Houghton International - formula for success
Houghton International’s reputation as a problem solver for its customers has been long and hard-earned – it all started in 1867 (two years after its founding) when it introduced a rust prevention product into the American market. Since then the company has grown its products and industry verticals, and has also expanded internationally.
After successive years of strategic investment and growth, the company was recognised in a 2010 report by Kline & Company as the world’s largest supplier of metalworking fluids. Following up this achievement, we speak to a number of key management figures within Houghton who outline how this was accomplished and how it will be maintained and expanded in the coming years.
This report explores Houghton from multiple angles: we speak to Mervyn Chung-Fat, Director of Marketing and Product Management; Michel Gerard, Global Director for Automotive Components; Neil Winterbottom, Director of Fluidcare Operations; Mirek Kania, European Equipment and Services Manager; and Dr. Dave Slinkman, Senior Vice President of Global Research and Technology. Together they provide a fascinating insight into how the company has every aspect of its business geared to serving the needs of its customers while maintaining operational excellence across the board.
Houghton International is responsible for bringing premium speciality chemicals and lubricants to a variety of industrial segments which include automotive, aerospace, metals, mining, machinery, offshore and beverage can industries. Leveraging its decades of experience working with such a variety of products and sectors, Houghton is now able to provide a range of associated services which help customers to manage their chemicals and provide as much value as possible from them.
Headquartered in North America, the company has a truly global presence, whether through directly-owned offices or affiliated suppliers. Alongside the Americas, Houghton has a strong presence across the length and breadth of Europe, South-East Asia and the Far East, as well as manufacturing operations in India and Australia, Russia and Turkey. Through a combination of partners and appointed representatives, Houghton has a presence in Africa’s two largest economies – Nigeria and South Africa.
Neil Winterbottom explains how Houghton has come a very long way from simply selling specialised high-performing chemicals and is now able to also provide a range of after-sales services to customers, which helps them improve productivity, reduce costs and minimise risks. He says: “By recognising our customers’ needs, we can guarantee savings while delivering real benefits and adding value – and even make their operations more competitive. We have a lot of our employees operating and working on customer sites to achieve this - they have even become part of the customer's team to a certain degree. Having continually delivered in this regard, our customers have come to rely on us as their main source of technical in-house know-how.”
Mervyn Chung-Fat explains how Houghton’s customer alignment strategy is carried out globally: “The key element that we've learned is that one size doesn’t fit all, as chemical regulations change around the world. To be able to support a customer today you have to realign yourself with how they are organised and what their specific needs are. We try to make sure we support them locally, but with this global perspective, because so many are run at a global level or are looking into it for the future. Wherever our customer’s plants are, we strive to provide the same promise of performance and service to that customer.”
Michel Gerard adds: “Each industry has a range of specific needs, which at Houghton we strive to address and predict. Let’s use the automotive industry as an example, as it is a very challenging market where competition is very tough: the automotive customer is always looking to increase productivity and efficiency, as well as to improve quality.”
“If we are to provide the right solution for this customer, we need to understand its needs all the way down to individual plant level, while also understanding its drivers from a global perspective. We often run audits at customers’ plants - we want to know how their processes work and what kind of process we can help to develop.”
“We try to impact the whole manufacturing value chain which means that we know all the plant production processes and we understand where Houghton’s solutions can provide value and savings for the customer.”
Ensuring that the company’s goal to retain its position as a global leader is fully understood, adopted and delivered across the world is no mean feat. Even with the best business model in place, no company can function without the collective efforts of its employees, which is why Houghton’s management teams make sure that the company employs intelligent, dedicated and customer-focused employees at every level. The company has reinforced its talent management operations using a two-fold strategy – firstly by maintaining a constant working partnership with universities across the world and, secondly, by ensuring that the current workforce has the scope and resources to develop.
Dr. Slinkman explains how the company is actively engaged in pushing the boundaries of current thinking to new levels: “Houghton is working with a number of Universities throughout the world, spanning a number of the application areas that we serve. In Europe specifically, Houghton is involved with the University of Sheffield Advanced Manufacturing Research Centre, the University of Birmingham, and the Technical University of Dortmund.
“Houghton employs chemists, chemical engineers, biologists, and metallurgists in the research and technology group and has over 20 PhD chemists involved in Research efforts globally.”
Winterbottom adds that the company measures its employees’ performance using a variety of means but primarily does so, in line with many other larger organisations, using a balanced score-card system.
Furthermore, he explains that Houghton is not content to simply score the achievements of its staff on a case by case basis: “If we see a production improvement we will typically write up a case study. We will then circulate that within the organisation and also during our corporate reviews with our customers. There have been many cases of an improvement being scaled to multiple manufacturing plants; if we know improvements can be made, then there is no reason that these cannot be rolled out globally.”
Continuous development is a key element of keeping talent and Houghton invests much in training. In 2013, Houghton won two Training Journal Awards for their HELIX training programme specially developed for their sales organisation.
As European Equipment and Services Manager, Mirek Kania is keen to illustrate the pivotal role that research and development plays in directing the company’s approach to providing solutions to its customers, and it is this factor that enables Houghton to retain its leading global position.
He says: “We are more distinctive in the marketplace because we provide the customer with the greatest number of tools and because we can offer them the most savings. If a customer uses standard filtration methods, for example, we can provide additional equipment that enables them to make unexpected savings - perhaps a secondary filtration device that helps to keep the fluid cleaner and in better condition.”
Chung-Fat adds: “We have research groups in North America, Europe, Asia and in South America. Everywhere we are producing products we have an R&D team there. Innovation is a core part of our corporate strategy. This also extends to managing our supply chain where continuous improvement – particularly Six-Sigma – is part of our DNA.”
Dr. Slinkman explains that the Houghton’s extensive experience has endowed the business with both foresight and the will to act on it – particularly in regard to a global regulatory framework that is more environmentally-orientated than ever.
He says: “Houghton’s Hocut® 4000 series of metal cutting fluids is a great example of how regulatory changes like REACh can lead to innovative solutions as we have removed boron, DCHA, and formaldehyde releasing components while maintaining and improving lubricity.”
In an industry where regulations often vary from country to country and where customer requirements are, by nature, in a constant state of flux, keeping to a single operational approach can be extremely challenging. Houghton International has demonstrated across the board that its business model is sustainable, profitable and flexible enough to attain its much deserved position as a global market leader.