ACME Whistles

Background

The Acme Whistle Co, producers of the ‘finest whistles in the world today’, was founded in 1870 by Joseph Hudson, inventor of the first police whistle and has a continuous history of trading, as an independent SME, remaining  essentially a ‘family business’. Unlike many similar manufacturing concerns, it has survived the impact of Far Eastern low cost competitors and copycat products. It has not sold out to a bigger company, nor lost its market to ever increasing competition.

“Through changing times – world wars, depression, recession, inflation, shifting world trade patterns and unprecedented social change the firm has grown and developed. Starting as a sole tradership in the name of the founder, Joseph Hudson, through partnership as other relatives joined the “family firm”, to Limited Company status in 1949, and then finally through a total change in ownership in 1982,” says Simon Topman, Chief Executive.

Since inception total production stands at 460 million products, currently 6 million a year with an estimated customer (end user) base of 18 million worldwide. Whistles is what they are most famous for, but bird calls, musical accessories, signal horns and sound effects make up a range of 83 specialist items or 200 SKUs.

70 people are employed producing a 27% return on assets employed, with a gross turnover of around £10 million and exporting to 119 countries, including China. “Imagine that,” exclaims Simon, “a Birmingham-based manufacturer exporting handmade whistles to China; that’s not meant to be possible.  But we’re doing it!”

“The global market for whistles has been expanding over the past decade in all world markets. This is down to growth in sport and leisure and a focus on health and safety. The full value of this market is ultimately unknown.

“We’re probably the world market leader,” Simon adds. “We have an absolute belief that we make the best product in the world. And that no one can touch us.”

In every decade, over 14 of them so far, an inventive and patentable step has been found that moved the industry forward.  The first Police Whistle of 1883, the First Referee Whistle of 1884, the first ‘Silent ‘dog whistle of 1935 and the first waterproof Life Saving Whistle of 1949, are among the most famous.

Despite enjoying years of success since Joseph Hudson’s  renowned  Thunderer, Metropolitan and Siren Whistles first hit the streets, Acme continues to build market share, at home and around the world.

“Most of our competitors are located in the Far East.  The Chinese, for example, watch us like a hawk and what we do today they will copy tomorrow. “

Differentiators

So what is the real story here? Why should a low tech manufacturing SME, making in Western Europe where social costs are high but selling 85% of production overseas , including sales to low cost manufacturing countries like China, Korea and Thailand, thrive today against all accepted odds?

The answer is complex and many stranded.

“As the ‘definitive whistle’ producer we exist to provide our customers with the right sound for the right occasion.”

Katie Allen writing in The Observer, 19 May 2013, has a shot at listing some of the ‘right sounds’ produced by Acme Whistles, “The Boy Scouts of America, New York Police Department and American football umpires all deploy whistles from Acme. The Beach Boys used Acme sirens for some of their more whimsical sounds, such as in the Brian Wilson song Heroes and Villains. An army of American pet owners use its “silent” dog whistle and US exports make up more than a quarter of the company’s annual sales,” with US customers including the New York Philharmonic, who needed cuckoo and nightingale sounds for a performance of Haydn’s Toy Symphony. “We are the guys who made whistles for the Titanic in 1912, but we are also the guys who made the Tornado 2000 that was used in the Olympics in 2012,” says Simon Topman.

The company has made a conscious effort to differentiate their offering across a wide product range within the whistle market. Three out of nine ranges account for around 60% of sales, and whilst overall there is no clear pareto ratio within each range the 80:20 rule would tend to apply with 80% of sales generated by 20% of customers and markets. Lifestyle potential is indicated through the doubling in growth of the Collaboration or co-branding market and the General Consumer markets over the past three years, with Fallen Whistles delivering the bulk of sales at over 50% but other co-branding exercises have been with Hardy Amies, Sophie Hulme and Zippo and have all performed well.

