Thomas Marks, Secretary of AEMT, visits Houghton International in Newcastle-upon-Tyne. He speaks with Michael Mitten, the CEO, who is joined by Tiffany Scott, the Marketing and Business Development Director. They talk about the company’s latest service offering, the vision for the future and how it will be achieved.
Driven by the company’s core values, Houghton International has been expanding its business significantly over the last 5 years. Values such as protect and develop the workforce, deliver exceptional customer service, honesty, integrity and the use of innovation have proven to be the recipe for their success. So essential was it for the workforce to engage with the values, Tiffany organised for large boards emblazoned with the values to be erected all over Houghton International’s sites – you will even find them in the restrooms!
2020 vision
Being a goal-orientated business, encouraging staff to meet the next set of targets was important. Back in the summer of 2014, Michael introduced an ambitious 5-year plan with an aim to increase turnover to £20 million by 2020. Such an increase in growth would require considerable leadership and investment in both people and premises. As the business grew beyond the £5 million mark, a diverse leadership team would be required to manage the various facets of the business.
Key to the vision’s success was the workforce. Assembling all 65 employees for a presentation, Michael kicked off the project by explaining the company vision, and a plan on how it would be achieved. At its core were the staff and their belief in the quality and expertise within the business. The expansion plan would require this talent to be developed as well as bringing in new expertise.
Having recruited some key positions, the management team was brought together at a team building day to discuss vision 2020 and how to achieve it. By talking about the objectives, they had been tasked with, the team were able to set milestones and make sure they had the tools to deliver them.
Organic growth
The growth of the business has seen the addition of new premises including a large machine shop to handle electro-mechanical repairs up to 30 MW. More recently they’ve moved into vacant space at Newcastle’s CAP Works to expand their burgeoning pump business.
For the more complex or high value projects, customers often come to the workshops to look at progress and audit the completed work. These visits are welcomed and this open-door approach ensures that the high standards of workmanship and cleanliness are always maintained.
Growth was achieved organically within the marketplace based on high levels of customer satisfaction and a confidence in their ability to take on a greater share of the market. Expanding the service offering to current customers to include pump services has proven a successful driver for growth.
Critical to this growth was the ability to attract and retain the people to deliver the work. As such a key objective for Houghton International is to become an employer of choice, regionally, nationally and internationally. Houghton International has been recognised in the top 10 employers in the North East for 2 years running. As part of this strategy a ‘Sharing Success’ campaign was developed to improve benefits and remuneration for the staff. Houghton International now employ over 150 people in the North East region, up from 65 in 2014.
Expanding skills and expertise
Central to the 2020 goal was investing in the talent and facilities required for delivery. Firstly, the overall workforce needed to increase while developing their skills. The best way of expanding such a workforce is to take on apprentices and trainees who can learn from experienced engineers.
Encouraging the apprentices, trainees and the existing workforce was rooted in the new Sharing Success bonus scheme. Designed to improve performance it has proven important for maintaining morale and achieving the company’s goals. Based on last year’s figures, the company far exceeded its targets, meaning the expected bonus was more than two and a half times the original figure. The whole aim of the strategy is to include everyone and ensure they feel engaged and appreciated for their contribution. Part of the process is to ensure everyone understands the company values, the reasons for them and how to uphold them.
The integrity of the company is based entirely on that of its employees and Michael wanted to continue building the business with the same values that were established by his parents. This would include training new staff and expanding the knowledge and expertise of existing employees. Essential for the continued growth of the company.
Supporting the workforce
One objective is to be recognised as an excellent employer, locally, nationally and internationally. As the company continues to grow, the overseas aspect will become more important. To gauge progress on this aspect of the expansion plan, an employee survey has been conducted each year to assess satisfaction within the workforce and to elicit suggestions for improvements. 82% of employees took part this year and of these, 97% stated that the company was a great place to work.
Interestingly, after one employee survey it became clear that although the workforce stood behind the company’s values, they remained ambiguous. How do we live by these values, and what do they really mean?! A team meeting developed the third essential part of the 2020 vision – the principles to which the team works. From then on, each decision made is challenged by the company’s values.
