With a rich history dating back to 1917, Sutton Tools has grown from a small family enterprise to one of Australia’s most trusted manufacturers of cutting tools, drills and power tool accessories. Managing Director Peter Sutton discusses the company’s experience of the COVID-19 pandemic and how the company navigated the shutdowns.
AMT: What were Sutton Tools’s plans for 2020 before the pandemic took hold?
Peter Sutton: Like every other business around the world, most of our plans were put on hold, preparing for who knew what was to come. Having been through the Global Financial Crisis (GFC) just over a decade ago, we had some experience with what was to potentially come. We ran various scenarios on the impact on the business, from modest to extreme. At the time, we believed we were going to be in a fight for our survival.
If a word defined the year, it was ‘uncertainty’. Each day brought on a new challenge for our staff, not only in the way they worked but also for their personal lives. As time progressed, we started to re-establish our business plans where we could but, in reality, we were reacting to what the market was doing on a weekly basis.
AMT: Was the slowdown demand-based, or did the combination of finding avenues to get material dispatched from Australia to overseas and vice-versa play a significant role?
PS: Our business is fortunate to have several channels to market – our traditional, local industrial manufactures; building trade and construction; and export. Over the course of the pandemic, export has undoubtedly been the most severely affected. As seen in the news daily, the majority of our customers in South-East Asia and Europe have been hit hard by COVID. While these regions continue to struggle, we have been fortunate that our domestic market has rebounded strongly.
Being a local manufacturer has certainly played in our favour. While global supply chains continue to be disrupted, to a certain extent, we have been self-sufficient for many of our products.
We have had to revert to air freighting to the majority of our overseas customers. Fortunately, air freight has not been impacted as severely as sea cargo, and we have been able to provide our customers, in some cases, with greater levels of service – albeit at a higher cost of business. We see the additional expenses as an investment in the long-term, gaining market share and loyalty where others are unable to supply.
AMT: What would you consider as some of the biggest hurdles that Sutton Tools has been forced to overcome during the pandemic?
PS: As far as challenges go, I don’t think we can over-emphasise the effect that it’s had on the mental wellbeing of our staff. While Australia has been incredibly fortunate to be in the position we are today, the uncertainty, isolation and disruption has taken its toll. It is important that we continue to communicate with our staff and give them the support they need.
From a business perspective, while we have been fortunate to recover reasonably well, the daily roller-coaster of uncertainly continues. Supply and logistics are under constant pressure, whether exporting finished product or importing of our raw materials.
AMT: Have there been any unforeseen positives that Sutton Tools has experienced?
PS: Having overseas operations in New Zealand and Europe has posed its difficulties. Surprisingly, initially believing this was going to be our greatest challenge, it has proved not the case. While we all sometimes bemoan Zoom and Teams, using these collaboration tools has made us work more effectively. In some respects, our communication amongst the divisions has never been better. I even feel the additional site autonomy has worked in their favour, working closely as a team and making decisions for themselves.
From a sales perspective, we have certainly seen a shift in customer support in favour of local manufacturing. Whether it be driven by an inability to source products from overseas, or a genuine desire to support local jobs, people are questioning where the things they buy come from. Since the exit of the automotive industry from Australia, I have not heard as much talk about local manufacturing, conversely in a positive way.
AMT: What would you say have been some of the biggest changes at Sutton Tools?
PS: Probably the biggest change has been the rapid acceleration of the digitisation across the entire company. One simple internal example is our printed paperwork – our paper usage is down 80%. Simple things like electronic approval of the invoices, electronic purchase requisition, automated workflows, electronic forms… all now paperless. It’s not just about the cost of the printing and the paperwork, which is relatively minor in the scheme of things – it’s the efficiency.
Additionally, with digitisation from a customer point of view, we’ve rapidly deployed customer service portals. Customers now have access to enter orders directly, view stock availability, check pricing, view order status, check on deliveries, and so on. These customer experience enhancements have occurred very quickly, achieving more in the last year than we have in the previous five.
AMT: How is Sutton Tools using the pandemic as an opportunity to emerge stronger?
PS: Witnessing the impact on supply chains, it has given us a resolve to the importance of maintaining local manufacturing. As a business, we have always re-invested for the the long term. In some ways, we see it as incumbent on us to continue to support local manufacturing as we have for the past 100 years, and especially in these uncertain times.
There’s been a general feeling of supporting Australian jobs in manufacturing, and it’s been great to be able to use that opportunity to promote our manufacturing capabilities. People who have sourced product overseas in the past are looking for local alternatives, be it Sutton Tools or other local producers.
Overall, we are so proud of all our staff and how they’ve worked together to continue to operate in these at times extremely difficult and surreal times.
The Sutton Tools story is part of Integra Systems’ Advance Australian Manufacturing (#AAM) initiative. Integra Systems is asking manufacturing business owners and CEOs to share their Advance Australian Manufacturing stories. Reach out to Erika Hughes, Commercial Director at Integra, on erika@integrasystems.com.au, and use the #AAM hashtag wherever you can.