Page 24 March/aPril 2014 Feed Compounder

by Andrew Mounsey

OUT & ABOUT

A Visit to Davidsons

Animal Feeds

Out & About is sponsored by DSM Nutritional Products Ltd

“Our buzzword is consistency in everything we do. We focus on

consistency of service for our customers, from the salespeople and

from our drivers who see and interact with them. We need consistent

quality from the mill and consistent nutrition from the products. We

want our customers to know that, when buying from us, they get that

consistency in service, quality and in value. Everything that we do, right

across the organisation, we have to ask ourselves, ‘This action I am

about to perform, how does this add value to my customer?’ We are

not looking to be the cheapest supplier, and hopefully we’ll never be

the most expensive – what we are looking for is consistent value.”

This is how William Davidson sums up the ethos of Davidsons

Animal Feeds. The company was founded by William’s father Billy

Davidson in 1977 and grew rapidly by providing a local alternative

supplier and a more personal service than much of the competition.

Today it can claim to be the largest manufacturer of animal feed in

Scotland. While Billy Davidson is still officially the Managing Director,

the role he fulfils on a day-to-day basis is more akin to that of a

Chairman, while William, officially Operations Director, actually acts

more in the capacity of the MD.

Davidsons’ focus on consistency applies to products and services

for customers but also benefits suppliers. As suppliers to Davidsons

know that they can rely on this consistency, this in turn helps with their

own suppliers and thus strings benefits along the supply chain; this

allows value to be passed along the chain and on to the customer.

There are many things in any feed business which cannot be controlled

– for example the weather and the markets (both the one which the

business buys from and the one which its customers are selling into).

And while it is necessary to be aware of these and to understand them,

it is important to focus on elements which can be controlled, and that

is how consistent value can be achieved.

All members of staff are treated equally and everyone has the

same opportunities, no matter that each has their own role to perform.

All are part of the team and there are no prima donnas. It is a family

business with Billy and William at the core but with everyone regarded

as part of an extended family; everyone is important. Farming is a family

business industry and this creates synergy and understanding between

Davidsons and their customers – it really does make a difference.

William tells his staff to give his number to farmer customers so that,

if they have an issue, they can phone him direct – “I may not have all

the answers, I’m not a nutritionist. But I will listen, I’ll take it on board

and do what I can to inform, assist, resolve – whatever is required,”

he says.

“First and foremost,” says William, “what a farmer requires of their

feed supplier is that when they go to their silos or their bins and open

the chute, feed comes out.” Remembering to order feed takes up a

small proportion of a farmer’s thinking time, in amongst all the jobs

which they have to do in running their farms. But that small proportion is

100% of what Davidsons do, so the company has to understand and do

its best to achieve the objectives set by the customer when the orders

are placed. The ethos is to do exactly what they say they will do – not

to promise what cannot be or is not intended to be delivered. And it is

working: sales are growing, they are getting closer to customers and

to suppliers.

The last time I visited Davidsons, in the spring of 2013, the offices

were in two buildings and on three floors. “Accounts were on the far

side on the top floor. Nobody ever went to accounts and it was a trek

for accounts to come to

see anyone else!” William

explains. “My dad was in

“We want our

customers to know

that, when buying

from us, they get that

consistency in service,

quality and in value,”

says William Davidson

Feed Compounder March/aPril 2014 Page 25

one corner, transport in another, me in another and the laboratory was

tucked away at the back of the building. Sales were across the yard

in a separate building so people were crossing vehicle routes carrying

envelopes from one place to another – and a trip to see someone for

a necessary two minute conversation could take half an hour by the

time you’d said ‘hello, how’s it going and cheerio’ to the people you

met along the way.” The situation had evolved according to need as

the company had grown, but what had resulted was fragmented and

clearly far from ideal.

William was lucky enough to go on a ‘Learning Journey’ with

Scottish Enterprise which took him over to the States. The group visited

many different businesses in different parts of the country: amongst

others, a hotel, a magazine publishing house and an architect’s

office in New York City, a design company and a clothing retailer in

San Francisco and a couple of universities – all nothing whatsoever

to do with feed but all successful organisations from which lessons

could be learned. One of the talks, Williams recalls, was advocating

the benefits of being ‘Messy’ in business. He took some persuading,

being someone who prefers his working environment to be neat and

tidy with everything in its place. How, he wondered, could being messy

be an improvement on order? Eventually, it clicked. What was being

spoken about was people, not things. Don’t put them, like different raw

materials, into silos – mix them up and get them crossing over each

other and, that way, communication and cross-fertilisation of ideas

are nurtured. “When I got back I realised I had a hundred silos in the

factory, but I had just as many in the offices, and that was holding us

back.” So last year, coming out of a good winter for the trade, William

decided to have a go at creating the kind of beneficial ‘mess’ he had

learned about, bringing all the office staff together in one building to

provide his leadership with the help of having people around about

him. A different animal from his father, whose entrepreneurial style

had been so essential in building the company up from the beginning,

William saw this as an opportunity to change the working environment

to one which suited his management style and would help him to grow

into his role in the future.

