Paul Kemp and Philip Perrin tell Will Stirling how the new Howard Hunt Group, its processes, people and KPIs have adapted to meet the needs of clients who invest millions in getting to know their customers.
Ten years ago, Howard Hunt Group simply put ink on paper. Today its four-strand, £56 million business provides multichannel marketing solutions, from direct mail to social media, and is continuously restructuring in order to become a more integrated, multi-platform marketing company where printing is just one activity with which to deliver its clients’ communications.
When marketing mail from a travel company or big retailer next lands on your doormat, take a closer look. It’s likely that the letter will have a date reference, like a birthday, that is personal to you, and it may be printed in your favourite colour. It may even display an image of your holiday destination last year and refer to places you like to visit.
Welcome to personalised mass marketing. Using the latest technology, myriad variants can be printed in direct marketing campaigns to appeal more directly and personally with the individual customer. This can be done across all media channels, not only print, reflecting the different ways people select their communication channels for different purposes. The stakes are high, as choosing the correct combination of marketing channels can determine the success or failure of a campaign. Highly targeted direct mail and email – customised individually, using personal hooks like images and sent at the optimum time of year, or even on a specific day – can have a huge influence on consumer spending behaviour.
Formed in 1990 in London and now in Dartford, Kent, Howard Hunt Group was originally a ‘plain vanilla’ litho printer. By the late-1990s most of its work was for direct marketing clients, a portfolio it has nurtured to include big brands including First Choice, TUI, Vodafone, Pizza Hut, British Gas, Virgin Media and Love Film.
About eight years ago Howard Hunt Group realised two things. Not only would demand for DM wane over time, but also that to survive and prosper in a fast changing marketing industry, the company had to turn risk into opportunity. It began to offer more mailing contracts to expand its service beyond printing, and established a data management business, Celerity, to assist customers clean their databases and ensure that marketing material would reach existing customers more accurately.
Today, Howard Hunt Group comprises four separate businesses which support each other to fulfil cross-channel, high volume marketing campaigns. They are:
Howard Hunt – core printing business
Howard Hunt Mail – a mailing agency, established in 2009
Celerity Comms – a data management company specialising in personalising marketing material, anddigital marketing company specialising in variable digital print and cross-media communications
Celerity IS – a data companydivision that builds and acquires databases, and improves their integrity and integrates specialist marketing and CRM software
In 2010, digital spend in the $368bn global marketing industry surpassed print media spend for the first time. “The world is changing,” says Howard Hunt Group’s operations director, Paul Kemp. “The way we communicate is changing – social media, SMS, web, phone, emails and letters. We have to react with that.”
Is it a concern to a printer of this size that the DM market is declining? “Our response has been: we should not see this as bad news but as good news because of where we’re positioned,” says Mr Kemp. “The strongest [marketing] results come from using all channels of communication and we are set up as a business to do that.”
Adapting from being an offline printer into a modern multi-platform marketing business is a complex ambition. Large printing businesses traditionally operate a ‘top-down’ management system. A few years ago at Howard Hunt Group there was little formalised shop floor training, no 5S or continuous improvement activities and little internal communications between departments. The answer was to get lean by cultivating a culture of continuous improvement and a ‘bottom-up’ management style where machine operators and fulfilment personnel would truly own their departments, providing management with the best solutions to efficiency problems.
In September 2009, Howard Hunt Group (HHG) hired Philip Perrin, a Lean Six Sigma master black belt who had worked for BAE Systems and GlaxoSmithkline and had trained more than 1,200 people globally.
Along with Paul Kemp, newly appointed to the board of directors, and aided by other members of the management team such as business development manager Fergus McManus, they devised a programme of procedures to tackle several areas: to improve manufacturing processes, to be better aligned with group business goals; to introduce a weekly Training Hour, 5S, Operator Preventative Maintenance and other ‘job ownership’ activities; provide far better internal communications – using weekly team meetings, T-cards and group performance presentations; and to empower the staff to direct their own projects and improvements.
Phil Perrin, who spent 30-years honing business improvement methods at BAE Systems, began by demonstrating the inverted pyramid, where shop floor operators advise team leaders who tell middle managers and finally the managing director what needs to change to effect true improvement. This diagram may be familiar to many but at HHG, this was a sea change from common practice.
