Manufacturing Global - August 2014

A ugu s t 2 014

w w w.manufacturingglobal.com

HONEYWELL International: 100 years in aviation

Training For Transformation: Reaping the Benefits from Long Term Objectives Perfect Production: ERP, EAM & Smart Sensors Combine to Optimise 3D Printing

Nike Overhauls Its Lean Strategy

TOP 10: Manufacturing Locations

www.reassuringlyinexpensive.co.za Tel: +27 (0)31 767 1347

Don’t lower your standards.

Be driven by value.

In the current economic climate, it can be challenging to maintain one’s standards.

When presenting to the masses, where only large-screen projection leaves the right impression, one desires luxuriant, colour-rich images. Where red is red, green is green and blue is most definitely royal.

Fortunately those chaps at Christie know a thing or two about quality. Expert technical support, industry renowned reliability and now two reassuringly inexpensive models in the NEW Christie E Series.

Of course one has to make certain sacrifices, but as mother used to say ‘it never pays to lower one’s standards’.

THE E SERIES SINGLE CHIP DLP® PROJECTORS

when it matters.

edit o r ’ s c o mment

Fresh Impetus for Industry Stalwarts T w o o f t h e w o r l d ’ s most recognisable

brands in their respective fields are promising an era of development, and this month, we take a look at the intricacies involved in taking the likes of Honeywell Aerospace and Nike to an even higher stratosphere.

The former is leveraging its recent centenary in the aviation industry to signify its latest advancements in revolutionising the technologies used in aircraft manufacturing, and we spoke to EMEAI President, James Bryson to get a leader’s perspective on the anniversary.

Nike is undergoing a slightly more dramatic overhaul of its operations in an attempt to create a manufacturing revolution through a three pronged lean approach.

Elsewhere this month, Andrew Kindor of Infor analyses how 3D printing could be the final ingredient in producing ‘perfect production’, Gary Wyles of Festo Training & Consulting promotes the art of long term training for effective transformation, and we count down the top 10 countries primed for manufacturing prosperity at present.

Enjoy the issue!

Matthew Staff

Associate Editor matthew.staff@wdmgroup.com 3

Contents

FEATURES 26

8

People & Skills Training for Transformation: Manufacturers reap benefits from long term objectives

Leadership Honeywell International 100 years in aviation

Top 10

Manufacturing Locations

Technology

20

Perfect Production: ERP, EAM & smart sensors combine to optimise 3D printing

Nike implements efficient practices as it overhauls its manufacturing strategy

14

Lean

32 5

www.reassuringlyinexpensive.co.za Tel: +27 (0)31 767 1347

Don’t lower your standards.

Be driven by value.

In the current economic climate, it can be challenging to maintain one’s standards.

When presenting to the masses, where only large-screen projection leaves the right impression, one desires luxuriant, colour-rich images. Where red is red, green is green and blue is most definitely royal.

Fortunately those chaps at Christie know a thing or two about quality. Expert technical support, industry renowned reliability and now two reassuringly inexpensive models in the NEW Christie E Series.

Of course one has to make certain sacrifices, but as mother used to say ‘it never pays to lower one’s standards’.

THE E SERIES SINGLE CHIP DLP® PROJECTORS

when it matters.

Contents

62 WRS Group

68 SRXGlobal

54 MIG Steel Fabrication company profiles USA

76 FEMIA

46 Delkor Systems 54 MIG Steel Fabrication

Australia 62 WRS Group 68 SRXGlobal

latin america 76 FEMIA

94

86 Airbus Helicopters 94 Home PSI Pinturas

Home PSI Pinturas

7

LE A DERSHI P

HONEYWELL International: 100 years in aviation The world’s largest aircraft engine manufacturer has dictated aviation’s growth over the past century, but still believes the best is yet to come W ritten b y : M a t t h e w S ta f f

9

Leadership Honeywell Aerospace is spending 2014 celebrating its centenary in the aviation industry with a very concise strategy to bring further technological innovation to the sector over the coming years.

The division of American conglomerate, Honeywell International forecasts that the industry will see more technological developments in the next 25 years than over the past 100, and EMEAI President, James Bryson is confident that this familiar face will continue to be at the forefront, through its devotion to optimising the very latest technologies; in both its manufacturing process and its end products.

“Technically, modern airliners are a million miles away from Lawrence Sperry’s Curtiss C2 – the bi-plane Honeywell: Celebrating 100 Years in Aviation

10

August 2014

“…what is common between Sperry’s flight and any that you and I take today is the presence of Honeywell Aerospace technologies keeping you safe and comfortable” – James Bryson, President EMEAI, Honeywell Aerospace

that demonstrated first autopilot to the world back in 1914. Yet what is common between Sperry’s flight and any that you and I take today is the presence of Honeywell Aerospace technologies keeping you safe and comfortable,” he said Over the years, Honeywell has made a name for itself in delivering the most efficient, productive and safe components within both flying and space exploration arenas, to the point where a Honeywell product can now be found on every aircraft.

H O N E Y W E L L I nte r nati o nal 1 0 0 yea r s in a v iati o n

Lawrence Sperry’s Curtiss C2 bi-plane demonstrated first autopilot to the world back in 1914 Caption to the image In a recent statement written by Vice President of Global Communications for Honeywell’s $12 billion Aerospace division, Bill Kircos, he explains how a key aspect of the company’s success stems from its consistency and fresh outlook on upcoming trends.

“I am proud to be part of company that has accomplished so much and to work with so many smart and incredible colleagues – from those who have been with the company for more than 50 years to a generation of young and ambitious interns that

join us every summer,” he said.

“Honeywell Aerospace is 100 years “young” – yet flying is as magical and exciting today for hundreds of millions of people as it was over a century ago. With great employees, customers, partners and suppliers, we hope to continue changing the game and making a difference in people’s lives every day by providing innovative solutions, products and services that continue to remind us of the possibilities of flight.”

A brief trip down memory 11

Leadership

“…looking at the innovation that is coming down the line and how it is set to change the way we fly, I believe the best is yet to come” – James Bryson

lane emphasises Honeywell Aerospace’s influence on the aviation manufacturing industry; from providing the science to aid the first controlled flight 100 years ago, to the introduction of refrigeration turbines, weather detection systems and innovations in cabin pressurisation which allowed flights at higher altitudes.

“Honeywell’s equipment is installed on virtually every jet in the sky, be it power and propulsion systems for improved performance, cabin and environmental systems to keep you cool and relaxed, or avionics in the 12

August 2014

cockpit that help pilots fly safer, more efficient flights,” Bryson continued.

These latest innovations are capitalising on the most modern of technological advances; in some cases developing existing devices, and in others, engineering entirely new components.

“We are also developing the first electric taxiing system, innovating upon our 3D weather radar, improving the power and fuelefficiency of propulsion engines, revolutionising the global air traffic management system, growing our

H O N E Y W E L L I nte r nati o nal 1 0 0 yea r s in a v iati o n

service businesses among so many other areas,” Kircos continued in his 100-year anniversary article.

A large part of Honeywell Aerospace’s manufacturing efforts at present are revolving around the customer experience in terms of simplicity and the passengers in terms of connectivity.

Leaders from within the organisation have subsequently introduced the Honeywell User Experience (HUE), comprising functionality where customers can maintain and repair aircraft engines using as little as 13 hand tools.

Bryson explained some more of

the developments that Honeywell Aerospace plans to bring to fruition over the next stage of its long journey: “Our innovation in aerospace is set to continue. Doing away with holding patterns, providing broadbandlike wi-fi in flight and enabling aircraft to save fuel through electric taxiing are just a few of the benefits Honeywell Aerospace will bring to the market in the next few years.

He concluded: “We have already come a long way since Sperry’s 1914 Autopilot but, looking at the innovation that is coming down the line and how it is set to change the way we fly, I believe the best is yet to come.”

Honeywell remain devoted to the customer experience

13

TEC HNOLO GY

Perfect Production: ERP, EAM & smart sensors combine to optimise 3D printing Andrew Kinder of Infor looks at how 3D printing might be the final ingredient in manufacturers’ quest for perfect production in 2014 W ri t t e n B y: A n d r e w K i n d e r , S e n i o r D i r e c to r , I n d u st r y & S o lu t i o n M a r k e t i n g , I n f o r

15

T E C HNOLO G Y Manufacturers are getting serious about perfect production in 2014 if latest figures are to be believed. According to a recent survey of over 1,000 European IT professionals, this year is set to witness a significant increase in implementation or upgrading of ERP systems by 59 percent, compared with 43 percent in 2013.

