Business Insight 58 – The Food Chain (blog & vlog)

The Golf Tournament was a great success, but the amount of publicity was very poor; the PR guy really was retired and acted as much (he treated it as a very nice holiday in Eastbourne). We had arranged with the magnificent 5-star Grand Hotel some excellent room rates, and filled the place. The event had probably cost nearer to £40,000 in the end, and I wondered if it was really worth it. It certainly didn’t feel like it at the time, but there was probably some intangible value to putting it on – a value that stayed with us for years after as a result.

Two further significant events culminated in that year. CA, our principal supplier for the past few years, had told us that we were to lose our exclusivity. As we had pushed further out, we were running up against other customers of theirs – customers they were not prepared to give up.

We decided that, as we grew bigger and covered more territory, this was going to be a constant thorn in our side. We could design a much better window and door suite ourselves, and could build in USPs which were genuinely ours (and ours only). We would get the new system extruded, stock the components, and supply them to appointed manufacturers – who would sell us back the finished fabricated product.

A highly recommended designer, Eric Hibbert, was hired at the back end of 1981, and the launch of the product was going to coincide with the Golf Tournament. We had a competition for the brand, and ‘DATA 7’ was the winning name (a shortening of DAvies & TAte plus the number of years we had been trading, 7).

A new depot was taken on in Gloucester (where Eric lived and where most of the technical side of the industry was based), and we started stocking our own extrusions for sale.

CA – having realised we meant business – said they would now customise aspects of their windows and doors, and offered us exclusivity on that range; but it was too late, as we were too deeply committed to our own.

INSIGHT 58 a:- It seems a constant that you have to take virtually everybody to the limit to get what you really want (or a joint resolution), and that they only concede or agree when it is usually too late. 

 

1983

Post-Rodney, my ego and ambition saw no bounds – it was rampant. In 1983 the confluence of those human traits produced my personal “perfect storm”.

Eric Hibbert must have seen me coming from a mile off. We wanted our own range and paid him a considerable fee to design one; however, we definitely didn’t want to manufacture it. The double glazing industry, beyond the major players, was set up thus: systems companies designed, stocked and supplied the various window, door and patio door extrusions and components to the manufacturers (customers) of their product range; and they (their customers) in turn either supplied the retail or commercial markets themselves (i.e. sold and fitted them as well), or sold to retailers/installers like ourselves who didn’t manufacture.

The reason for the industry structure was that it took a long time (and was very expensive) to design and run out window and door systems yourself. Some of the components (particularly with a range designed to be the ultimate in windows and doors) were very lightly used, but still had to be stocked at a minimum economic quantity to make it worthwhile from the extruder’s point of view.

We were going to have to stock all of these (components) anyway, so Eric suggested that we become a ‘systems’ company as well, selling our window and door system to other companies outside our retail marketing area – a whole new ‘business to business’ market, making the enterprise ultimately more justifiable.

The trouble was that our retail range was too ‘esotERIC’, so we would have to run out an additional more basic range to suit the bulk commercial market. Some of the components would be used on both ranges though, so it wouldn’t be twice the cost; however, if we were serious about being a systems company it was the minimum required.

So that’s the design and stocking of TWO complete window, door and patio door systems – plus the associated locks, hinges and other extras – all sited 100 miles away, in a brand new building that we were going to rent on a new full repairing lease basis .

Eric was going to be managing director of the new company Davies & Tate Systems Ltd (D&TS), but was also going to hire a team of 3 people – including an experienced systems person called Sheila…who would actually run the business, as he (Eric) was going to carry on his own design business. (What did I say about part-timers?)

INSIGHT 58 b:- This was a very ambitious project, and in truth a huge distraction; it was hugely expensive and never in its life made a profit from outside customers alone (i.e. not including sales attributable to factories supplying finished products back to D&TRWS).

 

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