Crucially, the overhaul of operations was executed in tandem with a group-wide restructure where HHG laid out its transformation plans to a market-leading, multichannel marketing company. This involved identifying underperforming areas of the company, making some redundancies, ramping up the Celerity data businesses and investing in plant to fulfil more personalised marketing.
The overhaul was, by admission, overdue. “As a business we’ve always wanted people to improve, but as a company we’d never given enough time to it,” says Mr Kemp. “We’ve always expected staff to turn up, ‘press a green button’ and just get better. But we’d not scheduled enough time to let them step back from their job and give them the time to do it.”
Performance metrics and the Training Hour
Factory visits were arranged for site manages to see best practice first hand. “The first thing they saw when they entered [one factory] was a big improvements board,” says Perrin. “It really made an impression on them.” “We had something similar but no PCDA, ours were scattered around the factories and there was no focal point,” adds Kemp. HHG now has a large, central Improvements Board at each site, covering quality checks, PDCA, suggestions, 6S audit, metrics and health & safety.
One of the early changes was to introduce a training hour. Partly an introduction of tighter Standard Operating Procedures, and partly a chance for teams to brainstorm issues, this additional hour of work began once every three weeks at one site but is now weekly, across all sites. While the hour is paid, several employees had initial reservations – many time-served staff at this East End London printers were not used to added duties beyond their normal shift pattern. Over time, however, attitudes changed. This is partly because the training hour has cultivated projects led by junior staff (see later).
With training, HHG now does weekly Operator Preventative Maintenance or OPM. “We actually shut the factory at each site for an hour, some do OPM and the other group go for the Training Hour,” says Mr Perrin. Why run the two concurrently? “Because TPM and OPM were being done at different times, management teams were being stretched to do the training hour because they were focusing on busy shifts,” he says. Staff were staying on for an hour to fit in OPM. “They preferred to come in an hour earlier, so we switched this around to suit them. Aligning the training hour with OPM meant that management can focus on that fully with no distraction from the shift.”
Alongside the Training Hour came 6S – standard lean 5S with safety added. Simple things affected improvements; specialist tools were supplied at point of use and shadow boards reveal when key tools are missing. Defunct areas have been cleaned up and made fit for purpose once more, included a roller cleaning station that had become a redundant waste of space.
Press lines now use a T-card system to record issues. “An engineer can take a duplicate copy away,” Perrin says. If he needs to order parts he can write this on the T-card, so the operator has visibility so that he knows something is being done about it.”
Staff have really noticed the changes. Francis Jackson is a senior operator on Press 1 at H1 (HHG has three sites, H1, H2 and H3). “We use special inks. Now we have an ink board which tells you where the ink is – it avoids me walking all over the factory,” he says. “TPM [Total Preventative Maintenance] has been a massive improvement. Perhaps it’s not as regular as it could be, but about once a week we do basic maintenance – so instead of the press breaking, we’re getting in there first. Its scheduled so you need to complete it in that slot, that’s the discipline.” He adds that white boards that show messages and request maintenance actions creates accountability, where now operators have recourse to engineers if something has not been fixed or reported. “A lot can happen in a 7.5 hour shift. If I forget something or have an issues I can write it down, the next guy can get it or respond to it. With maintenance, you can now prove the request and tell the engineer ‘you’ve had two weeks, where is it?’”
There is now a monthly 6S audit at each site and 6S audits are performed in the offices too.
The changes at HHG have encouraged junior staff to devise and lead their own projects. This is a big shift for a company who used to dictate solutions from middle management who had far less daily experience of certain procedures and machines. Barry Davidson’s double insertion project is a good example. He is a team leader in the enclosures department at H3, where personalised printed material is folded and packed for despatch. This section was recording too many double-insertions, where more than one insert was being packed – unacceptable when preparing packs customised to the individual. Barry wrote a set of SOPs, an operator manual and a presentation. Knowing that where change was being resisted, an operator’s voice would ring more truly than a manager’s, Paul Kemp asked Barry to present his project to a group of peers from H2. He explained the project’s purpose:
- Minimise error rate in enclosed items
- Increase customer satisfaction from doing this, and
- Reduce wasted time in tracking blame and fire-fighting the issue
The root cause was ineffectual checking of sensors designed to filter and place the inserts, and lack of finetuning of the machinery mechanics. He developed a standardised checking procedure, and standardised the settings on the sensors. “It used to be that the managers would show you a solution to a problem. We might say that’s not right, but we’d have to do it,” says Barry. “Now they tell us the problem and we devise the solutions, which works best.”