 

 

Whistle type % Acme Whistles Turnover
Sports 25%
Music 20%
Collaboration (Co-Branding) 15%
Military 15%
Dog training 10%
Safety 5%
Police 5%
Hunting 5%
General Consumer 5%

“Finance is clearly important,” he adds. “At every stage of our company has had access to adequate funds to enable investment. Often lower growth over the short term has been accepted on the basis that the long term plan was more important.”

One of the advantages of both being a family firm and having a long corporate memory is that owner managers have taken a long term perspective, prepared to take current pain to secure the future. “The rules of ‘the City’ transgressed in the interests of a different wisdom,” is how Simon Topman puts it.

Constant and original improvisation are embedded in a culture transferred to each succeeding generation like well-loved folk songs. Embedded so strongly that they could jump across a buyout and change in company ownership and management. Put simply, we don’t view manufacturing as a skill, but as a culture. You can only truly understand your product if you make it yourself (just owning the IP is not enough) and by making and understanding it you come to love it. We speak of our own brand of ‘curious culture’, controlling it as we would ‘any other business process’.”

So successful has this approach been that there is no whistle available anywhere in the world that does not owe its design and effectiveness to Acme. The marketplace is full of products that offer an apparent choice. But each is no more than a development on a theme by Acme.

“Our approach to New Product Introduction aims for the launch of two new products a year, targeting at least a 10% sales increment over three years. These have to be patentable innovations, whether they’re ultimately patented or not. Functionality is the quest, not just style and design which are still essential. This part of our culture may be shifting as lifestyle aspirations open up new opportunities for well-designed authentic products where functionality can take a second place.”

Heritage as marketing

Marking the centenary of the beginning of the First World War in 2014 has presented us with an opportunity to reproduce and sell the original trench whistles used by the infantry, sometimes referred to, with great poignancy, as the ‘Sound of Death’.

The company has found a profitable niche in collaborations with other brands. Working with Zippo to produce replica ‘clickers’, used by the allied troops in World War 2 to signal the presence of friendly forces, has been one case in point. Or working with young and upcoming designer, Sophie Hulme, to produce whistles, specially branded for her leather bags.

So is it all just a look backwards?

“No, heritage inspires not just the customers but also the employees. Everyone at Acme has a sense that the previous generations ‘look on’ with high expectations. Nobody at Acme is going to let them down. The past is both an inspiration and a challenge. It MUST be lived up to. So Tornado 2000, the world’s most advanced whistle, patented and more powerful than anything that has gone before leads the way. Unique in appearance and function, developed with help from local universities, it brings together the elements that best define a corporate philosophy, “technology with tradition”.”

Brand

Two things stand out as the constant background to progress: innovation and authenticity in both function and design.

“What is a truly “great” brand and does Acme Whistles qualify for such an accolade?” asks Simon Topman. Whilst we recognise we are not a luxury brand like Cartier or Chanel, as a lifestyle accessory do we qualify as a brand?

“Different brands operating in different sectors will inevitably have different reasons for their success. But are there common features amongst a spectrum of products declaring, “this is a brand”, not just a company name or the latest concept in marketing and fashion dressed up to generate higher than usual returns before being replaced with ”the new trend.

Longevity: great brands stand the test of time, is part of the story. The brand that achieves this is both its own cause and effect.  An iconic founding , First , The Best (once it was all there was ) is a cause . But this story lives on and bridges the subsequent generations of trend and fashion with an authenticity those others cannot claim or own. Their very short-term appeal lends extra strength and true brand perception to a great brand with whom they compete. This bridging of the generations of trend and fashion then itself becomes an effect and also a cause for the brand. These two qualities combine so that they become inseparable and no one is sure which is which or which the chicken and which the egg.

Good commercial instincts must partner the brand. Access to finance, business planning, growth, sales and marketing to keep the all-important name at the forefront of recognition.   But these are bit players in a long running show. The product lifecycle is vital. In and out market positioning will not do. The great brand enjoys many years of success. Its products copied as patents expire, competition erodes the market share, but the essential product is demanded throughout a long period.