William brought in an architect and explained what he saw as the

problems, and how he would like these to be solved. Together they

walked round the site, looking at what people did and discussed the

brief, which was to give everyone their own space, but close enough to

facilitate teamwork and communication. The architect came back with

a courtyard idea, which spaced people out but gave visibility (“there’s

nowhere to hide, including for me,” comments William, pointing to the

glass front of his own office). With a few tweaks, the idea was adopted

and the decision made to go ahead in May 2013. Ground was broken in

the first week of July and, in spite of the architect’s belief that it would

probably take until Easter 2014, the building was handed over complete

and finished on 25th November – some achievement by the builder and

obviously hugely important to Davidsons to be able to make the move

in before the height of the winter feeding season.

The sales team were fantastic during the process of the changeover.

Their original office, which was one half of one of the existing buildings,

was sealed off from where the refurbishment and building work was

taking place. A temporary kitchen and toilets were installed outside and

they continued working while the new build, consisting of a canteen,

toilets, offices, laboratory, store rooms and a training room, was added

alongside. Not only did they have to keep going while the building work

was taking place, last year William was also brave enough to stick his

neck out and regionalise the salesforce – so they had that restructuring

to cope with as well and at the same time! Previously, each telephone

salesperson may be calling a customer in Cumbria one minute and

Inverness-shire the next. It was decided that it made sense to organise

the telephone sales team on a regional basis according to the number

of available customers. Davidsons as a company had embraced the

use of telephone sales as a cost-effective means of selling to farmers,

perhaps to a greater extent than any other in the feed trade. Certainly,

Right: Views of the new office building. From top to bottom: The

courtyard, the boardroom and the training room

Page 26 March/aPril 2014 Feed Compounder

they had reduced the number of traditional sales rep on the road over

time – maybe too much, they now believe. More recently, in order to

help sales growth by getting closer to their customers, they have started

to recruit external reps to complement the telephone sales efforts, with

both now organised regionally. It wasn’t easy to make this change;

some of the telesales people had been calling the same customers

for up to 14 years. However, it is working well. They now have sales

teams in the department with subject matter experts in each team for

each region. It also means that the people who deal with customers

in a particular area can attend events within that area. The sales team

consists of ten people making

calls from the office, together

with six on the road and Tommy

Davidson (pictured left) as

sales manager, who places an

emphasis on continued, steady

and sustainable sales growth,

achieved by getting close to

and understanding customers.

Sales have grown from just

over 80,000 tonnes in each of the three years from 2009 to 2011 to

130,000 tonnes last year, a clear indication that the strategies are

working. William himself is also actively involved in sales, speaking to

his own customers on very a regular basis, which helps him to keep his

finger on the pulse of the markets the company is selling into.

The business is very much focussed on feed – they do supply

some third party products but those are on the fringe of the company’s

offer. The feed produced is mostly compounds, with some blends, but

regardless, everything is produced through the mill; the blends are

simpler mixes and not ground or pelletised but otherwise produced

in the same way as the compound. And speaking of compounds

and blends, William believes there has been something of a change

in emphasis towards the former in his markets in recent years. He

believes there a variety of reasons for this trend, including changes

in pricing policy from suppliers of pelleted co-products as well as the

implementation of UFAS accreditation across all feed suppliers, which

has narrowed the cost differential. At the same time, changes on farms,

such as the introduction of robotic milk parlours have mitigated towards

feeding complete compounds.

That the change to regional sales teams was accepted readily

by people who had been doing things differently for a long time is

testament to the trust which has developed in William’s leadership. He

first started taking on such a role in 2009, and he believes that such

trust is built on communicating his ideas to the team, explaining the

reasons behind them and making sure they know that changes are not

irreversible if they don’t work out. But everyone is prepared to give them

a go. He began on the operations side in the factory and has also run

the transport department in his time, which gives him a good grounding

in the business and was excellent preparation for a leadership role.

He could do most of the jobs in the business himself if required and

he knows what can be achieved easily as well as what might be a

bit more challenging. To help spread a similar level of understanding

and communication across the company, the management team has

done such things as putting a driver in the sales office for a morning or

one of the sales team on a truck or in the control room for half a day,

allowing them to see how their colleagues work in other parts of the

business. Across the whole workforce they know that the people before

or after them in the process of serving the customers are working just

as hard as they are.