This is echoed by a Morgan Stanley survey of 150 CIOs in the US and Europe who say they will spend 4.5 percent more on IT with budgets focused on cloud computing,

Andrew Kinder, Senior Director, Industry & Solution Marketing, Infor

16

August 2014

‘While selecting the right ERP application is key to super-charging the factory floor, it is by no means the panacea’ ERP and analytics software.

But while selecting the right ERP application is key to super-charging the factory floor, it is by no means the panacea. If machines break down mid-production and cannot be fixed quickly, production stalls and profitability starts to leak.

A revolutionary new discipline – 3D printing - has been heralded as the solution to this problem.

Through building up layers of materials to build solid objects, on demand, at relatively low cost, 3D printing can replace parts quickly.

So instead of being in the hands of suppliers’ lead times for components, it can immediately create and swap out a broken part, minimising downtime and ensuring production schedules are adhered to.

E R P, E A M & s ma r t s en s o r s

InforMingle alerts application

In fact, earlier this year, BAE Systems announced that RAF Tornado fighter jets have flown with parts made using 3D printing technology in a move that is hoped to cut the RAF’s maintenance and service bill by over £1.2 million in the next four years.

And if further proof as to the credibility of this seemingly sci-fi shift was needed, US space agency, NASA plans to send a 3D printer into

space this year in order for astronauts to produce parts and tools.

But the truth is, without the connectivity and intelligence of supporting systems and smart sensors, 3D printing simply cannot deliver on the hype which surrounds it.

Working Smarter Smart sensors have become commonly used to provide data in a 17

T E C HNOLO G Y

‘This combination of intelligent ERP, proactive EAM with smart sensors, and some spaceage wizardry in the form of 3D printing represent the right ingredients for manufacturing success’ range of areas; from tracking pollution levels and health and wellbeing, to planning a house purchase or mapping out a route for a morning jog.

On production lines, smart sensors are embedded within machinery and act as radars which track data on temperature, utilisation rates, line speeds and power ratings.

Through monitoring equipment continuously, these smart sensors send alerts to engineers or production managers in the same way we send tweets, to flag anomalies before they become problems, 18

August 2014

Infor VISUAL ERP Overview preventing downtime and minimising disruption to production.

Of course, the data from the sensors requires a means of analysing and applying it. This is where the third piece of the jigsaw – modern, proactive EAM software - comes into play.

These systems capture the data, build intelligence around it, in some cases using CAD diagrams of the highlighted part, and act on it through forwarding alerts to the right people, building real-time responsiveness into business processes.

This contextualised information can

E R P, E A M & s ma r t s en s o r s

be visualised immediately in a modern social media-esque interface on a tablet, so that production managers can get a live, detailed overview of the production line; from bill of materials and schedules, to servicing intervals and malfunctioning of a machine part.

With the sensors and systems having predicted equipment failure, identified the failing part, analysed the cost for repairing or replacing parts, allocated resources and scheduled the action, 3D printing then completes the process through enabling engineers to instantaneously

print a part such as a filter or motor in order to respond to these alerts.

This combination of intelligent ERP, proactive EAM with smart sensors, and some space-age wizardry in the form of 3D printing represent the right ingredients for manufacturing success.

Blended together using modern middleware and presented via a centralised platform where information is contextualised and organised, perfect production can become a genuine reality for manufacturers in 2014.

19

Le a n

Nike Implements Efficient Practices As It Overhauls Its Manufacturing Strategy The world renowned clothing manufacturer has sited environmental concerns as well as rising labour and supply chain costs as it undergoes a three-pillared internal revamp of its lean operations W ritten b y : M a t t h e w S ta f f

20

August 2014

21

Lean Nike is world-renowned for equipping some of the planet’s most elite athletes for competition, but is currently embarking on an internal competition of its own as it looks to modernise and streamline its production processes.

Labelled a ‘manufacturing revolution’, the idea behind Nike’s new strategy is to redefine how its products are made, from what material, and at what cost; always keeping in line with the most efficient results possible.

The three-pronged approach comprises people, the supply chain and the environment and it

is already reaping benefits despite being in its early development.

Manufacturing Modernisation Empowering workers has long been a focus within the leading sportswear brand, but the manufacturing revolution has paid special attention to optimising this empowerment and creating a more collaborative environment among the more elite manufacturing roles.

This comes from one of the key pillars of the new strategy, titled ‘Manufacturing Modernisation’ which consists of making

“We are constantly integrating more sustainable ways of working across our business. But we recognise that many issues facing business and society are greater than one brand can solve alone” – Hannah Jones, Chief Sustainability Officer & Vice President, Innovation Accelerator

22

August 2014

N ike I mplement s E fficient P r actice s

Nike is using a three-pronged approach

value-added steps in production more efficient through the utilisation of automation in processes such as cutting and stitching.

The reduction of manual labour means that workers throughout the supply chain will need to be more highly skilled, with the necessity for more manual jobs being almost eliminated.

Manufacturing Innovation The subsequent savings in labour costs are being pumped back

into the supply chain in what makes up the most significant arm of the new strategy. ‘Manufacturing Innovation’ is the second pillar and is focusing on finding entirely new ways to manufacture products, leveraging the enhanced automation being utilised within Nike factories.

At present, 85 percent of all Nike footwear and three quarters of branded apparel is made on lean-certified lines and the aim is to dramatically increase the 23

Lean percentage by the end of 2015.

In a similar vein to its labour reductions, Nike has put a similar emphasis into its supply chain overhaul, already cutting its supply chain base by 14 percent over the past two years from more than 900 factories to less than 800.

The comparative rise in both production and sales suggests its lean focus is already paying off, however.

The end target is to bring manufacturing as close to the market as possible, but through a much more sustainable progression than may have been seen in previous efforts. Reducing logistics costs is

another by-product of the long-term strategy, while in the immediateterm, quality control and supplier evaluation is taking precedence.

Nike hopes, through its Sourcing and Manufacturing Sustainability Index, to create a value chain consisting of suppliers exclusively who have achieved bronze or better in the index by 2020.

Manufacturing Excellence As part of the index, its sustainability report requires significant improvements in terms of efficiency and the reduction of energy and waste usage, under its final pillar,

Lean-certified manufacturing will increase

24

August 2014

N ike I mplement s E fficient P r actice s

‘Manufacturing Excellence’.

Its CO2 reduction goal for 2015 is 20 percent while water reduction and the use of more sustainable materials is also pivotal across its manufacturing operations.

“We are constantly integrating more sustainable ways of working across our business. But we recognise that many issues facing business and society are greater than one brand can solve alone,” Hannah Jones, Chief Sustainability Officer & Vice President, Innovation Accelerator said in a recent statement.

“To achieve systemic change we must understand risk and embrace innovation as a way to accelerate positive impacts at scale.

Collaboration and unconventional partnerships will be critical to our collective ability to design more sustainable business systems.”

As part of Nike’s recently released Sustainable Business Performance Summary, the company has also outlined its increased efforts in using more sustainable materials such as ColorDry and Flyknit technology, to help reduce waste and the overuse of chemicals.

This will also be evident in the

“…we believe that sustainable innovation that benefits the athlete, the company and the planet will play a key role in the future of our business” – Mark Parker, President & CEO suppliers that Nike looks to partner with over the coming months and years, to ensure future sustainability throughout the entire value chain.

“Nike’s success as a growth company is tied directly to our culture of innovation,” Nike President and CEO, Mark Parker explained as part of the summary. “Today we believe that sustainable innovation that benefits the athlete, the company and the planet will play a key role in the future of our business.

“We believe business has a critical role to play in meeting the challenges of a changing world – addressing climate change, preserving the earth’s constrained resources, enhancing global economic opportunity – not by reducing growth but by redefining it.”

25

People & Skills

Training for Transformation: Manufacturers Reap Benefits from Long Term Objectives Transformational Training Requires Stamina and Faith, according to Gary Wyles of Festo Training & Consulting

26

August 2014

27

People & Skills In manufacturing we have a severe lack of skills and, as an industry sector, we face a number of choices.

