The site visit was hosted by Jack Clarke (CFO), Matthew Cummings (Site Operations Manager) and Darin Fleming (Lead Continuous Improvement Manager). We were introduced to Marshall’s Daily Management System and were impressed by the systematic way the management team controls manufacturing processes, taking the best of Japanese Kaizen principles, including operational protocols such as the 5S’s (Sort, Set in Order, Shine, Standardize and Sustain), GAS (Go and See) walkabouts, as well as ideas generation workshops. These processes demonstrate that Marshalls continually strives for best practice while maintaining strong control over standard operating procedures. The company has the coveted, and hard to achieve, Shinko award within its 5-year targets.
We tried out the company’s new Virtual Reality training system for health & safety awareness. Management said Marshalls was probably unique in UK manufacturing in having had no serious industrial accidents in the last 10 years.
Marshalls uses digital technologies throughout its organisation, and we saw an example of how the company uses QR codes to link operatives to YouTube process demonstration videos. This is in preference to long worded operational manuals which many people find hard to read and which are subject to varying interpretations.
During the tour we saw the concrete block production facility making everything from brick to paving stones to road kerbs. The facility is working at approximately 85% capacity utilisation throughout the organisation, which management feels comfortable with and leaves capacity for further growth.
The company reported a 14.6% rise in 1H sales and a 16.4% rise in operating profit, a very respectable level of growth, though Jack Clarke, CFO, did say Marshalls would be having an even stronger year without the economic uncertainties surrounding Brexit.
The company now has over 50% of the hard landscaping products market in the UK, a tremendous achievement.
The site visit was a salutary and timely reminder of the intricacies and hard work involved in managing a UK industrial business, helping us to appreciate the bigger picture rather than just focusing, as investors, on the company’s financial accounts and stock performance.
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Source: Aubrey Capital Management Ltd, Bloomberg. Past performance is no guarantee of future results. Source for all data: Bloomberg, RBC and Aubrey Capital Management. Aubrey Capital Management is authorised and regulated in the UK by the Financial Conduct Authority and is registered as an Investment Adviser with the US Securities & Exchange Commission.
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