On the 2nd of February 2010, Klarius; already described as the fastest growing automotive aftermarket manufacturing and distribution company in Europe, completed the purchase of the Quinton Hazell automotive group (QH) from its US owners.
One of the best known automotive replacement brands had taken the next step in its development, what has happened to that business since is nothing short of a revolution; a new sense of pride, a renewed focus on quality, investment in manufacturing and a resounding shift in culture to a sales and customer service orientated business has seen a loss making behemoth turned around into a lean, up-to-date, responsive and fast moving manufacturing, distribution and supply enterprise.
The QH story began when Eric Quinton Hazell saw a gap in the UK Automotive Industry for pre-packaged repair solutions for vehicles and in 1946, this vision became reality in a small garage in Mochdre, North Wales - Quinton Hazell Automotive was born.
Manufacturing ball joints soon grew to other steering components, relationships with suppliers developed along with the offering to the Industry. So much in fact, that by 1955 Quinton Hazell had become part of a vertically integrated group engaged in manufacturing, wholesale distribution and retailing along with a national distributor of parts and an exhaust fitting centre group.
The Group grew through the 1970’s, 80’s and 90’s, with several different owners, and in the early 90’s (1992) QH Germany became the main distribution warehouse for Europe; operations also expanded significantly in France, Poland, Sweden, Netherlands, Spain and Italy, creating a very powerful Europe-wide sales and distribution base.
In February 2010, the Klarius Group brought a huge shot of energy, efficiency and investment to the organisation, allowing the strongest assets to shine and adding the flexibility and drive that was needed to prepare the business for a changing marketplace going into the future.
‘Keeping the fundamental strengths of the QH business was essential’, comments Tony Wilson, , Principle Shareholder and Chairman of the Klarius Group, ‘The QH brand represented a huge range of products, three large EU production sites, substantial warehousing and global distribution capability, a quality reputation and indeed a personal service, all of which were vital - what we have done is to improve quality even further and use the latest production techniques to increase efficiency, productivity and range. Investing heavily in our manufacturing base and logistics systems has also raised the bar significantly in terms of availability and deliveries. We are helping our customers develop their businesses; passing on the competitive edge and helping motor factors and garages improve their product availability and service.’
After just six months of ownership key financial performance indicators were over 50% above expectations. After making waves in the automotive aftermarket by publicising a policy of retaining a substantial manufacturing base in the UK and Mainland Europe, the decision had already paid off. More recently however the Klarius Group has stepped-in to support several EU car plants in order to maintain continuity of supply after the disruptive events in Japan.
Having invested heavily in European manufacturing plants over the last three years, the Klarius Group has found itself in a unique position of being able to find additional manufacturing capacity at very short notice in order to satisfy demands for over 100,000 parts per month to keep EU car plants in production. Lean manufacturing techniques and a focus on OE quality proving successful both for the aftermarket and with OE manufacturers.
The production cycle at Klarius plants has been reduced in terms of time which means the business can adapt quickly to customer demand in either the aftermarket or from OE manufacturers, which is further testament to the quality of the products. Items such as water pumps and shock absorbers that the company already supplies in large numbers to the car and commercial vehicle aftermarket have been the first items in demand from car manufacturers, with others under urgent consideration.
The key aspect of flexible production that has allowed this to happen has been driven by the need for 100% availability on a huge range of products. Klarius has moved a substantial section of its manufacturing platform away from a high-volume sequential production line model, to a more focussed, lean ‘super cell’ arrangement. The results are ensuring the company’s manufacturing plants remain competitive in a global market.
The lean revolution at Klarius has culminated in the creation of the ‘super cell’, it started in 2007 when lean manufacturing expert, and now Klarius UK MD, Andrew Jones became part of the Klarius management team. Having reorganised production in two of Klarius’ largest UK manufacturing plants, to ensure all available production efficiencies were being taken advantage of (the plants have a combined output of over 2 million exhausts and catalytic converters per year). Andrew and his team moved their focus onto reducing batch sizes economically in all Klarius plants.
In order to move ahead of competitors in the market; total availability needed to be achieved, but with over 5,500 different vehicle types being used regularly on Europe’s roads (representing 98% of the vehicles on the road), satisfying that huge back-catalogue required a vast amount of storage space, and as every experienced manufacturing business manager knows, large stocks are expensive to hold.
The only answer was to keep smaller numbers of each product type in-stock and replenish it in on a daily, and if possible, an hourly basis. In order to be able to replenish stock in small numbers, each product type offered in the company’s comprehensive catalogue had to be manufactured in relatively small numbers. The Klarius Group product offering covers 98% of the EU car parc so it was a major challenge.
For the more popular products, ones designated for extremely common cars, with large numbers all reaching their component design life of between three and five years (depending on the manufacturer) together, the initial production efficiencies put in place allowed batch numbers in the low hundreds to be produced extremely efficiently.
Then, the back catalogue (represented by 80% of stock) where demand is medium, slow or even ‘occasional’ was satisfied by taking lean manufacturing techniques to their outer limits, this has led the team to re-design the production flow completely, by replicating the process employed on the larger scale manufacturing runs.
The concept was designated a ‘super cell’; a production cell that is so flexible, it allows the larger company to offer its customers same-day delivery on the entire back-catalogue of parts, some of them reaching back as far as the 1970’s and 80’s.
The final words go to Paul Hannah, Klarius Group International Business Development Director, credited as the driving force behind the international sales teams. ‘Looking back at the last 12 months we went into this acquisition with a very pragmatic picture of the short-to-mid-term organic growth prospects for the QH side of the business, so we were very pleased to have improved upon even our own expectations by completing the complex business integration process ahead of time, and posting solid sales growth and profitability figures after a few short months.’
‘It goes to prove the value that is in this business as a whole, both in terms of physical resources and in its people, who have proved both knowledgeable and very willing to make improvements and adopt positive changes to their working practices. We have pushed sales increases by breaking the mould in many instances and working with our customers to improve their businesses, reduce overall costs and increasing both sales effectiveness and operational efficiency’
2011 sees QH celebrate 65 years in the Automotive Aftermarket, and now as part of the Klarius Group, with a worldwide distribution network representing 5,600 delivery points in 136 countries, modernised production facilities and a dynamic, positive sales and customer service culture it shows no sign of slowing down.
Photo Caption: Klarius Group Directors pictured with a range automotive aftermarket branded products now available from the Group.
Pictured left-to-right: David Cheetham, Chief Financial Officer (CFO) Klarius Group Ltd. Tony Wilson, Chairman Klarius Group Ltd. Andrew Jones, Managing Director Klarius Group Ltd. Paul Hannah - Business Development Director Klarius Group Ltd.
About the KLARIUS Group
Klarius Group is the largest European manufacturer of aftermarket car parts today. The Klarius Group operates five high-volume Manufacturing Plants, a Research & Development Centre, four European Technical Centres, eight International Logistics & Distribution Hubs, and eighteen national and regional Stock Warehouses based across Europe. Klarius Group Headquarters are located in Manchester (UK).
The Klarius Group employs 1,200 personnel across Europe, and has an annual turnover of 350 million Euros.
The two current major market brands within the Klarius Group are Klarius Emission Control Products and QH Automotive parts. Both the QH and Klarius product brands represent a range of OE quality replacement automotive products. Klarius Group companies now offer over 100,000 parts, covering the majority of the European Car Parc, supplying over 80,000 parts every day, to over 5,600 delivery points in more than 136 countries.
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Company Contact
Klarius Group Ltd. : Veronique Auger
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Email: Veronique.Auger@Klarius.EU