With a burgeoning orderbook seemingly unaffected by the recession, TM’s Edward Machin meets Amtico, a British manufacturer taking deliberate steps to ensure its own continued success.
Operating from its global headquarters in Coventry, Amtico International manufacture high-end LVT — luxury vinyl tiles — flooring for both retail and commercial markets. However, what differentiates Amtico from the majority of it competitors is, says supply & logistics manager, Ben Naylor: “Our world class design capabilities. Indeed, the company is primarily led by a culture of continual product innovation, with a key objective of ours being to remain at the forefront of all design advances within Amtico’s respective markets.” “What is more, it is the facet of our business which is widely recognised as being sector-leading. For example, we were awarded first position for design and product capabilities in a recent survey of the American flooring industry.
Given that Amtico is not the largest company in our sector, especially when compared with the American corporations, it was particularly pleasing to be recognised as an undisputed best in class manufacturer.” Amtico’s operations are broadly delineated two seperate, albeit often cross-pollinating, customer bases: retail and commercial. In terms of the clients that the company works with, says Naylor: “We have a number of diverse channels that we sell through. In the UK, for example, Amtico primarily supplies high street flooring specialists — which provide retail customers such as you or I with our flooring needs.”
“In terms of the global product breakdown, we supply approximately one third to the UK market, one third to the rest of Europe; one third to the USA and the rest of the world. We are currently increasing our presence in the rest of Europe to complement the significant traction that the company has in both Germany and France. However, we have identified further opportunities to increase our footprint across the continent.”
In spite of the current downturn, business remains robust across the company’s portfolio. While Amtico’s orderbook to some extent depends on general economic conditions, the products which it manufactures are often at the front end of any recovery.
Moreover, that Amtico is well ahead of where it expected to be in such a climate highlights, says Naylor: “The excellence of our product offerings, together with the fact that we are able to respond more robustly than our competitors.”
Spacia: a new frontier
In 2005 Amtico launched a new ‘Spacia’ flooring range, designed as a “simple, stylish collection of woods and stones for everyday living” to complement the company’s high-end, sector-leading product offerings. To enable low-cost production, Amtico partnered with a state of the art manufacturing facility in China, which has, says Naylor: “Enabled significant growth in a market segment that the company hadn’t traditionally operated in.” “However, such growth can be rather unpredictable, and thus challenging to manage. Thanks to the considerable process improvements made in our UK facility — including lead times, flexibility and increased control, among others — it was identified that we could compete on a cost basis by recalling a percentage of our product manufacture to Britain.” Accordingly, in June 2009 Amtico began manufacturing of the Spacia range at its Coventry site — currently sitting at 25% of total production.
Given the aforementioned advantages, does Amtico have plans to recall its entire production to the UK? “We are hitting the point where UK manufacture of the Spacia range is constrained by our production capacity,” says Naylor. “While it doesn’t stack up on a fiscal basis for the company to invest in increased capacity, if we can do so then it is economically beneficial to recall a greater percentage of manufacturing to the UK.” That being said, Amtico will look to retain a manufacturing base in China, ensuring both a balanced spread of production footprints and the ability to increase capacity at very short notice.
Central to the success of Amtico’s UK operations has been an ethos of maintaining fastidious standards of internal quality. Confirms Naylor: “Within the manufacturing aspect of our business in particular there has been a pronounced investment in training and personal development — such as Six Sigma Black Belts and NVQs for floorlevel operators. Ultimately, we are driving a culture of root cause analysis in all that we do, ensuring that every member of our organisation understands where we are headed and why.” The benefits have been both immediate and significant. Amtico used to quote a lead time of three weeks from order to dispatch; it now does so within five days — with a delivery rate of 87%. Says Naylor: “We believe that this sets us apart from the vast majority of our competitors, who largely use a sale from stock model. We have subsequently improved our availability to 98.7% in 2009, and both our throughput and cost per metre rates are regularly breaking company records.”
Supply chain and demand
Given his role in the company, Naylor is understandably keen to highlight the developments made in Amtico’s supply chain. In essence, he says: “We have moved from a make to order to a mixed make to stock and make to order model, meaning that the company has had to wholly change the way we work.” Having analysed its markets in depth, Amtico identified that the majority of its customers were purchasing the same type of products — a finished goods range of approximately 250 items which covers over 60% of the company’s sales volume. Says Naylor: “There are certain products which we hold specifically for large customer orders. Given that the majority are for general commercial or retail clients, however, who will generally choose to purchase similar flooring solutions, we decided to tailor our supply chain accordingly.”
Because Amtico’s internal processes have become considerably more formalised, the company’s next challenge is, says Naylor, to implement a support system capable of analysing all related data. He explains: “It is a programme that sits on top of our ERP system, and while not a huge spend financially, will require an extensive amount of training to ensure that all employees are aware of what it means to them and the attached benefits. Ensuring this smooth transition is very much the company’s future from a supply chain point of view, and will only serve to further improve our availability, lead times, efficiency and overall production processes.”
And Amtico’s wider organisational strategy? “Given that it is the single most important aspect in the company’ remaining ahead of our competitors, we will continue to develop our products in both design capabilities and technical solutions, says Naylor. “Indeed, Amtico is primarily a design and research-led organisation, with every department in the company involved in the process.”
“Our ultimate goal, and one which has driven the company since its inception, is to design the best fit flooring to meets our customers’ needs. Inevitably certain designs come in and out of fashion, and we must clearly seek to stay on top of them. However, we believe that an Amtico flooring solution is timeless, and it is our manufacture of such industry-leading products that will ensure we fulfill our mission of becoming the number one global supplier of premium resilient floor tiles.”
