A “burning platform” mentality pushed CB Technology to increase factory capacity

When electronics manufacturer CB Technology started its new financial year in April the business forecasted annual revenue to grow from £10m to £30m. Now, it’s about trying to stay close to last year’s figures – but that doesn’t mean the business is standing still.

Managing director John Cameron reviewed the company’s forecasts when he realised how badly its customers had been affected by the crisis. About half of the business is in oil and gas, and John remembers the change in market dynamic when prices collapsed.

“The challenge was recognising that the actions customers wanted to take meant the growth plan for this year was suddenly not going to be a growth plan. The £30m we were thinking about was suddenly going to be £10m, maybe eight,” he said.

John’s new objective is to stay as close to last year as possible, maintaining the company’s financial numbers and team of 70.

Being forced to rethink the factory layout also had an unexpected upside. Rather than lose capacity, the company has gained 30 per cent and now has potential to grow without having to invest in a new location. 

Utilise existing space to increase your capacity

Before Covid, one of CB Technology’s biggest challenges was factory space. The company has grown around 60 per cent a year for the last three years. It had reached a point where there wasn’t the capacity to take on new customers. 

The crisis should have compounded the problem, since the business needed more space between workers. But John said the focus required during the last few months has pushed the management team and staff to look differently at what they already have.

“I think it’s the burning platform idea. When you have an urgent need to do something and there’s no question over what you need to do, you just do it. In March, the factory looked really tight and full. Now, because of the urgency around coronavirus, the factory is much more spacious.

“Rather than having to go and buy another unit with 30 per cent free floor space, we’ve created that and I can now utilise that. From a cost position and an efficiency factor, it’s brilliant, because I can get more output from the space I’ve got. It’s a really positive outcome.”

Look for opportunities as markets change

The free floor space has increased the company’s overall capacity, which means John can start thinking about new business again. Despite downgrading the original financial forecasts in April, John is optimistic about the opportunities for growth.

“We’re trying to grow and a stable market is the hardest market to grow in. When everybody’s comfortable and when customers are happy with the suppliers they’ve got and have no reason to change, it’s very difficult to grow.

“A market that’s going through some kind of change is usually the best opportunity to grow and break out. I think those opportunities exist now and I think smart companies will capitalise on them.”

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