NZ Manufacturer December 2015 by Media Hawkes Bay Limited

December 2015 Award winning supplier of SOLIDWORKS in Australia and New Zealand

www.nzmanufacturer.co.nz YEAR IN REVIEW 6 THE Meeting the needs of

MERRY CHRISTMAS

manufacturers.

NZ LED design opens door to global opportunity Business Lighting Solutions (BLS) is eyeing up lucrative growth opportunities, as the innovative New Zealand-based LED lighting manufacturer launches a new product line targeting the global food processing industry. BLS Commercial Director, Paul Stoddart, said the company’s new patented product Soffito was poised to revolutionise lighting in food production areas - an industry conservatively valued at over $1 trillion USD. The product has already stirred up significant interest amongst the

food processing industry in New Zealand, in advance of its release later this month. Stoddart said Soffito answers a number of key issues within the industry that were identified by BLS, following ongoing discussions with leading food processors aimed at better understanding the challenges and problems they face with current lighting solutions. “We found that most customers were using highly inefficient metal halide light fixtures, basically a tin box with a prismatic lens,” Stoddart said. continued on page 31

THE YEAR IN REVIEW A year of outstanding growth.

This Year We Saw • Manufacturing hold its own. • A successful resolution at the Climate Change Conference. • Phil O’Reilly moving on to bigger and better things. • Tim Groser calling it a day. • The continuing drama of the Auckland housing market. • A successful SouthMACH 2016 trade show in Christchurch. • XERO holding its own on world markets. • Fonterra consolidate.

needing

• The completion of the TPP. (Until it starts we don’t know what it means) • All Blacks doing it again! • The flag referendum. (Will John get his way?) • Continuing gaps tradespeople.

skilled

• El Nemo visiting us again. • Judith Collins back on the Front Bench. • Automation moving ahead. (Left) Tony Wightman from AFFCO with Mark Mathieson of BLS at AFFCO Horotiu check light levels at the facility.

• Back to the Future come back.

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THE SAFER FARMS PROGRAMME WHY A FARM SAFETY PROGRAMME? Farming kills more people than any other sector in New Zealand – 41 people have died working on farms in the last two years. That’s four times the number of fatalities in either forestry or construction. There are also thousands of serious injuries that lead to a loss of productivity and income for farmers. Farmers, their families and farming communities are directly affected, and bear the emotional and financial cost of deaths and injuries on the farm. This is why WorkSafe New Zealand is partnering with farmers and their families, sector organisations, and the rural community as a whole on Safer Farms, a comprehensive farm safety information and education campaign. WHAT IS SAFER FARMS? Safer Farms is a new way of working. It is a multi-year programme jointly funded by ACC. It aims to increase farmer awareness and understanding of their risks, support farmers to manage their safety, and build local and sector farm safety leadership. It will achieve this by: > Providing an easy-to-use toolkit and a comprehensive online resource - www.saferfarms.org.nz – so that farmers have clear health and safety advice and information. > A widespread media campaign in newspapers, magazines, on radio and online helping farmers identify and manage risks. > A seasonal information and education campaign highlighting the risks and how to manage them when they arise through the year (e.g. calving, shearing, picking). > Working with rural retailers to help them incorporate safety messages when dealings with farmers. > Training programmes to be delivered alongside rural stakeholder groups. > Education and information for rural kids delivered through school programmes and Dairy NZ’s Rosie’s World website. Safer Farms was not developed in isolation. It was built with extensive input from farmers, their

WSNZ_00155_FEB 15

communities and the sector to ensure the focus was on helping farmers to take ownership of their health and safety. WHERE CAN I GET MORE INFORMATION? Visit www.saferfarms.org.nz or call 0800 030 040.

KEEP SAFE, KEEP FARMING

SAFERFARMS.ORG.NZ

CONTENTS DEPARTMENTS

1 4 EDITORIAL 5 BUSINESS NEWS DEVELOPMENTS

ADVISORS

NZ LED design opens door to global opportunity.

Craig Carlyle

Punching above our weight.

Is Director of Maintenance Transformations Ltd, an executive member of the Maintenance Engineering Societyand the Event Director of the NationalMaintenance Engineering Conference.

Massive market available for exporters if they can perform. Trade Minister’s contribution to NZ’s success.

6–9 THE YEAR IN REVIEW

Meeting the needs of manufacturers. New export opportunities opening up. NZ establishing culture of collaboration with Vietnam industries. A YEAR OF OUTSTANDING GROWTH.

Catherine Beard

Is Executive Director of Export NZ and Manufacturing, divisions of Business NZ, NewZealand’s largest business advocacy group, representing businesses of all sizes.

10-12 MANUFACTURING TECHNOLOGY

Sustainable manufacturing: how ERP can help. PowerMILL chosen for new additive/subtractive service. Smart chip tells you how healthy your battery is.

13-15 THE YEAR IN REVIEW

China is calling – is your company China ready? NZ expertise growing choice for America’s agricultural sector. Opportunity is still aplenty in Australia. The emergence of South America.

16 BUSINESS 17 SUPPLY CHAIN

Magazine Features 2016.

Dieter Adam

Chief Executive, New Zealand Manufacturers and Exporters Association has a Ph.D. in plant biotechnology, consulting and senior management roles in R&D, innovation and international business development.

Excellence through Lean Thinking. A digital revolution in supply chain.

Lewis Woodward

Is Managing Director of Connection Technologies Ltd, Wellington and is passionate about industry supporting NZ based companies, which in turn builds local expertise and knowledge, and provides education and employment for future generations.

18 THE FUTURE OF MANUFACTURING

The development of smart manufacturing. Automotive suppliers must embrace faster innovation.

20 DEVELOPMENTS 21 ANALYSIS 22-23 FOOD MANUFACTURING

Sustainability at the heart of TRX Project. The Nine Pillars of Technological Advancement.

Dr Wolfgang Scholz

Australasian management strongly supports environmental initiatives. OneStep technology improves efficiency for milk production from powder.

Is HERA Director and a Fellow of the Institute of Professional Engineers NZ.

24-25 WORKSHOP TOOLS

Infrared camera solves issues with equipment. Bending tool reduce cycle times and waste. WeldCube keeps an overview of welding technology data. Enamelled piping range expanded. PlantPAx DCS integrates new enabling technologies.

Garth Wyllie

Is EMA’s Executive Officer, Manufacturing & Industry Groups. He is a strong advocate for the manufacturing sector. In his 20-plus years with the organisation Garth has managed a range of sector groups, with manufacturing being a key focus.

27 BUSINESS BOOKS Who Moved My Cheese? Talk Like TED. The Intelligent Investor. Unmade in China. A Curious Mind The Secret to a Bigger Life.

28–29 30 IoT 31 REAR VIEW ANALYSIS

21 28

Five big technology predictions for 2016. Is your shop floor ready? Manufacturing matters more than ever.

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NZ Manufacturer October 2015

EDITORIAL

Punching above our weight

PUBLISHER

Media Hawke’s Bay Ltd,1/121 Russell Street North, Hastings, New Zealand 4122.

MANAGING EDITOR Doug Green T: +64 6 870 9029 E: publisher@xtra.co.nz

CONTRIBUTORS

Garth Wylie, Dieter Adam, Catherine Beard, Tony Martin, Holly Green, Vishnu Rayapeddi, Wolfgang Scholz, Mike Arand, Charlotte Simcock, Tim Gibson, Andrew White, Cristiana Pedrosa, Vishnu Rayapeddi, Zhao Jizheng www.mscnewswire.co.nz

The Year in Review is again the highlight of this last issue of the year where key indicators for business have the light shone on them. This means where the opportunities are for the continuing growth of the manufacturing sector, how we maximise these opportunities and the tools and expertise required to get there. It has been a busy year for manufacturing in New Zealand, as one day becomes another and we realise again that business as a 365 cycle has no respite.

ADVERTISING

Doug Green T: + 64 6 870 9029 E: publisher@xtra.co.nz

DESIGN & PRODUCTION Kim Alves, KA Design T: + 64 6 879 5815 E: kim.alves@xtra.co.nz

I read, with some amusement, how northern hemisphere visitors see New Zealanders as thinking about the holidays at Christmas from mid-November, January as non-existent and making some effort towards ‘getting back in to it’ in February.

WEB MASTER

Julian Goodbehere E: julian@isystems.co.nz

PUBLISHING SERVICES On-Line Publisher Media Hawke’s Bay Ltd

No longer. We can’t afford to wipe away three months from the business calendar this way. We cannot treat the buyers of our expertise from overseas as being prepared to wait until we turn the lights back on.

DIGITAL SUBSCRIPTIONS E: info@nzmanufacturer.co.nz Free of Charge.

MEDIA HAWKES BAY LTD T: +64 6 870 4506 F: +64 6 878 8150 E: mediahb@xtra.co.nz 1/121 Russell Street North, Hastings PO Box 1109, Hastings, NZ NZ Manufacturer ISSN 1179-4992

Vol.6 No.11 December 2015 Copyright: NZ Manufacturer is copyright and may not be reproduced in whole or in part without the written permission of the publisher. Neither editorial opinions expressed, nor facts stated in the advertisements, are necessarily agreed to by the editor or publisher of NZ Manufacturer and, whilst all efforts are made to ensure accuracy, no responsibility will be taken by the publishers for inaccurate information, or for any consequences of reliance on this information. NZ Manufacturer welcomes your contributions which may not necessarily be used because of the philosophy of the publication.

Affiliates

In this issue New Zealand trade representatives from Australia to Europe, to South America and back again provide insights into where (and what) they see as the current business opportunities for New Zealand manufacturers. Insightful contributions are included from Dieter Adam, Chief Executive, New Zealand Manufacturers and Exporters Association; Wolfgang Scholz, HERA Director and Catherine Beard, Executive Director, ManufacturingNZ. After digesting all of the contributions one message is clear; take advantage

ASIA

MANUFACTURING NEWS

NZ Manufacturer December 2015

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of the opportunities available. Ensure your company has the tools to compete, is cost-effective, innovative and competitive with pricing and supply chain management. Over 2015, the biggest issue to raise its head, causing concern, is not a slowdown of the world economy or markets drying up – let’s face it, they won’t, there are always markets – it is the issue of automation and how to manage the workforce. Automation by its (current) nature leads to staff reductions as a means of cost cutting and maximising financial return. In a small country like New Zealand, we can’t treat people badly by making them redundant because of automation and robotics. Or can we? Let’s take automation steadily and be rational with our approach. We live in the age of Star Wars – but we don’t have to go there.

Best wishes and a peaceful holiday season. Doug Green, Publisher

Doug Green

BUSINESS NEWS

To accomplish great things, we must not only act but also dream. Not only plan but also believe. ~ Anatole France

Massive market available for exporters if they can perform A Lincoln University expert says New Zealand exporters will have to be on their game to reap the benefits of a huge trade access deal which has gone under the radar. Faculty of Agribusiness and Commerce lecturer, Dr Eldrede Kahiya, says while the Trans-Pacific Partnership (TPP) has dominated media recently, an equally significant trade-related development has gone largely unnoticed. In August New Zealand became part of the Global Procurement Agreement (GPA). Situated within the framework of the World Trade Organization, the GPA is designed to make it easier to compete for foreign government contracts.

He says this opens up a $2.65 trillion market for New Zealand exporters willing, and able, to exploit the opportunities it presents. However, New Zealand exporters really need to lift their game and neutralise disadvantages they face, he says, such as the sometimes difficult process involved with accessing international markets, our smaller scale and lesser market presence, higher costs, and an innate favouritism towards domestic suppliers. “Selling to an overseas government is not unlike playing on an unpredictable wicket which favours the home team,” he says. “Given that New Zealand is aiming to grow exports to 40 per cent of the GDP

by 2025, the importance of the GPA to the Business Growth Agenda cannot be overemphasised.” The GPA presents opportunities in areas of public spending such as defence, health, education, customs and border control, aviation, transportation infrastructure, postal services, and information technology. Dr Kahiya says tendering and evaluation processes will be much more transparent to bidders, giving New Zealand exporters a fair chance to win foreign government business, however, success depends fundamentally on understanding and adjusting to the unique challenges of selling to foreign governments.

Trade Minister’s contribution to NZ’s success Mr Groser finished his term as Trade Minister mid month prior to becoming New Zealand’s Ambassador to the US.

or steered valuable trade agreements for more than three decades, from the historic CER deal with Australia and numerous Asia and Pacific free trade agreements, to this year’s Trans Pacific Partnership Agreement.

ExportNZ Executive Director Catherine Beard says the Minister has negotiated

“It would be hard to quantify the dollar value to New Zealand of Mr

Trade Minister Tim Groser has made a massive contribution to New Zealand’s success, says ExportNZ.

Commercial & industrial growth

Employment growth

Groser’s work, but it is immense, and New Zealand exporters and others owe him a debt of gratitude. “We can also be assured that the new Ambassador to the US will ensure that New Zealand’s trade interests there will be vigorously promoted,” Catherine Beard said.

Economic output

Crime rate East Tamaki is the largest industrial precinct in Auckland with 2000 businesses and a growth rate higher than the regional average.

getba

getba.org.nz

Greater East Tamaki Business Association Inc.

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NZ Manufacturer December 2015

THE YEAR IN REVIEW

You will either step forward into growth or you will step back into safety.

Meeting the needs of manufacturers – Dieter Adam We are coming towards the close of another year, and it’s time to reflect on how it has gone for our manufacturers. I will also take this opportunity to give some updates on changes at the NZMEA in the last year and things we hope to achieve into the next year. Much of 2015 can be characterised with the usual volatility, both in markets and the exchange rate, which unfortunately seems to be all too normal in the current global environment. But we have also had a lot of bright spots in comparison to some recent years, notably the shift in the exchange rate, starting its long awaited correction from very high levels. After reaching record highs in the previous year, seeing the long awaited downward trend in our currency take shape through this year came as a relief. Exporters and import-competing manufacturers have felt the pressure of an overvalued currency for a number of years, peaking against the US$ in July 2014, but our dollar has steadily dropped since then and now lies at a far more reasonable level. Similarly for our biggest trading partner, Australia, our currency reached record highs in January of 2015, but again this has fallen back. This correction was helped along by the RBNZ cutting the OCR, better aligning our interest rates with those lower rates around the world. There are also suggestions we may see more cuts in the coming year. This long-awaited downward trend of the NZ$ will help manufacturers be competitive, both in global markets and when competing with imports,

as well as helping them claw back some margins – we hope this will help put manufacturers in a better position to invest in their businesses and innovation in the coming year, something that has not been easy particularly since the Global Financial Crisis. Use of technology is only going to become more important to manufacturers into the future, and keeping up will require investment. This will be important as we move into a more uncertain environment. World markets continue to be mixed, with some real opportunities, such as the continued strengthening of the US market, but some challenges, including the slow down in Australia and China, and other potential geo-political market disruptions. New Zealand’s domestic economy is also slowing, influenced in no small part by the depressed dairy prices – time will tell how this directly feeds into demand for manufacturers, but some supplying the dairy industry have noted a slowdown in demand. Here at the NZMEA we are looking forward to next year and how we can expand our services in ways that can best meet the needs of manufacturers and our members, and help them grow and thrive. One recent change we have made was the introduction of our new workshop

series, From the Factory Floor, which aims to connect those running manufacturing businesses in a peer learning environment on a particular topic. I started in the role as CEO of the NZMEA in May this year and have spent a lot amount of my time since then meeting with manufacturers who kindly opened their factory doors and shared their experiences with me. It has been an eye-opening experience to see the kind of adaptations our manufacturers have made to their businesses to stay globally competitive in an increasingly harsh market. We continue to see smart innovation at all levels – products, technical and business processes, and even wholesale changes in business models. I suggest the time has now come for the NZMEA to do the same. We live in a highly competitive world as far as business organisations in New Zealand is concerned, and we support and represent manufacturers who are increasingly time-poor and strongly focused on only engaging in activities that tangibly contribute to their own success. Over the next twelve months we’ll continue to critically look at our activities and what else we can do to offer support and representation that manufacturers can immediately see as adding value to their business.

