A transparent machinery manufacturer

Egon Rasmussen, ErhvervsBladet, 30. July 2009

REPORT CARD. Owner and manager Henrik Holvad believes in transparency, and for this reason he has chosen to publish customer reviews of the company on its website. The total scrap percentage for the production department, along with actual delivery times, have also been listed.

It’s a beautiful sight. Green fields, farms and thatched cottages surround RIVAL in the village of Svejstrup near Skanderborg. The area known as Sohojlandet offers a typical picture postcard image of the Danish countryside, and the company’s 48 employees enjoy stunning views of Yding Skovhoj and Mosso, which forms part of the Gudenaa river.

But the setting is not the only thing that works in RIVAL’s favour.

Owner and manager Henrik Holvad runs a transparent company with the aid of his wife. In 2002, when the couple bought RIVAL from Henrik’s father, she had a successful career as a solicitor and was about to be made a partner at Kromann Reumert. Two demanding careers, however, would have had a detrimental effect on family life – the couple have two daughters aged 11 and 14 – so today Kirsten Holvad is chairman of the board and head of administration at RIVAL.

Since Henrik Holvad took over RIVAL in 2002, the company’s turnover has tripled and the number of employees has increased from 20 to 48. 

Live nearby
“We work really well together. I think it’s a great idea to mix family and work. After school, the girls come over to the office and have a chat with us and with the employees – we live right next door to the company,” says Henrik Holvad, who trained as a mechanical engineer at the University of Aalborg.

After qualifying, he worked as a sales engineer for Mobro Instrumentering A/S and with sales and leadership training at Mercuri International.

“It was a good place to train for life as a businessman. At the IT company Merkantildata, I was responsible for the network department. I started as number four, and when I left the department after four years, there were 48 of us,” says 45-year-old Henrik Holvad.

Since the couple took over RIVAL, the turnover has tripled and the number of employees has risen from 20 to 48. RIVAL has three main business areas. The company functions as subcontractor, supplying unique parts to production companies. It also manufactures small quantities of complex workpieces.

In addition, the company produces and sells its own adjustable calibrating sleeves for the extrusion of plastic pipes. The adjustable calibrating sleeves are sold in 52 countries, and two employees have just attended a plastics trade fair in Chicago to promote the product, which retails at an average unit price of DKK 60,000.

Accuracy
Most managers routinely say that their company’s daily focus is on customers. So does Henrik Holvad, but he also goes a step further by publishing customers’ opinions of RIVAL on the company’s website. He is happy to put the customers’ opinions on show and to act on the company’s exclusive promise: Precise products for rapid, precise delivery. Whether the company honours this promise, and others, has been subject to close scrutiny. A consultancy company asked customers 36 questions to assess their level of satisfaction with RIVAL’s service, logistics and back office. 84.5% of RIVAL’s customers responded to the survey.

The most significant conclusions are that RIVAL’s services are excellent, and that the company is seen as a highly flexible supplier. In addition, customers trust that RIVAL is able to process vital, costly parts. But there is still progress to be made in terms of delivery reliability.

“It’s a great tool which indicates that the vast majority of the measures we have implemented have been positively received. We undertook the analysis to identify the areas in which customers feel we need to improve. The responses were positive as regards quality, flexibility and our ability to manufacture complex workpieces. But there are areas in which we need to improve – including our ability to deliver on time,” admits Henrik Holvad.

Report card on the Internet
A consultancy company carried out a customer analysis survey for RIVAL. All customers were contacted and 84.5% of them responded to the survey, awarding RIVAL points in key areas. Customers answered a total of 36 questions. RIVAL has published its ‘report card’ on the company’s website. The survey showed that delivery reliability could be improved. The exact figures relating to deliveries are listed on the website, which shows actual delivery times going back to 2006. The figures for scrap percentages in the production department are also available.

Delivering on time
The website lists RIVAL’s actual delivery times for 2006, 2007, 2008 and 2009. The company’s aim is to deliver 98% of all orders on time. The company is close to meeting this goal, but it still has some way to go. The figures for scrap percentages in the production department have also been published on the website.

Investments in documentation across a wide range of areas allowed RIVAL to enter into partnership with a Norwegian offshore company last year. The company required an external audit before awarding RIVAL its first order. RIVAL benefited greatly from having worked for several years with documentation. The audit looked at documentation on quality assurance, delivery reliability, the environment, internal documentation, safety work, procedures and ethics. In addition, RIVAL needed to be certified to work with particular materials, which was already the case.

“We have chosen to work with large international companies that require perfect products delivered on time. They’re willing to pay for that, and if you have the skill and the capacity to meet their requirements, there’s definitely a market out there,” says Henrik Holvad.

The company’s ambitions were largely fulfilled in the 2008 annual accounts, which showed that turnover has increased by 12% to just over 45 million, with results before tax of 5.8 million.

“It’s a satisfactory result, even though it’s just below our annual growth target of 15%. Growth remains our goal for the future,” emphasises Henrik Holvad.

Last year, the plant was expanded by 2,000 square metres to a total of 5,000 square metres.

Foreign customers
“We could see that 2008 might be a difficult year, so we went against the trend and focused on doing business with large, international customers such as Grundfos, Vestas, Siemens, Man Diesel, Velux and others that focus on quality and delivery reliability,” explains Henrik Holvad.

Upwards of half the company’s turnover comes from foreign customers.

“Our employees are good – and not just professionally. They work in self-managed teams and are responsible for planning, processing, quality control, delivery times, training, machine maintenance and much more. They feel responsible for the needs of our customers, and that allows us to function both nationally and internationally,” explains Henrik Holvad.

RIVAL has found favour in Norway, where a local manufacturer of marine engines has components delivered from Denmark. RIVAL also supplies components to Norwegian offshore companies and to a Norwegian crane manufacturer. In Hungary, RIVAL supplies parts to Grundfos’ pump factory.

Today, Henrik Holvad is happy that he didn’t move the company out to the motorway some years ago. He had been sorely tempted to do so at the time.

“A lot of people say you should be near the motorway because of logistics. But we only have about five or six lorries a day coming in, so why would I place greater importance on vehicle access than on the beautiful setting that we all enjoy so much?”

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