McPherson's Consumer Products January 2020

THE VALUE OF TENURE

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ON LONG -TERM RELATIONSHIPS

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McPHERSON’S CONSUMER PRODUCTS

WE SPEAK TO MARK BRADY, SUPPLY CHAIN DIRECTOR AT MCPHERSON’S ABOUT HOW THE COMPANY LEVERAGES LONG-TERM POSITIVE RELATIONSHIPS WITH BOTH EMPLOYEES AND PARTNERS TO ACHIEVE SUSTAINABLE GROWTH

M

cPherson’s Consumer Products (MCP) is an Australian Health Wellness and

Beauty brand with a legacy that dates to 1860.

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MCP is a global company, distributing across Australia and New Zealand as well as in China, Singapore, the UK, Germany, and the Middle East.

Aside from marketing and distributing its own brands, it also engages with agency work. MCP is a category leader for several of its brands; Lady Jane and Manicare lead in pharmacy while Multix is the number one brand in the Australian grocery channel. Its company mission is to “create better ways for people and communities to thrive.”

According to Brady, “at MCP, we want to challenge the norm.”

Mark Brady has worked at MCP for eight years as the Supply Chain Director. By MCP standards, he is relatively new. His team consists of 90-100 people, subject matter experts in a variety of fields.

The average tenure within supply chain at MCP

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McPHERSON’S CONSUMER PRODUCTS

is 18 years. According to Brady: “We

Valuing employees has been key

leverage off this every single day. The

to MCP’s success. In its canteen

adaptability, learnedness and calm

area hang photos of employees who

temperament of this group means that

have 10+ years of tenure. Leadership

whenever we have new challenges,

and accountability are at the core of

we have experience to fall back on.”

creating a positive atmosphere. MCP

Brady’s background in operations

holds long-service award dinners.

has been key to his success in his

Hosted by Laurie McAllister, manag-

role at MCP. He is trained in Lean and

ing director at MCP, they are attended

Six Sigma. The two pillars of success,

by senior leadership, board members,

according to Brady, are the clear abil-

partners, and long-stay employees

ity to define processes and reliable

in milestone years of employment:

collaborative teamwork.

10, 15, 20, 25 years. “The ability for a

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“ WE HAVE TRIED TO ALIGN OURSELVES WITH KEY STRATEGIC PARTNERS WITH WHOM WE CAN DEVELOP A LONGSTANDING RELATIONSHIP” — Mark Brady Supply Chain Director McPherson’s Consumer Products

CLICK TO WATCH : ‘MCPHERSON’S CORPORATE VIDEO’ 07

company to find and retain staff is so important,” Brady affirms. Being an Australian-business based in Australia means employees are empowered to make decisions that affect the wider company. With 75 people working in the warehouse, safety is another priority at MCP. Its Occupational Health and Safety committee is led by employees. “It is key to us that our employees drive our safety culture,” Brady says, “we want people to go home as happy and safe as they came to work.” w w w.mc phe rso ns. com . a u

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“ THE ABILITY FOR A COMPANY TO FIND AND RETAIN STAFF IS SO IMPORTANT” — Mark Brady Supply Chain Director McPherson’s Consumer Products

MCP has been in a process of balanced growth. It is looking to enhance its primary Beauty branch while growing its Health and Wellness arm. In so doing, it aims to maintain its status locally while looking overseas for opportunities. China provides a massive potential market for MCP. There are 24 million people in Australia; there are 240 million people in the Chinese middle class alone. “This growing

E XE CU T I VE PRO FI LE

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Mark Brady Mark has lead the global supply chain area at McPherson’s for the last five years, after being promoted from his role driving continuous improvement and quality across the organisation. Mark has been able to lead the organisation’s supply chain through structural and operational change and efficiency improvement, enabling sustainability and growth within McPherson’s. With 20 years’ experience across operations and supply chain, Mark has worked within a number of industries including pharma, FMCG, food grade manufacturing, electronics and services delivery. As an engineer by education, Mark has a robust, analytical approach coupled with qualifications in continuous improvement methodologies, including Lean, Six Sigma and World Class Manufacturing. w w w.mc phe rso ns. com . a u