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NZ Manufacturer December 2015

Adhesives, Calibration & Instrumentation

Designers of automation equipment

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Heavy engineering at its best

Design technology with AutoCAD

Vineyard equipment

Dieter Adam, Chief Executive, New Zealand Manufacturers and Exporters Association

We are looking forward to next year and how we can expand our services in ways that can best meet the needs of manufacturers and our members, and help them grow and thrive.

THE YEAR IN REVIEW

Concentrate all your thoughts upon the work at hand. The sun’s rays do not burn until brought to a focus. ~ Alexander Graham Bell

New export opportunities opening up - Catherine Beard, Executive Director, MaufacturingNZ As we near the end of 2015, it’s encouraging to note that New Zealand’s manufacturing sector is continuing its expansionary path and new export opportunities are opening up. At the time of writing this, the latest BNZ - BusinessNZ Performance of Manufacturing Index (PMI) results were from October 2015, and the seasonally adjusted PMI was 53.3 (above 50.0 indicates that manufacturing is generally expanding). Although this was 1.7 points lower than September, the level of expansion was still healthy. The sector has now been in continued expansion since October 2012. While a lot of the expansion can be attributed to the Christchurch rebuild and a catch-up of building and construction investment in the Auckland region, the manufacturing sector overall is looking increasingly resilient, having coped with a high NZ dollar through improved productivity. We have also seen consistent expansion from other sectors such as food and beverage. The high New Zealand dollar has allowed many manufacturers to invest in new plant and equipment and has encouraged manufacturers to move away from competing on price and to invest in innovation and quality to stand out from the competition. The monthly PMI survey has been a great way of keeping track of the industry trend, with comment and input direct from Kiwi manufacturers themselves. We are grateful for the BNZ’s ongoing support of this important exercise and to all the manufacturers around New Zealand

who fill in the 5 minute survey every month. Another survey that helps us keep a good handle on New Zealand’s manufacturing performance is the annual ExportNZ survey, in the field in August-September. The majority of respondents (49%) identified themselves as manufacturers. The main findings showed that the business outlook is positive, with 70% of respondents expecting business profitability to improve in the next 12 months, 22% stay the same and 6.8% to deteriorate. Most (54.6%) expected their business to employ more people with 38.5% employing the same and only a small number reducing staff (6.8%). The majority (68.8%) are able to access enough skilled staff to grow their business, however it is concerning that 31% said this is a constraint. Australia, China and Europe were the top three export markets. The EU is New Zealand’s third largest export market with $7.7 billion in goods and services last year. There are exciting prospects as the EU Commission has announced it is seeking to negotiate an FTA with us as part of its trade strategy for the next four years. The other positive trade news is that the successful conclusion of the Trans Pacific Partnership has the potential to boost the competitiveness of manufacturing exports with savings of $10 million per annum that are currently lost to tariffs. In addition to this New Zealand singing up to the WTO Government Procurement Agreement means New Zealand manufacturers now have access to tender for Government purchasing in

huge markets like the US and EU on an equal footing to local suppliers. This has been welcome news for manufacturing exporters that have otherwise had to do costly work-arounds to access these opportunities. For our more tech based manufacturers, there is some great growth happening. The 2015 TIN100 report is evidence of this. It shows that from 2014 to 2015, high-tech manufacturing revenue growth was up by 4.5% ($256m), ICT up 13.1% ($324m) and Biotech 8% ($30m). It’s interesting to note that the majority (74%) of this year’s TIN Rising Stars are operating in ICT – reflecting the recent growth of this sector. It’s not surprising to see ICT company Xero being ranked third in the top ten companies to watch (named No. 1 on the Forbes World’s Most Innovative Growth Companies List), along with Fisher & Paykel Appliances in the number one spot and Datacom second. The CEOs were asked for their key success factors for growth. A focus on an ongoing innovative culture was cited, along with maximising cloud-based technologies and pushing into the US market. In today’s competitive world innovation is becoming a strong focus. If we want to make an impact and compete globally, we need to be more innovative and know the right tools to turn ideas into new products, services and new ways of working. Manufacturers need access to staff with the relevant skills and training for this. It is fantastic that the University of Auckland Business School has developed a Master of

Commercialisation and Entrepreneurship (MCE) in response to calls from many sectors to increase the commercialisation of New Zealand’s investment in science and innovation. Innovation was identified in the TIN2015 report as a driver of success: “Companies require continual innovation and creativity to stay ahead. To do this, investment in research and development (R&D) as well as sales and marketing is key. TIN Rising Stars spend twice the amount on R&D than the rest of the TIN200.” This is food for thought for Kiwi manufacturers considering their growth plan for 2016 and beyond.

The manufacturing sector overall is looking increasingly resilient, having coped with a high NZ dollar through improved productivity.

High value manufacturing New Zealand is an ideal location for investors looking for a competitive, developed country in which to drive niche production and sales in the Asia Pacific region. Its manufacturing industry has earned a reputation for being flexible, resilient, adaptable and entrepreneurial. New Zealand’s global advantage is in manufacturing high-value, short-run production cycles. Key areas of strength and opportunity include the aviation, energy, healthcare, marine, security, industrial equipment, and food, beverage and bio-processing technology sectors. A skilled workforce and innovations in metal, plastics and composites creates an attractive opportunity for investors. New Zealand offers businesses a simple

tax structure that supports investment in research and development. From high-tech manufacturing to healthcare, New Zealand is responsible for some of the world’s most significant breakthroughs. It was New Zealand innovation that led to the splitting of the atom, the joint discovery of the structure of DNA, the invention of the disposable syringe and modern water jet propulsion. A well-educated, skilled workforce New Zealand’s knowledge-intensive, high-value manufacturing sector uses the county’s skilled and experienced workforce to transform products and processes. This gives manufacturers a competitive edge. New

Zealand

has

small

and

well-educated population, with one of the highest tertiary qualification rates in the world. Its manufacturing operations are well staffed, and have established a solid history of high-quality production and innovation. Currently, 40 percent of the adult workforce holds tertiary qualifications, compared with the OECD average of 32 percent. Intelligent design founded on the discipline of customer focus With a culture of creative self-sufficiency and resilience, the New Zealand workforce is known for original thinking with a fresh perspective that animates research and development processes and leads to the design of clever, pragmatic innovations.

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Cost-competitive labour New Zealand’s skilled labour force is cost competitive by developed country standards. Engineering employee costs are also lower in New Zealand, making it an attractive place to set up a high-value manufacturing business. Collaborative research development environment

and

Collaboration between research institutes, universities and the private sector is a significant feature of the New Zealand economy, leading to user-focused products and processes. There is a range of research-focused organisations of direct relevance to high-value manufacturing and services.

continued on page 18

NZ Manufacturer December 2015

THE YEAR IN REVIEW

What is at stake with this climate conference is peace. The fight against terrorism and the fight against climate change are two major global challenges we must face. — French President Francois Hollande.

New Zealand establishing culture of collaboration with Vietnam industries By Tony Martin, Trade Commissioner and Consul General to Vietnam This year marked 40 Years of relations between New Zealand and the Association of South East Asia Nations (ASEAN), with total exports from New Zealand to ASEAN standing at NZ$5.9bn as at June 2015. A growing number of New Zealand businesses in multiple sectors across food and beverage, ICT, geothermal, healthcare, agriculture and aviation sectors have been steadily increasing their presence in the region since the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) came in to effect five years ago. The agreement means a significant proportion of import duty tariffs have either been eliminated or reduced.

Economic growth makes Vietnam viable market The ASEAN region is expecting to see GDP growth of 4.5% for the year ending 2015 and Vietnam is a key contributor to this with an expected year-on-year growth rate of over

6.5%. The medium-term prospects for economic growth in Vietnam remain strong and with Air New Zealand’s recent announcement of direct flights between Auckland and Ho Chi Minh City there is plenty of cause to see our trade relationship with Vietnam and indeed ASEAN as a region go to another level. Vietnam has been New Zealand’s fastest growing export market in the ASEAN region over that five year period with exports increasing by 78 percent since 2010. Two-way merchandise trade was NZ$1.07 billion in the year to July 2015, making Vietnam our 20th largest trading partner.

Free Trade Agreements provide real opportunity This growth has been built on the platform provided by AANZFTA and the recent signing of the TPP Agreement of which Vietnam and New Zealand are (along with Singapore, Brunei and Malaysia) member countries – will only

add further impetus for growth. There is a real opportunity to access the advantages Vietnam provides for New Zealand businesses in manufacturing for not only local consumption but also to export to third countries within the ASEAN economic community (AEC) and TPP group. New Zealand manufacturing companies are starting to take advantage of this and there is a small but committed group of New Zealand enterprises operating in clothing manufacturing, timber treatment processing and ICT services already operating in Vietnam with success. The cost of labour in Vietnam in addition to the opportunities for accessing export markets in the AEC and Trans-Pacific region certainly warrant serious consideration and the number of New Zealand businesses setting up in Vietnam is expected to increase - whether it be directly or through transitioning their operations from other markets - in the next 12-18 months.

Building on our proud history of trade with ASEAN This year New Zealand celebrated 40 Years of diplomatic relations with ASEAN and as a result the profile of New Zealand in Vietnam has been elevated in this part of the world with substantial activity taking place at both a political and commercial level. Vietnam’s Prime Minister visited New Zealand in March with a large delegation of more than 200 government officials and business leaders. This visit was recently reciprocated by Prime Minister John Key when he visited Vietnam in mid-November along with the Minister of Economic Development

Tony Martin New Zealand Trade Commissioner & Consul General to Vietnam

– Hon. Steven Joyce – and a business delegation of aviation and education organisations. A total of 16 key agreements were signed during that period leading to further business opportunities in health, aviation, education and agriculture sectors.

Vietnam has been New Zealand’s fastest growing export market in the ASEAN region over that five year period. There is a growing culture of collaboration between our two countries and this represents plenty of opportunity for the New Zealand manufacturing sector to export either their products and services, or even their expertise by teaming up with the right in market partner. PM John Key and Vietnamese Prime Minister Nguyen Tan Dung witness the signing of agreements by Minister Steven Joyce in aviation, education and health sectors in Hanoi, November

PM John Key and Vietnamese Prime Minister Nguyen Tan Dung witness the signing of agreements by Minister Steven Joyce in aviation, education and health sectors in Hanoi, November 2015.

NZ Manufacturer December 2015

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Flatter me, and I may not believe you. Criticise me, and I may not like you. Ignore me, and I may not forgive you. Encourage me, and I may not forget you. ~ William Arthur

THE YEAR IN REVIEW

Heavy Engineering Industry Activity – A Year of Outstanding Growth Dr Wolfgang Scholz, HERA Director and Fellow of the Institute of Professional Engineers NZ. Looking back, 2014/15 was a real confidence boost to HERA and the industry with increased activity, demonstrated leadership and greater engagement. For example, as demonstrated by the SFC scheme participation, a generally confident and innovation-focused industry, and a newly-refurbished HERA House, great outcomes can be achieved by our industry. This would not be possible without the incredible support of our members, including the many individuals who freely give of their time for the common good. This also applies to individuals from our partner organisations and key stakeholders outside the industry, from Government and its departments to the many research providers we interface with. Our thanks go to all of those who contributed, and this includes HERA’s committed team of around 20-plus in staff, visiting scholars and students, and associated contributors.

Heavy steel usage in New Zealand rose by 9% compared to last year Heavy steel usage in New Zealand rose by 9% compared to last year, bringing the total consumption to over 157,000 tonnes. The major growth was in sections with over 11% growth, being indicative of the buoyant building and construction sector. Furthermore, plate usage was also considerably up with

7% growth as compared with last year, indicating strength in the non-steel construction market of our industry. At the same time, the landed cost of imported steel stayed at the previous year’s level, assisting in steel–based products remaining cost competitive. Metals-based Exports and Imports Shrank The heavy engineering import-export collective showed exports in our tradable items sector shrank by an alarming 25% but imports declined even further with a 30% reduction. However, most concerning for our sector is the increase in imported prefabricated structures (7308) by 32% to $155m. This followed a 25% increase in the previous year, and is confirming that not only do we need to focus on our industry’s competitiveness, but also that the imports are conforming to our New Zealand requirements in terms of standards, and fair and equal trade. HERA House Refurbishment From a HERA perspective, we are delighted that the HERA House owner, the Heavy Engineering Research and Educational Foundation (HEERF), has completed the HERA House refurbishment which was started last year. As HEERF Secretariat, HERA was intimately involved in the project management. HERA staff and its subtenants had to go through a very trying time being temporarily housed in the HERA House conference rooms while the refurbishment was going on. HERA House tenants and every visitor so far agree that we have a superb result achieving a contemporary and future-proofed office space, which at the same time displays our industry’s capabilities.

Thanks to excellent industry sponsorship and despite significant unexpected variations we stayed very close to the budget of $1.8m for HEERF and $200k for HERA for the office fit out. Our thanks go to everyone involved, and this includes Minister Hon Steven Joyce who assisted us in a great re-opening function. Outlook With the overall construction industry pipeline looking to be extended by slightly increased demand largely from Auckland growth at least to 2017, the steel construction sector no doubt will be pleased. Our ongoing effort to meet this demand cost effectively while maintaining and demonstrating the required quality will maintain confidence and trust. Due to the encouraging development in non-structural heavy steel sales during the last year, HERA expects steel volumes in the non-steel construction sector for the coming year to at least match this year’s levels. While HERA has confidence as to its own levy-funded activities, particularly in steel construction, leveraging public sector co-funding for our R&D programmes will reach a critical phase in the next year. The Structural Systems division effort for the development of a steel construction innovation research partnership proposal did not come to fruition due to the MBIE requirement that such a proposal must have an export focus. In the current funding landscape and, with our industry’s unwillingness to commit to export-related development activities when the focus is on staying competitive in the buoyant local market, this proposal was rejected.

So it will be very much business as usual in structural steel R&D, with the exception of an industry requirement for HERA to sort out easy access to steel construction design software which meets our local requirements. For the Industry Development division, the government co-funded AGGAT programme will start the last year, and pressure is on HERA and its research and industry partners to deliver the outcomes, including two operational ORC pilot plants. Hopes are high that a strong industry commitment will trigger the development of a successful co-operative research proposal which will find future public sector co-funding. Additionally, other industry business development opportunities largely in the renewable energy space will be explored. For the NZ Welding Centre, the contribution to the AGGAT materials research aim will dominate research activities. A new research focus will be aiming to answer the question “How can the increased industry focus on quality assurance in welded steel fabrication be used to get efficiency gains on the welding inspection side?” Also continued research into seismic steel framed solutions is on the R&D work plan.

Are you a Kiwi manufacturer who is NOT appearing in NZ Manufacturer? Why Not? We offer: •Case Studies•Analysis•Interviews•Opinion Articles•New Products to the Market from our Innovators and Developers FOR New Zealand and overseas readers.

