Seton UK

Source: Supply Chain Digital

Date :7/26/2007 11:13:37 AM

GIVE ME A SIGN: How Seton consolidated a market leading position

Seton is a catalogue-based distribution and warehousing business, specialising in facilities management & health & safety products and a subsidiary of the global Brady Corporation – recent acqusitions have consolidated its position as the UK market leader

Written by John O’Hanlon & produced by Paul Radbourne

Public signs are so much a part of the landscape these days that we are inclined to forget that this is a business driven by legislation as well as advertising. For example, in the UK this month has seen the introduction of new rules banning smoking, not just in the workplace but in specific areas close to entrances and exits. Despite plenty of discussion in the news, the deadline has crept up on many businesses, and keeping them supplied with the required signs and equipment is keeping facilities management specialists like Seton very busy this year.

Seton is a global business, and has been part of the $1 billion Brady Corporation for some 30 years. Brady is a manufacturer of the materials for labelling and signs, explains Seton’s UK Managing Director Paul Slawson, and acquired Seton because as a major manufacturer of safety signs and a major customer, it fitted well with Brady’s vertical market policy. Manufacturing industries are the biggest purchasers of safety signs, along with any organization involved in public access, from local authorities, schools and hospitals to leisure facilities. “A lot of hotel chains buy from us. They may not have so many employees, but they carry a lot of liability because of the public traffic they have.”

Direct marketing

Seton’s business model is direct marketing. It deals direct with the end user and services its market through its catalogues. In the UK, Seton’s annual turnover is in the region of £27 million, from a catalogue that contains some 35,000 products. About 75 percent of these are externally sourced – the remainder manufactured by Seton itself at its facility in Banbury (mainly plastic safety signs), or elsewhere in the Brady organisation. “We have quite a large customer base, but our customers order relatively infrequently, probably twice a year and in relatively small values,” says Slawson. “Keeping them up to date with constant mailings is something we are very good at – if someone last bought from us five years ago they will still be getting regular mailings and targeted catalogues.”

“Legislation is one of the primary drivers for the business,” Slawson confirms. “As you can imagine labels and bins and shelters are flying out of the door at the moment, and that means we are having an incredible year this year.” With the ban now in place right across the UK, there is still a lot of ignorance of the law, and, he says. “I was surprised to learn only this week that 70 percent of businesses in the UK are still unaware that they have to put a no-smoking sign on every doorway. WE have just launched a 16-page brochure of non-smoking products, including starter packs that contain everything you need to comply with the law if you’re a small business for example.” As well as signs, employers need quite a lot of hardware for their smokers, from fireproof bins to shelters that keep out the weather without being classed as enclosed spaces.

Many small businesses may not have their own H&S officer on site, and therefore rely on Seton to make sure they are complying not just with the new smoking legislation, but with all the constraints on any business that employs more than five people. “As soon as you employ more than five people a lot of legislative requirements kick in. You need a health and safety law notice on site, clearly displayed. You have to have a first aid kit of course, and you are obliged to do risk assessments. A large proportion of the products that we sell are solutions that help customers to keep on the right side of employment and workplace legislation.”

Covering the categories

There are a number of other categories that are important to Seton’s aim to be a one stop shop for facilities management. Janitorial products spill over (no pun intended) into health and safety – spillage procedures require not only that there are materials to mop it up but that warning notices go up as well. First aid is a big category, Slawson says, as is COSSH (Control of Substances Hazardous to Health) compliance, which governs how chemicals should be stored, labelled and handled. Many hazardous substances have to be kept in locked metal cabinets, and these can be some of the larger products that Seton supplies.

Fire safety is also important, and again the market is being kept alive by new regulations. “There was a change in legislation last year which meant that companies now have to do their own risk assessment on fire safety in the workplace. Previously the local fire brigade used to come in and do this job, so of course many companies really don’t know how to set about it. We supply everything they need from fire extinguishers, alarms and fireproof blankets to wallcharts to training DVDs and manuals.” It is, he says, a profitable category, and one that fits Seton’s direct marketing approach very well – the companies cannot do without these products, price is not nearly as important as service, and the long relationship that Seton has with its customers along with its known ability to supply a complete range make repeat business a big part of the sales operation.

Though it was already the market leader, Brady’s acquisition of Manchester-based Signs & Labels in 2004 was an important strategic move. S&L was and is the second biggest player, with a lot of overlap in terms of product and services but nevertheless a good fit for Seton and Brady because it principally supplies resellers. Now, Seton supplies its end users direct, as it has always done, and through S&L supplies a large proportion of the indirect market too. Thus, Seton increased at a single move its access to companies that obtain their supplies through a facilities management contractor such as Rentokil.

The two companies continue to be managed autonomously, because as Slawson explains, amalgamating them would have the effect of losing market share and opening the way for a new number two challenger to enter the market. However their financial and HR requirements, as well as much of the materials sourcing, has now been centralised. “We used to look at each other’s catalogues, and if one of us added something that looked like a good idea, the other would copy it!” he admits. “We are able to make much smarter stocking decisions now, and by consolidating similar products we can achieve volumes that make it worthwhile sourcing from China for example.”

Materials handling is another important category, with its own catalogue. Some of larger products such as pallet trucks are sourced direct from the Far East and drop shipped direct to the customer rather than going through Seton’s warehouse. “We tend to concentrate on fairly low tech equipment like ladders, access platforms, pallet trucks, trolleys and storage bins, but it is an important and growing market for us.”

Keeping track of this diverse product bas became a lot easier after Seton implemented SAP last year as part of a roll-out across all Brady’s businesses. The new ERP software went live in December 2006, following a year’s preparatory work. “There were a few challenges, as you’d expect, but it has made a huge difference, especially with inter-company trading. Previously if we wanted to buy something from another Brady company we had to raise a purchase order, re enter it as an order into their system, they had to dispatch it and we had to receive it. But when you are on the same system it is seamless. All that stuff happens in the background and it is much more efficient.” S&A will follow onto SAP later this year, he says, which will make for seamless customer relations and stock management.