to on a weekly basis. The benefits for them are that they have excellent product availability on the shelf, and it ensures that when a customer goes into the shop, the product is on the shelf. If the product is not on the shelf they will lose the sale and the customer will go elsewhere.”

Blame it on the rain
In addition, due to the nature of their business being based outdoors and the seasonal buying habits of their customers, Hozelock has realised the impact that the weather has on its business. Hozelock has been obtaining both short and long term weather forecasts for the last 12 months, and uses the predictions to assist in production scheduling, ordering and staffing. With forecasts proving to have an 80% accuracy, Rush says the insight has been invaluable.

“Because we had done a lot of other good work regarding the supply chain, we decided the next thing to do was to look at how we can try and get a better insight in terms of the weather.

It is partly for UK manufacturing, but predominantly used to assist us in monitoring our production volumes in Asia due to the longer lead times we experience from there.” “What we have been able to do is actually correlate EPOS data, and therefore purchasing habits from retailers, with the weather. They can quite accurately provide us with a view of what the past data is likely to be. For us, this has been hugely beneficial. We have the forecasts for this summer already, and they will be giving us the forecast soon for going into next winter.” While the benefits of such an endeavour might seem somewhat fantastical, Rush says the buying habits for their products clearly correlate to the weather. For instance, he says, if it is likely to be a hot summer then products such as spray guns and sprinklers are likely to be popular. In comparison, if it is going to be a cold winter, then garden equipment is likely to become frost damaged and require replacement come spring. In both cases, Rush says Hozelock is able to adjust their production to ensure they will have enough of the required products.

In addition to the long term forecasting, a weekly short term forecast is also correlated with retail spending habits and allows Hozelock to adjust its temporary staff volumes. “The short term forecast allows us to decide how many temporary staff we need on any given week,” says Rush. “This, in turn, allows us to have a flexible manufacturing output.” Regardless of the fluctuations in weather patterns, the nature of Hozelock’s business is very seasonal.

Thus, to combat the substantial differences in production requirements, the company has engineered fully flexible assembly lines which can be operated at a minimum rate using just four staff or at peak times by up to 20. “Our turnover in this business moves from being a £10m business in the winter to being the equivalent of a £150m business during the peak season,” says Rush. “This flexibility on our manufacturing lines and the ability of bringing temporary staff into the business is absolutely fundamental to our success. Another reason we have done so well in managing our stock, our output and our efficiencies is that we have really perfected this flexibility.”

Secure investments
Of course, maintaining and improving operating efficiency is reliant not just on the operators, but on the machinery and product innovation. Hozelock has ensured that this aspect of their operation is consistently performing by careful and consistent investment in infrastructure. The company’s most recent purchase of three new Demag injection moulding machines at a cost of £250,000 is an example of this investment. “These are more efficient and have better cycle times. Continued investment in current equipment is something we are always looking to do,” says Rush.

Working hand in hand with the company’s machinery investments is its desire to continue to cement their competitive advantage. This is demonstrated by the company’s work to improve its capacity for hose production.

“We want to continually develop faster lines,” he says.

More green shoots
The ingenuity involved in the operational management of Hozelock is definitely inspiring. While it is functional and sensible, it is also a slightly out of the box approach to ensuring continued success. There is no denying, however, the correlation between the company’s approach to planning and its securing of its own longevity.

Clearly not one to rest on its laurels, according to Rush the key areas for the business going forward will be continued investment and consumer driven innovation.

The development of adjacent product categories is already in place with the release this year of the company’s first pressure washers and further exciting developments for this innovative company are undoubtedly still to come. With the focus clearly on steering the company in the direction of continued accomplishment and a plan in place by which to achieve it, Hozelock is set for continued growth.