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publisher@xtra.co.nz www.nzmanufacturer.co.nz www.nzmanufacturer.co.nz 9 / NZ Manufacturer December 2015

MANUFACTURING TECHNOLOGY

Never mistake motion for action. ~ Ernest Hemingway

Sustainable manufacturing: how ERP can support manufacturers Being known as a sustainable business can be a competitive differentiator. But manufacturers have to be careful; sustainability is not just a label or greenwash, and ensure it applies to the entire supply chain. A recent survey by Ethical Corporation revealed that eliminating supply chain risks is the biggest driver for organisations looking to embed sustainability throughout their supply chain and sourcing department. Reputational concerns were also important drivers.1 The same study showed that Asia Pacific-based companies cite environmental concerns as the biggest supply chain issue.2 Carsten Pedersen, Senior Executive – Microsoft Dynamics NAV, UXC Eclipse, said, “Greening your manufacturing can deliver significant benefits including cost-savings, waste reduction, process efficiency, and overall business resilience. “Manufacturers need a clear, comprehensive view of all aspects of their operations in order to see where they can make supply chain changes and leverage opportunities for best results. Implementing an enterprise resource planning (ERP) solution, can help manufacturers monitor, maintain, and optimise their manufacturing processes and the supply chain overall.” There are three key ways an ERP system can help make your manufacturing more sustainable. 1. Improved visibility Because ERP systems deliver a single, overarching view of company operations, it can reveal the opportunities for change that will have the strongest impact. For

NZ Manufacturer December 2015

example, it is critical to be able to identify the plant and equipment in place, its maintenance and use schedules, and what happens if a piece of equipment fails. Without this knowledge it becomes impossible for manufacturing organisations to make the kind of changes that deliver both environmental and operational benefits. By scheduling equipment and plant maintenance at optimum times, manufacturers can ensure their equipment is running as efficiently as possible. This can save on electricity use and emissions, and it also reduces downtime associated with unplanned repairs. Similarly, by reviewing supply chain relationships according to the insights offered by ERP systems, manufacturers can understand whether they need to consider alternative suppliers for better efficiency and environmental sustainability.

normal manufacturing process. The company also requires manufacturers to protect water quality by restricting the use of harmful chemicals, so the water leaving the factory is cleaner than when it came in. 3. Streamlined logistics and transportation An ERP system helps manufacturers understand the environmental impact of logistics and transportation, and make changes accordingly. This can save money and time as well as greenhouse gas emissions. For example, a company could change

its delivery routes and times, choose suppliers that are located closer to the factory, or distribute loads according to what is most efficient, such as using fewer, larger trucks. Carsten Pederson said, “Having appropriate supply chain management and ERP systems in place is critical for companies to be able to make informed decisions about their supply chains, manufacturing processes, and logistics and transport arrangements. Introducing sustainable practices will help to lower costs, reduce risk, and increase competitiveness.”

Update needed on below information.

2. Better decision-making An ERP system delivers visibility into internal processes as well as the results of decisions. Consequently, managers can make smarter decisions based on these insights. They can then see where simple changes can make manufacturing processes cheaper, faster, and more environmentally sound. For example, Levi’s, the well-known denim apparel company, has introduced jeans that are made using a fraction of the water used in the

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Can anyone assist with the origination of this graph and IN updating of the information?

Please contact publisher@xtra.co.nz

Making the beginning is one third of the work. ~ Irish Proverb

MANUFACTURING TECHNOLOGY

PowerMILL chosen for new additive/subtractive service from Star Prototype Delcam’s PowerMILL CAM software has been chosen for a new service from Star Prototype that combines additive and subtractive manufacturing. The new service, which Star Prototype calls AddSub Manufacturing, combines metal 3D printing and five-axis CNC machining to deliver quickly complex, low-volume components that would previously have required the input of two separate bureaux. British-owned Star Prototype has been based in Guandong Province, China, for over ten years, where it has been breaking manufacturing ground by using a combination of new technologies, including 3D printing, alongside their traditional counterparts like CNC machining to deliver top-quality parts for a host of applications. The company developed the new service after it identified a significant demand for a one-stop-shop for such components. “Many metal 3D printed parts are no longer used as prototypes but as complex low-volume manufactured components,” explained Gordon Styles, president of Star Prototype. “As a result, many of these parts need certain high-precision features that

are virtually impossible to produce with 3D printing alone. Problems arise because most 3D printing companies don’t carry out secondary machining, meaning the customer needs to take care of the finishing work themselves or farm it out to a separate specialist machining bureau.” With the AddSub process, Star Prototype first uses its Renishaw AM250 3D printer to produce extremely dense, high complexity metal parts that are often not possible to produce using traditional machining techniques. The Renishaw equipment uses direct metal laser melting to produce components in titanium, stainless steel or aluminium. The resulting parts are then finish machined on a recently acquired Haas five-axis machine programmed with PowerMILL. Star Prototype sees this combination as being ideal for the production of mating faces, precision bores, tapped holes, spigots and other very necessary high-precision features. Whenever possible, the parts are built on the AM250 in the correct orientation, with machining supports designed so that the build plate can be transferred directly to the five-axis machine.

Star Prototype was founded in 2005 by British engineer, Gordon Styles, after the sale of his Styles RPD company to ARRK. After initially managing the production of parts by Chinese suppliers for UK and US companies, Star Prototype began manufacturing in its own right in 2009. Having always used Delcam software in his UK companies, Mr. Styles again chose to use PowerMILL in his Chinese machine shop. Star Prototype now uses PowerMILL to program a range of milling machines, predominately from Haas but also from Hurco and from local Chinese suppliers. With its Delcam software, the company can machine quickly

parts in either plastic or metal to a high standard of accuracy and surface finish. “Star Prototype is world-renowned for its CNC machining capabilities, and its forward thinking approach to adopting new technology and improving the service we provide to our customers,” continued Mr. Styles. “AddSub was very much born out of a combination of our established prototyping and machining services. We are confident it will prove of enormous benefit to businesses across the globe, particularly to companies in the motorsport, aerospace, military, medical and dental fields.”

This joint from Star Prototype combines the design flexibility of additive manufacturing with the accuracy and surface finish possible with machining

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NZ Manufacturer December 2015

MANUFACTURING TECHNOLOGY

Before anything else, preparation is the key to success. ~ Alexander Graham Bell

Smart chip tells you how healthy your battery is Scientists from Nanyang Technological University (NTU Singapore) have developed a smart chip which can tell you how healthy is your battery and if it is safe for use. If the battery in your smartphone or electric vehicle is faulty and is at risk of catching fire, this smart chip will warn you. Current warning systems only alert users when the battery is already overheating which may be too late for any remedial action. Developed by Professor Rachid Yazami of the Energy Research Institute @ NTU (ERI@N), this smart chip is small enough to be embedded in almost all batteries, from the small batteries in mobile devices to the huge power packs found in electric vehicles and advanced aeroplanes. A pioneer in battery research, Prof Yazami won the 2014 Draper Prize for Engineering awarded by the Washington-based National Academy of Engineering for being one of the three founders of lithium-ion battery. The prestigious award

recognised his discovery in the 1980s in making lithium-ion batteries safely rechargeable, paving the way for its universal use today. “Although the risk of a battery failing and catching fire is very low, with the billions of lithium-ion batteries being produced yearly, even a one-in-a-million chance would mean over a thousand failures,” explained Prof Yazami, who holds more than 50 patents and has authored more than 200 scientific papers, book chapters and reports on batteries. “This poses a serious risk for electric vehicles and even in advanced aeroplanes as usually big battery packs have hundreds of cells or more bundled together to power the vehicle or aircraft. If there is a chemical fire caused by a single failed battery, it could cause fires in nearby batteries,

leading to an explosion.” Patented technology Embedded in the smart chip is a proprietary algorithm developed by Prof Yazami that is based on electrochemical thermodynamics measurements (ETM technology). Current lithium-ion batteries have a chip in them which only shows voltage and temperature readings. Today’s battery chips are unable to detect symptoms of a malfunction and can also show only the estimated amount of charge the battery is holding. In comparison, Prof Yazami’s patented algorithm is able to analyse both the state of health and the state of charge through a 3-dimensional chart. On a monitor screen, it looks similar to a ski route down a mountain. Drawing

on the analogy of a fingerprint, he said: “The ‘ski route’ of a brand new battery looks different from those of a degraded or faulty battery – just like how two fingerprints will look quite different.” “In addition to knowing the degradation of batteries, our technology can also tell the exact state of charge of the battery, and thus optimise the charging so the battery can be maintained in its best condition while being charged faster,” added Prof Yazami, the Director of Battery Programmes at ERI@N. “My vision for the future is

NTU Prof Rachid Yazami (left) holding his smart battery chip with research fellow Sohaib El Outmani holding a prototype testing device.

NZ Manufacturer December 2015

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that every battery will have this chip, which will in turn reduce the risk of battery fires in electronic devices and electric vehicles while extending their life span.” Worldwide annual production of portable battery cells have been predicted to grow from 13 billion in 2014, to over 35 billion by 2025 according to a report by Avicenne Energy. On track for commercialisation The smart chip took Prof Yazami more than five years to develop and is now marketed by his start-up, KVI Pte Ltd. Working together with Prof Yazami on developing the smart chip platform at ERIAN is research scientist Mr Sohaib El Outmani. KVI is now being incubated by NTU’s commercialisation arm, NTUitive. KVI is developing this chip into a series of products, which include battery packs for recharging mobile devices, charge gauge for electric vehicles, and a smart chip for every battery. The start-up company has an exclusive license on Prof Yazami’s ETM technology which is based on his research done in NTU Singapore, California Institute of Technology (Caltech) and French National Centre for Scientific Research (CNRS). His research incorporates two other unique factors: entropy, a measure of disorder or randomness of a system, and enthalpy, which is the sum of internal energy of a system. It is expected that the technology will be made available for licensing by chipmakers and battery manufacturers before the end of 2016.

To reach a great height a person needs to have great depth. ~ Anonymous

THE YEAR IN REVIEW

China is calling – is your company China ready? By Mike Arand – NZTE China Business Development advisor Lately the question “Are you China Ready?” seems to be heard often and many are starting to ask what does “China Ready” really mean? Without doubt there is opportunity for many NZ companies in China. The top line numbers continue to be staggering - a total population of 1.4 Billion, 446 Million households, 670 Million netizens (internet users), and an economy that is set to have 470 Million middle class households earning over US$15k by 2030 (compared to the expected 133 Million households in USA earning over US$15k at the same time). And, as the Economist recently pointed out, even at a growth rate of 6-7% which is considerably lower than the average of the last few decades, China will add another US$900B to GDP by end-2016. That’s like adding an economy the size of Indonesia or the Netherlands in less than 18 months! Even at this slower growth rate, in the so-called “new normal”, the Economist expects that China is expected to have GDP of 36 Trillion by 2030. So an economy of this size with ongoing growth, with continuing urbanisation and a growing middle class which is driving huge growth in consumer demand must offer opportunity, right? Many of these factors are behind China now competing with Australia for New Zealand’s top export destination. It must be remembered, however, that China is also the top export destination

for more than 120 other countries. The trade buyers and the consumers are absolutely spoilt for choice with a myriad of options for products and services with different brands, origins, prices, and a host of other attributes from other imported products and services. And the competition is even more intense with some very savvy, skilled, well resourced, well-funded, and often entrenched local competitors as well. The top line numbers in China suggest the opportunities are huge, but the challenges to reach sustainable and on-going profitability are also huge. In addition to the intense and very good imported and domestic competition China throws in challenges including demanding compliance and regulations, difficult labelling requirements, strict border control, language complications, and high supply-chain and logistics costs. There are also numerous different markets within China spread over a large land mass.

You could argue that this is true for any market. And while that is a valid argument the “size of the prize” in a market like China means that it justifies more resource and capability and more effort to reach success. This is where companies need to ask themselves are they “China Ready?” Being prepared for China means digging much deeper to understand the market, the trade, and the consumers; there is significant resource required to dig deep and understand the consumers in China. You need to Gain an understanding of who the target consumers are, where they are, when/how they buy, what their options are, and, what their needs are. This is very difficult to do when sitting in an office in New Zealand, or even by visiting China a few times a year.

These are just the start of the challenges!

Likewise, it takes considerable time and resource to gain a deep understanding of the competition, the route to market, the regulations, the border entry requirements, the local supply chain, the channels, the partners, and the value chain.

This is why I recommend to companies that they need to be prepared, they need to be present in the market, ready to persevere when it gets tough, and build strong partnerships. They also need to have a passion for turning China into one of their largest and most profitable markets ingrained throughout the company.

Being “China Ready” means taking a long hard look at the resources and capabilities both currently available and required for taking on a significant market. It means asking if the company is prepared to deploy these resources and capabilities to research and understand the market, the channels, the channel partners,

and the consumers. China is a market which has the potential to be the largest market for many New Zealand suppliers, but there are a lot of resource required to even just reach a decision on whether to enter the market or not. So being “China Ready” means gaining an understanding of the resources and capabilities required to develop, enter, and ultimately grow in the market, It means then making decisions on whether to divert, or add, those precious resources and capabilities towards building a long term sustainable and profitable position in China. Next being China Ready means digging for a deeper understanding of the market and taking a long hard look at whether the company will persevere when the inevitable barriers and hurdles arise – will the company continue to commit those scarce resources to the market when the going gets tough? In short, being “China Ready” means understanding how those top-line staggering big numbers translate down to meaningful opportunities for your company; fully understanding the challenges and hurdles, fully assessing and understanding internal resources and capabilities required, and, building an absolute passion throughout the company for developing, entering, and growing a long term sustainable and profitable position in China.

Being “China Ready” means gaining an understanding of the resources and capabilities required to develop, enter, and ultimately grow in the market. www.nzmanufacturer.co.nz

NZ Manufacturer December 2015

THE YEAR IN REVIEW

Beware that you do not lose the substance by grasping at the shadow. ~ Aesop

NZ expertise growing choice for America’s agricultural sector By Charlotte Simcock, North America Regional Marketing and Communications Manager America is the world’s largest economy and a critical agricultural producer with the US agriculture sector generating more than $374 billion USD from 2.2 million farms in 2012. The size and scale of the industry means there is a lot of interest in tools and technologies to boost productivity in food production, ensure food safety and traceability and reduce cost. This means there are significant trade opportunities for New Zealand, which has a strong international reputation across the sector. The North America market is looking for New Zealand expertise to provide a competitive edge in traditional segments like dairy and animal management, as well as new, high-tech niches like precision agriculture manufacturing and big data. Ultimately, the industry is looking for New Zealand manufacturing companies that can do one of two things: 1) save the farmer money; or 2) save the farmer time If a company can do both then they have a good shot at success in the United States. Plenty of companies are already doing it and have established a strong reputation of excellence for the New Zealand brand, paving the way for other companies to enter the market.