The bottom-up exercise had worked: “It was an eye-opener for them [H2 staff] to see this young guy owning a project, thinking ‘I need to be doing that at my site and I want my employee to be up there’. This was our buy-in to the management team,” says Kemp.
Only as good as your tools
As retailers seek to differentiate themselves, there is a growing demand for higher levels of personalisation, also called targeted marketing. The problem has been the capacity of the manufacturing process. A traditional offset litho press can print huge volumes but cannot apply variants in a print run, while a typical medium-sized digital press can print variants in up to 25,000 items per day. Enter Kodak. The print technology company’s latest digital press, the Prosper 5000XL, is a variable image inkjet printer capable of printing up to 1.4 million completely variable and personalised items a day, revolutionising high volume direct mail. HHG is a beta test site for Kodak Prosper in Europe, where Kodak has an in-house team at Dartford testing and colour-balancing the machine for the type and scale of print runs HHG will make.
At £2.5 million, Prosper is one of HHG’s biggest investments to date, but it is absolutely integral to the restructured company’s designs on becoming an inclusive Marketing Service Provider. Luke Piggot, CEO of HHG, explains Prosper’s potential. “Last year we did a big end-of-year campaign to 250,000 people, where the customisation was based on deep rooted analysis: which holiday resorts customers visited, how many times, long haul flights, spending preferences etc,” he says. “We produced 250,000 small brochures that had the potential of 850 creative and contextual million variations. It was exciting but took a very long time to put together and deliver. Prosper is able deliver such a project in hours.” HHG is planning to invest in a second Kodak Prosper.
HHG invests upto £5m p/a on capital equipment and business improvements. In the enclosure department, a new CMC9000 enclosure machine has greater capacity and is more accurate than the incumbent machine, and the company expects to take delivery of a second 9000 this autumn. In finishing, in the last 12-months HHG has bought a customised MBO 1020 and a Heidelberg 82 finishing machines.
For IT to match the new equipment and processes, the group has invested in a new manufacturing information system (MIS), Imprint, which was first rolled out in the estimating department. Further investment in Customer Relationship Management (CRM) tools and a Salesforce database are integral to the new MIS.
Customer feedback suggested that HHG’s website wasn’t informing people about everything it does as an integrated Marketing Services provider (MSP). Assistant managing director Lucy Edwards was asked to overhaul the site and the new revamped website now presents HHG’s business more clearly to both clients and prospects alike, and is reaping the benefits of an underlining Content Management System (CMS) to keep its content constantly up to date and relevant to its clients needs.
The last word
When touring factories to witness evidence of business improvement, The Manufacturer reporters speak to one or two senior people. At HHG, I spoke to eight different people, three or four of whom worked on the shop floor. Phil Perrin made a point of making these introductions. Change sounds impressive when presented in a tabular series of KPIs. Invisible change is more compelling when it comes from those doing the job.
So are the myriad changes at this fast-adapting company actually making real improvements? Dennis Williams is site manager at H3, the enclosure handling facility which also houses the Kodak Prosper. The new TPM and project work, he says, has made tremendous improvements. “For example, last week we did 10.6 million packs in a week. Three to four months ago we’d have achieved about 9 million packs maximum. The increase is down to the reliability of machines, the training we’ve had and the results of some projects. And we have the stats to back it up.”
With testimonials like this, high levels of investment such as the Prosper and enclosure machines, and a group-wide, pull-together approach to serving multi-channel marketing needs efficiently, Howard Hunt Group is well positioned to be a leading player in the new, super-personalised marketing industry.
For a complete list of Howard Hunt Group’s business improvements and 2011 KPIs, measured since the main changes were initiated in 2009, go to https://www.themanufacturer.com/articletype/company-profiles/