The departure of a popular leader can leave a crippling vacuum in a company, wrong-footing strategic direction and unsettling staff. Not so for DavyMarkham however, as Jane Gray finds out.
When TM last profiled heavy engineering firm DavyMarkham in April 2010 the company had a truly inspirational story of transformation to tell. From a situation in 2006 where business was weak, morale low and an aging workforce was making crucial skills critically endangered, the company has undergone a dramatic reversal of prospects.
This turnaround was driven by the robust leadership of then managing director Kevin Parkin who proved beyond all doubt the power of charismatic leadership and the responsibility that needs to be borne by all company leaders to ensure the success of an organisation. In his time with DavyMarkham, Parkin initiated an intensive education and engagement programme for all employees which taught the principles of continuous improvement and empowered them to uphold quality and efficiency through the use of lean tools such as 5S.
Another outstanding outcome of Mr Parkin’s leadership at DavyMarkham was the establishment of its tailored apprenticeship programme, the striking success of which has caused it to be held up as an industry benchmark for training provision by institutions like the Institute of Mechanical Engineers and EEF. In addition to safeguarding the future of the company by creating skilled engineers to whom outgoing, experienced employees can pass the torch of industry, the programme has revitalised workforce enthusiasm with an injection of fresh blood, increasing productivity.
In March, however, Parkin moved on from DavyMarkham to take up a new position as chairman of a newly formed plastics recycling business, R3 Products. Creating continuity in the wake of such a departure can be difficult and many business consultancies thrive on helping companies understand leadership legacies in order to avoid a crisis of confidence. While DavyMarkham did not feel the need for external help in their recent transition of power, Gordon Scott, director of sales and marketing at DavyMarkham, admits that when Parkin left there was very real concern about what the future might now hold. Such fears were soon put to rest.
A world of opportunity
Defying the grubby, far from glamorous, image of heavy engineering DavyMarkham’s approach to project planning means that many engineers working on mining and industrial equipment get to live a rather exotic, jet-set lifestyle. Scott explains: “There is continuity in a project from the moment the plates arrive on the shop floor for fabrication, through to the finished product and installation.”
For those working on a project, they see it through from end-to-end, including the process of fitting equipment, wherever its end location may be. For those working on the company’s newly won contract in Peru, this will provide a chance to exchange England’s North East steel bashing beat with the spirited Latin rhythm of industry in one of the world fasted growing industrial markets. Scott says this kind of opportunity provides a foundation for enthusiasm: “Throughout the company people are enthusiastic about both the heritage and the future. That is something we encourage in every way possible.” Furthermore this end-to-end approach, which includes refurbishment through the product’s life in service, helps to safeguard British involvement in prosperous new markets and emphasizes the need for advanced engineering and manufacturing skills in the UK.
Stepping confidently into the legacy left by Parkin and showing their commitment to continuing DavyMarkham’s transformation the new management team immediately took steps to speak directly to employees and reassure them. Scott says: “Kevin’s initiative was founded in the idea of taking on the engagement issues we had here at DavyMarkham and the four of us now on the senior management team [John Watson, director of production; Mike Robotham, director of engineering and contracts; Andy Howard, financial controller and Gordon Scott director of sales and marketing] are absolutely committed to taking that forward. We did recognise the potential issues around Kevin’s departure however, and the week after he left we stood up in front of the work force and explained the future plans we had for this company. This was very well received as there had been some genuine concerns that, with Kevin leaving, there would be a big hole left in the organisation. What we were very keen to make clear, in person, was that this is not the case. All the initiatives in place have been fully committed to by the management team.”
The decisive statement from the new management team was that there would be no glitches in the company’s trajectory and that business as usual should continue without pause has allowed further improvements business wins to roll on without delay. The company is now about 50% of the way through applying 5S to all of the equipment on the shop floor and there are 13 active projects on the go. With regard to continuous improvement (CI) the company’s dedicated CI manager, Pete Cross, having worked with the machine shop staff to establish a CI culture, is now starting work with team in fabrication and fitting.
The apprenticeship programme is also going from strength to strength. There are currently around 20 apprentices enrolled with DavyMarkham, a figure which represents around 20% of the workforce on the shop floor. The first apprentices to graduate from DavyMarkham’s programme, which other manufacturers now come from far and wide to observe as a reference point for their own apprenticeship aspirations, are now in the workforce. Scott says: “They are working on the large machines in fabrication and in on suite fitting projects.
They are working with mentors now and taking on the kind of responsibility which might have taken them eight or ten years to achieve just a generation ago.”