Quality must never falter. The brand can cope with being “not the latest” providing it is very good at what it does. It can be both authentic and contemporary——great brands do. Constant experimentation and innovation in form and function that give the old authenticity a contemporary relevance are  important parts of the mix.

Culture

“But even all of this is not enough to make a great brand. There is one essential ingredient without which the show will not go on and on. Corporate culture, that hard to define but easily spotted love of the product. A regard for all that it represents in the past and present that makes the mere business considerations secondary. A self-belief in all aspects of its excellence.  A desire to be proud of what the brand is before making profit. This is the life blood that all other aspects of the brand feed on.

“Acme has all of these and has maintained them over 144 years. Succeeding generations of leaders and followers within the business have bought this mind-set to the business. This is what the brand taps into and what the customers buy into.

“Manufacturing isn’t a skill it’s a culture. It’s a culture and by both understanding your product and making it, you come to love it.  That’s part of the magic.”

“Culture always trumps the business plan.  Therefore before you can have a truly flexible and efficient business plan or even one that works, you need to understand your culture and have the means of continuously analysing and controlling it.”

Design Process

“We start to become aware of new product introduction opportunities possibly at a Trade Show  or through a customer enquiry. Once we have spotted a potential opportunity we have to decide if there is a real market opportunity.

Stage 1:

“We first develop the sound a product will make. Nothing could be more craft-focused than this because this process involves huge inherited or tacit knowledge, the personal experiences of people working here and an understanding of the processes so that they develop products we can actually make.
“Having established the sound we will start making some kind of rig or prototype that makes the sound, what it looks like at this stage is irrelevant.

Stage 2:

“The next process is to make it aesthetically pleasing and of the right size to be practical. Following this we make proper prototypes bringing all those things together. We test it by asking our customers to try it out.

Stage 3:

“Once we’ve got it right we use designers – inside the business, or outside the business – to come up with a final design as something that we’re capable or producing.

Stage 4:

“We make the product.  One of the things about sound is that much of design is determined for you by what you’re trying to achieve.  Musical instruments have to be a certain way to make a certain sound so we are to some extent controlled by the sound we want to make in our designs.

New Product Introduction

“Customers no longer want to buy just a functional product. They demand great design, great quality and more than ever they want to experience a story. Authenticity is as sought after as the best. If you have both —your market position is secure and sales can be built from there.”

The company has around 20 patents on products. They see this as part of the mix, but not key. For small companies it is nearly impossible to enforce – being too costly — but having the patent can put others off.

In developing new products Acme also has a policy of bringing out new models to plug gaps in their offering, even where they believe it unlikely to generate the 10% of additional sales required.

“For example, we brought out a very small safety whistle to attach to rucksacks and to go into first aid safety packs,” Simon continues.  “Our existing product was good but too big and if we hadn’t produced something a competitor would have done, resulting in loss of market share. If they were to break in with that type of product it could have been an inroad to expanding into our existing sales.”

Production

Manufacturing is ‘vertically integrated’, with all production undertaken in-house, not just the main processes: brass pressings, polishing, plating, soldering and plastic injection moulding, but also tool making and machine making for their own specific requirements.

“Hand making craft skills still dominate the manufacturing process, this alone encourages those who make the product to love it for its own sake —-an exemplar of their skill. Customers too love that individual “feel” to each item made. Knowledge, once a trial and error experiment, is now guided by the latest understanding of sound , its perception by the human ( and sometimes animal )ear. An ever-developing understanding of how the manufacturing process, increasingly automated , captures that understanding and finds a way to offer that to the market at affordable prices.  The product itself may well be low tech, but the making often isn’t, sonic welding and induction soldering are two instances. Over the last decade the Acme tool room has built four machines unique to our production and improving throughput.  This demonstrates the combination of product knowledge and process knowledge essential to craft production.”

