MGN Turnover: A strong and sustainable heritage

Peacocks Medical is one of the North East’s oldest manufacturing businesses. It has been manufacturing its range of medical devices and supplying other services to the UK healthcare market for 115 years.

A fourth generation family business, Peacocks today has two main elements: orthotic manufacturing and the supply of capital equipment. It also has a recently established third strand which is in 3D printing. But the manufacture and supply of orthotic equipment makes up around 80 per cent of the business. The company employs 180 people, of which 70 work in the manufacturing facility in Newcastle, and achieved turnover of £14m last year.

Taking over as managing director two years ago (having previously been the company’s finance director), David Stevens is currently overseeing a transformational period for the business. David explains: “Our aim is to bring the strong heritage of the business into the future and to meet the challenges that we see within our core markets. We are growing at between 5-10 per cent every year and we believe in steady, sensible growth.

“Our mission is to improve the quality of people’s lives and we have a long and proud history in the NHS working with it since 1948. Our main focus is therefore to be a partner to the NHS and to provide the best solutions and care for their patients.”

Peacocks employs clinicians to go into specialist NHS clinics and prescribe devices for use in a range of conditions such as cerebral palsy, arthritis and even spinal cord injuries. It also sees private patients that want to get treatment for certain sporting conditions. “Many of the patients we see are in great pain and have quite acute conditions – without our devices they just cannot function.

“We need to understand the needs of both the NHS as well as understanding the needs of patients as well. We manufacture all these orthotic devices in Newcastle, products such as in-soles, callipers, mobility equipment to free up movement for people. The challenge is that people come in all shapes and sizes so we need to make products that fit an individual’s particular needs.

As Peacock’s manufactures products designed for an individual patient, David is challenged with automating the manufacturing process and maintaining the handcraft expertise that the company has built up over the year. “The challenge is how we can automate to make us more streamlined and efficient while making sure the patient is fitted with the appropriate device and the appropriate design specification. Our technicians have 20 or 30 years’ experience in dealing with these kinds of condition and they know that every patient is different and every device therefore needs to be different too.

“Automation is clearly something we need to develop but we will still need hands-on skilled operatives to finish a product off to meet the specific standards that our customers need. And we’ve invested hundreds of thousands of pounds over the last couple of years in machinery as new technology comes along all the time. It’s merging new technology with traditional skills that’s the trick.

Peacocks has always looked to reinvest profits into the business, to invest in equipment and in people. David says: “R&D is central to what we do because historically we are very proud to be one of the forefathers of orthotics and developing the market is a real passion for us and we have recently spent around £2m on it. We have a 5-strong R&D team that looks into product development and also into ways of applying IT software into our processes .”

One of the first things David did when he took over as managing director was to implement a recruitment strategy. They have taken on eight apprentices recently and will be taking on another five each quarter. “We see this as crucial as some of the skills we need you simply can’t pick up off the street. We’ve also introduced some Kaizan and 5S techniques.”

The NHS is going through a digital transformation at the moment and David and his management team want to move with it on this, to streamline its processes and offer patients the best products quicker and with a better fit. “Using the best technology of this is what we are working on and this is where the future of orthotics lies. The NHS doesn’t move fast and of course it has some real challenges of funding and budget constraints at the moment. So we need to look at making things as cost-effective for the NHS as we can and this is another reason why R&D is so important for us.”

Peacocks’ growth strategy is based not only on increasing its share of the orthotics market but also on offering a truly market-leading service to its customers. “But we don’t want to grow too quickly and don’t lose the value we provide. We think we have the capability and the scalability to do this and to offer the same level of service to our future customers.”

A longer-term goal is to offer our services on not only a national scale but an international one too. They have started to engage with strategic partners in export markets, mainly in the Middle East, Far East and Asia. But they are taking a rather cautious approach to this to order to get the strategy right.

The Far East in particular presents some cultural challenges and in certain countries Peacocks has found there is real lack of awareness of what orthotics is and a lack of understanding generally about foot care. “It’s an area of medicine that has really been ignored in certain countries in the world, so we’re looking to raise awareness of orthotics and what it can provide.  Exports are certainly part of our long-term strategy but we need to make sure we’ve done all the necessary preparatory work before we start.”

This lack of understanding of orthotics is also pervasive in the NHS too and this is something Peacocks is working hard to change. “Research has shown that for every pound spent on orthotics, the NHS could save four pounds.  We are trying very hard to engage at every level of NHS England to promote of exactly what orthotics is and what our products can do. If you can get patients using orthotic products quicker it undoubtedly means they won’t be in an operating theatre later in their lives.”

The desire to widen the services and products they provide is very much part of David Steven’s growth strategy. “Ours is quite a fragmented industry, with podiatry, physiotherapy, osteopathy all within all this. We have established a private clinic in Newcastle to provide something of an umbrella service, offering all these kinds of services. And these people may well need a wider range of products. So we’ve developed our own product catalogue for the more ‘off-the-shelf’ products and widen our product range too.

“In terms of our machinery we’ve got the capacity and I think we can grow this fairly easily. We’re going through what is quite an unusual process for orthotics – the industry likes to keep things as specialist as possible but we’re now starting to cross-train and cross-functional capability of our staff, so they widen their skills.”

There is no doubt that David Stevens and his team are putting in place the building blocks to ensure steady, sensible and sustainable growth and to ensure Peacocks another hundred years of quality manufacturing service.

The Manufacturing Growth Network (MGN) is a quarterly publication sponsored by NRG, EY, Square One Law, Lloyds Bank and EEF and published by Insider Media.  MGN is FREE for North East manufacturing businesses to join, for further information on how your business can get involved contact Julie Mordue, client relationship manager at NRG.

*Article originally published by Insider Media.