Youâ€™ve got to hand it to the team at Euro Car Parts, they certainly seem to know what theyâ€™re doing.
Whichever way you cut the company numbers it looks deeply impressive, daunting even. Itâ€™s now 35 years since the original Highways Autos store was opened by 18-year-old Sukhpal Singh in Wilsden but, with a projected turnover of Â£340 million this year, ECP seems nowhere near the zenith of its rocketship growth trajectory.
Singh recently said he saw no reason why his dedicated and energetic team shouldnâ€™t continue the drive to create a company with a turnover of Â£1 billion and 10,000 employees across Europe. Thatâ€™s about three times the size of the company now, but could just be the tip of the iceberg.
When CAT went to meet the ECP team at its Wembley HQ and massive Tamworth national distribution centre, we discovered turnover could get close to Â£1billion in the UK alone. And expansion into Europe? Why limit yourself to looking at Europe when the rest of the world is there, too?
ECPâ€™s journey could eventually take it around the world, powered by a philosophy of getting every detail right at a local level, but how quickly can it get to the Â£1 billion mark and where will it go from there?
Letâ€™s start here at home. Singh says expansion into Europe and beyond is not in his â€˜immediate plansâ€™, with a target to get to half a billion turnover in the UK over the next 36 months: â€œThereâ€™s enough to do here in the UK for the next three years. Weâ€™ve got geography to cover and product ranges to cover as well. Thereâ€™s so much to do.â€
ECP peopleâ€™s director Martin Gray says: â€œFor every Â£10 spent in the UK we only Â£1 to Â£2 of it. Thereâ€™s still 80% to 90% of the mark left for us to acquire in the UK.
â€œIâ€™m not saying that we want all of it, but could we get 30% of the spend? I wouldnâ€™t say that was unreasonable. Could that get us close to Â£1bn in the whole of UK? I think so. At that point weâ€™d be looking at other expansion as well.â€
More of that added expansion a little later on, but development of the network will drive growth in the UK until then. New ECP branches are currently opening at the rate of 10 to 15 a year with the immediate target of having 110 branches to cover 97% of the UK.
At the time of writing there were 87, the 87th opening in York the day after our visit, but this figure will already be out of date by the time you read this. Huddersfield also arrived in July, with Singh saying ECP is now looking at Potters Bar, Stoke and further north to Scotland.
With this sort of branch rollout rate, ECP has got well practiced in the art of rolling into town. It uses geomapping technology developed at the University of Leeds to find appropriate locations and, says Gray, has a â€˜cookie cutterâ€™ approach in setting up shop – up to a point.
The difficulty comes in finding the right people, says Gray, who is ready to spend Â£1 million next year in employee development. Each region will have a centre of excellence, in branches, were training is available.
Gray says: â€œThereâ€™s not a people tree I can pluck the right kind of people off â€“ itâ€™s our biggest single barrier to growth. We do work at a ferocious pace, itâ€™s very intense, and for a lot of the time business can be very full on. Itâ€™s a bit controversial but itâ€™s like a positive drug, itâ€™s intoxicating.
â€œItâ€™s not for everyone, and thatâ€™s okay,â€™ says the ever-enthusiastic Gray, â€œbut why donâ€™t you come touch us and feel us and see if you like us?â€
After branches, thereâ€™s an even more rapid story of growth story with the Bosch-backed AutoCrew garage concept for which ECP is the exclusive distributor. The first opened in February, there were 70 when we visited ECP, but this will number 80 by the time CAT lands on your lap. By the end of the year there will be 150.
The process of percolating and integrating into the marketplace doesnâ€™t end there, either. Right now, garages are also trialling a brand-new ECP garage management system. With a new catalogue in the pipeline, too, the aim to help garages with a suite of support and, of course, ensure ECPâ€™s closer connection with their business.
â€œYouâ€™ll be able to press a button and get repair times, ordering schedules, technical information and all of those services,â€ says Singh. â€œA lot of garage workers today are very good guys and very hard working, but they might not be business people. We can help with that.â€
The system will roll out officially next year with ECP hoping to have 2000 garages using it by the end of 2012. We donâ€™t doubt they will, so watch this space.