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domestic market and the overlaid China volatility brings forecasting challenges,” Brady notes. “We can have a 12,000 forecast for a given month and then get a purchase order for 90,000 with no warning.” As a solution, MCP turns to partnership with Access Brand Management (ABM), a reseller in China. Its direct-selling app has 3.2mn people registered. MCP also bought a small share in skincare contract manufacturers Aware Group, to help provide the continuous supply required thanks to its new links to China. The growth

“ DEALING WITH THESE MANY TYPES OF SUPPLIERS ALLOWS THE ADAPTABILITY AND FLEXIBILITY THE MARKET DEMANDS” — Mark Brady Supply Chain Director McPherson’s Consumer Products w w w.mc phe rso ns. com . a u

McPHERSON’S CONSUMER PRODUCTS

1860

Year founded

$4mn Revenue in US dollars

750

Number of employees 12

JANUARY 2020

has been phenomenal. MCP brand, Dr. LeWinn’s, has gone from selling AU$300,000 three years ago to AU$16mn last year, with projections of making AU$25mn this year. With the help of Aware Group and ABM, MCP manufactured and sold as much product in the months of May and June as it had in the prior 10 months.

“We have tried to align ourselves with key strategic partners with whom we can develop a long-standing relationship,” Brady explains. “Like our staff tenure, we have many relationships that are 10-15 years old.” For shipping, MCP has a 15-year relationship with Mondiale freight. For warehouses, it turns to its 15-year partnership with Concept Warehousing. New partners that join supply chain are heavily vetted, with an eye on a long-term future.

Partners range from larger companies that can scale to leaner companies that are agile. “Dealing with these many types of suppliers allows the adaptability and flexibility the market demands,” Brady affirms.

The launch of Dr. LeWinn’s R4 collage, Surge was the fastest and most successful launch in the pharmacy w w w.mc phe rso ns. com . a u

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McPHERSON’S CONSUMER PRODUCTS

channel to date, brought about thanks to partnerships with domestic partners such as Chemist Warehouse, Priceline and the virtuous cycle created with ABM and manufacturing partners Pharma Cosmetics. MCP has also recently started engaging in jointventure partnerships, buying 51% of a company’s shares and growing it until it is financially viable enough to be bought out. It acquired a stake in skincare brand Kotia, in tanning brand Sugarbaby, and in wellness company 14

Soulful. “The advantage of joint-venture platforms is that they allow MCP to go from a standing start,” Brady says.

“ IF I LOOK AT OUR SHARE PRICE TODAY STANDING AT MID $2.00. FOUR MONTHS AGO, WE WERE AT $0.75” — Mark Brady Supply Chain Director McPherson’s Consumer Products

JANUARY 2020

“We leverage all our strategic partnerships across a number of key suppliers to enhance the product offering capability in our brands.”

MCP comes from a history of change. Its origins in 1860 as a hardware and tools store saw it participating in the construction of the iconic Harbour Bridge. Although now operating in a different sphere, this legacy of adaptability continues. Four years ago, MCP was $68mn in debt. It has shrunk that debt to a tenth the size.

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In the last five years, MCP has exited

at our share price today standing at

eight different brands and business

mid $2.00, four months ago, we were

arms while inbounding 18 new ones. “It

at $0.75. That’s a phenomenal story

really hearkens to that flexibility,” Brady

and I feel proud, as all the supply chain

comments, “to take something that’s

team should, that we can add to that

new and be able to move forward with

outcome. It’s a great place to work and

it.” Looking to the future, MCP sees

I am glad to be here.”

growth, balancing domestic and new external customers. It is also in the early stages of considering machine learning and AI as tools for forecasting.

“We continue to be on the journey for further success,” Brady says, “if I look w w w.mc phe rso ns. com . a u

McPherson’s Consumer Products 105 Vanessa St Kingsgrove New South Wales 2208 Australia T +61 1800 651 146 www.mcphersons.com.au