Turning Metal Into Money

Posted on 3 Nov 2008 by The Manufacturer

By the end of 2009, the owners of Central Metal Manufacturing hope to have almost doubled the turnover of the company they took over just three years ago. Mark Young discovers how success can be found in spotting the right opportunities

In early 2007, Ashley Crump, Jonathan Handford, Kevin Stant and Steve Ford purchased an underperforming sheet metal manufacturing business. The business had fallen upon hard times due to unforeseen changes in the markets in which it was predominantly operating. Potential opportunities were identified by diversifying the company’s product range to meet the needs of a migrating industrial and commodity-based metal production market.

Central Metal Manufacturing is now in full-flow with Crump handling finance, Stant supply chain management, Ford in charge of production and Handford taking the role of managing
director. The company is able to offer a complete service with steel sheet punching and laser cutting, folding, fabricating, assembly and painting capabilities. It delivers a diverse range of products, taking sheet metal through the entire treatment process. Current products now range from supermarket point-of-sale displays to crushing equipment; from machine guards to refrigeration bodies; from diesel engines to Swarf conveyors; electrical enclosures to industrial cabinets and chassis. If the firm does have a focus, it’s size. “We have no interest in producing large volume, small sheet metal parts that could be imported more cost effectively from China,” Crump explains, “Our focus is on producing larger fabricated assemblies from steel sheet to the finished article to satisfy our customers’ needs.” And that’s CMM’s niche.

A further element of the firm is the design service it offers. It works individually with clients and offers a tailored service to provide exactly what is required. In addition, it sub-lets this design resource to companies in the UK and overseas, effectively offering a contract service to create designs from the facility in Leicestershire and to sell these globally for manufacturing elsewhere. This allows clients to combine the best of British engineering with the advantages of local sourcing.

To complete the service portfolio, CMM offers VA/VE consultation (value analysis/value
engineering). “Customers may approach CMM to develop cost down initiates for their
products, and we offer support to develop ideas to ensure the customers’ end product
is more competitive in the marketplace,” explains Crump.

The company employs 180 staff across three facilities on an industrial estate just outside Leicester. But that figure could well be out-of-date by the time you read this as it is adding to its ranks all the time. This personnel expansion in the face of the
current global financial un-rest is something Crump considers to set the firm apart from
its competitors.

CMM is ambitious and it is keen to let that be known through its rapid expansion. And another measure of that is turnover. Set at £8 million when Crump and co took over 18 months ago, the company then pulled in £10 million in the first year under the new shareholders’ lead. Now the firm forecasts close to £12 million and next
year they aim for £15 million.

Crump is confident that one way this can be achieved is by exploiting opportunities
that arise in the metal commodities industry specifically and world economic
developments in general. One such strategy CMM will follow is to take advantage of the
stronger euro and vastly inflated fuel costs to take on domestic clients who currently
source supplies from eastern Europe.

“Eastern European suppliers are not as cost effective an option as they once were – and we feel that this will give rise to opportunities for companies prepared to exploit this,” said Crump. “I think you will see more business moving back to the UK from eastern Europe over the coming years. We have to be at the forefront of that development, and can offer our UK customers a better service than our eastern European counterparts. We can be more responsive, as well as now being able to compete on price.”

When they took over, before giving the dust a chance to settle, the new shareholders
decided to sweep the old cobwebs away. They put the entire workforce through a Train to Gain programme which was centred on business improvement techniques. Upon completion, all of the staff were brought up to NVQ level two, and some NVQ level three. The main focus was on continuous improvement and that’s the culture Crump says is now well and truly instilled throughout the firm.

“In every aspect of the business we want to continuously improve. That way we can offer a better service to our customers, we become more efficient and we offer a better
price – and that means we stay competitive. So whatever we do we drive that into our employees, under every aspect. So not only in production but across every aspect of the
company,” he said.

Crump staunchly subscribes to the notion of investment in people. He believes one of the key factors in the firm’s success has been its ability to recognise the skill sets each member of staff possesses, and areas of potential to be nurtured. “We strongly believe we have a very skilled workforce and we know that we need to invest in them to improve them further, bring them forward and thus make the company more effective and more efficient,” said Crump. On managing skill sets he reiterated it’s about finding the right person for the right job. “We do have a skilled workforce, and we are strengthening our team from external recruitment, and identifying personnel who have management potential and developing those individuals so that they become an integral part of our business,” he added.

In addition, the firm has links with North Warwickshire College through which it offers part-practical and part-theoretical onsite apprenticeships.

Communication throughout the ranks is another factor Crump attributes to the rising stock that CMM is enjoying. Teams are kept small, with team leaders reporting to facilities managers who in turn report to the directors. A monthly newsletter is sent
out to the staff and three directors each address one of the three facilities, on a rotational system, also on a monthly basis.

One thing Crump isn’t as satisfied with is the support structures available to manufacturers in differing areas of the country and differing sectors of the industry. “I would like to see more support in the East Midlands for manufacturing firms. In the
West Midlands there has generally been more support for firms, particularly in the automotive sector, in the form of grants and management support,” he said. “It’s
disappointing that there aren’t more schemes across the board to support companies
willing to invest in UK manufacturing.”

Overall, reflecting on the company’s prospects, Crump says: “Care is always required when a company has ambitions of growth; it’s important to grow at the right
pace. But there are certainly opportunities out there that we want to position ourselves
to take advantage of.” He adds that he and his firm are “positive about UK manufacturing
and its future prospects despite the many negative reports surrounding the economy.
There are always winners and losers in times of such uncertainty, and the strategy
we’ve adopted will ensure that we are on the winning side!” And why wouldn’t they be?
CMM’s future looks as safe as steel.