You could definitely not say that the First Choice Group lacks ambition. The Cannock-based spares specialist has really made industry heads turn this year, firstly with the announcement that it was to move to its own new purpose-built headquarters and then with its takeover by American spares giant PT Holdings, the owner of Parts Town.
But according to MD, John Whitehouse, the two developments had very different geneses. “We had the foresight around 4 years ago that we needed to grow the business and take it to a new level. We needed to increase the staff and the stock but we didn’t really have the facility in place as we were in five units.
“We couldn’t find a building in the area but we wanted to stay in Cannock to maintain the staff and the hundreds of years of expertise that we have within the company. So we contacted the council and managed to get onboard with this new development at Kingswood Lakeside.”
Constructing the 100,000ft2 building to spec meant a £4.7m investment for internal enhancements, including more than doubling the capacity of the lean lift automated storage machines. Having 12 machines of 6 metres high at the former premises, the new headquarters has 20 lean lifts at 12 metres, all due to be commissioned by the end of September. The firm also added an on-site staff canteen, outfitted by C&C with equipment supplied by MKN and Catering Equipment Professional, which can be used as a test kitchen too.
First Choice set a target move date of February and the keys handover wasn’t too far off that, as it was mid-March. The warehouse switched over the Easter period in April and the rest of the staff followed in May.
But in contrast to this long-planned move, the Parts Town deal was a comparatively swift affair. Whitehouse detailed: “We weren’t looking to sell the business; we were moving and simultaneously we rolled out a new computer system called Epicor. We were happy to grow the business under our own steam.
“Then we got approached by quite a few different companies looking to buy us. Whilst we said no, when Parts Town came to the table last October we were intrigued because they are the biggest in America and they only deal in OEM parts, which we where we see ourselves moving towards as well. We felt that whilst we’ve invested heavily to grow, our company could get hampered if we didn’t look at the bigger picture.”
Therefore First Choice signed the deal and the acquisition took effect on 1 March this year. “Parts Town has given us financial support and stability straightaway,” said Whitehouse. “It’s a company that’s grown from $3m to $300m in 14 years, mostly organically. They’ve had to go through the pain barriers of growth and saw us a real opportunity because they know how to grow a company and they felt we had a great infrastructure so all they had to do was share their successful experiences.”
This advice comprised building on manufacturer relationships, growing the partnerships and improving the service level to the customers. First Choice is also adopting Parts Town’s company values of safety, integrity, passion, innovation and courage.
The acquisition helped First Choice to carry out an in-depth customer analysis. Whitehouse explained: “We know our customers really well and want to support their growth aspirations by working with them to identify opportunities; providing a great customer experience.
“To make sure that we can look after all of the demands we are going to build a new web platform in conjunction with Parts Town’s new SAP system called Hybris.” This will be designed to increase technical support with multiple language and pricing options. Plus the app launched in May has already been downloaded 2,000 times.
Other technical advances the spares specialist is developing include the Active Enquiry System (AES), which systematically logs enquiries against accounts and part serial numbers and records this to a central database. “We can track parts and enquiries much easier through the system,” said Whitehouse. “It times enquiries, tells us how many we’ve got in the system and how many are pending so that we can track the KPIs and understand how quickly and efficiently we are dealing with them.”
First Choice’s move to its new headquarters has also benefitted its training division. The building includes three test kitchens and conferencing facilities available for dealer days, associations and manufacturer sales and engineering courses.
The premises already offers Rational, MKN and ACS gas assessment training, as well as the CCEECC electrical course.
“The take up has been really encouraging. We are developing an F Gas course, starting in November, and we are working with other manufacturers to develop more new courses,” reported Whitehouse. “We are adding value to the industry and engineers’ competence.”
Furthermore, First Choice is pushing to up its stock levels to raise its first time ship rates. Currently the firm is able to ship 68% of all parts overnight from stock, but this includes orders where customers want to wait for all parts to be available, even if some could be shipped immediately. Adding the immediately-available parts into that total would raise it to 80%.
Therefore it analysed its stock and divided it into several categories, ranging from low cost parts with high values to high cost parts with low values. Whitehouse explained: “By working on a matrix we can build a stocking profile for anything moves more than twice a year. If parts are low value and high volume we only want to order them once a year, so we place fewer, bigger orders. Our intention is to jump 15% on our first time ship statistics.”
This has involved a further investment of around £2.7m in obtaining stock. Hobart and Electrolux were two of the earliest brands to benefit from this, with first time ship rates already increasing on their equipment. Whitehouse added: “Even if there are enquiries coming in we could end up stocking something on the back of the enquiry rather than the order.”
And First Choice’s big plans don’t stop there. Whitehouse predicted: “We intend to concentrate firstly on the UK market, to make sure we develop as much as we can. But there are some European opportunities which we will develop into over time, and that will add more people here.” The spares firm is also examining the possibility of offering some customers a later order cut-off time, which will add another shift of 2-10pm in the warehouse to manage each afternoon’s order bottleneck.
He concluded: “We are absolutely committed to working with manufacturers and supplying OEM parts and we are passionate about our customers getting added value from us. We’ll have so much to offer that there really will be no other choice.”