Oliver Wight helps Victrex build future-proof strategy

Victrex, a world leader in polymer solutions, was looking to maximise its profitability, while finding a way to offer new goods and services without disrupting its core business. With the firm’s leadership busy with the day-to-day running of the company, Victrex turned to Oliver Wight for support – and the consultancy ultimately helped lay the foundations for a transformation that led to double-digit sales growth in the years to come.

Victrex was established in 1993. Its headquarters and the majority of its manufacturing operations are in the UK, with global technical and customer support facilities serving more than 40 countries. Every day, millions of people use products and applications which contain their sustainable solutions – from smartphones, aeroplanes and cars, to oil and gas operations and medical devices.

Historically, the company had a very successful business model, with excellent customer service and competitive lead times. However, Victrex also had significant growth expectations – looking to increase annual sales within the core business, while also giving it the capability to seize mega-trend opportunities in aerospace, automotive, electronics, energy and medical devices. As is often the issue with transformation programmes, delivering changes to enable this was difficult for Victrex’s leadership, which was pre-occupied with managing the everyday running of the business, and firefighting immediate issues rather than focusing on the medium to long-term business objective.

It was clear that the firm needed external support, to oversee the changes while management could continue looking after the business as it existed. So, in 2018, consulting firm Oliver Wight was introduced to Victrex, and commenced working on a new strategy to deliver growth – maximising revenues from its core business, while moving up the value chain to supplying semi-finished or finished products. This transition made Victrex a more complex business requiring better processes to meet its strategic ambitions.

Speaking on the changes, Jakob Sigurdsson, CEO of Victrex, recalled, "We knew that we needed to become more efficient in the key processes across our core business by improving our supply chain, reducing inventory, and establishing better demand planning controls… When I met Oliver Wight we wanted to better align our long-term strategy of growth and our existing internal operational capabilities. If we were going to grow our business, then we needed some of our core processes to be more efficient.”

18-month plan

First off, Oliver Wight planned an 18-month maturity transition, which included addressing business processes, systems, data organisation, and governance. Under the guidance of Oliver Wight Partner Stewart Kelly, the firm’s team identified that many of the operational systems used by Victrex were not being used to their optimal capacity. For example, multiple systems were in place that were not connected seamlessly throughout the business, causing time lost reconciling data and significantly slowing down decision making as the business struggled with multiple ‘sets of numbers’.

During the resulting change programme, Oliver Wight advised Victrex on the improvement of some 50 internal processes across various areas. Victrex also decided to improve and update its existing reporting system to develop sustainable performance measures that wouldn’t require significant effort to deliver the required data and information.

Looking back, Martin Hackett, supply chain quality director at Victrex said, "Oliver Wight made us realise ways we could be more successful with systems that actually talked to each other. In the past, every department had its own set of figures that changed every week. We now plan every day, and we can feed this data into a system that produces one set of figures giving us a much greater visibility of performance. We are already seeing the time-cost benefits of this which will be even more visible once we move out of the constraints of working within the current and volatile supply chain market and into business as usual."

And the supply chain market was especially volatile 18 months into the project – when Victrex suddenly found itself dealing with unprecedented trading conditions. The onset of Covid meant that the business was faced with volatile demand, global logistic challenges and staff isolations that all put pressure on its operations. In order to manage fluctuating demand, Victrex decided to review expected demand each week rather than the usual monthly cycle. The firm’s original customer relationship management process was unable to cope with this frequency and so under the advice of Oliver Wight, Victrex implemented the new Arkieva process.

Offering end-to-end supply chain planning processes, Arkieva provides decision-support solutions to global clients that are data intensive. These solutions contain sensitive client data, as well as descriptions of planning processes that are proprietary to Arkieva’s customers – something which proved to “a game changer”, and actually enabled Victrex to avail itself of opportunities that would only have been possible during the pandemic.

Victrex Chief Financial Officer Richard Armitage noted, "Covid was a double-edged sword – we had limitations because of our available people resource, and it delayed us reaching our IBP objectives, but it accelerated many of our new processes such as the implementation of the weekly cycle for managing demand and supply. This allowed us to plan, organise, and communicate in a calm manner despite the turmoil going on in the world around. This would have been impossible before, and it has been very reassuring for employees.”

Beyond the pandemic years

Despite the many challenges of Covid-19, and a volatile global supply chain, working with Oliver Wight has ultimately enabled Victrex to continue delivering high customer service levels and the business now has a robust foundation to increase our program of innovation. In the three years since initial implementation started, Victrex’s financial results have shown an impressive upwards trend with strong trading performance and cash generation.

Sales volumes were up by 25% in 2021 and inventory levels were down by 20%, while the company is continuing to see healthy demand in its core business, and also seeing the strong growth potential of mega-programs and significant milestones across the company. Its long term growth opportunities also remain strong.

Stewart Kelly, Partner at Oliver Wight commented, "This is a huge achievement for Victrex and in particular because the leadership team took the opportunity to use our Class A program as a broader business-wide improvement mechanism beyond the requirement for accreditation. I was particularly impressed with the huge amount of work on communication, training and education driven by both the senior management and program delivery teams."

Looking ahead, Victrex is in a strategically strong position to maximise on its growth plan that seeks to further grow its core business, seize on mega-trends in the industry and continue investment in innovation. These include climate change and meeting net zero pledges – which Victrex has set itself a 2030 goal for – which the firm is undaunted by given its experience changing rapidly during the last problem-laden period.

Having the last word, CEO Sigurdsson concluded, "As a global business, Victrex has seen a solid and sustainable recovery following the impact of Covid-19. We would not have been able to do that without IBP and the processes and management that Oliver Wight helped us to put in place.”