Ebac as a company is wary of the term innovation, which sounds like heresy in a
modern business environment.
Group managing director Pamela Petty explains: “I feel more comfortable with saying we do things differently rather than that we innovate, because I worry that the term innovate brings up the idea of technical solutions to everything and constantly trying to change things for the sake of it. We like to do things differently when it’s right for us.’’
Indeed, whether one calls it innovation or not, Ebac has a long track record of doing things differently.
Petty’s father John Elliott, who set up the company and is now chairman, introduced dehumidifiers – which were popular in the US - to the UK market more than 20 years ago. The technology was the same as that used in their then core product - industrial building dryers.
Petty says: “When we first brought dehumidifiers in we couldn’t get retailers to sell them for us because at that time there was no section of their shops to put them in. There was no concept then of having a dehumidifier in your home for every day life.’’
The original dehumidifiers were larger and metal but Ebac quickly introduced `wood-look’ models. Because of the lack of take-up by retailers the company sold direct to the public through advertising in Sunday supplements.
The condensation which dehumidifiers combat is worse in winter and, as these were then Ebac’s main product, business was extremely cyclical, which caused problems. But Ebac came up with a solution.
“It seems really simple now and a lot of people do it but we introduced annual hours over 25 years ago,’’ says Petty. “The problem was our core product was dehumidifiers and that’s a very seasonal product. Back in those days 10% of dehumidifier sales would happen on one Saturday in the year and the whole year’s sales were almost dependent on when that Saturday happened, which was dictated by the weather.’’
If the weather worsened too early people did not have £300 for a dehumidifier and, if too late, their money was earmarked for Christmas. The result was that sales could fluctuate widely from one year to the next.
“The problem was that we needed a lot of people to work for a short period of the year. Then we had a reputation as a hire and firer. Then there weren’t as many people out of work as there are now and there were a lot more manufacturing opportunities for people and people chose not to work at Ebac,’’
“We tried to build up stock in the summer but we built the wrong ones and people wanted a different colour so they had to be reworked. So we decided to look at keeping the workforce all year but who wants two days pay in the summer and six days pay in the winter? You can’t manage your bills like that. So we introduced annual hours whereby we pay everybody the same pay every week irrespective of the hours that they work, we averaged it out to pay everyone 1/52nd of their salary every week irrespective of hours. That was pretty innovative at the time we did it.’’
It had a twofold benefit: it gave the workforce a dependable regular wage and meant Ebac did not have to worry about cranking up production to satisfy extra demand. This was important in the face of growing competition from foreign imports, as Ebac could then react to such sudden fluctuations in demand where a foreign manufacturer could not.
“Once you’ve turned on the tap with a Chinese supplier, it’s hard to turn it off,’’ says Petty.
Since then Ebac has widened its product range, including office water coolers – an area which has been subject to an Ebac technical innovation. Point of use, POU, water coolers where the water comes from the main as opposed to ready filled bottles, now account for almost 50% of the overall market, compared with just under 12% in 2002.
They are popular because they provide endless amounts of chilled water without the need for deliveries, or changing of bottles. However, with most POU coolers, the water is filtered – to make it taste better by removing chlorine - as it is fed into the machine and, with less well-used coolers, it could be hours or days, before the water is consumed, meaning that, without the chlorine, small levels of bacteria are able to build up in the water. In bottled units the water is sanitised during the bottling procedure.
It struck Ebac’s designers that if the water was filtered at the point of dispensing, with the chlorine left in the water until the last possible moment, as it is in the mains supply, before it is put through a carbon filter system, the system would be more hygienic.
Because the chlorine remains in the water, instead of requiring regular sanitisation, the coolers simply require a change of filter kit and the process can often be done by the user, rather than needing an installer call-out. This removes any potential element of human error from the sanitisation process. Additionally, no chemicals are required, reducing the carbon footprint of companies.
“Aquasafe turned it on its head and we said, why not leave the chlorine in the water until we dispense it and then we don’t have the problem of having to sanitise the cooler any more. Now, it’s an extension to your mains pipe,’’ says Petty.
This is the principle behind the Ebac Aquasafe system, which was launched in its Fleet coolers last year. The company reckons the system reduces the chance of microbiological contamination by 98%.
Ebac has also invested £500,000 in adding air source heat pumps to its range of products, know-how gained in the manufacture of air coolers and dehumidifiers. Air source heat pumps allow home owners to provide heat form a renewable source.
With the market expected to grow through the advent of Government backed
green incentives, the company sees the potential for air source heat pumps to become a significant business stream.