R&D and Innovation

R&D costs run at around 5% of turnover each year.  If they believe they’re onto a real winner this sum can rise to as much as 8% of turnover.  “But,” says Simon, “we have to feel very confident to break the budgetary rules.”

“These figures include not only new sales, but replacement sales,” he adds.  “No matter how hard we try to develop new products for specific niche markets, as they are all whistles, customers often replace old popular models with new ones.  We find this unpredictable.  And of course product life cycle models apply to us too – so it is worth having something new regardless of generating new business. Perhaps the hardest decision is to invest in new items when you know it is only like-for-like replacement.”

“We’re continuously engaged in R&D and we work with partners including Staffordshire University looking at producing holistic solutions and with Birmingham University on technical challenges using their laboratory facilities and knowledge base.

“A culture of constant innovation sends messages to both their workforce and customers.  Our employees know that we’re always seeking ‘new and the better’ offers.  Our customers realise that in working with an innovative company it’s always worth taking a look. They may not always buy, but you are constantly on their hit list.  ‘What’s new?’…is the constant question at Trade Fairs. You must answer it.”

“New ideas are inevitable.  Through new product development we are constantly redefining our relationship with our marketplace. Trends change, contexts change, but we keep up with the times through constant experimentation. The cliché is true – ‘the future never sleeps and neither should we’. There is a real buzz about success and the excitement of change. People enjoy it and in turn love our product. The one who will win is one who can constantly innovate : but we need to bring to that process of innovation a highly competitive edge.  If you innovate often enough the competition is constantly behind you.  But we also protect our innovations with a ‘hard-nosed’ business plan.”

STEM-Led Innovation or Brand and Craft-led Innovation

“STEM, like any acronym, is a ‘means’.  In understanding this it is a descriptor, not a prescriptor.

“If we look back at the long term reason for an SME, in the context of scale and time – it is small, insignificant and emanating from a singular point in history – surviving the test of time.

“When so many have gone out of business, been destroyed by cheaper competition, been taken over by bigger companies, failed to be part of contemporary culture – how can a low tech craft manufacturer have survived?

“If a firm starts now it is most probable that it would have ‘high tech’ in its DNA. Imagine there had never been a whistle what would it be like invented today. They would probably say, ‘what robotics would we need to make this?’. This business started 144 years ago when people did not have all this equipment. People manipulated metal by hand and with tools to create the product, a whistle and by and large still do. What’s the difference? One process would be regarded as a high tech manufacturing process, the other could be viewed today as low tech and outdated. Whilst both would be turning out the same product, both companies would have a very different culture and outlook.

“What is the impact of the date of founding on the subsequent development of the company?

“The Culture that was established when Acme was founded 144 years ago and the traditions of the industry were set then. Those traditions echo down the years to create a culture and a set of values that cannot be reproduced elsewhere, are unique to the company concerned, generating its own sense of pride and capturing the hearts and minds of the succeeding generations. The Japanese have a word for it, Monozukuri, meaning ‘manufacturing isn’t a skill, it’s a culture’ implying the love of making a product.

“By the measures of the age the technology we use is inevitably regarded as past its sell by date. No future for yesterday’s methods and understanding. To accept this is to belie the difficulty of doing anything well – of machining a piece of metal to the finest tolerances and the dedication to doing that in the certain knowledge that that kind of perfectionism will lead to the finest product of its type made anywhere in the world.

“What is the meeting point of craft and production? Craft is knowing how to achieve the sound and moving quickly to an acceptable but probably not the ultimate solution.

“The technology is then saying how do we achieve this? Can our machinery cope or do we need new machinery. Material selection is also a technology based issue in that if we take the reed in a dove call or a horn it has to vibrate so many cycles per second and we have to be advised of that by a supplier.