The Product Story New Zealand’s size, location and reputation for innovation and “thinking outside the square” is unique and most agricultural manufacturing companies have an interesting story behind their success. However our companies too-often overlook this aspect, which is crucial in standing out from the crowd in large markets such as North America. An innovative product story can tip a deal or contract in a company’s favour, particularly when sector expertise and scalability is allowed to shine through; it can make a world of difference in the boardroom. New Zealand-led advances in software and manufacturing equipment are sought out for their great design, innovative solutions, competitive pricing and flexibility and a good product story lets investors, buyers and distributers understand what makes a product successful. Reinvigorating the market Agritech manufacturing and food processing are often considered traditional markets but companies with clever, cost-efficient technologies and manufacturing solutions are really reinventing the industry. One of the hottest investment focusses currently in the US is agricultural technology. According to the Agfunder 2014 Agtech Funding report, of the US$2.36 billion invested globally

in agricultural technology in 2014 around 90% originated from the US, predominantly California. From the field to the factory, food processing and sorting equipment is a massive growth market in the North America. Automation of the harvesting process is becoming more commonplace and New Zealand companies offering high speed, high accuracy sorting systems for fruit and vegetable grading are leveraging their competitive advantage and growing market opportunity. Such technologies are expected to appeal more and more to US farmers and, while the US has typically been quite conventional in its farming practices, a new generation has entered the field of farm management, creating an appetite for new technology. Providing tools to boost productivity in food production, ensure food safety and traceability, and reduce costs are all areas that New Zealand companies excel in. Niche food manufacturing It is not just primary product processing that is driving popularity of New Zealand technology in the US food supply chain. Niche food manufacturing equipment companies are also benefiting from smaller run requirements and an increasing shift for large food processors to outsource some of their production. New Zealand companies are also

leveraging the market trend among United States retailers to have smaller run production in store to support local sourced and artisanal food products and niche localised products. Overcoming in-market barriers Whilst the opportunity clearly exists for food technology companies in the US, there are also challenges for New Zealand. Aftercare service is a key consideration and models need to be developed to assure customers that if there are any problems with machinery or equipment, that the distance to New Zealand will not be an issue. There are some great examples where New Zealand companies have really got this right and are cited as leaders in customer service in their category. Partnerships with in market service companies, and training and provision of contracted onsite engineers are potential solutions. Where New Zealand companies often have the best success, is where there are full time employees on the ground. Not only does this allow servicing existing customers, it also demonstrates a commitment to the market to potential new customers. In order to continue to innovate and remain relevant to the US market, it is also important to be close to the customer to get first-hand knowledge of US needs which can then be fed back into the R&D pipeline in New Zealand.

Opportunity is still aplenty in Australia Tim Gibson, Business Development Manager, Australia The Australian economy is pivoting, albeit slowly, towards non-mining sectors for more balanced export growth. Overall project investment is soft, though this is heavily skewed by the tapering investment into the resources boom. Promising non-mining sectors include dairy, food manufacturing and infrastructure. There is a high level of construction activity, especially in state capitals, and good opportunities in the resources sector for service and maintenance contracts.

Can you balance cash-flow against the time it takes to win new customers? Long term payoffs are generally worth it, and access to a wider range of projects may also allow you to broaden your capability base. Relationship building

Lead Time Winning contracts often takes longer than expected. Consider the investment required to build and sustain your relationships in-market.

The old adage of ‘people buy from people’ is still very relevant in Australia, and building relationships with key stakeholders is essential to winning contracts. Successful companies spend up to 80 percent of their time building relationships and prospecting opportunities before an RFT is published. The remaining 20 percent is spent preparing the tender response. This follows on from the point above about lead time - be prepared to wear

The Australian market can be tricky to navigate, but here are some tips for successfully growing companies across the ditch:

NZ Manufacturer December 2015

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out some shoe leather and get to know your customers. Pricing New Zealand’s reputation for quality is very strong and companies generally price very well in Australia. We sometimes hear of particularly high pricing from New Zealand companies, usually during periods when the New Zealand domestic market is running hot with projects. This causes some exporters to appear as ‘fair weather friends’ in Australia. The volatile exchange rate doesn’t help but it’s important to be competitive when pricing work. Pie charts are a useful tool to illustrate the individual price components within a proposal – this helps your customer to quickly

understand the price you are offering. Planning and focus Australia is a big and complex market, therefore defining your areas of focus is critical. Your market plan should define your key customers, core capability, USP, competition, and geography. Companies that don’t have a plan will quickly burn valuable resources. Focus, focus focus! ProjectLink ProjectLink is an online subscription service run by NZTE to help New Zealand companies access supply chains in Australia by connecting with decision-makers early in the project development and tendering process.

THE YEAR IN REVIEW

Disruptive technology is a catalyst for change, not the reason. -anon

The emergence of South America as a region of trade opportunity By Cristiana Pedrosa, South America Regional Marketing and Communications Manager social issues still to deal with in South America, the region has a lot to offer to New Zealand companies. From new free trade agreements to governments taking steps towards creating a more hospitable investment environment, there is plenty of market potential for NZ companies. The World Bank estimates that over the past decade the region “has managed to lift more than 70 million people out of poverty while expanding the middle class by more than 50%.” Better-quality infrastructure, security and healthcare services have become part of the core demands of the region’s rising middle class, sectors in which New Zeal and companies can take a huge advantage of. Broken down to individual markets, South America presents plenty of opportunities for New Zealand companies, but also takes plenty of in market knowledge.

South America presents plenty of opportunities for New Zealand companies. Brazil Over the past year, the Brazilian currency has lost about 70 percent of its value. Its devaluation created

a number of problems like a hike in inflation but for some businesses it has also proven to be a major investment opportunity, offering better value for NZ money. While the economy presents some uncertainties, Brazil remains the 7th largest economy in the world, with a growing middle class and young population which make it a key market to NZ and other multinational companies. The Olympics, and other high profile events due to happen in Brazil in the upcoming year, are also an excellent opportunity to help leverage New Zealand presence and expertise, especially in sectors such as Construction, Infrastructure and Food and Beverage. Chile Chile is South America’s most matured market for New Zealand companies. For many years NZTE customers in Chile were largely in the agri-technology and food processing sectors, but this is diversifying. However the customer base has expanded to sectors such as health, mining, food processing technology, aviation and construction. Compac Sorting Equipment, Convex, Gallagher Fuel Pumps Division and Enviro-Mark are a few examples of NZ companies that have being growing and

expanding their operations in the region with great and successful stories to tell. Colombia With a population of 46 million Colombia is an increasingly important trade partner for New Zealand. Strategically placed between Central and South America, the country has been showing one the strongest performing economies in the region for the past five years. New Zealand is planning to establish its fifth Latin America embassy in Bogota by 2017 and having a dedicated New Zealand presence on the ground there will help to support the development of strong business links, particularly through investment in Colombia’s agri-business, mining and dairy sectors. The Trans-Pacific Partnership (TPP) is expected to open further opportunities for trade in the country. Peru Peru was this year considered to second best country in Latin America to do business with and is already one of NZ’s main importers. The ease of doing business reflects the country’s recent improved credit information system, implementing a new law on personal data protection and its ability to make paying taxes easier for companies by creating an advanced online registry with

up-to-date information on employees. The recently negotiated TPP will introduce Peru as a free trade partner and provide further trade opportunities. New Zealand companies are starting to click on to the opportunities in Peru and we expect to see an influx of business in the market over the next 12 to 18 months. Building on our reputation Worldwide New Zealand is renowned for our agribusiness expertise and this reputation undoubtedly paves the way for companies from other sectors. To succeed in South America New Zealand companies must continuously innovate and invest to generate international knowhow and competitive products and services. Ensuring product consistency, building scale and developing a strong understanding of the region through a local presence and strong customer relationships will all help New Zealand companies maximise the opportunities available in the region.

Open doors in Europe for NZ by Andrew White, NZTE Regional Director - Europe Europe is an $8 billion export market for New Zealand goods and services, which is perhaps easy to lose sight of given the distance from New Zealand compared to Asia and the Pacific Rim. The big ticket items still tend to be food and beverage exports – from meat, seafood, fruit and wine – but the region is also an important market for an increasingly diverse offering of value added, specialised manufactured products and services. For example, agricultural technology exports to the region already amount to $300m and have the potential to grow further due to current market dynamics, the use of New Zealand health technology products and services is expanding in the public and private health systems, and kiwi technology solutions are helping the utilities sector to transform in some EU

countries. The EU, as a whole, is also our single largest wine market, with exports totalling over $460 million and representing in excess of 30% of total wine exports. New Zealand’s country brand is well respected in this region and markets are expected to become even more accessible if Free Trade agreements with the EU can be successfully negotiated. Growing New Zealand agritech exports in Europe The EU is one of the world’s largest dairy producing regions. The recent elimination of EU milk quotas means farmers are in need of solutions which drive on farm efficiencies, productivity and profitability. New Zealand is recognised as the champion of efficient dairy farming

worldwide. The technologies and techniques that New Zealand produces are perfectly placed to meet the growing European farming need. Given the market opportunity NZTE has developed a 12 month programme aimed at bringing New Zealand agritech companies together to showcase the depth and strength of the New Zealand offering. Targeting four countries - UK, Germany, France and Ireland – the programme will help NZTE customers generate new business. The programme offers a comprehensive mix of tools to access the market through market research, market insight webinars, trade shows, marketing and PR opportunities. New Zealand ICT sector thriving in UK New Zealand continues to enjoy

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success in the UK ICT market. From retail payments to management of confidential health records, New Zealand companies are really making their mark. These high-value, high-tech and highly scalable operations are exactly the kind of companies that will help New Zealand reach its ambitious export goals. With their offerings being essentially weightless, and based on constantly evolving intellectual property, the headway that is being made now bodes very well for the future. Productivity, efficiency gains and closer engagement with end customers are driving ICT decisions – all areas where New Zealand has strength and the market has need – the future looks positive.

NZ Manufacturer December 2015

BUSINESS

Just because a business is embracing new technology doesnâ&#x20AC;&#x2122;t mean that it is creating meaningful, productive, or measurable experiences. -anon

MAGAZINE FEATURES 2016 FEBRUARY

JULY

Manufacturing Technology 3D and 4D Developments

Supply Chain Manufacturing Technology Food Manufacturing FoodTech PackTech 2016 Preview

(additive manufacturing)

New products for Manufacturers Environmental Technology Workshop Tools (including injection moulding and CNC machines)

MARCH Manufacturing Technology

AUGUST

Business News

(Including robotics)

Analysis

(including robotics)

Production and Distribution Disruptive and Future Technologies Export Success EMEX 2016 Preview

Project Management Food Manufacturing FoodTech PackTech 2016 Preview

(additive manufacturing)

APRIL

SEPTEMBER

Manufacturing Technology Industry 4.0 The Future of Manufacturing

Manufacturing Technology Food Manufacturing Disruptive Technologies FoodTech PackTeck 2016 Preview

Disruptive and Future Technologies EMEX 2016 Preview Iot and Manufacturing

OCTOBER Preventative Maintenance Manufacturing Technology

MAY 3D and 4D Developments (additive manufacturing)

Manufacturing Technology New Products for Manufacturers Environmental Technology EMEX 2016 Preview

Developments Rear View The Interview Export Success Opinion Health and Safety New products for manufacturers Regular sections provide assistance for: The Future of Manufacturing Manufacturing Technology Industry 4.0

(including converging technologies)

Automation

Workshop Tools

Robotics

(Including injection moulding and CNC machines)

Supply Chain

NOVEMBER Manufacturing Technology Production and Distribution

JUNE

NZ Manufacturer is rich with the latest news and developments from New Zealand manufacturers which can be read about in the following Departments:

Disruptive Technologies Manufacturing Technology 3D and 4D Developments

(including converging technologies)

EACH ISSUE INCLUDES

Food Manufacturing TPP Update Manufacturing Technology Automation Production and Distribution

DECEMBER

For further information contact Doug Green

E publisher@xtra.co.nz T 06 870 9029 M O21 625 6166 W www.nzmanufacturer.co.nz

The Year in Review Manufacturing Technology NZM Manufacturers Directory Automation

Additive Manufacturing Composites Nanomaterials Food Manufacturing Environmental Technology The Aviation Industry The Marine Industry NZ Infrastructure Plastics Developments Outsourcing Energy Food Manufacturing The Construction Industry Business Services Industry Training Production Management Preventative Maintenance Forestry Trade Shows and Exhibitions

NZ Manufacturer December 2015

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Almost all quality improvement comes via simplification of design, manufacturing... layout, processes, and procedures. -Tom Peters

SUPPLY CHAIN

Supply Chain Excellence: Series 2 – Excellence through Lean Thinking! - Vishnu Rayapeddi a) Speed and responsiveness to customers,

Path Forward to a Lean Supply Chain

Lean it out! - Select or develop lean sources;

b) Reduced inventories,

• Lean is a cooperative process for survival and for success. Supply chains that want to grow and continue to improve must adopt lean.

Eliminate Duplication! - Move from “buying” to allowing suppliers to manage delivery;

c) Reduced Costs, and d) Improved Customer Satisfaction

In the previous article, I briefly introduced the concept of Lean as part of the definition of Supply Chain Excellence, which is “......while minimising waste and being open to embrace change”. So, why is it important that we minimise waste? In today’s world, supply chain management has become more global, more complicated, more demanding, and less forgiving. Also, the trade barriers are down, competition is up, stakes are higher and margins are lower. Lean Thinking is a business philosophy that has been widely applied in Toyota and many other businesses and industries world-wide and is designed to, improve the value proposition to customers, reduce waste, smooth out peaks and troughs of activity and make individual’s work life easier. The benefits of a “Lean supply chain” are,

Lean Supply Chain in essence can act as a competitive weapon by enabling the member companies to align themselves with each other and to coordinate their continuous improvement efforts. This synthesis enables even small firms to participate in the results of lean efforts. Competitive advantage and leadership in the global marketplace can only be gained by applying lean principles to the supply chain. Thought, commitment, planning, collaboration, and a path forward are required. Based on the SCOR model I mentioned in the previous article, we can say that every aspect of the supply chain has to go through a “lean” transformation...a) Supply Chain Strategy, b) Lean Planning, c) Lean Suppliers, d) Lean Manufacturing, e) Lean Warehousing, f) Lean Transportation and finally g) Lean Customers. But all along we have another component called the “Lean Office”. Please note that, Lean Thinking for the Office is important wherever there are administrative processes.

• Lean concepts require an attitude of continuous improvement with a bias for action. • The concepts of lean apply to all elements of the supply chain, including support departments such as product development, quality, human resources, marketing, finance, purchasing, and distribution. • The challenge is to bring all of these areas out of their traditional silos and make them work together to reduce waste and create flow. • Duplication and a lack of appropriate and timely communication run rampant in these traditional organizations. • A lean supply chain is proactive and plans for the unexpected by positioning all resources for effectiveness. • Downturns in demand can be addressed without layoffs or significant productivity losses. Lean Supply Chain Design…

Let Demand Drive the Supply Chain! Allow consumption not forecast drive the supply chain; Optimize! - Eliminate waste in the supply chain, Outsource non-core competencies – Not core business, Compress – balance freight, cost of value, quality, Collaborate to reduce total costs; Focus! - on the customer; Delivery Frequency! - Deliver only cost drivers more frequently. This article is written by Vishnu Rayapeddi, a Lean Manufacturing & Supply Chain Operations Specialist, who works as a volunteer Executive Committee Member of NZPICS, the only Premier Channel Partner of APICS in New Zealand. NZPICS Offers the following courses in Supply Chain in affiliation with APICS: CPIM (Certified in Production & Inventory Management, CSCP (Certified Supply Chain Professional) and Principles of Operations Management, which is a fully customisable solution to businesses.

For further information, please visit www.nzpics.org.nz or call 09-525 1525.