We can recruit young and train, look for transferable skills and train for industry knowledge, or look further afield for relevant skills and train to fit our needs.

Central to each of these is the word training. But training as a standalone event doesn’t work and won’t transform your business. If training is seen as a commodity that is delivered once and used to tick the personal development checklist it will not deliver any long-lasting value.

Research shows that we forget more than 50 percent of what we learned within five days and this can rise to 80 percent after ten days. There are many things that can improve this, such as the quality of the training, trainer style, venue, mix of theory to practice and so on, but the impact of training can be limited and the return on investment of time and money very low.

To maximise the value that the company and the individual gain from the investment, training and other learning interventions must be considered as part of an ongoing process for manufacturing organisations.

28

August 2014

Invest in the Long-Term Transformational training requires stamina and faith in a long-term strategy. It does not start with the individual; instead it is embedded in every element of the manufacturing organisation’s strategy. We call this the seven steps to transformational training: 1. Establish Purpose and Vision Transformational training is underpinned by a clear understanding of the organisation’s purpose and where it wants to be in the future.

Without a compelling vision and mission it is impossible to orientate learning interventions so that they take you to the place that you want to be.

2. Values and Attitudes To change the culture of an organisation, to transform it to be fit for the future, values and attitude need to be at the centre. These should not be

T r aining f o r T r an s f o r mati o n

Proper training boosts profits posted on a wall but intrinsic to how you expect each employee to behave.

3. Leadership & Management Principals Leaders and managers in particular need to exhibit and uphold the values and behaviours required in the organisation. If a leader doesn’t embody the organisation’s values and a manager’s day-to-day techniques are not aligned, there is little chance that employees will adhere to these principals. Values should underpin

‘To maximise the value that the company and the individual gain from the investment, training and other learning interventions must be considered as part of an ongoing process for manufacturing organisations’ 29

People & Skills every recruitment, development and retention strategy that is developed.

4. Strategy Mapping Manufacturers will need to have a medium term strategy that is mapped across the organisation as a whole, and for each individual business unit.

Interestingly, once the previous work has been put into place – what you want to achieve, where you want to get to, how you want to achieve it – defining the strategy is a much simpler and straightforward exercise.

5. Skills Development With the future clearly laid out, individuals need to be encouraged to define for themselves the skills they will need to deliver this future through their own personal development plan. The manager’s role here is first to challenge the individual using coaching skills to ensure the plans

30

August 2014

‘Before embarking on a long-term programme of transformational training, manufacturing leaders need to be aware of what they’re letting themselves in for’ are robust then to endorse, and finally enable the development plans. Of course this approach takes effort from the manager and individual but results in, not only a training plan aligned to the future needs of the business at an individual level, but a motivated and engaged employee that has defined the future for himself and is far more committed to ensure it is successful.

6. Consistent Communication Every employee should know what the organisation is trying to achieve.

They should understand the part that they play in achieving the vision of the company. They will be engaged in the journey, and in manufacturing we need engaged employees. They are more productive, stay with us for longer and are central in delivering the strategy.

T r aining f o r T r an s f o r mati o n

Engaged workers is key 7. Performance Metrics This is one area that is often overlooked in manufacturing organisations. It is not just a case of measuring performance through an annual appraisal. Performance metrics, like the Balanced Scorecard, link an individual’s objectives to what the organisation is trying to achieve.

Equally, it’s about understanding the goals and aspirations of every one of your employees and giving them opportunities combined with reward and recognition for their efforts.

Keeping the faith Before embarking on a long-term programme of transformational training, manufacturing leaders need to be aware of what they’re letting themselves in for. It can be painful, and is not a quick win; it requires faith and stamina as well as a commitment to investment that will hold even when times are tough. Yet, the benefits are boundless. Investing in transformational training means that manufacturing organisations will truly be fit for the future.

31

TOP 10

Top10

Manufacturing locations While China continues to dominate Deloitte’s annual countdown of the most prominent manufacturing countries, we take an angle of suitability this year, via Cushman & Wakefield’s global index Written by: Matthew Staff

Cushman & Wakefield’s Global Manufacturing Suitability Index takes into account numerous factors, including costs, risks and conditions, before breaking them down further into sub categories, to establish the top 30 countries ripe for manufacturing success.

33

top 10

10

Mexico

Arguably above all other countries in this list, Mexico is the one to watch out for in the years to come, with all conditions primed perfectly for rapid manufacturing growth.

With a strong expertise established in key sectors, the country is able to capitalise fully on its low wage costs, high productivity levels, strong trade links and efficiencies in terms of energy usage.

Volkswagen production in Mexico

34

August 2014

M A N U FA C T U R I N G L O C AT I O N S

Harley Davidson production in the USA

09

USA

Inevitably making the countdown, but perhaps surprisingly not coming out on top of the North American contingent, the US has long been the flagship

for driving the entire region’s manufacturing sector forward.

In terms of pure capacity and technological prowess, the country is still leading from the front in that respect, but growth is slowing and costs are rising.

35

top 10

Indonesia has broad base of manufacturing capabilities, including the production of packaging

08

INDONESIA

While many countries pride their manufacturing success on activities in aerospace, automotive, electronics and machinery engineering, Indonesia is quietly making a 36

August 2014

name for itself in other areas.

Providing numerous opportunities in the fields of cosmetics, textiles, packaging and FMCG, the country is just one of many Asia-Pacific nations emerging into global manufacturing forces.

M A N U FA C T U R I N G L O C AT I O N S

07

RUSSIA

In arguably the most rapidly developing manufacturing market, Russia is now leading the way in the EMEA stakes, while Turkey also

narrowly missed out on the top 10.

The country’s rising affluence in the sector is making it an increasingly appealing option for companies looking to set up businesses or relocate.

Russia is developing quickly, meeting the demands of the industry

37

top 10

06

CANADA

Edging ahead of neighbours USA, Canada’s growing prevalence in the manufacturing industry and top six place in Crushman Canada is world’s fifth largest exporter of pulp and paper products

38

August 2014

& Wakefield’s list comes largely from its position as the least risky location of all surveyed countries.

Canada has risen to prominence through capitalising on its strengths in exporting and resource-based manufacturing.

M A N U FA C T U R I N G L O C AT I O N S

China is a market leader in affordable highly skilled labour

05

CHINA

Despite topping Deloitte’s index of global manufacturing locations through its worldleading capacities, it falls

short in the suitability index.

Rising labour costs and poor risk ratings means that the country isn’t lauded for volume and capacity alone, but improving education standards and R&D developments balances out the deficiencies still.

39

top 10

Thailand has a highly technical skilled workforce

04

THAILAND

One in Asia who has potentially developed ahead of schedule is Thailand, whose strive to be at the centre of the ASEAN Economic Community in 2015 40

August 2014

has led it to premature heights in the manufacturing sector.

While not necessarily competing with the likes of China in terms of volume, the standards and processes put in place has set the country up perfectly for future growth in the sector.

M A N U FA C T U R I N G L O C AT I O N S

03

SOUTH KOREA

Overcoming the negatively impacting slowing of the global economy, South Korea continues to thrive in the manufacturing industry through its role in some

of the sector’s key areas.

Packing a punch in automobile, technology, marine and semiconductor manufacturing, the country is also placing a lot of its emphasis in green and renewable initiatives to create a positive outlook for the future too.

South Korea has a long established history in ship building

41

top 10

02

TAIWAN

Establishing itself as one of the most prominent bases for manufacturing among some of the world’s leading brands, Taiwan’s reputation comes largely off the back of its huge influence on the electronics industry.

Despite a lack of natural resources, its strong relationship with China continues to offset any shortcomings, in order to capitalise on its healthy infrastructure and relationship with western markets.

42

August 2014

top 10

Malaysia is one of the least expensive locations, making the country a leading option for brands looking to outsource manufacturing operations

M A N U FA C T U R I N G L O C AT I O N S

01

MALAYSIA

While the likes of China and Taiwan maintain their historically impressive activity at the head of the manufacturing table, there is an emerging selection of neighbouring Asia-Pacific nations rivalling, and now surpassing, standards across the sector.

Malaysia is heading this pack, scoring impeccably in Cushman & Wakefield’s Global Manufacturing Sustainability Index in a number of the key areas monitored.

Its relatively low score in the cost rankings was complemented by its equally impressive low risk rating, which many of the emerging markets are honing in on in differentiating themselves.