One of the functions of a good designer is that they will have that kind of knowledge. For example, we used to make a brass reeded duck call. By making it in plastic we were able to make it adjustable.
The brass we adjusted a few times and it would snap. The plastic won’t break after a million bends.

“We have a very significant knowledge in –house of materials and where metal is concerned we understand why cartridge brass is better than simple brass for a vibrating reed. But material science has expanded so dramatically we cannot possibly keep pace with the developments. Craft needs technological back-up. Technology needs the inspiration of craft.”

Performance

As with all products the law of diminishing returns applies. Small differences in the design and production can make massive differences in performance.

“Where whistles are concerned this is equally true. The whistle maker who understands that the relationship between the angles of design are critical to creating the right frequency that is the most audible and most easily distinguishable in the context of use and who relentlessly pursues that perfection will create the ideal product. To then translate that piece of individual knowledge into mass production so that none of its excellence is lost and to love the outcome in such a way as to make sure that as the tooling wears and shifts over time, as the millionth product comes off the production line, that this product is nevertheless equal to the first one that was produced.

“Functional challenges faced by every whistle produced at Acme include – easy to blow, easy to hold, right frequency, loud and light.  None of overwhelming technicality, but put together more challenging than might be thought to be the case, especially by those who have never visited a factory.

“The easy way to judge the veracity of this is to look at the letters from customers when you have got it wrong and the failure of the competition, even when they try to copy. A very traditional example of this is the Boatswain’s pipe, a naval whistle, that must produce two octaves of sound of specific frequencies to enable a well-trained and experienced hand to produce a whole series of naval commands. Each whistle is hand-tuned with small adjustments being made to the item being produced by machines before it has the exact sound quality required.  Whilst Middle C is well defined, the harmonics sitting around it can produce tonal variations that enrich the sound and make it ‘special’ however difficult that may be to define. Perhaps the final appreciation of this is the comment made by one of the twentieth century’s most famous composers, Shostakovich, who was a fully qualified FIFA referee, who said, ‘the difference between my Acme Thunderer and just a whistle is the difference between a Stradivarius and a violin’.”

HR

Acme Whistles employs people from B6, B19 and B20 believing in supporting their local community. Staff development is an ongoing business with a training programme constantly in progress.

With up to 20 languages spoken in Aston, Acme has piloted some innovative techniques for bringing together their ethnically diverse workforce. Theatre in the Workplace, Kathak dance classes and housing Birmingham’s first art gallery dedicated to Indian art are examples – even leading to the development of their Meteor Whistle – the largest whistle in the world.

Distribution and Retail

90% of the Acme Whistles turnover is sold via distributors worldwide.  In this case for every pound sold retail the margin is split, between Acme, the distributor and the retailer on the basis that for every £1 to Acme the distributor gets £1 plus 33% and the retailer multiplies this sum by 2.6.

With the internet opportunities have opened up for Acme to deal directly with customers who increasingly come to them when they have any problems, replacements are needed quickly or for special orders in small quantities.

They are naturally keen to continue working with their international distribution channels but internet sales have grown to 10% of total sales and offer an opportunity for higher margin growth.

The company is asking itself whether there is an opportunity to design a new lifestyle oriented product range drawing on elements of their heritage, as a range which would not normally be offered through traditional distribution channels but which might target trends affecting customers’ lifestyles currently unavailable.

For Acme Whistles to do this it would need to introduce greater numbers of products, developing its network of designers alongside a greater brand presence online, requiring brand and web design, graphic and packaging design, but with the aim of generating higher returns on lower volumes to grow the brand whilst supporting existing sales channels and businesses.

Business Support and Networking

“The demise of Business Link made no difference to our business and the start of other initiatives has similarly had no impact on us. The support available that has made a difference has come through the research and expertise available in the university base in the Midlands. We train all our own people so we meet our own needs in this respect too, although again we have been working with local universities to provide more management training support.