Of the total workforce, 20% is at one stage or another of their apprenticeship, with the business usually taking on eight new apprentices per year. They are encouraged to work in all areas of the company to give them a wide range of experiences. Multi-skilled staff provide a more flexible workforce. This allows Houghton International to transfer more resources to larger projects when required and ensure projects are completed with minimal downtime.
Gaining traction
The core business at Houghton International has centred on the repair and rewinding of electrical motors and generators. This business has grown to include traction motors, commutators, alternators, fan units and other auxiliary equipment. The expansion into the rail sector has brought many advantages; not least new processes and testing facilities to ensure the best possible solutions, backed up by precision engineering.
In the rail industry, it is difficult to become established as a recognised supplier. The strategy developed by Houghton International has aided the development of many contracts throughout the industry.
Today, the rail division is recognised by the Railway Industry Supplier Approval Scheme (RISAS). In particular, the company’s unique HiTRANS patented transient dynamic test process has received praise. Designed to simulate full load conditions for motor alternator (MA) sets, it ensures that assets returned to customers will run without any issues when reinstalled.
Expanding into pumps
More recently, the company has diversified further into larger and more complex pumps. Enabled by acquiring considerable pump expertise within the management and workforce. The potential within this market is huge, not only with existing customers, who already appreciate the value Houghton International can deliver, but also with new clients.
Houghton International has also invested in all the design and reverse engineering tools, including a 3D scanner, necessary for comprehensive pump repair solutions. With so many new technologies and materials available, they can create improved pump designs to legacy equipment for better performance and efficiency.
Modern reverse engineering capabilities create new components that have been designed using the latest 3D CAD and analysis tools to model flows. The result is improved reliability and efficiency, which helps to reduce power consumption and running costs. The Houghton International ethos to improve the performance of existing assets, reduce expenditure and add value for the customer, has transferred successfully to the new pump division. In just the second year of working on pumps, this division will turn over £1.5 million, endorsing the approach that is still being used to support company growth.
Improving sustainability.
Today, sustainability is a very important issue and the repair and refurbishment of assets is vital to reducing industry’s carbon footprint. Reusing as many components as possible helps to reduce waste while improving reliability and performance at the same time.
In Michael’s view, the whole industry, with the help of the AEMT, needs to do more to encourage the circular economy and promote the reuse and repair of assets.
AEMT membership
The introduction of any new concept or technology requires pressure in the early stages to encourage their adoption. This process is helped by organisations, such as the AEMT, who promote the advantages and discuss the challenges. Industry 4.0 is a good example where technology has reached such a point that it is able to deliver benefits to industry as a whole, but the number of individuals actually investing in it was small in the initial years.
As the advantages become more well-known, so more and more people take the plunge. Eventually, you reach a point where those who have yet to adopt the new technology are in the minority but also losing ground to those who already made the decision to invest and streamline their processes.
As an AEMT member, Houghton International maintains its connections with its industry peers. The Journal offers a great communication channel while events, such as the awards evening, play an important role in recognising those members that have made significant contributions to the industry and those working in it.
The AEMT also offers support to members in gaining new accreditations and training in specialist disciplines such as hazardous areas. The association has considerable influence on industry standards where members can have their views represented. By bringing together such a large collection of expertise and industry experience, the association offers considerable advantages to suppliers and customers alike.
Moving forward
As we head into 2020, the next five-year plan is being drawn up. Consolidating the existing organisation and aiming to always improve the quality of service delivered to customers are the primary aims. Keeping sight of the company’s core values and principles while working with integrity and transparency ensures every employee will be working towards the next set of goals.
In terms of the marketplace, the potential for expansion remains high. The number of electric vehicles is increasing as the world is starting to see the benefits of them. The next step will be to establish who repairs these electric motors to the required standards. The most obvious choice would be a company that has decades of experience in the field of electric motor maintenance.
By continuing to deliver the advantages of sustainability through repair and remanufacturing, Houghton International will help every customer to reduce operational costs while minimising the consumption of resources.