As one of the least expensive locations on the index, the country also benefits from its own resourcefulness; making the country a leading option for brands looking to outsource manufacturing operations, in the same way that the likes of Taiwan has previously developed.

While Malaysia leads the way, Vietnam and the Philippines are two more countries in the region bringing in considerable manufacturing business, as Asia’s lockdown on the upper echelons of the sector holds strong.

45

Delkor Systems

How Delkor Systems has Fo Entrepreneurial Culture

Employee work-life balance sparks wellbeing and creativity at packaging equipment manufacturer Written by: Abigail Phillips

Produced by: Michael Magno

ostered an

y

47

Delkor Systems

O

ver the last four decades, Minnesota-based Delkor Systems, Inc. has built a thriving manufacturing business by helping consumer product companies automate the packaging of their products. Listening closely to customer needs and investing heavily in research and development Delkor has introduced a steady stream of inventive machinery – and novel packaging designs – that are making brand owners more productive and profitable.

In a time when many manufacturing companies were cutting back on R&D and marketing, Delkor President and CEO Dale Andersen expanded the engineering staff and committed the company to expanding its product line to satisfy the wider packaging market.

Delkor specializes in machinery that forms, loads and closes secondary packaging, which includes the cases, cartons, trays and shrinkbundled packages. These are used to transport products throughout the supply chain, from manufacturing to retail shelves.

Andersen acquired Delkor in 48

August 2014

the late 1990s. Prior to that, the company founder had divested some of its technology and business to other packaging companies.

Andersen took over the Delkor name and the core of the company’s business, which primarily served the packaging needs of the dairy industry. By expanding the number and types of machines available, Delkor is now serving more packaging segments among Fortune 500 companies. As a result, over the last decade the company has experienced average organic growth of 12 percent annually, with revenues growing from $20 million in 2004 to $65 million today.

Delkor recently consolidated its operations in a new 114,000 sq. ft. facility in St. Paul, MN. Andersen says Delkor takes pride in producing high-tech equipment here in the U.S. that can compete globally. He says the company’s location in Minnesota is a strength since the area is a strong packaging center and it provides a highly skilled talen pool.

At Delkor, the entire team of 170 employees is encouraged to find new ways to automate packaging.

USA

All sales staff are Delkor employees and have a strong engineering background that helps them understand and visualize customer requirements. They are backed by a team of 23 engineers who translate these needs into efficient machines that meet or exceed customers’ requirements. Delkor’s manufacturing staff all have received technical training. Many also double as service technicians, using their extensive experience in building the machines to ensure the equipment is properly installed and is optimized for maximum productivity.

Continuous Improvement Packaging is a product used daily by virtually all consumers.

Changing consumer requirements are driving packaging changes, such as sustainable design, singleservings, flexible pouches, zippered enclosures, microwaveability and other convenience features. These modifications have prompted further developments in secondary packaging. Delkor has anticipated many of these changes and adapted the design of their equipment to take advantage of these transformations.

Mass merchandisers are playing an increasingly important role in w w w. d e l k o r s y s t e m s . c o m

49

Keenline designs, engineers and manufactures conveyance systems to convey raw or packaged food products.

(920) 685-0365

Minarik is a proud partner and provider of linear motion to Delkor Systems, a manufacturer of high-quality, innovative end-of-line packaging equipment.

1.888.646.2745 | www.minarik.com

www.keenline.com

Delkor Systems the types of packaging used in different retail channels. These range from convenience stores to wholesale club stores, and each has its own shipping, display and size requirements.

For a brand owner or a copacker, this means their machinery must have the flexibility to handle a range of packaging. Until very recently, many packaging lines were dedicated to producing a single type of product. Now, machines must changeover between packaging formats more frequently, and packagers are seeking to minimize the downtime during each change.

An engineering executive at a leading U.S. food company recently said that the old mantra for packaging operations was “Bigger, faster , better.” Now that company’s expectations have changed. They are seeking packaging equipment that is “Adapatable, flexible and efficient.” Delkor has been ahead of the curve in adapting its business model to this new mantra. Examples of its success include designing machines that can changeover in less than three minutes, which prevents lost production time.

USA

In addition, Delkor has added “intelligence” to much of its packaging equipment that can significantly increase production efficiency. Inspection devices allow the machines to detect and selfcorrect many packaging faults without stopping and requiring aid in removing defects from the machine.

Another factor that separates Delkor from many equipment manufacturers is that it often either designs or helps design new packaging – not just the machines themselves. Packaging must protect and sell the product, but sometimes these goals clash. By working with its customers, Delkor has helped develop packaging that effectively achieves shelf impact while delivering efficient manufacturing.

An example is the patent-pending Delkor Cabrio Case™, which is a shipping case that easily converts to an attractive shelf-ready tray ready for store display.

An Entrepreneurial Culture While engineers are developing new machinery to better accommodate packaging goals, Delkor provides an inclusive, entrepreneurial w w w. d e l k o r s y s t e m s . c o m

51

Delkor Systems

culture that allows each member of the team to contribute creatively and technologically. According to Andersen, “One of the things I am most proud of is that we’ve been able to develop an innovative culture, and it’s not easy to do that.

It means that we have to have a culture in which you hire the right type of person. Innovation presents a lot of challenges. As soon as you accomplish one challenge, you’re on to the next. You have to be creative, willing to accept failure and use that failure to move on to success.

It takes a special culture to really reach a higher level of innovation.

Management has to be attentive, and you have to have the right 52

August 2014

team. I think that we’ve been doing that over the last few years, and we need to make sure that we’re bringing the right people on board that fit that role.”

Delkor also employs a productstrategy team, representing eight departments, that decides the development projects that the company will undertake. Among the departments represented are sales, marketing, engineering, operations, product-line developers, as well as the CEO, to ensure Delkor determines the best approach to fulfilling customer needs and requests.

Employee Wellbeing Employee satisfaction and work-

USA

life balance also are primary goals for Delkor.

The company aims to minimize staff turnover and create career opportunities for employees to pursue within the company to provide a higher quality of life. Delkor is one of the few companies that provide daily fitness classes, including yoga, in which around 70 employees participate.

These classes, held in an on-site fitness center, provide employees the opportunity to meet new people from other departments as Delkor rapidly expands its workforce. The fitness classes also work as a way to promote a healthy, active lifestyle to improve heart health, among various health benefits.

A majority of Delkor’s business is concentrated in the food and beverage industries, where it serves numerous multinational companies.

In planning for the future, Delkor continues to expand its product lines to meet the needs of a growing customer base, primarily based in North America, but expanding into other areas outside the U.S.

Company Information Industry

Packaging Equipment headquarters

St. Paul, MN founded

1973 employees

170 revenue

$65 million+ products/ services

Automated equipment for forming, loading, closing and inspection of packaging

w w w. d e l k o r s y s t e m s . c o m

53

MIG Steel Fabrication:

Growth and Progress at MIG Fabrication

Operations Manager Richard Gast discusses MIG Steel Fa capabilities and new expansion into Nashville Written by: Sasha Orman

Produced by: Justin Burkinshaw

G Steel

abrication’s range of project

55

M I G S t e e l Fa b r i c at i o n

Meharry Medical College Nashville - Turner Family Center

Steel has been the strong backbone of the construction industry for well over one hundred and fifty years. As a fabricator structural and miscellaneous steel for commercial and industrial projects, Lexington-based MIG Steel Fabrication supports the construction industry throughout the Southeast United States with highquality products and responsive customer service.

A Balance Between Industry and Art The projects underway at MIG Steel Fabrication encompass 56

August 2014

a variety of building types and display the company’s wide range of manufacturing capabilities.

Ranging from multi-story university facilities, such as the 507 ton Turner Family Center at Nashville’s Meharry Medical College, or the 485 ton Nursing Building at Southwest Community College in Memphis, TN. MIG Steel has a proven record in steel fabrication for traditional structures.

However, some projects reflect a more complex vision by the architect and MIG Steel Fabrication has shown a unique capability in bringing these artistic projects to life.

USA

Woodland Playground - Memphis Tennessee

The recently completed Talley Tower at North Carolina State University’s Student Union is a prime example.

Standing over one-hundred fifty feet above the campus skyline and fabricated from sixty-six tons of open-lattice rolled steel, this unique three million dollar artisan project represents MIG Steel’s most creative project to date and a clear illustration of its ambition to be known as go-to specialist in architectural steel structures.

