from another company in Yorkshire. All those costs to the company making the foam, all the diesel spent transporting it to us, and all the stock we had to make sure we never ran out. “In my mind, this equalled an opportunity for Cab Automotive and so I started to look at how we could maximise that. At the time, there was a massive influx in industrial machinery from firms going bust going up at commercial auctions, and I spotted a foammaking machine that had previously been used to make material for caravans. “It was going for a bargain price and, because I had to act quickly, I ended up buying this machine on my own credit card. A bit of a risk, but I knew the machine was worth so much more, and if things didn’t work out I could have recouped my money several times by reselling it. “I then went out and employed an expert to teach us how to make foam. Previously, we’d had up to £100,000 tied up in foam contracts – in terms of another company’s costs, transport and stocks. But by making the foam onsite, we removed all those costs, all that transport and all that need for stock. “This resulted in only around £800 tied up in foam at any point. Obviously, the difference between £800 and £100,000 is huge in terms of operating costs. The machine I’d bought for the equivalent of a second-hand car was soon paying for itself every three days – and it’s been doing that ever since.” John then insourced the laser cutting of steel, wood routing to cut car console profiles and welding. A significant step was buying an entire powder-coating plant at another
BUSINESS QUARTER | SPRING 13
commercial auction, this time for around the price of a new car. Today, albeit after various improvements, that same plant is worth upwards of £1m. “It wasn’t just about costs,” says John. “That was part of it, of course, and we certainly thought we were putting our costs base right with all this insourcing. “But what we didn’t really think about at the time was the extra value we were putting into our own work. Within 18 months, customers were suddenly realising that Cab Automotive was something different. We were not only supplying car seats but were making every part of those seats as well.” Foam, John explains, comes first in the seatmaking process, but it’s not necessarily the most profitable part. By adding the leather, vinyl and cloth, that’s when Cab Automotive began to not only make more money but also to build a stronger reputation for its products. “Once we’d insourced the machinery and skills to manufacture the whole product, people started buying it all from us, leading to new orders for the parts involved, including the coverings and the assembly.” By 2011, Cab Automotive’s resurgence led to John’s promotion to managing director, and he has continued to lead the company’s success. Annual revenues rose to £19m in 2011, increased again in 2012 and are climbing fast in 2013, with signed contracts meaning turnover will reach nearly £40m by 2014. After the temporary contraction in 2009, staffing at the company rose to 230 workers by 2011, was 310 at the time of writing, will be 350 by June and 400 by Christmas 2013.
“What was effectively a new product line meant new orders,” says John, “which allowed us to recruit people who could make the difference in quality, adding a real depth of skills to the company. “The trick then was to go out to other big companies to convince them about what we were doing. “Another aspect we improved was our cost base, investing in lean training for our managers, looking at all sorts of areas like shop floor layout, stock control and so on, improving our financial performance. “This approach worked hand-in-hand with our new depth of product, our skills and our widening customer base, in ever-increasing circles of success.” Cab Automotive is now a first tier supplier to such names as JLR, Aston Martin, Bentley and a few other super car manufacturers. Its improvement has even resulted in ’JLR Q’ status – essentially a quality award marking the business as a highly-preferred supplier, creating what John describes as “a halo effect” in the automotive industry. It also supplies the likes of Toyota and Honda through an array of other blue chip, first tier suppliers, such as Magna International. Current car products now include complete seats, centre consoles, gearlever gaiters, carpets, load floors, parcel trays and head linings. “We’ve got the technology and now don’t have a problem getting the orders,” says John. “As an example, when we make a seat for Land Rover we now make 85% of it on one site from raw material. From metal welding and powder coating to cutting and