Skills and people development at DavyMarkham is not, restricted to the engineering and production areas of the business. For a company that is renowned for its flexibility in being able to frequently undertake one off engineering projects, some of epic magnitude, the attention to detail which DavyMarkham applies in its sales and customer care truly differentiate it from competitors, according to Scott.
Heritage and hereafter
DavyMarkham has grown into the company it is today through the parallel development of two companies; the Davy Company of Sheffield and Markham and Company of Chesterfield. Both companies were founded in the 1830s, the former specialising in steel manufacture and processing, the later in the production of mining and tunnelling equipment.
The path towards unifying these two companies, both highly respected within their industries and the local community, has been somewhat circuitous. Each organisation has been through a number of acquisitions and, after a joint acquisition by Kvaerner ASA in 1996, a number of name changes too.
The incarnation of DavyMarkham as the organisation we know today took place in 2006, cementing and rationalising the combination of skills and experience which both could bring to each other’s markets. The reversion to original names of the two companies also underlined the strong heritage which each had in those markets and formed a strong base on which build a brand which now commands great customer confidence.
Looking forward however DavyMarkham is keen to extend the potential of this brand confidence and is pioneering in new markets where its expertise could be leveraged. A focal point for strategic development is the new-build nuclear sector in the UK. Considerable opportunity has been identified here in the provision of equipment for power generation, such as low pressure casings, as well as the fabrication of water cooling systems and tunnelling equipment.
While plans in this area are in something of a hiatus following the Japanese tsunami earlier this year, the company is confident that the market still represents significant opportunities. Plans are in place to develop the necessary quality specifications and work procedures which will qualify DavyMarkham as a nuclear supplier. Training programmes for targeted areas of the workforce are also in development.
Since we last profiled DavyMarkham the sales staff has grown and Scott explains that the team’s strategy is to treat every customer as an account, despite the one off nature of most business. “We look after clients on an ongoing basis, even if we don’t have any live enquiries. With key clients, like Roll-Royce and Sheffield Forgemasters, this means keeping up regular contact on a weekly and monthly basis to hear what is happening now and what projects they are thinking about. This helps with production and capacity planning.”
DavyMarkham now has an active graduate programme for bringing graduates into sales and marketing, as well as engineering. Sales and marketing recruits are employed and trained to make the most of specialist knowledge of particular markets. Scott comments: “Because we have such a diverse number of markets it can be difficult for a small sales team to cope with. Each market has a different style of operating. Energy, mining, tunnelling and our civil engineering projects for bridges; they are all quite different. We are looking to develop people as specialists in each area.” Scott is confident this approach will help DavyMarkham in the up-front work which has to be done in bidding for projects before the quotation and proposal stage is even thought about and that it will put the company on a much stronger footing for winning new business.
In terms of DavyMarkham’s traditional market for mine hoisting equipment, finding new business means keeping a close weather-eye on emerging markets. Scott reflects: “In this traditional area of the business our home market has almost entirely disappeared. We have about five operating mines in the UK now.
“Exports however have been very successful. We initially exported to Africa and then North America for the nickel, gold and semi-precious mines located there. In the last eight years about half of our turnover has come from this mining equipment business.” A recently won contract in Peru will extend the work being done in North America. Scott says: “We took a close look at which countries are expanding their mining markets and Peru came first among those we identified. This will be the first time we have supplied new equipment to Latin America and we have just signed a contract worth £3.25m. We will be looking for further expansion in Peru and then, once we are well established there, we will be looking at Mexico, then Chile.”
These plans for expansion, alongside moves to secure more business in the renewable energy sector and sustain activity in the UK steel and bridge engineering industries speak for themselves of the dynamism and forward thinking culture at DavyMarkham. Stressing the point however, Scott says: “We are moving forward as a company. We want a secure workplace for our workforce; we want to bring in new people and new ideas in order to continue our successes so far.”
Davy Markham at a glance
Location: Sheffield, United Kingdom
Size of site: Manufacturing Area 175,000 sq ft
Key markets: Civil Infrastructure, Mining, Quarrying and Tunnelling, Water Control, Steel and metal processing, Power generation including Wind and Hydro Power, Nuclear – storage and movement, Oil and gas Key products Mine hoists, tunnel boring machines, mechanical handling systems, test rigs, press components, moving bridge components and products to aid the control of water in hydro generation projects
Points of interest: Since 1869, more than 300 hoists of all types and sizes have been supplied to customers around the world. Our largest hoist to date is a double drum, single clutch production hoist, rated for a maximum rope pull of 78000kg, and a maximum depth of 2650m, at a hoisting speed of 15 metres per second, and a motor rating of 6.25MW rms. These drums are 6400mm diameter, and carry 64mm diameter rope