The project has required intense care, as well as cooperation between MIG and partner Anatomic Iron Steel Detailing. “In our shop we

divided the project into eight layers, and each layer was built complete on our shop floor, then shipped to a finish painter in Georgia and on to North Carolina State University where it was installed by our steel erectors,” explains Richard Gast, Operations Manager at MIG Steel Fabrication. He notes that the project is in its final stages being touched up with 3-coat high end urethane finish.

It is complex, challenging, and the kind of rare project that any company with a true passion for steel work hopes for. “There are not very many of them that happen – w w w. m i g c s . c o m

57

NCSU Talley Tower Nearing Completion

M I G S t e e l Fa b r i c at i o n when they do happen, if we get the opportunity or see that they’re out there, we definitely look for them,” says Gast. “Right now this is our first artisan project, and everybody in their minds wondered whether it could be done. But we got it done, it looks great, and it’s going to finish up nicely.”

Keeping Up with Techniques and Technology Steel fabrication may be an ageold industry, but technology has helped to push the trade forward and MIG Steel Fabrication is at the forefront. “We’re constantly looking for applications that can enhance our systems – it’s all process oriented, and we have to look for new developments all the time,” says Gast, noting that MIG is in the process of updating its FabTrol Systems steel fabrication software to boost efficiencies throughout the company’s value chain.

“Right now we’re adding modules to that which will allow us to directly access the databases at our warehouse companies and give pricing back within just a few minutes,” he says. “It will allow

USA

us to take the files we get for our drawings, import that information into FabTrol, and it will have pricing come back to us almost instantly.

We can know whether stock is available, have instant pricing, and be able to place orders much more quickly. That’s one interesting new feature that’s coming about for us.”

MIG Steel Fabrication also utilizes BIM and 3D modeling for the vast majority of its drafting projects, in order to better communicate with architects and designers. According to Gast, this method has saved construction projects valuable time and resources. “We’ve had chances to make corrections, where we’ve caught modeling errors between the two models that don’t work together,” he notes. “It saves some time and effort on the back side in not having to correct work that’s wrong.”

Still another standard that has become increasingly popular in recent years is LEED certification, as more businesses strive to improve their sustainability and carbon footprint. MIG Steel Fabrication caters toward LEED certification by improving their own products and w w w. m i g c s . c o m

59

M I G S t e e l Fa b r i c at i o n

Discovery Park - Union City Tennessee

production methods toward more sustainable standards.

“That’s an easy thing for us to handle,” says Gast.

Growth in the Future For MIG Steel Fabrication, the future holds growth in several ways. “I would say we are on a three year growth pattern and are looking for new technology in the shop over a three year period in order to enhance our fabrication,” says Gast. “As far as projects go, we’re fine tuning what we’re looking for in 60

August 2014

USA

projects as far as size and type and who we want to work for, and what types of contracts are best for us.”

Recently the company opened a new office in Nashville, in order to better serve its clients and expand its employee base, and thus far the prospects in the city have been promising. “With a good increase in permits being pulled, there is a lot of stuff out there on the boards for engineers and architects – Nashville’s going to be a good market for us for a good timeframe,” says Gast.

“We’re not stuck to Nashville – we’re looking through the whole Southeast right now, catching work down in Mississippi, Alabama, and some in Georgia – but in the near future, Nashville’s looking bright.”

But no matter where MIG Steel Fabrication sets down roots, it’s undeniable that the business is growing strong, ready to take on bigger and brighter challenges every day. “We feel like we’ve developed a good group of folks – we’ve got a great team going here, we can run 4050,000 shop hours a year pretty easily, and we’re developing constantly,” says Gast. “We’re a growing concern. Last year was a good year for us, and we expect this year to be even better. It gets better every year.”

Company Information Industry

Manufacturing headquarters

Lexington, TN founded

2007 employees

30

w w w. m i g c s . c o m

61

WRS Group Pty Ltd Written by: Sasha Orman Produced by: Nick Ledue

Paolo Bona / Shutterstock.com 63

W R S G r o u p P t y Lt d

Parent company of KooGa, Silverfern, Brant Media, Linebreak and BLK

WHEN IT COMES to the business of sport, WRS Group is at the forefront. Home to such sports apparel brands as BLK and Kooga, the Queensland-based business manufacturers innovative and cutting-edge performance apparel for professional athletes and enthusiasts alike. With its dedication to integrity, WRS Group is quickly growing to meet the needs of a worldwide audience.

challenges like finding ways to break into a new market. As a leading manufacturer of rugby apparel, WRS Group has chosen the sport as its point of contact with newer markets like the United States.

“It’s about bringing that authenticity,” says WRS Group CFO Michael Robinson. “The reason that we’ve chosen rugby as the vehicle into a number of new countries is that it’s a good entry sport with global recognition, and we’ve Growing into New Regions got to make sure we’re bringing With offices to serve consumers in authenticity in certain areas.

Australia, Japan, the UK and the US, There’s no point in us coming into there is no doubt that WRS Group the US market and sponsoring a is growing rapidly. Along with that basketball or baseball or NFL team, growth there come a host of new because we don’t have credibility 64

August 2014

A u s t r alia

as a manufacturer there. But when it comes to contact sports as in rugby or the AFLs or even football, as in soccer, we do have a strong history. It’s important that we choose the right vehicle to get into those areas – but without saying we’re a rugby brand because we are a multi-sport brand.”

WRS Group is also utilizing strategic partnerships to grow the business, sponsoring the official USA rugby team and seeking out colleges for similar relationships.

“The college sports culture in America is a giant and it’s only getting bigger,” says Robinson. “If we can partner up with universities in the States, it will be advantageous to the brand for sure.”

ability to scale up was impressive.

We’ve got just over 200 staff in Fiji, within the first six months, and that will go to 400.”

Cultivating a Strong Company Culture At WRS Group, building a spirited company starts with building a spirited team. According to Robinson, cultivating a strong corporate culture within WRS Group has been paramount.

“We know that we’re amongst sharks, so we want to make sure that people buy into the culture before they buy into the business,” says Robinson, explaining that making sure prospective employees understand the corporate culture is a vital part of the recruitment process. “We’d rather get the right Scaling Up Manufacturing person culturally than the right “It’s actually about scalability,” person from an educational point says Robinson. “Our ability to of view, because they have to buy generate revenue quickly for teams into the vision. They have to buy into and capitalize on opportunities where we’re going as a brand. We’re needs to come from an in-house very clear on what our path is and manufacturing source, but what what our next five and ten years will happened is that in Australia we really struggled to find the staff to be look like, and the ability for people to grow with us is very important.” able to scale up. But Fiji has a long It is important that WRS Group history of manufacturing, so their w w w. w r s g r o u p . c o m . a u /

65

W R S G r o u p P t y Lt d employees are ready to invest in their company, because WRS Group as a company is dedicated to investing in its employees.

“We want to make sure that when people come to us, whether they stay for a year or the rest of their lives, that they actually have a better resume from working for us,” says Robinson. This means constant education, whether it’s training at Gold Coast Institute or cultural courses abroad at Oxford and Harvard. “We work across a multitude of different institutes,”

Robinson adds. “Investing in our team is a big part of what we do here.”

Working Within Core Values Another critical part of the company culture at WRS Group is the development of its four core corporate values, around which the business and its employees are expected to base their daily choices and actions. With these core values, WRS Group establishes itself as a business dedicated to: • Building relationships and

one world

one solution Manage your global workforce, wherever you are • Full or part managed payroll outsourcing service • Successful HR and Payroll implementations since 1983 • Australia processing centres • Human Capital Management as an option • Integrated Time & Attendance as an option

1300 376 684

sales@frontiersoftware.com

Human Capital Management & Payroll Software/Services

www.frontiersoftware.com

Offices: Melbourne, Sydney, Perth, Brisbane, Adelaide and Canberra Other offices: India, Malaysia, New Zealand, Philippines, Singapore and UK

A u s t r alia

partnership based on trust and integrity; • Treating everybody with respect and dignity; • Giving more than we take and to go the extra mile, and; • Ensuring that every touch point with WRS is a positive experience.

