Data-Driven Approach Helps Micro-Mesh Identify Most Profitable Customers

Background

Nottinghamshire-based Micro-Mesh has been a leading UK filter manufacturer since 1968. Launched to serve the mining industry, the company diversified into other sectors as mining shrunk. Today it produces hydraulic filters, gas turbines and air pollution control solutions that are used in numerous sectors such as military, off-highway applications and rail - which makes up around half of the business.

Customers including Network Rail, Balfour Beaty, McLaren Cars and Volvo Construction Equipment trust Micro-Mesh to deliver their high-quality filtration devices.

The company also operates globally and has had a large presence in India since 2014. Micro-Mesh purchased EuroFilter Air Filters in 2016, which added to their gas turbine offering.

Most products are specially designed, re-engineered and manufactured for each customer or application. As a result, the company continually invests in the latest technology and innovations, from high-end materials, machinery and tools.

Employing around 20 members of staff, its turnover in 2020 stood at just under £7 million.

 

Using data to overcome challenges during Covid-19

The company has been using Access FactoryMaster MRP since 2005, choosing it to replace a purpose-built database and laborious paper system.

With the improved customer and supplier communication it gave them, Micro-Mesh had already benefited from increased turnover after implementing the software.

However, the system proved even more invaluable during the Covid-19 pandemic. Staff were immediately sent home following national lockdown orders in March, as managing director James Underwood gathered his senior team to discuss next steps and “settle the ship.”

Amid the confusion about whether companies could continue operating, James received confirmation from Network Rail that they were a key supplier delivering an essential service.

Micro-Mesh had other key customers to supply, yet lack of manpower due to furlough proved a challenge. Operating with reduced staff levels at the height of the Covid-19 pandemic, efficiency was critical, as James explains:

“Myself, our commercial director and our data expert went through the data we had on our system, from over a decade of using Access FactoryMaster MRP.  We didn’t have manpower so we needed to use insight to move things forward.

“We decided to step back and interrogate the data. This could have been done at any time, but the pandemic forced us into this new position where it was essential. It’s rare you get an opportunity to look at that level of detail. Furlough gave us the breathing space to do so.”

 

Access FactoryMaster MRP in action

After analysing the data, the senior leadership team gained a deeper understanding of their most profitable customers. While it served over 200 businesses, 83 per cent of its profits came from the top 20.

Drilling into the data further offered more insights, says James:

“With this analysis we then went further and found that our top 100 customers were bringing 98 per cent of business. This led us to explore what exactly we were getting from a business perspective from our other customers -  some were strategic and some legacy. We needed to find the right solution for going forward with the remaining clients.”

James and his senior team referred back to the software’s findings to lead the company’s new approach. To better manage the less profitable, smaller customers, they set up an E-commerce platform. This helped free up staff to deal with the bigger, more profitable accounts. Some agreed to an increased standard price (calculated using Access FactoryMaster MRP) while others had minimum order requirements added to their contracts. They then turned their attention to the company’s suppliers.

We asked questions such as - can we amalgamate any of our suppliers? How much order processing went into particular jobs? And how much return did we get as a result? These are questions that are incredibly enlightening, but we’d never had the opportunity to drill down that far - though the system is more than capable.

“After the meeting we had a clear vision of where we could go, using these informed decisions.”

Like many businesses, maintaining cash flow was a priority and once again, Access FactoryMaster provided the support the team needed - making it possible to accurately analyse numerous parameters to predict turnover and support forward planning. 

James adds: “Our product mix has now changed - some are higher margin while some are lower, but bigger volume. The reporting allowed us to see the bottom line and take action to keep cash flow moving. It gave us a much better vision over our order balance. As such, we could offer solutions that worked for both us and our customers by arranging delivery dates to ensure there was an even mix of product and payments going out and in.”

Results

The changes Micro-Mesh made after using Access FactoryMasterMRP more effectively meant the team was able to streamline workflows when it mattered most. They were able to make smarter decisions, while the agile workforce could respond quickly. They bought new equipment to de-skill specific tasks, improving workflow and maintaining consistently-high quality.

As James concludes:

“Staff were motivated because it now means they can do different things. People are naturally a little sceptical when using new processes but once the results have been proven everyone quickly comes on board.

“The future looks bright and we’re always looking to take the positives out of the situation. Now Brexit is settled, our European customers are confident while our overseas clients are unaffected. We’re ready to drive forward in the areas with the most opportunity, investing in new materials and designing new ranges all based on our new, clear vision.”

Within just 12 months, Micro-Mesh has clearly defined its core sectors and customers. Diversifying its business operations means that it can cope with the natural peaks and troughs of business while identifying new opportunities for growth. 

Alongside its core clients, Access FactoryMaster MRP identified those that were less profitable for the company. The website was created to serve their needs efficiently, redirecting any customers no longer suitable for the main business model at Micro-Mesh, but still providing a product.

“Within six months we’ve progressed forwards about two years. Using data we’ve been able to reduce sticking points and evaluate efficiency and process to overhaul the business.”

 

Final reflections

“Every company has the information within them to make efficiency changes. We did analyse the information somewhat previously, but not to the extent we did last year and the results have shown. Mining the data and visually seeing the numbers, percentages and true statistics from your business is incredibly interesting and insightful.”

“Some 20 years worth of data from our business was logged in Access FactoryMaster MRP. Evaluating it in a meaningful way is key, leading you down further avenues to explore more areas and source more data.”

“Now it’s vital that we get daily reports coming to our staff. This could be orders, sales, profitability, PO value or number of POs. These go to the individuals that can act on that data. This has been revolutionary for our business.”

Find out more about Access FactoryMaster MRP.