When Peter Fenn started Fenn Tool Ltd in 1982, he planned a modest operation. It had three employees based in an old church hall and imported quality machine tools from Switzerland and Austria, selling them to UK customers at a competitive price. His business grew modestly and steadily, moving into larger premises with more staff, opening new markets and an office in Ireland. But it took an unforeseen technological problem and its solution to catapult the enterprise into serious success.
In January this year, Fenn Tool was chosen as the Parcel Force Worldwide Small Business of the Year, winning £30,000 in prizes. It also received the prestigious Manufacturing Industry Achievement Award and Product of the Show Award at the Enquip 2000 exhibition in Dublin. Sales and profits are up, the firm has moved into larger premises on the Springwood Industrial Estate in Essex and is taking on new staff, and has a client list that includes Rolls-Royce, Marconi and BAE Systems.
Fenn has now retired but keeps a benevolent eye on the management team of sales director Gary Ridgeway, operations director Martin Fenn, financial director Sarah Potter and office supervisor Peter Clements. "We all work well together," says Potter, "pooling ideas, looking for new ways to do things, discussing problems."
As most of the managers and sales force are skilled engineers who have retrained for their present posts, they became aware a few years ago that there was a big and unfulfilled demand for specialist cutting and grinding tools, particularly in the rapidly developing aerospace and telecommunications industries, where a constant stream of new designs required manufacturing implements that didn't yet exist.
At first, the team tried to design a required tool and get it made by their traditional suppliers on the continent, but this was an inefficient and frustrating procedure.
'The waiting time would be six to 10 weeks,' says Ridgeway, "and our customers just couldn't afford to wait. It meant expensive machinery standing idle and lost orders. So we looked at what other small companies were doing, and after a lot of discussion we decided to buy a computer design and manufacturing package that would enable us to do the whole job ourselves."
Fenn Tool spent £250,000 on the computer-aided design package, a top-of-the-range Anca 3D CIMulator, which handles design, programming and verification from a desktop computer, feeding information directly into the computer-aided manufacturing system, an Anca TGX, with further precision verification by an Innova Tool measuring system.
Although buying the machinery was a big risk, using up much of the company's available capital, it has proved to be a wise decision that has revolutionised the business. The lead time has been cut from between six and 10 weeks to an astounding 48 hours from order to finished product.
The new machinery has had many other benefits.
A one-off tool created for a specific manufacturer can be made in further small batches to stockpile and sell to other markets. Fenn Tool has complete flexibility of design, and tools can be made in a variety of metals and finishes that will do the job more efficiently than a standard drill or cutter. The quality of tools made by a manufacturing robot is extremely high, but the cost per unit is sharply reduced. The new system also offers the company an inexpensive way of researching and developing new products.
The investment produced so many benefits that Fenn Tool decided to take out a bank loan to purchase a second, smaller Anca TGX for specials and short production runs.
The company's website (www.fenntool.co.uk) is designed and maintained by Clements. A year ago he convinced his colleagures that setting a website would be a shrewd move. He used a simple package and hired technical backup, then went on a company-sponsored course to learn Front Page web design software. He is now able to handle editing and repairing the site himself.
The website has proved to be another good investment. In the past, when the management wanted to open up a new territory, they hired a salesman with an engineering background, or trained someone with the right qualifications who went out, making contacts and demonstrating the product. An international salesforce is a possibility but an expensive one.
And it may be an unnecessary one. The website is bringing in orders as well as enquiries. Large orders have come from Japan, Spain and the US, and Clements plans to set up a database-led catalogue of products on the site.
"We're prepared for growth," he says, "and will eventually get into e-commerce in a big way."
Potter worried about committing such large sums to new technology but voted for it and is certain that it has been the right thing to do. Although it is too early for the results to show up in yearly accounts, it is clear that costs have fallen and sales are on a sharp upswing. She says: "I would advise other small businesses to take the risk and invest in new technology. Things can go wrong, but it's better to fail trying than to fail for lack of trying."