WRS Group holds to these values on an internal level, checking in frequently to ensure that its teams never lose sight of what sets the company apart. “We judge a lot a lot of our leadership group and our executive team and our normal team on those core values,” says Robinson. “If one trips up and we need to have a chat from an HR perspective, we actually start off the conversation around what core values were broken.”

These core values also inform everything from the company’s positive outlook toward finding innovation and inspiration, to the way that it maintains relationships with suppliers. “A core value of our business concerns how you treat people,” says Robinson. “What happens with the old model of apparel manufacturing, where it’s about finding the cheapest possible labor and treating people like a commodity, never worked for me – I think that when you treat people with respect and make sure that, when you go into any sort of negotiations, you’re going in to negotiate a draw and not a win, it gives you trust with your supplier, with your staff, with your distributors. It’s about building relationships.”

Company Information Industry

Sports Apparel Manufacturing headquarters

Queensland, Australia founded

1999 employees

100-200 revenue

$200 Million products/ services

The World Rugby Specialists Group was founded in 1999 and is a leader in the business of sports.

w w w. w r s g r o u p . c o m . a u /

67

SRXGLOBAL SRXGlobal Electronics Manufacturing Services Form Integral Element of Customers’ Businesses SRXGlobal provides a powerful suite of services that grant their customers a variety of ways to successfully extend their businesses.

Written by: Laura Close Produced by: James Hayes

69

SRXGlobal

Sydney, Australia Manufacture

SRXGlobal Electronics Manufacturing Services Form Integral Element of Customers’ Businesses SRX is a leading Electronic Manufacturing Service (EMS) company, committed to providing high-quality Contract Electronics Manufacturing. SRXGlobal is the single, largest EMS provider in Australasia with manufacturing facilities in Australia, New Zealand and Malaysia.

“We form an integral part of our customers’ businesses once they’ve made the decision to outsource their manufacturing,” says SRX’s 70

August 2014

Executive Chairman Joe Browne.

“We essentially act as an extension of their business. This is distinct from the traditional model of just being a commoditized EM supplier.

That’s not us. The key differential for us is the essence of being a necessary part of their business.”

Services SRX provides a powerful suite of services that grant their customers a variety of ways to successfully extend their businesses. As specialists in electronic manufacturing, SRX provides competitive advantage to OEMs, allowing them to focus on

au s t r alia

Circuit Board Manufacture

their own core business drivers such as New Product Development, Sales and Marketing.

Prototyping: Using experience and knowledge from volume production processes, SRX operates a dedicated fast-turn prototype department, using flexible and highly capable placement equipment.

Design for Manufacture & Test: Having a product optimised for manufacture is vital to achieve inbuilt quality and a commercially successful outcome. Advice on production methods and capability and the right test solution are key requirements for a ‘right first time’

product introduction.

Procurement: The Company’s improvement programme with key vendors encourages close relationships and promotes excellence in all aspects including quality, delivery and commercial performance.

PCB & Box Build Assembly: SRXGlobal can provide their customers with one of the most technically advanced placement capabilities in the marketplace. They have many years of experience in the demands of fine-pitch placement and BGA technology.

Test: The Company also offers a whole host of capabilities including w w w. s r x g l o b a l . c o m

71

SRXGlobal AOI, Boundary Scan, Flying Probe, ATE, and custom functional test rigs with the capability to develop all of their own test solutions and programs in-house.

Service & Repair: SRX provides OEMs with after-sales support including end-to-end electronics repairs, service and logistics solutions.

Quality Management: SRX operates a Quality Management System structured around the requirements of ISO9001:2008, ISO14001:2005 and

Moulding Services PRECISION PLASTIC CUSTOM MOULDINGS Supporting SRX Global with the latest in plastic injection moulding technology Geared to deliver your product requirements from concept to production.

PPC Moulding Services Pty. Ltd. Australia 25 Miowera Rd Villawood, NSW 2163 | Phone +61 2 9780 9050

ISO13485:2004 and is registered as meeting the requirements of the standard with SGS. Building Rapport and Maintaining Flexibility SRX endeavors to target customers with the greatest potential for longterm relationships. “We target companies where we’ll be dealing with the senior management team, building rapport with the CEO or CFO,” says Mr. Browne.

He also points out that this targeted approach allows SRX to maintain a broader approach to their customers, because they do everything from early-stage design involvement, prototyping, NPI, volume manufacturing, etc.

Furthermore, when the Company’s Australian and New Zealand customers get to a certain size, SRX can take them to their low-cost manufacturing facility in Malaysia.

The Company’s approach to targeting customers also lends itself to SRX maintaining a greater degree of flexibility with their target customers. “When we’re dealing with customers in the U.S. and Europe, it’s more about

au s t r alia

“Depending on the geography of our customer, it can be a slightly different pitch, but the common theme is that we like to be that extension of their existing business.” Joe Browne, Executive Chairman our ability to build their product in its entirety and ship it to their customers in the Southeast Asia region — that’s our differentiator when we’ve got our Malaysian hats on,” says Mr. Browne. “Depending on the geography of our customer, it can be a slightly different pitch, but the common theme is that we like to be that extension of their existing business.”

Long-term Customer Relations SRX customers are granted an added degree of confidence knowing that SRX will be there with them the entire way. This is reflected in SRX’s sales cycle, which can take from two to three years from when the Company initially meets a potential customer to when they do an NPI build and launch into a volume-build manufacturer.

“Because it’s such a lengthy sales cycle, it has to be more than ‘We’re a few percent cheaper than your

incumbent’. Because someone who’s prepared to move from one manufacturer to another for a small price savings, if it’s all about price, invariably they’ll be leaving us in a year’s time for another few percent savings elsewhere, and that’s obviously not attractive to us,” says Mr. Browne. “By and large, most of our current customers have been with us for many, many years; 10 years in some cases.”

Continuous Improvement Strategies SRX’s comprehensive commitment to continuous improvement is one of the primary factors that motivate its clients to lock in for the long-term relationship. “For us, it’s investing in tools, equipment, software products, for example, that expand our capabilities.

Because we’ve been in business for such a long period of time — our business has been in operation w w w. s r x g l o b a l . c o m

73

SRXGlobal do with them,” says Browne. for nearly 25 years — we’re very A powerful local network also strong on the traditional operations helps the Company continuously side of things. Therefore, where we’ve put our focus is on products, improve. “We have a strong network we’ve developed with four such as Valor MSS, which is a or five local design houses who software suite that allows us to we consider strategic be more involved allies. We meet with with our customers “We never had a in the design customer come to us them quite regularly. stage — design for yet who’ve asked for They are involved with brand-new products manufacture, design for test, component us to build a product and brand-new technologies, and selection, to make that is beyond our being in that network sure components capabilities.” Paul helps us receive selected fit in with Appleby, CEO early notice of the our existing supply next technological chain — to make sure advancement, innovation or that we can deliver the best cost. improvement in the pipeline,” says Those are the areas where we are always focusing on expanding what SRX’s CEO Paul Appleby. we can do for our customers,” says Additionally, SRX has the Mr. Browne. traditional suite of Six Sigma, operational performance Being a privately owned standards, LEAN manufacturing, business, SRX has a degree of etc., in place. And each of the flexibility from an entrepreneurial GM’s that run the operational parts perspective, which again fits with of the business — the Company targeting OEM’s that are similar in has a GM in New Zealand, one in size to their own business. “Their Australia and one in Malaysia — spend with us is very significant they all come from very strong OEM to both parties. We look for more flexible ways to set up commercial backgrounds, with very strong arrangements and expand what we engineering and manufacturing 74

August 2014

au s t r alia

skills, so all of that is very well embedded within everything SRX does.

Large Business Manufacturer of the Year SRX bring together the key elements that their customers demand, offering the IP protection, high quality, process control and ease of doing business in Australia, combined with their lowcost country sourcing capabilities and their genuine passion to help their customers succeed.

As such, SRX is the fresh winner of the 2014 Large Business Manufacturer of the Year awarded through Business Victoria, an organization of the State Government of Victoria.

“We never had a customer come to us yet who’ve asked for us to build a product that is beyond our capabilities,” says Mr. Appleby.