“For medium sized business, once you have learned the ropes of exporting I am not sure UKTI are as helpful as they might be. I’ve had reports from them saying Chinese whistles are very cheap and as yours are more expensive we recommend you do not consider exporting to this market, which is clearly very simplistic.

“If they organised a Birmingham Made Me type of collaborative exhibition in target markets, combined with their Meet the Buyer events this could be very helpful.

“Manufacturing Advisory Service, is, on the other hand, very helpful. They do get and understand manufacturing and we have used them many times over the years to find new suppliers, ways of doing things, buying machinery including robotics which we are currently installing and we are full of respect for their team.

“Regarding Advantage West Midlands and the Greater Birmingham and Solihull Local Enterprise Partnership (and my comments are based on what how these have impacted us as a business to-date) neither has had any impact on us at all. AWM had £300m in its last year which for the whole of the West Midlands is really not much and certainly is not going to match the sums being invested by our competitor city regions in Europe.

“In terms of what more could be done it would be good to develop a regional score card which looked at real measures that every business understands, for example corporate turnover, corporate profitability, skills gaps as measured against sectors of businesses, infrastructure as rated by business and consumers.  But not complex measures that no one really understands obscured by how they are calculated.”

Summary and Conclusions

Acme whistles exhibits all the traits of authentic brands –with 144 years since they were founded by Joseph Hudson who invented the police whistle, they live their stories with little need to play up a mythology.  During that time they have made 460 million whistles, purchased by an estimated 18 million users worldwide. 70 employees make 83 products which are exported to 119 countries, representing 85% of their output. “We’re a Birmingham-based manufacturer exporting handmade whistles to China; that’s not meant to be possible, but we’re doing it!” says Chief Executive, Simon Topman.

Success is put down to a curious culture driving ‘constant and original improvisation’ – with two new products introduced annually; to a love of making things – borrowing the Japanese term,monozukuri to explain how this permeates their culture.
Heritage goes not only to authenticity, but can be harnessed as a practical and commercial driver, providing many anniversaries as the focus for marketing innovations and brand collaborations – including with Zippo and emerging fashion brand, Sophie Hulme, opening up further opportunities for innovation and product extension.

Acme sees itself as a brand combining its iconic founding, being first and best over many decades at what it does, having complete belief in the quality of their product and partnering this with good commercial instincts.

The design process focuses on ‘providing customers with the right sound for the right occasion’. Developing the right sound is the first step preceding all other actions. Once produced this is coupled with the aesthetic – it must be the right size, light, easy to hold, practical for the market in question.  Above all, says Simon Topman, “customers no longer want to buy just a functional product. They demand great design, great quality and more than ever they want to experience a story. Authenticity is as sought after as the best. If you have both your market position is secure and sales can be built from there.” Production is vertically integrated with all production undertaken in house and with hand-craft making skills dominating the production process.

On average 5% of turnover is spent on R&D which is a constant process working with local universities.  Along with the search for new products this also sets the cultural tone – a constant quest for the new. Whilst the firm produces low tech craft manufactured products, they need to be, “easy to blow, easy to hold, right frequency, loud and light. None of overwhelming technicality, but put together more challenging than might be thought to be the case,” says Simon Topman.
Conclusions
Acme whistles, unique in so many ways, is another example of a manufacturer selling a low tech, value product into export markets worldwide, including China – and demonstrating that the UK can do it, despite its own lack of belief in it!.

Simon Topman is clear that the most important elements of support within the West Midlands ‘ eco-system’ have been delivered through links into specialist expertise within local universities and through advice from MAS on areas such as robotics. Other areas where support could be useful provided would include joint marketing and sales promotion into overseas markets with other lifestyle brands from across the region, including for example WB the Creative Jewellery Group, AGA Rangemaster, Pashley Cycles and others.

Mr Topman recommends developing a regional scorecard to keep and track in a very visible way, the region’s competitive position and progress in moving forward. He suggests using simple measures – corporate turnover and profitability, rather than measure such as GVA which are generally not fully understood.