Diversity spice of Backwell IXL
In an era of specialisation, Geelong Company Backwell IXL has guaranteed its fortunes through diversification.
Celebrating 150 years in business this year, the company’s history is one of constant adaptation and reinvention.
The privately owned company now boasts three separate divisions, which each generate between 10 and 50 per cent of company revenues.
Backwell IXL runs an iron and steel foundry, manufactures and sells home appliances and manufactures metal stampings and components for the motor industry.
General manager David Sykes says having a hand in numerous pies, so to speak, has brought unforeseen benefits to the company.
Innovations in one part of the business – particularly those needed to compete for tenders in the highly competitive automotive industry – drive efficiencies and improved practices in others.
“You have to be a leading-edge company in terms of technology and management processes to survive in the automotive components industry,” Mr. Sykes said.
The company is a first-tier supplier of metal heat shields and under-body metal components and has takes part in numerous supplier development programs to improve business practices.
“Embracing those philosophies across the business has brought benefits in the other two areas. I think it gives us a competitive edge in the appliance and foundry divisions,” Mr. Sykes said.
“There is a fair bit of synergy between the areas and they do share resources. The diversity adds value to our business.”
To retain contracts with manufacturers, Toyota and Ford, suppliers such as Backwell must quote for parts up to 18 months before models change.
Fending off competition from low-cost imported products is the biggest challenge automotive component supplier’s face today.
Indeed, low-cost overseas products are a growing challenge to every one of Backwell IXL’s manufacturing divisions.
‘YOU HAVE TO...RESPOND TO MARKET CHANGES---IN THIS CASE, FOREVER INCREASING VOLUMES OF LOW-COST IMPORTED PRODUCTS.’
Mr. Sykes says it was the reality of doing business in the global market today.
“Companies that ignore the challenge will disappear,” he said.
“You have to be innovative and agile and respond to market changes – in this case, forever increasing volumes of low-cost imported products.”
Mr. Sykes said Backwell IXL had remained competitive by becoming more efficient, reducing prices and supplying superior products.
In recent years, under pressure to buy low-cost tooling from Asia to ensure the company’s metal pressings remained price competitive. Backwell sought a local alternative.
After interviewing 10 of Australia’s best toolmakers, Backwell selected numerous small Victorian businesses to supply its needs.
The effort won the company an industry Capability Network award and resulted in more than $1 million worth of orders for local companies that could otherwise had gone to companies in China and Thailand.
Backwell also got to retain its “Australian Made” competitive advantage.
“By working with the local toolmakers, we were able to meet the price targets and timings, plus quality and performance (required),” Mr. Sykes said.
“All of this activity was going against the trend to source from low-cost countries.”
Backwell is perhaps best known for the IXL Tastic, a four-globe bathroom lighting and heating solution that has led the market for 25 years.
Last year Backwell, which is in the hands of a fifth generation of the family, merged with Sampford & Staff to import and sell premium-brand kitchen, bathroom and ventilation products for the home.
The new company, called Sampford IXL, operates separately to Backwell IXL.
This autumn, the company, which began, as a blacksmithing operation in the mid-1850s, will release a book on its history, aptly entitled Innovation and enterprise: A history of Backwell IXL.
Journalist: Paula Beauchamp
Herald Sun
12 March 2008.