Company Information Industry

Manufacturing headquarters

Sydney, Australia employees

400 revenue

$70 Million products/ services

Prototyping, Design for Manufacture & Test, Procurement, PCB & Box Build Assembly, Test, Service & Repair, Quality Management

SRX Circuit Board w w w. s r x g l o b a l . c o m

75

MEXICAN ASSOCIATION OF AEROSPACE INDUSTRIES Written by: Luis G. Lizcano, General Director; Pamela Arellano, Assistant

77

latin ame r ica

E

stablished in November 2007, FEMIA® has over 65 members generating over 5.0 billion U.S. dollars of products and services exported in 2012, growing nearly 24 percent.

Based on industry figures, the 2013 conservative growth potential is 13 percent.

FEMIA is a nonporfit organization recognized by the Federal Government. It covers the Mexican Republic, and its purpose is to bring national and foreign corporations within this sector to provide synergy and leverage from lessons learned.

Based on a 20 percent average growth in aerospace companies since 2004, FEMIA® with the support of the Mexican government, has created the “Pro-Aereo” Program, Pro-Aereo is a National Strategic Aerospace Industry Initiative having key strategies, milestone and goals through 2020 as outlined below: Key Strategies: 1. Promotion and development of internal and external markets, defining our niches and creating the instruments to support our con continuous growth.

Eloscan

“We work closely with aerospace associations in other countries and regions GIFAS, ADS, AIA-USA, AIAC, Aerospace Ontario, AAE, TEDAE, LBD” w w w. f e m i a . c o m . m x

79

M E X I CAN A S S OC I AT I ON O F AERO S PACE I NDU S TR I E S

Turbine interior

Helicopters

Aircraft interior

80

August 2014

2. Strengthen and develop our aerospace industry capabilities with a linked Supply Chain. Develop local suppliers and encourage cluster development throughout Mexico.

3. The development of the necessary human assets of the industry, with well defined technical and training programs and education-industry links.

4. Development of the necessary technology including specialized clusters, new areas of technology, R&D labs and development of new materials.

5. Development of the public-private programs required to assist the growth of the industry, with an institutional frame, Governmental leadership, incentives and financing,

latin ame r ica

Turbine interior

international covenants and including infrastructure, certifications required by the industry, logistics and technical centers.

Milestones to be reached: *The establishment of a formal coordination and administrative-management mechanism between industry and government. *Active manufacturing participation in international programs to access new technologies and markets. *To enact the establishment of a formal “buylocal” strategic program. *The establishment and implementation of “industrial cooperation” compensation systems to benefit corportions established in the country.

“Exports from the aerospace industry were higher than in 2013...”

w w w. f e m i a . c o m . m x

81

M E X I CAN A S S OC I AT I ON O F AERO S PACE I NDU S TR I E S

Welding

*To create specific support and incentive programs for the aerospace sector. *An access to a specific financial line for the aerospace industry. *The Opening of a Proof Testing Aerospace Lab to service the industry. *To design, to develop, to manufacture and to assemble an engine module. *To support the assembly of the first series airplane with 50% local content. * To place our country as the first aerospace service HUB in Latin-America.

Goals though 2020: *To be within the 10 largest suppliers of the aerospace industry in the world in exports. *To reach over $12 billion USD in exports a year. *To have over 110,000 workers in the aerospace business. *To reach 50 percent of local content in our raw materials and products in the aerospace industry.

Mexican aerospace facts: *Mexico is amongst the 14 largest countries in the world with an active aerospace industry. *Large supplier of OEMs, Tier1 and Tier 2 corporations in this sector, with over 300 suppliers of spare parts, raw materials and specialized machining for the aerospace industry. *We are targeting to get as many producers

82

August 2014

latin ame r ica

Chemical Processing

of raw materials of the aerospace industry to increase our national content. *Mexico`s (DGAC) and U.S. (FAA) signed the Bilateral Aviation Safety Agreement (BASA), where the Federal Aviation Administration (FAA) recognizes the General Direction of Civil Aeronautics of Mexico (DGAC) as an Agency with full capacity to certify. w w w. f e m i a . c o m . m x

83

M E X I CAN A S S OC I AT I ON O F AERO S PACE I NDU S TR I E S

“It is important to know the growth of the aerospace industry�

Turbines

84

August 2014

*Mexico joined the Wassenaar Arrangement December 2011, this global multilateral arrangement on export controls for conventional weapons and sensitive dual-use goods and technologies. Mexico will soon be joining the

latin ame r ica

Nuclear Supply Agreement, the Australia Group and the Missile Technology Control Regime. *Over 5.4 billion U.S. dollars of export of goods and services in this sector are a result of more than 266 different industrial processes in 2012, with a 24 percent increase. *Mexico has free trade agreements with 44 countries in the world, which gives corporations a virtual free or lower tariff operational environment. *Mexico is the lowest cost country of NAFTA, with great logistic advantages form its unique geographical location, closest to the largest market in the world; enjoying the same time zone and industrial practices. *Mexico has showed extraordinary manufacturing flexibility, proving attractive prototype fabrication abilities

Company Information Industry

Aerospace Country

Mexico services

Business representation Number of a ss o c i a t e s

65 members Key people

Luis G. Lizcano (general director), Pamela Arellano (executive assistant w e b si t e

www.femia.com.mx

w w w. f e m i a . c o m . m x

85

Innovation in the Sky: Aerospace leaders in Mexico

Written by: Rebecca Castrejon Produed by: Taybele Piven

87

Ai r b u s H e l i c o p t e r s Conquering flight since 1992 Established in 1992, the Franco-German-Spanish Eurocopter Group is a division of EADS, a world leader in aerospace and defense-related services.

The Eurocopter Group employs approximately 22,000 people. In 2012, Eurocopter confirmed its position as the world’s No. 1 helicopter manufacturer with a turnover of 6.3 billion Euros, orders for 469 new helicopters and a 44 percent market share in the civil and para-public sectors.

Overall, the Group’s helicopters account for 33 percent of the worldwide civil and parapublic fleet. Eurocopter’s strong international presence is ensured by its subsidiaries and participations in 21 countries. Eurocopter’s worldwide network of service centers, training facilities, distributors and certified agents supports more than 2,900 customers. There are currently more than 11,780 Eurocopter helicopters in service in 148 countries.

Eurocopter offers the most comprehensive civil and military helicopter range in the world and is fully committed to safety as the most important aspect of its business.

In México With clients such as the Presidency of the Republic of Mexico and the Mexican Navy, Eurocopter de México offers manufacturing, sales and after-market service to Central America, the north zone of South America and the Caribbean.

Eurocopter expanded its global industrial footprint and enhanced the company’s presence 88

August 2014

M anufactu r ing G l o bal

“It is very satisfying to see the AS350 B3e adapt perfectly to the diverse operating conditions of the Mexican terrain” – Serge Durand, CEO of Eurocopter de México

in Mexico in 2013, with the inauguration of a new manufacturing center of excellence in Querétaro, which is expected to produce high-technology aircraft structural metallic components. Mexican President Enrique Peña Nieto attended the event, along with other key government, local and Eurocopter officials.

w w w . e u r o c o p t e r. c o m . m x

89

Ai r b u s H e l i c o p t e r s “The importance of Eurocopter’s industrial commitment to Mexico is demonstrated by the role of Querétaro’s as the sole manufacturing source for all the aircraft components it will produce,” sats Serge Durand, CEO of Eurocopter de México.

Airbus Helicopters employs around 300 people at its facilities in Mexico City, Veracruz and Querétaro. The company has several regional support centers located around the nation offering enhanced maintenance and repair services to clients. Additional facilities are being planned for several other regions around the

“Large quotes usually go at the bottom or top the wide text column, only one per spread, followed by the credit name and position” – Name of person, Company position www.acb-ps.com | acb@acb-ps.com | www.cyrilbath.com | sales@cyrilbath.com

M anufactu r ing G l o bal

United States, including the Northeast and Gulf of Mexico.

Innovations This 2014, An Airbus Helicopters AS350 B3e helicopter achieved a new record in Mexican aviation history today by landing on the country’s highest peak, the 5,610-meter-high Pico de Orizaba (also known as Citlaltépetl).

“It is very satisfying to see the AS350 B3e adapt perfectly to the diverse operating conditions of the Mexican terrain,” says Durand.

Supplier profile

- ACB - Aerospace Metal Solutions

ACB and CYRIL BATH are the world leaders in aerospace metal forming solutions.

