The new Chief Executive, Jim McCarthy, with Chris Morris, Managing Director and the management team quickly identified a number of changes that needed to be made and these have either been completed or are well underway.
The key decision has been to target Avocet's investment in the UK towards achieving distribution excellence, while investment in China is aimed at enhancing Avocet's manufacturing capability.
To support the strategy, the company is committing £3m investment in 300,000 ft2 of new warehousing in Brighouse, and substantial investment has also taken place at its factories in Dong Guan and Shuzou in China. Avocet's Far East factories have doubled in size and also include a new coating plant, which will significantly increase manufacturing capabilities.
UK Redundancies
In pursuance of this strategy, Avocet has made the decision to pack screws and nails at its factory in Dong Guan, prior to shipping them to the UK. Although this course of action makes sound economic sense and will help to improve efficiency, it has meant announcing some 70 redundancies in the pre-pack area. All employees affected by the changes have been advised and, wherever possible, alternative employment is being sought within the Brighouse operation.
The rationalisation of the product range also continues apace, with Avocet concentrating on the door and window, retail and electronics markets (the door and window business represents some 60% of volume). Where Avocet once offered 23,000 different items, with the obvious stocking difficulties this caused, a new catalogue has now been produced which streamlines the product offering to around 8,000. The introduction of this strategy has resulted in very significant write-offs in areas that are no longer core to the business. Although this has had an impact on the financial accounts for 2002 and 2003, the result is that Avocet is now operating in a cash positive mode, having secured complete backing for this new approach from its parent MASCO.
Customer Service
In addressing, the manufacturing, distribution and product rationalisation issues, Avocet, is demonstrating its commitment to improving its customer service. The company is now acting upon the results of an in-depth market research exercise conducted with its customers.
this strategy has resulted in very significant write-offs in areas that are no longer core to the business
Although the survey revealed the company is doing many things right, such as the design of new products, ease of placing orders and attitude towards customers, there are other areas requiring attention.
The survey highlighted that product consistency was an area that needed to be improved, in line with market requirements and standards, and this has led to a total review of all specifications in the UK and Far East. As a consequence quality procedures throughout its factories have been improved and Avocet has recently been re-evaluated on BSI standards for quality procedure and has been awarded ISO 9001. In addition, Avocet's cylinders have also received the latest EN1303 Grade 3 accreditation.
Further recognition of the quality of Avocet's products has resulted in them being approved by 'Secured by Design', the Police recognition of product security, and also by Sold Secure, the MLA's own mark of quality and security.
Product availability is another area requiring attention. Avocet has therefore formed an in-house project team, headed by the new operations manager, Hedley Corcoran, whose task is to provide next day service to all customers and obtain a 95% minimum delivery by line. Results well ahead of this target are already being achieved in some market sectors.
As a further commitment to developing and building customer relations, the sales division has been strengthened further with the appointment of Jonathan Fennell, as head of commercial sales focussed on window and door hardware.
Source
Glass Age
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