SSL International PLC Development Review

 SSL International plc manufacture surgical and foot care products, and condoms under the “Durex” and “Scholl” brands. They have two manufacturing sites in Britain and a number of operations overseas. Their Redruth, Cornwall factory is compact. Their production and warehousing facilities have developed in an unplanned “reactive” way resulting in logistical and operational inefficiencies which limit productivity.

Millson was invited by the Director of Group Procurement to review a scheme which had been designed for a stand-alone warehouse unit on land they own adjacent to the factory. After visiting the site to review this specific proposal, it was noted that there were a number of operational issues. We recommended a detailed analysis of the manufacturing and warehousing operation be carried out.

As part of the in-depth review, we interviewed management and operational staff as well as liaised with local authority planning, highway, estates and economic development departments. We examined the manufacturing process from raw materials to finished product and assessed the transportation and logistical problems which the site presented.

The impact of major highway improvements proposed by the County Council was assessed both financially and operationally as well as the possibility of Grant Assistance for capital investment and job retention.

Millson presented a number of fully costed strategic Option Appraisals which also identified ways in which production efficiency could be improved and costs reduced by minor operational changes.

The initial problem faced was gaining the confidence of the on-site staff and management team. Another problem was that there was no property strategy or investment budget for the site, partly because the site might become surplus to requirements.

The options presented gave flexibility for the client moving forward. They included acquisition of an adjacent plot of land for car parking and sale of surplus (higher value) land for possible re-investment into a new warehouse; the sale and leaseback of their land and buildings to provide a cash injection and, given the unclear future of the operation, an option using a temporary warehouse which would be hired, increasing revenue but not capital costs.

Having considered the options, SSL has decided to realise the value of their surplus land by disposing of it, but not to invest further capital in the site. We explored an arrangement where a developer would construct and lease back to SSL a new warehouse facility. This maximizes their capital receipt and their expansion potential on the same site whilst retaining flexibility for the future should they wish to scale down.

SSL has also implemented my recommendations on changes to production flow and packaging finished products which will significantly reduce the number of containers required per month.