A digital revolution in supply chain Digitisation and the Internet of Things are buzzwords in the supply chain arena. But the key to applying these concepts to achieve business success is ensuring that digital innovations in supply chain operations are maximising efficiency - and, by extension, profits instead of just implementing “tech for tech’s sake.” One proven approach includes “digital sprints,” events similar in spirit to hackathons where supply chain, manufacturing, and project managers collaborate intensively in competition with other teams to brainstorm digital initiatives that will enhance an organization’s supply chain. We call them “digital sprints” to underline a bias toward quick actions and corresponding learning. While hackathons are well known by app developers and venture capitalists as ways to develop new software technology, digital sprints within the supply chain space seek to come up with working prototypes of

new products, new manufacturing processes, etc., under a “start small, fail fast, iterate and pivot, and scale fast” model. Digital sprints, with their collaborative, action-oriented approach, are well suited to push through the hype and get to real, tangible outcomes without companies having to predict the future or, even more difficult, rewire their entire IT infrastructure. Initiatives like the Internet of Things Consortium and the Industrial Internet Consortium seek to dramatically step up digitisation in manufacturing through collaboration and brainstorming innovative ideas within the space. They promote “testbeds” for quick action - in essence digital sprints - that produce case studies and proof of concept for digital experiments that lead to improvements in safety, energy efficiency, overall operating efficiency, reduction in cycle times, etc. Digital

sprints

require

startup

mentality, rather than the typical Lean Six Sigma mindset that is pervasive in supply chain. They benefit from a skunk works-like setup where a small group of people work together in a non-hierarchical, unconventional way with minimal management constraints and a high sense of urgency. Four Steps to Successful Digital Sprints Start small: Digital sprints involve a series of modest “experiments” that contribute to addressing earlier-identified pain points or opportunities and try to solve the problem in nonconventional ways. For example, companies can organize hackathons where informal yet focused teams work on well-defined problems over a pizza-fueled weekend and generate a range of solutions. Fail fast: Experimenting in a controlled manner can be a quite useful way to successfully prove or disprove the validity of certain digital concepts

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and approaches. Inevitably, some experiments will fail. But the key is to fail fast with minimal investments and to learn from the failures. Iterate and Pivot: Experiments typically require several iterations before definite conclusions can be reached. But at this stage enough should be known about the idea to commission pilots and validate the solution. Successful pilots can then be considered for “soft” integration with factory IT, if that is required to get them operational. GE’s FastWorks methodology is a good example of the “iterate and pivot” principle. Scale Fast: Once the proposed digital solution has a quantified business case with successful validation in one or more pilot implementations, you can now make the decision to invest in enterprise rollout, using the learnings from the process to accelerate the execution and, if warranted and required, to selectively rewire legacy IT systems.

NZ Manufacturer December 2015

THE FUTURE OF MANUFACTURING

Excellence is not a skill. It is an attitude. ~ Ralph Marston

The development of smart manufacturing However, substantial development work remains necessary, from standardisation and interoperability efforts on networks, protocols, and interfaces, to security frameworks around increasingly mission-critical infrastructure. There is significant adjustment in the information technology and communications (ICT) community to capture such opportunities, as vendors and service providers transform their traditional capabilities to fit the demands of a connected and smarter industry. Improving the speed and reliability of communication, enforcing uniform protocols across the organisation, and maintaining a robust security platform are vital for ensuring IoT adoption. One of the biggest impediments to IoT adoption is the fear of data theft, loss of privacy, and security. This calls for greater co-operation between automation and instrumentation vendors and software development firms.

The Internet of Things (IoT) is a sub-sector of the higher-level concept of the Internet of Everything (IoE) which connects people, processes, data and things, with the aim of bringing maximum value to the global economy. Technologies that have made IoE a reality include short range communications, embedded intelligence, cloud computing, next-generation networks, sensor technology, Big Data, and data analytics. The popularity of the Industrial Internet of Things (IIoT) in Asia-Pacific is largely attributable to informed manufacturing, which leads to a transparent and streamlined manufacturing process. Ivan Fernandez Industry Director, Industry Practice, Australia & New Zealand said “The top concern for discrete or process-manufacturing firms is the continuous effort to stay competitive. However, manufacturing competitiveness is not achieved by focusing on one parameter, but on a group of pertinent issues. Resource areas pertaining to people and process innovation are where manufacturing competitiveness is extensively pursued.” “Although Europe is seen to hold a major edge in terms of industries embracing IoT, several countries in Asia Pacific such as Australia, China, India, Japan and Singapore, will adopt these technologies to improve their global standing and become more competitive. Competition will force manufacturers to innovate and adapt various aspects of their manufacturing systems. Smart factories, considered to be the 4th industrial revolution or Industrie 4.0, will create a notable convergence of business models in manufacturing units. Embedded systems, combined with Internet connectivity and online data services, will kick-start the new era of cyber-physical systems, to enable smart factories.

Smart factories A manufacturing plant is typically located over a large area and operates multiple machines which are difficult to manage without automation. The smooth functioning of a manufacturing plant, therefore, requires the development of an automated plant-floor with connected

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Resources sector

machines that receive and respond to orders from central control systems and human machine interfaces. The convergence of technologies in smart factories will be focused on addressing a number of challenges such as increasing production efficiency by reducing cost and achieving the desired quality product with minimal wastage, reducing time-to-market, reducing operations and maintenance expenditure (including energy consumption), increasing asset-life and monitoring the supply chain in real-time. In the future, because of convergence, it will also not be unrealistic to expect greater use of end-customer insight in product development and customisation. Efficient machine-to-machine (M2M) communications is the first step towards achieving the two central objectives in a manufacturing plant and those are; to transmit information for control of devices on the plant-floor and to collect data about the various processes on the plant-floor. Advances in M2M technologies have allowed manufacturers to

become even more productive and efficient in their operations via better use of machine data to make operational decisions. The presence of connected machines can promote faster identification of faults on the plant-floor, provide transparency about the status of various processes, and keep manufacturers informed, thereby helping accelerate intelligent automation of industrial processes. An M2M infrastructure is necessary to integrate more intelligence into manufacturing processes in industrial control systems. Industrial automation (IA), particularly next-generation IA processes, will be an area where information technology (IT) and operational technology (OT) domains’ convergence will progress further and lead to an industrial Internet of Things. Plant Asset Management (PAM) technologies are shifting the next generation of performance improvements, from the current practices that are focused on preventing asset failure, towards practices focused on optimising asset performance.

In mining operations, many market players have set their own legacy frameworks with technologies that include industrial networks, analytic platforms, workflow applications, and production and measurement systems that are isolated and lack the ability to address connected efficiency. Competition for the ‘connected oilfield’ is fragmented and driven by both end users and suppliers, but there is high demand for integrated operations across the oil and gas value chain. “There is an increased demand for connected oilfield technologies to achieve overall efficiency across assets. Increased capital spending by oilfield operators in challenging unconventional oil and gas resource bases opens up significant digital oilfield market opportunities for achieving connected efficiency. A holistic solution provider, with a comprehensive product portfolio, who offers an end-to-end connected platform to host diverse applications and high-end enterprise-wide managed oilfield services, will enjoy a large and highly profitable share of the market,” concluded Fernandez.

High value manufacturing

These include Callaghan Innovation, eight universities and seven Crown Research Institutes (CRIs).

and innovation

Government support for science

The New Zealand Government actively supports the development and commercialisation of technology

NZ Manufacturer December 2015

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and innovation. It also recognises collaborative research as a critical driver for business growth. For example, under the Research and

Development Growth Grants scheme, Callaghan Innovation has awarded $32 million over three years to 22 high-tech companies.

To innovate first requires innovation within. -anon

THE FUTURE OF MANUFACTURING

“Automotive suppliers must embrace faster innovation to adapt to new realities” - Zhao Jizheng, Siemens PLM Software

The automotive industry faces stricter fuel economy and emissions standards around the world, with varying deadlines for achievement through 2025. These fuel economy and emissions standards, along with improvements to safety, growth of intelligent mobility and customer desires for integrating their lifestyle into the vehicle, have automotive original equipment manufacturers (OEMs) relying more on electronics and embedded software to keep up with an ever growing industry. These trends are causing a fundamental change in vehicle technologies which requires more innovation from automakers and suppliers in alternative propulsion, lighter vehicles and energy optimization. A 2014 Center for Automotive Research report, entitled Advanced Information Technology Solutions: An Engine of Innovation, summarizes this sentiment by saying: “The industry is transitioning from a primarily mechanical-based industry to a software-based industry. In fact, some would argue that the industry is transitioning from a transportation focus to a technology focus.” Adopting these new technologies and product innovations drives more interaction across vehicle systems and components. As the complexity of vehicle systems increases with new types of technology, these innovations demand a fundamental increase in the sophistication of automotive systems. Suppliers must integrate mechanical, electronics and software capabilities as well as system development knowledge to deliver more complex systems. That, coupled with the global growth of the industry, increases the pressure on automotive suppliers to expand their own engineering, manufacturing and supply chain networks around the world, which adds to program and operational complexity.

Staying in Front In Asia, suppliers are facing pressure on two fronts - the need to respond to their local market and OEM quickly, because Asia continues to be the growth engine for the automotive

industry, and, as the part of the supply chain, they need to collaborate with global OEMs more efficiently and contribute more actively than before. According to a news report from Just Auto, vehicle sales across the region is estimated to have increased by 4.6 percent to 37.76m units in 2014 driven mainly by the continued rise of China as the world’s largest vehicle market. The region is taking an increasing share of global vehicle sales and is the only major market expected to see strong growth over the next few years. Nevertheless, it is still vital for Asian suppliers to prepare for a more disruptive future in the long term. For automotive suppliers to realize more profitable innovation, they need to achieve greater success in our dynamically changing industry through a balance of traditional and technology-driven products, and the connected consumer lifecycle-centric and service-driven future. They need to execute program innovation through optimizing design and improving validation in the early development process to enable cross-discipline development in a unified environment. This in turn will allow these suppliers to quickly adapt to a changing global structure and improve visibility to program execution and risk management. In order to capitalize on the pressure for greater innovation, suppliers should adopt a model-driven program to provide early and comprehensive simulation and validation, fast and efficient design creation, integrated manufacturing validation and predictable program performance and profitability. To ensure success, the following key focus areas should be considered part of the overall solution: • Comprehensive development of systems through model-driven simulation and validation, including integrated controls simulation, and

1D and 3D simulation to enhance a supplier’s ability to virtually model and validate the performance and behavior of the systems before physical prototypes are developed. • Fast and efficient design creation through an integrated solution with an open and flexible modeling and design approach to reduce development time, capture organizational knowledge and best practices, and increase the capacity to effectively integrate product design and validation with the manufacturing engineering of molds, tools and fixtures. • Integrated validation of manufacturing to optimize process productivity and efficiency to improve costs, quality and flexibility in manufacturing while taking advantage of new innovations and platforms • Integrated program planning and costing for predictable program performance and profitability to collaborate effectively in all stages of a program and achieve greater visibility and transparency in program execution.

Facilitating a Dynamic Environment Automotive suppliers are required to demonstrate and provide

increased responsibility for the design, development, prototyping and final production of parts and systems. Today, they are asked to do more project management with extensive coordination, sourcing and qualifications, all at lower costs. Suppliers need to demonstrate their ability to perform all these tasks on time, on budget and with high-quality successful launches bearing in mind diversity, remote plant locations and multiple customers. As a result, there is a great need for a standardized, simplified process that will work across all product lines and ensure that operations are profitable. Meeting these needs for faster innovation combined with greater program control and risk management requires adoption of a model-driven approach to program execution. Suppliers who do not adequately adapt to these changes, will find themselves struggling for survival, while those that capitalize on the greater innovation pressure to bring to market new technologies and products while improving overall program visibility, control and risk management will carry the day.

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NZ Manufacturer December 2015

DEVELOPMENTS

The shortest way to do many things is to do only one thing at once. -Samuel Smiles

Sustainability at the Heart of TRX Project With growing demands from agriculture and energy production, as well as diminishing supply due to climate changes and reduced rainfall, water is quickly becoming a scarce resource with no alternative substitute. In light of this water stress, awareness has been growing towards the notion of water reuse. Although it is not a new concept, water reuse only started to garner more public interest in recent years, offering a way out in a world where water is increasingly in short supply. As water shortage will likely be more acute in the next 10 years, governments and multinational corporations (MNCs) worldwide have started to buckle down and look for ways to manage the remaining water reserves. In embarking on this path, many have turned to professional water solutions providers to mitigate their water crisis challenges. Veolia Water Technologies, a global leader in optimised resource management, was appointed to provide a wastewater treatment and reclamation plant for the prestigious Tun Razak Exchange (TRX) Project in Kuala Lumpur, Malaysia. In addition to being the first fully integrated commercial water reclaim programme in Southeast Asia, the TRX Project is also one of Veolia’s most significant global reference for sustainable development. TRX: Designed in Accordance with the Highest Environmental Standards

Set in the heart of Kuala Lumpur, Malaysia, the TRX Project is an iconic 70-acre development poised to be the new world-class financial district that encompasses investment grade ‘A’ office space and includes residential, hospitality, retail, leisure, and cultural offerings. TRX is also built in line to

NZ Manufacturer December 2015

support the Greater KL/Klang Valley, one of the National Key Economic Areas under the Malaysian government’s Economic Transformation Programme (ETP) - an initiative to support the government’s vision of transforming Malaysia into a high-income nation by 2020. As Malaysia’s new international finance and trading hub, the TRX Project is designed in accordance with the highest environmental standards, and the development will focus keenly on water reuse. The TRX is the first development in the country to achieve multiple accreditations, including the Leadership in Energy and Environmental Design (LEED) Gold Certification in the “Neighbourhood Development Plan” category, as certified by the United States of America Green Building Council, and the first township level Green Building Index (GBI) Platinum Certification in Malaysia, issued by the Malaysia Green Building Index Accreditation Panel. In a league of its own, the TRX Project’s focus on water reuse separates it from all other developments across the nation. Globally, Malaysia is one of the wettest countries with the highest average annual rainfall of around 3,000mm. Even then, the once water-abundant Malaysia is now rapidly facing water scarcity threats. With several qualified water and wastewater professional providers in the market, TRX devised a procurement exercise to narrow the selection pool, and to identify a supplier that could meet its goals effectively. After several rigorous rounds of selection, Veolia stood out amongst others to secure a 20-year partnership with TRX. Creating Value Through Responsible and Sustainable Solutions

For the TRX Project, Veolia aims to

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recover at least 80% of the expected 3.8 million cubic meters (m3) of sewage generated every year for reuse purposes within the TRX district. The reclaimed water will count towards reducing site-wide fresh water demand by more than 50%, exceeding International Best Practice standards of 40% reduction in potable water. To deliver the results that TRX wanted, Veolia proposed a redundant system with five wastewater solutions for maximum value to the client. Described by Briggs as being compact, robust, and straightforward, the technologies that Veolia recommended for the TRX Project include the Multifo settler, AnoxKaldnes Moving Bed Biofilm Reactor (MBBR) technology, Hydrotech Discfilters, Alizair deodorisation treatment, as well as Endetec’s Tecta and Kapta units. The primary wastewater treatment solution for the TRX Project is Multiflo, an efficient process for removing total suspended solids (TSS), colour, algae, and heavy metals. The technology produces a highly concentrated and thickened sludge required for the wastewater treatment process. The discharge then enters the MBBR tank, which stabilises discharge quality while it removes chemical oxygen demand (COD), biochemical oxygen demand (BOD), and nitrogen present in the wastewater. Alizair deodorisation treatment is also incorporated to ensure the complete removal of unpleasant emissions. As the wastewater treatment plant will be built within the TRX district, Veolia integrated a bio filter that would oxidize malodorous substances into inorganic and odourless compounds. Veolia also included a smart water network comprising two unique technologies – Endetec’s Tecta and

Kapta units – to ensure microbiological security, arming TRX with the best water quality management system in Malaysia. The Tecta unit provides accurate microbiological platform testing onsite, which is the most efficient way of monitoring contamination. On the other hand, the Kapta system, a miniaturised in-line multi-parameter water sensor probe for real-time continuous potable water monitoring, has had good applications in municipal networks, and the TRX Project will be Veolia’s first Kapta application in Southeast Asia. In keeping with TRX’s objective to establish a state-of-the-art green business facility, Veolia was careful to put together wastewater solutions such as Alizair, which is ecological in nature. The low electricity and chemical consumption of our solutions were also factors that matched TRX’s long term sustainability goals seamlessly. A Greener KL

The reclaimed water at TRX will be heavily monitored to ensure zero human contact, in that it would be strictly limited to non-potable uses such as toilet flushing in the residential and office buildings, trickle irrigation, and cooling tower make up for the District Cooling plant. This alternative water resource also provides better resilience in terms of continuous non-potable water supply for the financial district, ensuring that business activities can continue to run, even when faced with water shortages. Although Veolia is under obligation to recover at least 80% of TRX’s sewage, the global provider is able to recycle 100% of the wastewater – excluding sludge wastage - going above and beyond TRX’s demands.