I asked William about the dynamics of taking over the day-to-day

running of the company as the second generation in a family business,

and once more he pointed to assistance he had received from the

Scottish government. This came in the form of mentoring in his transition

from being an operator, to managing operations through to being a

leader of the business. It was, he admits, a challenge. “In operations,

we don’t like anything to change,” he says. “Just keep giving us product

to make and we’ll make it. If something comes up, we’ll firefight it –

that’s the ethos in operations, and that is where I had spent most of my

working life. But as you transition into the leader, you’ve got to recognise

the need for change and then drive it right across the team. How my

dad did that with his entrepreneurial spirit was to just get it done. He

went that fast that everyone ran behind him as quickly as they could

to make it work! I need to do things differently because I’m not that

person – what I need is a few key guys round about me.”

William’s team consists of an operations manager (Gordon

Mullen, a recent appointment from a different industry), a transport

manager (Stephen Hunter, a farmer’s son and for 20 years a driver

for the company who knows the customers and the job inside out), a

sales manager (Tommy Davidson – whose role in growing sales has

already been mentioned and whose surname is purely coincidental)

and a finance manager (Gary Dow, not originally from the feed industry,

who joined a few years ago). The five of them sit down as a senior

management team (with an average age of around forty, which is

impressive for our industry) around a table once a week to discuss the

running of the company. Operational day-to-day communication with

the sixty-strong workforce is carried out by the managers, whereas

communication of strategic information giving a business overview

comes directly from William.

Left: Part of the office sales team hard at work

Feed Compounder March/aPril 2014 Page 27

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In the past, the company has focussed very much on having the

latest technology – as a result it has one of the most modern feed

manufacturing plants in Europe. And they continue to work hard to look

after it, but William has changed the emphasis to developing the people

within the company, by appointing the best people for the roles and by

allowing those already in the business to take on new challenges and

responsibilities. The new building includes an impressive training room,

which is large enough to seat everyone in the company at one time,

and training takes places on a continual basis on all areas, undertaken

by a local specialist training consultant, by directors and managers and

by external suppliers.

William was keen to emphasize how Davidsons Feeds has evolved

and matured. For a good part of its history, within the trade and the

local farming community, the company has been associated almost

exclusively with the man who founded it and has driven it forward.

“My dad. The leader. The wee guy with the fiery temper,” as William

describes him. And to be sure, Billy is the person who started it all

and made it as successful as it has become. And he is still around

every day and oversees everything. As William says, “I like to do the

analysis down to the last dot, he likes to go with gut feel. There is a

balance – he makes sure my analysis is timely and I make sure that

we’ve actually done some analysis!” But today, as I hope this article has

demonstrated, there is a team of people providing a consistent reliable

long term partner to suppliers and customers alike. It is not a one-man

band, it is a well-run and sustainable family business.

Billy himself emphasizes the point. “We’ve been through a

transformation in recent times, right across the board. William is making

a tremendous job of it – he’s far better at it than I am. My problem is

I have no self-discipline or patience. I know what I want to do and I

can drive but William has the patience and we work better as a team

because he imposes the discipline on me. I think it’s tremendous. I’m

more enthusiastic than I was 20 years ago. Our oldest person in the

sales team is forty (and he’s been here twenty years) and right across

the company we have people who are in the twenties and thirties. My

only regret is that I’m not any

younger myself!” Billy sees a

lot of opportunities opening

up in the industry. He tells me

that the mill has three times

the capacity that it is currently producing, and believes there is scope

within the existing trading area to double their sales, whether by

organic growth or through acquisition (“We have the firepower to do

that if the right opportunity comes along at the right money, but today

I don’t see anything worth getting excited about.”) He believes one of

the company’s great strengths is its very tight management style with

the ability to makes decisions very quickly and to act on them. He

also believes in a one-site operation saying that it is not possible to

manage effectively from a distance. So if, in the future, an acquisition

is made it would be to bring tonnage into the mill at Shotts. But for the

time being, the emphasis will be to continue to invest in people and

their development, to maintain a first rate production and transport

capabilities and to grow organically.

William believes that Scotland has a great brand in producing food

and drink and that being part of the food chain in Scotland is, therefore,

a great place to be. The devolved Scottish government recognises this

and is very keen to promote it, and more than once the company has

been helped with training and development. “We are part of a good,

down to earth and honest industry dedicated to producing quality, safe

food and we are lucky enough to be able to supply the feed. You can’t

produce Scottish dairy products, Scottish beef and Scottish chicken in

any other part of the world. So for me, there is great opportunity and I

am very positive that there is more than enough business out there to

sustain our growth for years to come.”

Right: Billy Davidson – the

man who started it all back

in 1977