As part of the wider PrISMS program (Practical & Innovative Solutions for Manufacturing Sustainability), the Institute for Manufacturing Education and Consultancy Services (IfM ECS) worked with 120 smaller manufacturers to improve their business strategy and support capability development. The program enabled IfM ECS to develop business support tools to address firm’s strategic and operational challenges.
Ecotile is a manufacturer of PVC interlocking floor tiles. Ecotile was an organisation to benefit from the program. IfM ECS worked with the manufacturer to develop a plan for business growth, identifying areas for potential efficiency gains and putting an innovation process in place to develop new products and service opportunities.
The key objectives for the project were, firstly, to develop a plan for business growth, secondly, to identify ways to make efficiencies, and finally, to put in place an innovation process to develop new products and services.
STAGE 1: DEFINITION OF ACTION PLAN
IfM ECS assessed Ecotile’s priorities and practices through the IfM ECS Prioritisation process, a whole-business diagnostic and action-planning tool to help the firm to understand its strengths and weaknesses and draw up an action plan to address them.
STAGE 2: DECISION OF A BUSINESS STRATEGY
The business strategy was assessed and defined with the firm’s board, with an emphasis on innovation to boost growth.
STAGE 3: ACTIONS AND IMPROVEMENTS
Product market groups were refined and streamlined with a view to improving manufacturing efficiency. The board focused on its customers and competitors, leading to a radical rethink of where to target its marketing budget to highlight the value of the firm’s products compared with its competitors. Competence mapping helped to identify areas where the company performed well and areas that could be improved. Each member of the Ecotile team took ownership of these areas and improvement plans were established.
STAGE 4: INNOVATING
Operating disciplines were examined to determine how the firm could position itself to offer a better balance of innovation, service and efficiency. Once this structure was agreed, IfM ECS led several process mapping sessions on systems and procedures, examining the steps in each process to identify more efficient ways to achieve the same outcome.
TOUCHPOINT 1: INTRODUCTION
IfM ECS introduced to Ecotile Ops. Director by Luton Borough Council.
TOUCHPOINT 2: ASSESSMENTS
IfM ECS assessing Ecotile. This helped to show the gaps in understanding of key members of the management team relating to the current focus of the business. In particular, it showed that the Operations Director was running the factory to lower its cost profile, when the markets currently served by the business would respond well to improved service and more innovative products. This allowed the manufacturing part of the business to refocus on those elements of the operation which would deliver these benefits, even if costs rose as a result.
TOUCHPOINT 3: STRATEGY MAPPING SESSIONS
IfM process mapping sessions focusing on Strategy Development. This helped the Management team of the business to become better aligned with the MD’s understanding of the European market for their products and to understand which markets represented the best opportunity to grow sustainably.
On the one hand, Ecotile measured its success based on key metrics, including turnover generation, profitability and the number of new jobs created. On the other hand, IFM-ECS measured success based on whether the project delivered on the objectives and whether there were any learning points and enhancements to the tools and the approach that could be applied to support future projects.
The first barrier overcome was that of removing the mismatch between the manufacturing offering and the demands of the marketplace the business wished to serve. The second export-related barrier to overcome was through understanding the demands of markets in mainland Europe and understanding how to supply to those markets a customer value proposition sufficiently compelling to gain traction.
Concerning business strategy, the directors agreed on, and communicated to all staff, an ambitious five-year market growth strategy. Moreover, the final results improved considerably, turnover increased by 41% in just over a year since the start of the project and operating profit increased by 12%, this was despite major investment in capital and an increase in staff levels by four (an increase of 20%).
Furthermore, Ecotile invested in a new twin shot injection-moulding machine. This capital investment meant they could manufacture tiles with a 30% recycled core, making the range more cost-effective, sustainable and environmentally friendly. They have also invested in a second robot and ‘drive in’ racking to maximise storage space in the warehouse. However the major innovation is made in the manufacturing process in order to match the market requirements in the sector.
In addition, the use of the twin shot injection-moulding machine and a shrink-wrap packaging machine puts Ecotile at the leading edge of technology in its sector. A new German-language version of the Ecotile was launched as part of the plan to boost sales across Europe, with growing awareness of the company in Germany, Switzerland and Austria. It can therefore be stated that business strategy, as well as manufacturing efficiency and innovation have been enhanced in the process.
James Gedye, Managing Director, said: “Working with IfM ECS on our strategy enabled us to really focus on what is important in our business and to develop new systems to complete our processes more efficiently and cost-effectively, leading to growth through innovation"
From the SMEs perspective:
- Seek external knowledge and advice to improve the business strategy and operations.
- Tackle difficult problems e.g. sustainability, energy use etc. in small managable steps.
- Involve many people within the organisation in changes and improvement projects (not just managers).
From the RTOs perspective
- Have a holistic approach in business assessment.
- Provide a clear process and associated action plan for improvements.
- Have an effective method to capture feedback, data and knowledge from the SME to improve future tools and engagements.
From the SMEs perspective:
- Assume that a “business as usual” mentality can provide a competitive advantage for the long term.
- Assume that the business or sector is unique and external people cannot assist unless they have worked in this sector.
From the RTOs perspective:
- Use academic language and jargon.
- Focus on what you know rather than what the business needs.