ANALYSIS

Improvement usually means doing something that we have never done before. – Shigeo Shingo

The Nine Pillars of Technological Advancement Many of the nine advances in technology that form the foundation for Industry 4.0 are already used in manufacturing, but with Industry 4.0, they will transform production: isolated, optimised cells will come together as a fully integrated, automated, and optimised production flow, leading to greater efficiencies and changing traditional production relationships among suppliers, producers, and customers—as well as between human and machine. Big Data and Analytics Analytics based on large data sets has emerged only recently in the manufacturing world, where it optimizes production quality, saves energy, and improves equipment service. In an Industry 4.0 context, the collection and comprehensive evaluation of data from many different sources—production equipment and systems as well as enterprise- and customer-management systems—will become standard to support real-time decision making. For instance, semiconductor manufacturer Infineon Technologies has decreased product failures by correlating single-chip data captured in the testing phase at the end of the production process with process data collected in the wafer status phase earlier in the process. In this way, Infineon can identify patterns that help discharge faulty chips early in the production process and improve production quality. Autonomous Robots Manufacturers in many industries have long used robots to tackle complex assignments, but robots are evolving for even greater utility. They are becoming more autonomous, flexible, and cooperative. Eventually, they will interact with one another and work safely side by side with humans and learn from them. These robots will cost less and have a greater range of capabilities than those used in manufacturing today. For example, Kuka, a European manufacturer of robotic equipment, offers autonomous robots that interact with one another. These robots are interconnected so that they can work together and automatically adjust their actions to fit the next unfinished product in line. High-end sensors and control units enable close collaboration with humans. Similarly, industrial-robot supplier ABB is launching a two-armed robot called YuMi that is specifically designed to assemble products (such as consumer electronics) alongside humans. Two padded arms and computer vision allow for safe interaction and parts

recognition. Simulation In the engineering phase, 3-D simulations of products, materials, and production processes are already used, but in the future, simulations will be used more extensively in plant operations as well. These simulations will leverage real-time data to mirror the physical world in a virtual model, which can include machines, products, and humans. This allows operators to test and optimize the machine settings for the next product in line in the virtual world before the physical changeover, thereby driving down machine setup times and increasing quality. For example, Siemens and a German machine-tool vendor developed a virtual machine that can simulate the machining of parts using data from the physical machine. This lowers the setup time for the actual machining process by as much as 80 percent. Horizontal and Vertical System Integration Most of today’s IT systems are not fully integrated. Companies, suppliers, and customers are rarely closely linked. Nor are departments such as engineering, production, and service. Functions from the enterprise to the shop floor level are not fully integrated. Even engineering itself—from products to plants to automation— lacks complete integration. But with Industry 4.0, companies, departments, functions, and capabilities will become much more cohesive, as cross-company, universal data-integration networks evolve and enable truly automated value chains. For instance, Dassault Systèmes and BoostAeroSpace launched a collaboration platform for the European aerospace and defense industry. The platform, AirDesign, serves as a common workspace for design and manufacturing collaboration and is available as a service on a private cloud. It manages the complex task of exchanging product and production data among multiple partners. The Industrial Internet of Things Today, only some of a manufacturer’s sensors and machines are networked and make use of embedded computing. They are typically organised in a vertical automation pyramid in which sensors and field devices with limited intelligence and automation controllers feed into an overarching manufacturing-process control system. But with the Industrial Internet of Things, more devices— sometimes including even unfinished

products—will be enriched with embedded computing and connected using standard technologies.

deployed to the cloud, enabling more data-driven services for production systems.

This allows field devices to communicate and interact both with one another and with more centralized controllers, as necessary. It also decentralises analytics and decision making, enabling real-time responses.

Even systems that monitor and control processes may become cloud based.

Bosch Rexroth, a drive-and-control-system vendor, outfitted a production facility for valves with a semiautomated, decentralised production process. Products are identified by radio frequency identification codes, and workstations “know” which manufacturing steps must be performed for each product and can adapt to perform the specific operation. Cybersecurity Many companies still rely on management and production systems that are unconnected or closed. With the increased connectivity and use of standard communications protocols that come with Industry 4.0, the need to protect critical industrial systems and manufacturing lines from cybersecurity threats increases dramatically. As a result, secure, reliable communications as well as sophisticated identity and access management of machines and users are essential. During the past year, several industrial-equipment vendors have joined forces with cybersecurity companies through partnerships or acquisitions. The Cloud Companies are already using cloud-based software for some enterprise and analytics applications, but with Industry 4.0, more production-related undertakings will require increased data sharing across sites and company boundaries. At the same time, the performance of cloud technologies will improve, achieving reaction times of just several milliseconds. As a result, machine data and functionality will increasingly be

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Vendors of manufacturing-execution systems are among the companies that have started to offer cloud-based solutions. Additive Manufacturing Companies have just begun to adopt additive manufacturing, such as 3-D printing, which they use mostly to prototype and produce individual components. With Industry 4.0, these additive-manufacturing methods will be widely used to produce small batches of customized products that offer construction advantages, such as complex, lightweight designs. High-performance, decentralized additive manufacturing systems will reduce transport distances and stock on hand. For instance, aerospace companies are already using additive manufacturing to apply new designs that reduce aircraft weight, lowering their expenses for raw materials such as titanium. Augmented Reality Augmented-reality-based systems support a variety of services, such as selecting parts in a warehouse and sending repair instructions over mobile devices. These systems are currently in their infancy, but in the future, companies will make much broader use of augmented reality to provide workers with real-time information to improve decision making and work procedures. For example, workers may receive repair instructions on how to replace a particular part as they are looking at the actual system needing repair. This information may be displayed directly in workers’ field of sight using devices such as augmented-reality glasses.

NZ Manufacturer December 2015

FOOD MANUFACTURING

Improvement usually means doing something that we have never done before. – Shigeo Shingo

Australasian management strongly supports environmental initiatives A new study of Australiasian management attitudes towards environmental initiatives involving cleaner water and greener energy has found strongly increasing support among the people who are key to making such projects happen. The study, commissioned by CST Wastewater Solutions, finds industry is convinced about the potential financial viability of sustainable energy and water initiatives, if sanguine about the failure rate in Australia and New Zealand so far. The report, compiled by CST’s General Manager, Energy, Mr Andrew Boughton, is the result of 60 in-depth interviews with senior executives in industries such as food, beverage, agribusiness, processing, resources and energy, which have the greatest potential for new technologies such as wastewater-to-biogas being introduced to Australia by CST. The report shows respondents in Production, Engineering and Sustainability (PES) management have faith in the economics of sustainability investments, with over 90% disagreeing with the proposition, which is sometimes put, that sustainability is “never likely to be profitable”. “Yet for over 50% of end-users and two thirds of the consultants we

interviewed, there is a “major gap” between the goals and outcomes of Sustainability, while nearly all end-users we interviewed in person believe there are “major shortcomings” or even “failures” in sustainable energy and water projects, particularly around financial payback. CFOs and engineering managers were particularly sceptical of “over-cooked” sustainability claims, and of vendors using ethical leverage – urging buyers to spend for the sake of the environment while ignoring their real business needs. The market, by contrast, feels the sustainability industry should become more cost-effective, and be sure that business gets the results that they believe they have been led to expect and have paid for, says the report. Such healthy scepticism is sometimes justified given the number of less experienced operators moving into the business as clean water and green energy become headline corporate issues. Too many fulsome promises have been made and accepted, possibly because they haven’t been subjected to sufficiently rigorous financial analysis using the same terms of reference for all parties. This makes it hard for those who present realistic proposals and later are left to clean up the mess

created by others. Continuing the picture of optimism towards environmental initiatives presented in the report, over 80% of respondents agree it is “a genuine investment priority” with almost 60% agreeing strongly, yet almost half feel it is at least to some extent a response to “politically correct pressure. Over 90% of respondents believe the CFO is receptive to sustainability initiatives with a strong cost justification, though a third agree that Finance has higher investment priorities than Sustainability. In the open comments for the survey on “major challenges” in Sustainability, a number of respondents said that raising its importance over other investment priorities was either their first or second challenge, while in the “Opportunities’ section many respondents cited business growth or new product development as their key Sustainability opportunity. A number of PES managers candidly said that the first priority of the business was growth, in which context while environmental sustainability and energy efficiency came last – unless, as one respondent said, governmnt policies change, and then it could be a whole new ball game. Sustainability is the “poor cousin” on the Production side. So the responses

CST Wastewater Solutions’ Managing Director Michael Bambridge who recently installed a GWE combined green energy and wastewater treatment plant for one of Australia’s major global beef processers, Oakey Beef Exports

are mixed, with a tendency for production and sustainability staff to be fairly optimistic about the CFO’s approach to their proposals. “This is in fact one of the most comprehensive reports of its type in recent times in which CFOs have been very willing to invest time to speak candidly about the subject, because they passionately feel it has been over-cooked by the supply side”. A full copy of the report can be viewed at www.cstwastewater.com/ managing-sustainable-energy-water-investments.

OneStep technology improves efficiency for milk production from powder Tetra Pak has extended the application of its OneStep processing technology to milk production from powder; offering a solution that has only been available previously for production from raw milk. Producers can now prepare UHT milk from powder in one continuous step, reducing operational cost by up to 40 per cent, and cutting carbon impact by more than a half. Tetra Pak’s OneStep technology removes the multiple steps of pasteurisation and intermediate storage in the traditional process of preparing milk from powder before UHT treatment.

in-line blending unit, the whole process is now streamlined into one continuous step: skim milk powder is mixed with preheated water to make a concentrate, which is then blended with the precise amount of water and fat before undergoing UHT treatment. In addition to simplifying and accelerating milk preparation, the OneStep technology enables complete automation and continuous operations, reducing milk waste traditionally lost between processing steps and improving consistency in product quality.

Thanks to a complete redesign using the high performing Tetra Pak High-Shear Mixer and Tetra Alfast

Producing milk from powder is a common practice in markets such as the Middle East, Far East and Africa, where milk is increasingly seen as a

NZ Manufacturer December 2015

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good source of protein but there is an insufficient supply of raw milk. This is an expanding, but competitive market, and as the cost of milk powder is high, producers are constantly searching for ways to keep production costs down. Tetra Pak’s OneStep technology helps producers to achieve just that. Sadafco, a Saudi Arabian Dairy and one of the largest producers of recombined milk products, piloted the technology with Tetra Pak. Raffaael Reinders, Director Manufacturing at Sadafco said: “Thanks to the new solution, we have been able to reduce energy consumption by up to 40 percent, resulting in a smaller environmental footprint, whilst doubling production

capacity. In addition, the new system has enabled us to reduce production losses by as much as a third. The return on investment for the two lines was less than two years”. Sadafco started commercial production on the first OneStep line in December 2013 and has since placed its second order. Tetra Pak OneStep technology can be used to produce one single product, or configured into multiple streams to produce a number of recipes, giving customers full flexibility in production. It can also be used to produce formulated milk, which combines liquid milk or powder with fat and flavour to create flavoured and value added milk or lactic acid drinks.

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WORKSHOP TOOLS

Go confidently in the direction of your dreams. Live the life you have imagined. -Henry David Thoreau

TiS75 Infrared Camera resolves issues with equipment The Fluke® TiS75 Infrared Camera with professional-grade 320 x 240 pixel resolution and precise manual focusing enables maintenance professionals to pinpoint issues with equipment and electrical systems. Focus is one of the most important factors in conducting infrared inspections because an out-of-focus image can produce a temperature measurement that is incorrect by 20 degrees or more.

The TiS75 has a long-travel focus wheel that enables very fine manual focus adjustments so technicians capture in-focus images with precise measurements. It features a large 3.5-inch screen to help pinpoint issues while still in the field and also offers one touch image access, which eliminates the need to scroll through a menu to view images. The TiS75 is part of Fluke’s full line of 320 x 240 infrared cameras, including the Ti400 and TiX500, TiX520, and TiX560.

As part of Fluke Connect, the industry’s largest system of software and more than 40 wireless test tools, the rugged TiS75 can transmit measurements to a smartphone or tablet for later, detailed analysis. Those measurements can be uploaded to the cloud. Technicians can combine uploaded images and measurement data from multiple Fluke Connect test tools to create and share reports from the job site via email and collaborate in real time with other colleagues with ShareLive™ video calls or email, increasing productivity in the

field.* The Fluke Connect Assets subscription service offers ShareLive video calls that enable teams to easily share and access infrared inspections on the go and look at trends per piece of equipment over time. The Fluke Connect app can be downloaded from the Apple App Store and Google Play.

Bending tool reduces cycle times and waste Previously, three process steps were required in order to manufacture bent pipe components: cutting the pipe under consideration of span length and commercial length, the bending process itself, and the final cutting of the component. In order to make this process more efficient and economical, the pipe bending machine expert Schwarze-Robitec developed a new tool solution: a cutting device integrated into the bending tool. This makes it possible to bend and cut pipe components of commercially available lengths in a single process step. The users’ benefit is a reduction of material waste of up to 90% and

production times that are reduced significantly. The series production of short bent pipe systems must proceed in a fast, precise, and cost-effective manner. Here, resource-efficient production processes are the most important fundamental requirements. This is an intelligent cutting tool that can be integrated in almost all bending tools of the high performance machine series. The combination of the bending and cutting process step helps the user to reduce the production times significantly. Furthermore, waste is reduced to about 90% - a drastic cost savings. This applies in particular when it comes to high-quality materials and very short, bent pipe components. Previously, it was common practice to cut commercially available lengths to fixed length prior to the bending process.

However, this included span and support lengths that are essential for bending short components. Following the metal forming process, cutting The new bending/cutting tool by Schwarze-Robitec tools must be applied to cut reduces material waste by about 90 percent and the aforementioned additional lowers production times significantly.

lengths. This implies that the components must pass through three different process steps. Apart from this, the wasted material is enormous. It is quite common that during the production of manifold pipes depending on the bending system used - up to 100 mm is wasted for every component produced. When applying the integrated cutting tool, this drives the production cost down considerably. For instance, if interconnecting ten pipes, the waste is reduced to one-tenth - a tremendous economic advantage. Ingenious cutting technology The combination of bending and cutting tool provides the option to process longer pipe units instead of cut pipe pieces. During the first step, the bending machine forms the front of the pipe according to the program geometry. Subsequently, the integrated cutting tool separates the finished component from the unmachined pipe. The latter is moved through the bending machine, formed again, and cut. This process is repeated until the pipe bending process is completed and a single piece, which cannot be used, remains.