The Group offer includes: - Design, manufacturing and installation of machines for metal forming (Stretch forming, Elastoforming, Hot Forming, Superplastic Forming, Linear Friction welding…)

- Supply of related simulation softwar - Parts manufacturing in its own factories Thanks to its experience as press and parts manufacturer, the Group can provide turnkey solutions starting from simulation, tool design, parts development up to Turnkey workshop Website: www.acb-ps.com

w w w . e u r o c o p t e r. c o m . m x

91

Ai r b u s H e l i c o p t e r s

In addition, a level D full-flight simulator will be operational in 2016. Airbus Helicopters has committed to expanding and tailoring its customer support operations for helicopter transport providers serving the growing oil and gas production and exploration sector – for which the company is the leading rotorcraft supplier.

This will involve new resources for the EC175’s introduction in the Gulf of Mexico – the world’s busiest area for offshore helicopter activity – including parts and spare supplies available at the Dallas/Ft. Worth, Texas depot of the company’s U.S. subsidiary, Airbus Helicopters, Inc.

M anufactu r ing G l o bal

Expansion Plans The Mexican Ministry of the Navy (SEMAR) is continuing its 2013-18 naval aviation modernization and expansion plan through the procurement of 10 Airbus Helicopter AS565 MBe Panthers, two EC225 LP helicopters, and a single Bombardier Challenger 605 aircraft, according to SEMAR’s outreach unit (UNICOS).

Company Information c o m pa n y

Airbus Helicopters (EUROCOPTER) Industry

Aerospace headquarters

This procurement accounted for a combined MXN 8.651 billion (USD 668 million) investment announced in early July for unspecified aircraft types.

Ciudad de Mexico, Distrito Federal, Mexico founded

1992 employees

This article will continue in the September Issue…

300 revenue

USD +$95 million email

“The importance of Eurocopter’s industrial commitment to Mexico is demonstrated by the role of Querétaro’s as the sole manufacturing source for all the aircraft components it will produce”

gloria.illas@airbus.com w e b si t e

www.eurocopter.com.mx

w w w. f a c e b o o k . c o m / A i r b u s H e l i c o p t e r s – Serge Durand, CEO of Eurocopter de México h t t p s : / / t w i t t e r. c o m / A i r b u s H C w w w. l i n k e d i n . c o m / c o m p a n y / a i r b u s - h e l i c o p t e r s

w w w . e u r o c o p t e r. c o m . m x

93

More than 50 years producing colors: Specialty paint and finish solutions for every business sector Written by: Rebecca Castrejon Produced by: Jassen Pintado Interviewee: Javier Maldonado,Executive Director, Home PSI Pinturas Translated by: Rafael Tablado

95

P S I Pi n t u r a s Paint: the family trade

D Customer service in PSI Pinturas

uring its timeline, Home PSI Pinturas as a commercial brand has overcome multiple challenges, reforms from the government and even losses, after one of its plants was destroyed by a fire. All of these happenings have shaped and strengthened the company during its more than 50 years of operation since the road to success was firstpaved by founder Antonio Maldonado Bandini. Bandini started by producing brushes in the 1950s, until the family’s business opened after purchasing a small paint factory in the city of Puebla the fourth largest in Mexico.

Today, Home PSI Pinturas is a nationwide company offering products for homeowners, color solutions for businesses, painting products and franchising for entrepreneurs.

PSI Pinturas executive director Javier Maldonado is the founder’s son. He’s been tied to the

“We want to become the second-largest distribution network in Mexico” – Javier Maldonado, General Director of PSI Pinturas

96

August 2014

latin ame r ica

company since his childhood days, but it wasn’t until he attended college that his life inside the company began about 40 years ago. His first position was in the production area, afterwards he was in charge of deliveries, visiting clients and closing sales.

“I’ve been through every position in the company with satisfying results. This experience has provided me with complete knowledge about the tasks to be performed in every single area,” says Maldonado.

PSI Pinturas location in Mexico

w w w. p s i p i n t u r a s . c o m . m x

97

P S I Pi n t u r a s

Employees from PSI Pinturas

Going hand in hand with his position as Executive Director for Home PSI Pinturas and his entrepreneurial vision among the sector, the executive was also president of ANAFAPYT, A.C. (National Association of Paint and Ink Producers), and was in charge of COE (Business organizations counsel).

Competitive differentiation Home PSI Pinturas offers excellent products to local consumers. Its architectural line is the perfect balance between price and quality, providing flexible options for customers.

Availability and specialized service are also unique advantages of the company, whose franchising and increase of point-of-purchase 98

August 2014

latin ame r ica

plans bring them closer to customers nationwide.

“We are determined in innovation both productwise and also in terms of distribution,” says Maldonado.

Constant upgrading and modernization are part of the company’s policies, as Home PSI Pinturas became the second company in this sector to introduce online retail in the country.

Expansion within Mexico Home PSI Pinturas’ business vision focuses on three important points: 1. Franchising: Solid presence nationwide is strengthened by adding 50 franchises to this years’ distribution portfolio.

“Our vision is to expand our business via franchising, finding the right people being close enough to the target consumers we want to sell to, in order to cater to that area’s specific needs” – Javier Maldonado, General Director of PSI Pinturas

2. Repurchase: A very strong boom for franchises is expected.

3. Broadening of the national distribution network: after opening company-owned points of purchase in strategic markets, these outlets are to be franchised to executive entrepreneurs. Afterwards, results from market research will determine the opening of new outlets in areas where the product hasn’t had significant presence.

w w w. p s i p i n t u r a s . c o m . m x

99

P S I Pi n t u r a s Sixty percent of the company’s production is sold in Mexico City, where the distribution network growth is planned to grow in coming years.

Endeavors in Latin America

Business Unit

The introduction of Home PSI Pinturas’ franchising model into the rest of Latin America is a long-term plan for the company. The sector is being scouted and under research in nearby countries, such as Panama, where there’s a strong margin of purchase for paint products.

Franchising Home PSI Pinturas’ business units, either owned or franchised, are under continuous supervision, with their staff receiving constant training and dedicated attention to store opening and closing times, busiest sales hours, surveillance cameras, among other factors, enabling operators to provide the brand’s good service based in their experience and trade know-how.

“We want our franchisees to worry exclusively about helping customers and sales, that sums up our philosophy and every effort we do is directed to provide franchisees with timely, efficient, easyto-use tools for them to introduce the brand into their area’s specific markets,” says Maldonado.

100

August 2014

latin ame r ica

Javier Maldonado, General Director of PSI Pinturas

To make a success story out of every single franchise, franchisees are provided with the most complete information about their local market, including a segmented database and the projected take-off for the brand’s most popular products.

w w w. p s i p i n t u r a s . c o m . m x

101

P S I Pi n t u r a s Green solutions Home PSI Pinturas follows through with the global tendency of working with eco-friendly materials, such as their water-based coatings.

Some of their environmental-friendly efforts have introduced business solutions into intelligent buildings, for example using paints that produce cooler temperatures. “Thanks to our suppliers, new technology developments help us become more responsible with the environment. This tendency has two reasons: one, it has to do with conscience, and

latin ame r ica

the other reason is because our market demands such measures,” says Maldonado.

The executive added that there isn’t an established blueprint in the sector as to certify any “green products”, consequently the association took to the task of creating the guidelines and regulations to determine the ecofriendliness of products according to the solvents used in product preparation.

Vision-led suppliers The Home PSI Pinturas brand has become a

Showcase of brands from PSI Pinturas w w w. p s i p i n t u r a s . c o m . m x

103

P S I Pi n t u r a s

household name due in part to its suppliers’ reliability and the quality of the raw materials they provide. For their own part, the company’s engagement vision with business partners aims to get them involved with new product engineering.

“It is wisely stated that the customer comes first.

And it’s true, we owe our success to the market, hence to customers, but I think suppliers find themselves at the same level of importance,” says Maldonado.

104

August 2014

latin ame r ica

Company Information c o m pa n y

PSI Pinturas industry

Paint production and distribution, franchising headquarters

Puebla, Puebla, Mexico founded

1960 employees

80 revenue

Sketches for a colorful future

USD $76 million

“We want to become the second-largest distribution network in Mexico,� says the executive. The company has grown closer to different market niches and specific trades for sale of specialty solutions in paint, giving way to their prosperity on Mexican soil.

Em a i l ventas@psipinturas.com.mx

w w w. p s i p i n t u r a s . c o m . m x

105