Singh says growth the impressive national distribution centre in Tamworth can cope with growth up to Â£700 million with increased throughput.
Itâ€™s a model of efficiency. Voice verification means pickers have two free hands to grab parts. At the moment the pick rate per person is 145/150 items per hour, helped by the usual trick of having the most commonly-needed parts at eye level.
There is, of course, the â€˜long tailâ€™ of parts which logistics director Steve Horne says ECP has to have to â€˜have a ticket to the party.â€™ This means Tamworth has 100% coverage of the car parc with 114,000 parts available to branches overnight. Every part for every car, after all.
ECPâ€™s hubs mean it can get parts for 92% of the car parc to branches within the hour, however, while the branches themselves carry 15,000 different parts to cover 85% of the car parc.
Improved return rates will also help to save the company a fortune and boost profits going forward. At the moment itâ€™s running at 18-19%, which is pretty good, but the target is to cut this to 10% in 12 months. The new catalogue and garage management system will help with this and encourage garages to order online by offering discounts for doing so.
And then there are the new product lines for the UK. Horne is having to move some things around at Tamworth to make room for some tyres â€“ 60,000 of them. If ECP are sending vans to garages with injectors, pumps, belts and oils on them, why not tyres?
What about acquisitions? Do other companies need to be looking over their shoulders?
At the moment organic growth is the name of the game. Singh says he did enter negotiations with an unnamed company in the UK, but back out, preferring the less messy blank sheet of paper that comes from starting new branches.
â€œThereâ€™s always room for a fresh idea,â€ says Singh, reflecting on how a demand-driven delivery process would surprise those in, say, Germany used to allocated slots. â€œTheyâ€™re quite rigid and inflexible, If you introduced the concept of on-demand you could change things. Our cataloguing would be a big advantage.â€ Other markets excite Singh, too.
â€œEastern European markets have another ten years of growth. It will be one of the considerations. We might say letâ€™s do China, letâ€™s do India because theyâ€™re going through phenomenal growth â€“ itâ€™s double-digit growth, year-on-year.â€
Thereâ€™s enough to be getting on with in the UK for now, but what of the tactics when the time is right to explore the globe? Gray says: â€œWe have the ambition and appetite for expansion in various parts of the globe, but it will be driven through in a risk-averse way.
â€œWe donâ€™t have a plan for world domination â€“ weâ€™re not a James Bond villain stroking a cat. Weâ€™ll go for controlled expansion, looking at the markets locally, assessing the market, looking at our supply relationships and then driving that very aggressively. When we go into a country, we will do it very aggressively.â€
Is all of this happening too fast, though, even the growth just in the UK? Singh answers. â€œRead the balance sheet. Last year, for example, to show our faith in the business, we capitalised our reservesÂ – Â£28 million. We could have taken as a dividend in one hit, but we capitalised it to show this a long-term situation.
â€œWe have very little borrowings, we donâ€™t operate on an overdraft. Our growth is financed through our cash flow. We buy very well, we sell well, make good profits and reinvest it.â€
In any case, the Â£1 billion figure isnâ€™t being chased for the sake of it, says Gray. Itâ€™s a very big number, and one thatâ€™s easy to get fixated on, but Gray says itâ€™s just a future milestone that will be pass on ECPâ€™s journey into the future. Itâ€™s not the final destination, because there is no final destination.
â€œI donâ€™t think there is an end game. For true entrepreneurs, people who build real value, it isnâ€™t about the exit or the end. They donâ€™t actually get there. Am I at the end point? No. And if the answerâ€™s â€˜noâ€™ then lets keep on doing it and doing it and doing it â€“ thereâ€™s still so much, if only I had more time! That attitude is quite rare.â€
Singh giggles and says: â€œYou can have a busy day, and do a extraordinary amount of business, but then you get maybe 6% missed calls and you think â€˜my Godâ€™ – if we didnâ€™t miss those calls it could have been even better!â€
Did he ever dream the shop in Wilsden would turn into the ECP we have today? â€œI wasnâ€™t aiming this high,â€ he admits, but he must have been aiming pretty close.
With relentless energy and a huge amount of momentum, the ECP team is heading into orbit from where it need never fall back down to earth. The view from up there can be dizzying.