Schwarze-Robitec has developed a cutting technology that applies a clean cutting edge to all pipe components and allows to continue the processing immediately. In general, the ends of the pipes do not require any finishing process. During the cutting procedure, however, a small chip is produced that is carried away automatically. The cutting tool processes a variety of materials - among others, high-tensile steels - reliably and precisely. This particular series is used for large volume production processes that include short pipes. This optimises the cost advantages of this bending/ cutting solution. Moreover, the combination of multi-radii bending tool, cutting tool and bend-in-bend clamp jaws offer the option to produce particularly tight radii and short intermediate length of pipe in a single operation and, thus, optimize the reduction of waste. By adding further product innovations - e. g., the new timesaving CNC control system NxG and the rapid clamping system “Quick Tool Unlock” - the bending solutions offer the best premise for efficient and resource-saving production processes.

WeldCube keeps an overview of welding technology data The documentation and analysis of process data is gaining increasing significance for welding technology. After all, it is only with complete accuracy and transparency that targeted optimisation can become a possibility.

With this in mind, the international welding technology specialist Fronius has developed WeldCube, a documentation and data analysis system. WeldCube connects up to 50 power sources and makes accurate and continuous quality assurance and evaluation of countless parameters possible. As a result, users are able to significantly improve the output and reliability of their production operations.

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The WeldCube solution is based on an industrial PC (IPC) with integrated software, which is used to connect up to 50 power sources via the network. The system is compatible with all digital Fronius series, the resistance spot welding system DeltaSpot and the intelligent welding system platform TPS/i. This enables the user to document and evaluate a wealth of data - including current, voltage, wire speed, welding speed and time, arc length and dynamic correction, and job numbers -

during both manual and robot-assisted welding processes. This data is visualised in order to achieve an accurate analysis, then output via a web browser, which enables the results to be accessed conveniently from any computer or mobile device. Thanks to the Plug & Play principle, installing the WeldCube is extremely easy. Once the system is up and running for the first time, virtually zero maintenance is required to keep it going.

You can never cross the ocean until you have the courage to lose sight of the shore. -Christopher Columbus

WORKSHOP TOOLS

Enamelled piping range expanded By reorganising its product range, De Dietrich aims to become a major player on the piping market for the chemical and pharmaceutical industry. As a key leader in the enamelled equipment sector, particularly in reactors, De Dietrich relies on its technical expertise to propose a standard range of enamelled piping, which is both attractive and available at short notice. In order to meet the market’s objectives, the company has made a stock of over 12,000 items available, covering the whole range of the sector’s standard needs. The process peripherals (piping, pumps, valves, columns, gaskets, etc.) are components that are as important as the “heart” of the system. The De Dietrich glass-lined piping range thus benefits from the same quality of enamel as used for the reactors. A distinctive feature of De Dietrich’s enamel is that it is manufactured on-site, in France, allowing control

over the quality of the Group’s whole range of equipment. The current piping range is particularly suitable for transporting acid and alkaline fluids, abrasive solutions and high-temperature fluids in atmospheric or pressure conditions and in vacuum-high vacuum application in combination with temperature. In that last case the plastic lining have problems with accidental collapse.

consultancy skills, allowing it to take part in large-scale projects. Worldwide, clients can rely on the group’s expertise in selecting the standard product best suited to their needs in order to optimize the operating life and the dimensioning of the equipment.

De Dietrich can additionally provide tailor-made solutions when required. Finally, the glass-lined piping range is offered at highly competitive prices, making it the most attractive offer in terms of cost-performance ratio.

The range is designed for projects of all sizes and types: new installations or maintenance, always respecting the requirements of the most demanding markets. Corrosion-resistant, non-adhesive, pure, easy to clean and without catalytic effect, the components of De Dietrich piping are used by over 200 clients worldwide, in a quality that has made the company’s success. Another distinctive feature is the company’s engineering and

PlantPAx DCS integrates new enabling technologies The latest release of the PlantPAx modern distributed control system (DCS) from Rockwell Automation helps industrial producers across multiple industries modernize their plants and reduce time-to-market. New system capabilities include a more productive design environment to enhance automation productivity; easier adoption of new enabling technologies to improve user experience; and enhanced control capabilities to help meet operational goals. Increased Automation Productivity To provide operators with reliable and accurate system configuration, the PlantPAx system now includes expanded estimation, design and development guides. The updated documentation and design capabilities help dramatically increase automation productivity; decrease the time

required to deploy a maintainable and modern system; and reduce life-cycle costs. New pre-built control strategies developed within the Rockwell Automation library of process objects provide a consistent user and maintenance experience.    Improved User Experience Leveraging network improvements and built-in mobility, the PlantPAx system delivers an improved, reliable user experience. Expanded industrial Ethernet switches support Layer 3 topologies, enhancing scalability for a variety of applications. Smaller control systems can now be integrated into larger enterprise networks with a common, fully supported network infrastructure. The network switches include embedded Cisco technology to integrate and translate operations technology (OT) and information

technology (IT). This makes it easier for process operators to configure and manage system networks. The PlantPAx system also now includes a mobile component that enables users to create displays and interact with process data across any HTML5-compliant mobile platform. The software is responsive to the user’s specific device, allowing operators and plant managers to access and view performance metrics and data analytics in their preferred format. Enhanced Control New built-in control features – such as integrated PlantPAx model predictive control (MPC), alarm management and batch management – now operate in a common environment, helping to improve plant efficiencies and operational performance. Control-based PlantPAx MPC provides the ability to predictably manage

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external and complex process disturbances, and maximize process performance up to process constraints. This allows continuous improvements within the process while reducing waste and variability. The updated system also leverages the recently introduced batch application toolkit to help reduce the risk, time and cost of implementing batch control systems. Containing documentation, application examples and sample code, the toolkit gives engineers a starting point to build and maintain a consistent batch control system. It also provides flexibility to customize system elements for increased functionality. With the expanded capabilities of its modern DCS platform, Rockwell Automation continues to improve enterprise integration, scalability and open communication via EtherNet/IP and local support for its customers.

NZ Manufacturer December 2015

The best time to plant a tree was 20 years ago. The second best time is now. - Chinese Proverb

VISI Flow Analysis Software - Major Productivity Improvements Specialist plastic flow analysis software performs a significant role for a leading tool and mouldings manufacturer and its costs were recovered within the first month. “Within the first month of using VISI Flow to analyse the correct filling pattern and maximise our process parameters, we saved the cost of the software.” - Adrian Chapman, Technical Director “Aluminium moulds, in particular, can be damaged if filled from the wrong position, in the wrong sequence, or by excessive pressure with inadequate clamp tonnage. It’s all too easy to blow the mould and damage the parting faces. But VISI Flow shows us all potential manufacturing issues such

as welding lines, air traps and the best gate location, before the mould is trialled. “We can quickly analyse where the pressure is going to be too high, whether the material will freeze too quickly, if we need to have more than one gate and whether they’re in the right place. Once we’ve analysed and understood exactly what we need to do we can advise the customer on any necessary changes such as part thickness modification, changing the material or re-engineering.” Initial studies of moulded features and draft check analysis tell him all he needs to know to complete his initial Design for Manufacturability (DFM) work. He then carries out initial fill studies where VISI provides the same level of control over injecting molten polymer into the mould cavity as is available on the moulding machine. The simulation provides the

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ability to forecast and visualise how a component will be filled by the plastic melt front, making it possible to identify any potential aesthetic issues. VISI Flow provides a number of analytical tools that allow the investigation of moulding variables such as pressure, temperature, shear stress, frozen skin, fibre orientation, clamping force and many others. “With VISI I can quickly analyse the customer CAD data to verify moulding feasibility by checking for draft conditions and undercut features; then VISI Flow shows the capability of successfully moulding the required plastic part. “We use the part splitting tools to create parting faces, enabling us to quickly design the main core and cavity block. Once we have those finalised, we model the sliders, lifters and any other small components – whether they’re automatic or manual – and incorporate them into the mould tool. “With VISI we can simulate the mould kinematics and correct any issues before we start cutting expensive metal. It gives a very clear indication

of all areas where problems could arise. We can give our customers full and accurate information regarding the development of their mould tools. Without it, our dynamic approach and customer service would definitely be hindered.” “We don’t have any real challenges or issues with designing and manufacturing our jigs and fixtures, because VISI helps us achieve everything we need to. Summing up the company’s overall use of VISI, Adrian Chapman says: “It provides us with key information at the design stage and it supports the complete mould process, which ultimately ensures total end product satisfaction. “A conservative estimate is that within the first month of using VISI Flow to analyse the correct filling pattern and maximise our process parameters, we saved the cost of the software by avoiding downtime, repairs, wasted toolmaking and setting time, and reduced material costs.”

BUSINESS BOOKS

Your time is limited, so don’t waste it living someone else’s life. -Steve Jobs

A Curious Mind

The Intelligent Investor

The Secret to a Bigger Life

-Benjamin Graham

By Brian Grazer and Charles Fishman From Academy Award–winning producer Brian Grazer and acclaimed business journalist Charles Fishman comes the New York Times bestselling, brilliantly entertaining peek into the weekly “curiosity conversations” that have inspired Grazer to create some of America’s favourite and iconic movies and television shows—from 24 to A Beautiful Mind. For decades, film and TV producer Brian Grazer has scheduled a weekly “curiosity conversation” with an accomplished stranger. From scientists to spies, and adventurers to business leaders, Grazer has met with anyone willing to answer his questions for a few hours. These informal discussions sparked the creative inspiration behind many of Grazer’s movies and TV shows, including Splash, 24, A Beautiful Mind, Apollo 13, Arrested Development, 8 Mile, J. Edgar, Empire, and many others. A Curious Mind is a brilliantly entertaining, fascinating, and inspiring homage to the power of inquisitiveness and the ways in which it deepens and improves us. Whether you’re looking to improve your management style at work or you want to become a better romantic partner, this book—and its lessons on the power of curiosity—can change your life.

Talk Like TED -Carmine Gallo I am a fan of books on presenting, especially good ones, and this new book by Carmine Gallo, Talk Like TED – The 9 Public-Speaking Secrets of the World’s Top Minds, is a good one. The approach Gallo has taken is to analyse over 500 TED talks, looking at the videos, interviewing the speakers, and working with the people involved in making it happen. The book highlights great TED Talks, such as those by Hans Rosling, Amy Cuddy, and Amanda Palmer, and uses these to describe the lessons we can all learn from them. Gallo divides these lessons into three groups of three, and includes many of the well-known points about passion and storytelling. However, because TED talks are available via the web, we can read his descriptions and check out the videos – increasing our understanding of the points he is making, seeing them in action. No book is going to be a complete solution, and I could quibble with some of the advice. For example, I would like the book to focus a bit more on identify the needs of a specific audience, and in my professional world I often have to deal with speakers and/or audiences who don’t share a common language, which can produce a different balance of words and images. Most of the advice in the book is very sound and following that advice, watching the videos, and being more self-analytical would help any reader be a better presenter.

Who Moved My Cheese?

Benjamin Graham’s last line in The Intelligent Investor sums up the entire book in his trade-mark common-sense way: “ To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks.” First published in 1949, this version that I read was re-published in 2005 with a forward written by John Bogle who started Vangard Mutual Fund. Bogle’s forward serves as a very good summary of The Intelligent Investor, highlighting key points clearly. So I found it useful to read the forward again after finishing the book as a quick refresh of its content. Graham is very clear from the start that he is not writing for speculators but for the layman who wants to have a sound approach to grow his weath steadily. He believes that lay investors can achieve “a creditable if unspectacular result with a minimum of effort and capability…since anyone – by just buying and holding a representative list – can equal the performance of the market averages…” He warned those who tries to beat the market, as many smart people have tried to do this and failed. How he explained this makes a lot of sense to me every stock market broker thinks he can outdo the market. That means the stock market experts as a whole is trying to beat itself – a logical contradiction. They just cancel each other out. Thus, one should not rely on a financial advisor who promises the sky and raise your hopes that he can do better that the market average. That, claims Graham, is not possible.

Unmade in China: The Hidden Truth about China’s Economic Miracle -Jeremy R Haft The book sets out to debunk the following three “myths.” • China’s Economy is about to surpass the U.S. • Everything is made in China • China’s currency manipulation kills jobs One of Haft’s big themes is that we tend to give far too much credit for the good that comes from China and fail to realise how much bad comes from China, especially when it comes to product manufacturing. Haft plays up how so much of what is manufactured in China is really just assembled there from components made elsewhere. He also highlights how so many of the products China makes are of abysmal quality. Take baby formula in China. Please. Haft questions why we should expect China to be able to develop and build high end nuclear power plants or airplanes when it cannot even make safe baby formula. Haft sees China’s inability to make good products as an opportunity for US-made products and services to thrive in China. All that Haft says about China products is true, but at the same time, more and more China designed and made products are competing worldwide. Are these top of the line products? Very very rarely. But they are oftentimes quite good products produced and sold at lower prices than their competitors. And what about all the made in China products we buy every day that work just fine? Unmade in China also did an excellent job of debunking the notion that China’s economy is a juggernaut surpassing that of any other country.

Spencer Johnson First published in 1998, this is about a group of old school friends gathered for dinner and the topic of conversation gets on to change - in career, relationships and family life. One of those present contends that change no longer bothers him after having heard ‘a funny little story’ called Who Moved My Cheese? In this artful way, Spencer Johnson introduces the reader to his fable on how to cope positively with change. The story involves four characters who live in a maze: the mice Scurry and Sniff, and two ‘littlepeople’, Hem and Haw. All is going well because they have found a huge source of their favourite food, cheese. Hem and Haw have even moved their houses to be near it and it has becomes the centre of their lives. But they do not notice that it is getting smaller, and are devastated when they arrive at the site one morning and find the cheese is gone.

This is where the story splits in two. Scurry and Sniff quickly accept the loss of the cheese and go off into the maze in search of other sources. The little people, because they have built their lives around the big cheese, feel they are the victim of some kind of fraud or theft. Yet this only makes things worse, as their clinging on ensures that they go hungry. Meanwhile, the mice move on and find new cheese. The fable captures well that moment after we have lost a job or a relationship and we believe it is the end of the world. All the good things were in the previous situation, and all the future holds is fear.

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ANALYSIS

Coal and oil lobbyists added fossil fuels to a bill aimed at helping American manufacturers, so they too could claim ‘manufacturing’ tax deductions. -Bernie Sanders

Five big technology predictions for 2016 Frost & Sullivan’s Audrey William, Head of ICT Research, Australia & New Zealand shares her insights for the five big technology predictions into 2016. 2) The Enterprise Communications Market will witness disruption from an emerging class of start-ups. Cloud and Mobility are driving discussions around what the office of the future will look like. The use of the mobile devices will take greater precedence in the years to come. While it will still be compulsory or necessary for many organisations to have a desk phone, several organisations are eliminating the need for a desk phone. Microsoft’s Skype for Business is set to disrupt the traditional communications market. Although the traditional vendors still dominate in the voice space, Microsoft has started taking market share and with the recent innovation to its Skype for Business platform, Frost & Sullivan expects them to be a greater disruptive force in the market place.

1) Security will be the biggest issue in the ICT industry driven by rapid adoption of Cloud, Mobility and the Internet of Things. As platforms become more open due to the rapid adoption of Cloud, Mobility and the Internet of Things, security threats will rise and this will become the single biggest issue to tackle in the ICT industry.

We have also witnessed how well Microsoft has done with its Office 365 solution. Moving forward, Frost & Sullivan expects more companies to embrace Skype for Business as a replacement for its legacy communications platform. New start-ups such as Acano, Pexip and Slack are disrupting the traditional conferencing and collaboration space. Frost & Sullivan expects more start-ups to emerge in this space offering new ways of delivering voice, video, contact centre and collaboration capabilities to organisations by taking advantage of the cloud architecture and making the platforms more dynamic, collaborative and social in nature.