The company has developed, and received approval certification on 5kw and 9kw heat pumps. Production is anticipated to reach up to 3,000 units per year within two years.
Petty says: “Air source heat pumps using one kilowatt of energy can create heat output of between two and seven kilowatts. They are much cheaper to run than electric and, as gas prices increase and the same happens with oil, air source heat pumps become an increasingly viable option.
“We have developed a good, strong product and are very excited about the potential for air source heat pumps to become a large part of the Ebac portfolio of products.’’
She adds: “The increased viability of air source heat pumps could become even more enhanced with the eventual implementation of the Government’s Renewable Heating Incentive, as with the products’ inclusion on the Green Deal approved list. Therefore, we believe now is an excellent time to take this first step into the market.”
Last autumn 2012, it was announced that Ebac would start to manufacture washing machines, creating more than 200 jobs.
It is to develop the new products in a £7m venture, made possible by £1m from the Regional Growth Fund. The first washing machines are expected off the production line in spring 2014.
Ebac has also agreed a deal which will preserve the brands and products of UK manufacturer Icetech Freezers in a multi-million pound acquisition and investment deal, after the company fell victim to the collapse of Comet.
The deal, for an undisclosed seven-figure sum, will see production of the firm’s Norfrost domestic chest freezer range moved to Ebac’s Newton Aycliffe base, with up to 100 jobs expected to be created in the long term.
The Norfrost name and the company’s equipment, designs and copyright agreements have been acquired after production closed at the firm’s factory in Castletown, Caithness, Scotland, at the end of 2012.
The first washing machines are expected off the production line in Spring 2014 with the aim of building up to match the previous output of 80,000 Norfrost chest freezers a year.
Ebac is also to begin production of hot taps next January and add some £2m to its annual turnover and its growing range of domestic products.
The company, estimates the total annual UK market to be about 50,000 units a year and it hopes to capture a segment of that worth about £2m annually, creating a handful of new jobs. The taps feature in top of the range fitted kitchens to provide instant hot water to make hot drinks and cost between £300 and £1,000. Ebac will make them using the technology from the hot water tanks in its range of water coolers.
“We have commissioned the tooling for the plastic parts and now it’s a matter of finalising the tap design,’’ says Petty.
The company has not only been introducing new products but has also been innovating its existing range, particularly the dehumidifiers. The latest model, for example, includes a laundry function, which will dry clothes in the same room over a period of a few hours for about a third of the cost - Ebac estimates - of using a tumble dryer.
The company has also upgraded the filter system and the water container area, providing an injection moulded bucket.
“It’s not going to collect the water any faster, it’s roughly the same size but the experience of taking that bucket out of the recess will be better, your real interface with your dehumidifier is emptying the water out,’’ says Petty. These innovations are not made on a whim. Ebac goes through a process of consultation with its customers via its customer base – people who have registered with Ebac, having bought directly from the company or registered a warranty, and who receive news letters and other communications.
“Our customer base are great, they love to talk about deumidifiers,’’ says Petty. “I have also used them to research washing machines. We sent a survey out to just under 20,000 people, as of last night, something like 8,000 had actually clicked onto that email and 3,000 of them had answered the survey, which is phenomenal. They just like to help. I think the right people to drive innovation are your customers.’’
However, she does not believe that the feedback should necessarily be taken at face value.
She says: “You have often got to test their actions and test it with the question: what would you pay for it? If it’s going to cost you £50 extra to have that feature on it, is it worth it? You can survey that a bit but then you have to get down to conversations and watch their reactions when you talk about certain things because people tell you an awful lot alongside the words they actually speak.
“Everyone commonly tells us that washing machines are too complicated nowadays and that they only ever use two programmes so I test them and ask them if there were two washing machines in the shop, both exactly the same, apart from one having a very sophisticated set of controls with 20 wash programmes and the other has two and they are the same price – which one would you buy? They’d buy the one they have just told me is the one that’s the problem. But then, if you ask, if it was £50 more expensive? No, then perhaps they wouldn’t buy it. It’s a process getting a feel for things and then testing it to find what they really mean by it and what value they would put on it.’’
Ebac will go through this consultation process rather than just leave it to designers to propose an innovation.
“If we left innovation to the design office we’d probably be out of business quite quickly because designers and engineers always seek perfection and don’t always look at the commercial value of that perfection,’’ says Petty.
“To me the best use of innovation is when you understand how much a customer will value something and whether they have a need for something or a problem you can solve and then use innovation to fix that. I think that’s a better way to do it.’’