The Ashley Madison incident was an example of how hackers broke into the company’s network and leaked customers’ personal information. The incident brought about greater awareness of cyber security threats amongst organisations. Cyber insurance will rise in the coming years. We will witness more insurance companies step in to offer cyber insurance policies that will offer more than just compensation and protection from liability in the event of a cyber-attack. In the home environment, as Smart Home solutions witness greater adoption, this will mean that users will use their mobile phones and tablets to control power, cooling, heating, lighting and security. By allowing one interface to control the various applications of the smart home, security challenges will be a big issue for the industry players to grapple with. Targeted attacks on computer Industrial Control Systems (ICS) are the biggest threat to a nation’s critical infrastructure. Such attacks have the potential to bring down critical systems which can then lead to damaging a customer’s brand and reputation. Some of the attacks in recent years on Industrial Control Systems have not been publicised. The best known instances of targeted attacks on industrial control systems include the Stuxnet attack on an Iranian nuclear plant and the Shamoon attack on Saudi Aramco. The examples above demonstrate how security attacks are getting more sophisticated and can eventually lead to costly consequences. In 2016 we will witness vendors and service providers acquire specialist security vendors or grow their own practices internally to tackle the diverse issues in security impacting organisations.

3) Increased use of sensors across various industries will lead to a tsunami of data driving massive developments in Big Data. We are starting to see sensors being embedded in physical objects ranging from medical devices, wearables, highways, cars, industrial machines to mobile phones and these are then linked to very high speed and powerful networks. The volumes of data generated will lead to a huge repository of data. In farming and agriculture for instance, sensors can help gather information about the condition of the crops, and humidity, which will eventually assist in understanding water and fertiliser requirements. In the healthcare segment, when doctors need to analyse the traces of a disease that could be arising within an individual, it could mean swallowing a pill that has a camera attached to the pill and these cameras through sensors can help doctors determine the cause of the disease or what should be done to prevent the condition from worsening. In Smart City initiatives such as Songdo in South Korea, nearly every device, building or road is equipped with wireless sensors or microchips. The data generated will help the government make smart decisions about lighting, traffic, waste and other segments of a Smart City initiative. All these examples point to what the future of big data will mean for organisations.

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ANALYSIS

A bad system will defeat a good person every time. – Deming

5) Cognitive Computing and Artificial Intelligence platforms to become big across industries The Cognitive Computing platform is mirrored closely to how the brain works. It is based on how humans make decisions. The computer systems do not follow a specific pattern or fixed programming protocol. The computer intelligently identifies patterns thinking like a human brain. We can expect more cognitive computing platforms to bring about a new way of delivering services. We are starting to see that in healthcare for example. Memorial Sloan Kettering clinicians are partnering with IBM to train Watson Oncology to interpret cancer patients’ clinical information and identify individualised, evidence-based treatment options for its patients. In the contact centre space, we are starting to see contact centres using various technologies to create efficiencies such as cloud computing, self-service applications, web based platforms and analytics. IVR technology has been used for years by contact centres around the world and when you add artificial intelligence to that equation, it changes the face of how the contact centre of the future will look like. Last year IPsoft unveiled “Amelia” which is an AI contact centre agent. “Amelia” is designed to think like a human and can help answer complex customer queries. Whilst artificial intelligence solutions will gain in adoption, it is worth noting that the human element is still important as not all services can be taken over by AI.

Smart machines which include drones, driverless vehicles as well as robots are set to introduce efficient

Intelligent Personal assistants are also making its way in the market with Facebook’s M and Baidu’s Duer. The battleground for Intelligent Personal assistants will increase with nearly every large technology company investing in developing an intelligent personal assistant platform. Other popular solutions in this space vying for a share in this market include Siri, Cortana and Google Now. These platforms will offer a wide range of services which include booking a taxi, ordering food, groceries and other online goods.

ways of delivering output. 4) Smart Machines will disrupt the market place Smart machines which include drones, driverless vehicles as well as robots are set to introduce efficient ways of delivering output. As costs pressures rise in developed economies and emerging economies, smart machines will negate the need for staff in certain segments of the business. Rio Tinto recently rolled out fully automated driverless trucks at two of its iron ore mines in the Pilbara in Western Australia. The company is said to also be trialling driverless trains and will be deploying other technologies to cut costs. Wal-Mart Stores recently announced that it has applied to US regulators for permission to test drones for home delivery. Amazon was also trialling the use of drones for its online delivery business. The biggest challenge for the drone industry has been the ability for organisations to get approval from the respective aviation authorities. Robots are starting to be used in several Asian markets in hotels and restaurants to eliminate the need to have front desk staff or waiters. Toyota recently announced that it would be investing $US1 billion over the next five years to build Toyota Research Institute, a new company based in Silicon Valley focused on artificial intelligence and robotics. These recent developments point to a market ahead of us that will see how smart machines will be used widespread across various industries, but whilst it will drive efficiencies and help reduce costs, it will also start having a negative impact on jobs.

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IoT

We are what we repeatedly do. Excellence, then, is not an act, but habit. – Aristotle

Is your shop floor ready? Shop floors are often ground zero for scepticism regarding the Internet of Things (IoT). To the employees who work on the shop floor, IoT might seem like little more than the latest technology buzzword. Yet, the network connectivity that’s at the heart of the IoT is already rippling through the manufacturing industry. Manufacturers are realising significant productivity gains as a result of IoT-related improvements in sensing, analysis, prediction and control, and higher levels of automation. How organisations obtain the all-important buy-in from shop floor stakeholders? They must pay careful attention to change management. Capitalising on IoT opportunities is as much about reshaping an organisation as it is about implementing innovative technologies. The Importance of IoT Seventy to 80 percent of manufacturing processes are already automated. So then, what’s the big deal about IoT? By coupling software applications with sensors and controls that gather real-time production data, IoT links the entire manufacturing environment, including mobile devices used by

workers and supervisors. Take a look at the impressive advances IoT is notching on the shop floor. A packaging and chemicals company, for example, made considerable gains in asset management by outfitting its forklift operators with Google Glass. The operators quickly scanned batch IDs of boxes and automatically generated transfer orders that integrated with the company’s enterprise resource planning (ERP) system; this system also easily tracked packages as they checked in and out of storage bins. As a result of this connectivity, the company improved its inventory management and productivity. And by avoiding multiple touchpoints, it also reaped significant cost savings. In another success story, a logistics company implemented a GPS and telematics-based solution that alerts it to supply chain disruptions such as port strikes, traffic congestion, or weather-related problems. The real-time notifications allow the company to reroute global consignments and grant the company increased visibility across the supply chain. With this granular visibility, production planning and scheduling on the floor proceeds more smoothly. Adopting IoT and Managing Change Much of m a n u f a c t u r i n g ’s conversation about IoT focuses on shop-floor processes and environmental changes. But, IoT can impact every process within the

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organisation. It creates the next level of productivity gains by enabling manufacturers to both better align with customer preferences and build and leverage a collaborative ecosystem of partnerships. For these reasons, change management is a crucial element of IoT. This is especially true for managing change on the shop floor, where IoT’s generation of data and insight into operating performance elevates the shop floor’s role from a troubleshooter to a centre of lasting improvements. This shift represents a change in paradigm. The following tips can help manufacturers prepare for the change management approaches that IoT brings to the shop floor and to the broader enterprise: 1. Examine your organisational readiness. Taking advantage of IoT requires preparation on the shop floor and across the enterprise. Organisations need to be receptive to embracing new information. They must be willing to evolve into a culture where data replaces gut instinct, and routine decisions such as maintenance schedules and machine efficiency can become automated. Manufacturers need to consider if their organisations are open to these changes, and how they will manage these changes. 2. Embrace the construct of a learning organisation as a means of change. Becoming a learning organisation helps manufacturers increase acceptance of IoT on the shop floor. Learning organisations grow by harnessing the knowledge of their employees, especially when change is imminent and a knowledge-centric enterprise needs to emerge.

• February 2016 Issue •

The learning organisation is a relevant mechanism for change. When it comes to integrating IoT capabilities, organizations need to establish how they will tap into the expertise of smaller groups and individuals on the shop floor. They also need to plan for funneling this expertise toward broader corporate goals of higher efficiency, quality, and customer satisfaction. 3. Transcend boundaries. IoT presents a unique convergence of technologies and knowledge from multiple sources, including those outside your organization. Partners, startups, government agencies, and open sources of information form the IoT ecosystem — and offer tremendous value to both operational and strategic leadership. Initiatives that bring together multiple partners for a broader purpose create the perfect environment for change. But capitalising on IoT’s expanded boundaries also requires a different mind-set. Take the learning organisation paradigm, for example. In the IoT world, it is important that this paradigm include the partners and the ecosystem as well. The exact mechanism may be different for internal and external collaboration. The technology for implementing IoT is ready and available to deliver greater efficiency to manufacturers that adopt it. But IoT also has the potential to overwhelm the organisation, especially on the shop floor. By taking the necessary steps to prepare their organisations for IoT, manufacturing can become the epicentre of change for the organisation.

Features

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Manufacturing Technology

3D and 4D Developments

Additive Manufacturing

New Products For Manufacturers

Environmental Technology Workshop Tools (including injection moulding and CNC machines) Advertising Booking Deadline – 5 February 2016

Editorial material to be sent to :

Advertising Copy Deadline – 5 February 2016

Doug Green,

Editorial Copy Deadline – 5 February 2016 Advertising – For bookings and further information contact: Doug Green, P O Box 1109, Hastings 4156, Hawke’s Bay Email: publisher@xtra.co.nz

P O Box 1109, Hastings 4156, Hawke’s Bay

www.nzmanufacturer.co.nz

Email: publisher@xtra.co.nz Tel: 06 870 9029 Fax: 06 878 8150

At NZ MANUFACTURER our aim is to keep our readers up to date with the latest industry news and manufacturing advances in a tasty paper morsel, ensuring they do not get left behind in the highly competitive and rapidly evolving manufacturing world.

REAR VIEW

This month’s ‘Rear View’ comes to you from Australia. Nice to get some overseas reflections on manufacturing.

Manufacturing matters more than ever Manufacturing drives innovation and technological change. It accounts for a quarter of Australia’s private sector R&D expenditure. Manufacturing is the sector that contains and advances the skills and capabilities that prescribe membership in the ranks of the advanced nations of the world. For research and innovation, manufacturing provides the essential ground from which future streams of products and incomes can emerge. Furthermore, without a manufacturing base, Australia would need to import more consumer and capital goods, reinforcing our chronic inability to run a positive trade balance. Additional borrowing to do so, together with the repatriation of resource profits, would expose serious vulnerabilities in our external position. So manufacturing matters - more than ever - and every local manufacturer can contribute to keep our manufacturing base up and running. This country’s innovative capacity in the advanced manufacturing sector is also in strong demand in global supply chains within the high growth Asia-Pacific region. Australia’s capabilities tend to be focused on high technology, high value-add, and high-skill manufacturing that uses advanced design, processes, materials and technologies. Advanced Robotic Technology (ART) has always been – and will be – proud to be a 100% Australian manufacturer with all our ART-brand products, including plasma cutters and routers, all manufactured to the highest standard with advanced design features and latest CNC and automation technologies to make our customers more competitive. Automated equipment for manufacture ART, like many of Australia’s specialised automation and robotics system

suppliers, is able to deliver innovative and efficient automation solutions for many processing, manufacturing, material handling, assembly and packaging requirements; which is what our industry needs to survive in the long run. ART invests a lot of resources into developing new features and functionality into our products. Our machines have a lot of high-end features that are focused on productivity and versatility. Many of the functions that we have on our machines are simply unavailable on other machines. For example, we develop our software from front to back. Because our software developers work closely with our mechanical and electronics engineers, as well as our own in-house CNC operators, we have an extremely short development cycle time. This also allows ART to respond to the needs of customers by developing processes to suit their needs. Australian manufactures need to keep ahead of the competition in order to prosper. Innovation They also need to keep their eyes open and watch the market in order to identify industry’s needs or shortcomings. Looking at diversifying into other metalworking industries, we have studied the needs of every steel fabrication shop in Australia, from small to large, and developed the Metaltek XB series to answer the need for fully-automated structural steel processing in one machine. Our steel coping machine is an automated, versatile machine, giving steel fabricators around the country a competitive edge. Coping machines provide high speed and quality, eliminating all the drawbacks of manual coping. While there are many different machines from well-known overseas

By David White, Director Advanced Robotic Technology (ART)

Local support There is another important reason why Australian manufacturing will survive: Local support. As the market is being infused with cheaper imports, it is ever more vital that Australian manufacturers pull together to provide, not only world-class products, but also the necessary support structure that is lacking with many overseas products. Australia is a long way from the rest of the world. While it is becoming increasingly popular to purchase technology over the internet, a lot of companies are left high and dry when something goes wrong. ART encourages Australian manufacturers to focus on quality and service. That is where the real value is. When customers invest in a machine or any manufactured product, they are not just buying a piece of hardware. They are investing in the future of their business. The critical component that sometimes is sadly overlooked is the backup and support that can be provided through a local manufacturer.

The challenge is to increase productivity without compromising on the safety and quality of the product or the level of after sales support. One of the major advantages we have over imported products is the ability to customise to the specific needs of the customer. Almost all of our products are custom-ordered, with sizes and accessories configured to the specific requirements of the customer. Our entire sales process is focused around the needs of the client. That is the only way we can be sure that they get the machine that they need. In conclusion: Local manufacturing matters. Australian manufacturing is important because of the strong connection between manufacturing and developing a knowledge-based economy. True we may no longer be as competitive as we used to be in textiles, garments and footwear or mass production given the competition from low-wage economies. But by embracing modern methods of manufacturing, particularly through the use of automation, local manufacturers will be able to boost productivity and help to balance out some of the inherent costs of manufacturing in our country. We can bring manufacturing back into our country if we provide the right service and technology.

Increased productivity Even though Australian companies are starting to rethink their outsourcing strategies and ask if offshoring really makes sense in light of extremely complex supply chains, quality, intellectual property issues, and higher costs of not only labour but of shipping goods, we still expect to see an increase in imported products due to the strong Australian dollar. This puts increasing pressure on Australian manufacturers to be more efficient.

ART General Manager Shaun Gorman (left) and Director David White.

manufacturers on the market, our Metaltek XB series answers the need for fully-automated structural steel processing in one machine, including local support! The whole machine is designed to reduce labour and double handling while increasing productivity and profits.

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NZ LED design opens door to global opportunity “This type of fitting is highly-inefficient because it relies on outdated metal halide technology and suffers further losses through poorly designed lenses.” The only option available to the industry for decades, it failed to keep pace with technology and address key issues around maintenance, performance and importantly hygiene. Using the organisation’s wealth of experience with LED lighting, BLS fast-tracked an interim retrofit solution which was well received by its food production clients. “Despite that initial success, whilst

convenient, the retro-fit solution still relied on the old outdated lens and was not operating at its maximum potential efficiency. Furthermore, the ongoing problems around performance and hygiene were still present.” Regardless, the BLS design team headed by seasoned designer Chris Wheatley was confident that it could produce a world-class alternative utilizing its combined skills and expertise. Stoddart said while function and simplicity is core to the BLS product, it required significant investment in terms of tooling, design-work, sourcing of new materials and creative thinking

to develop what appears to be a “quantum leap” in relative efficiency. “We took a collaborative approach during development, working with clients who shared a vested interest in a successful future-proofed solution to understand the problems and issues with their legacy systems.” As the BLS team set to work on the project, it quickly became apparent that the legacy fittings varied considerably in size and how they were installed. “The new product clearly needed to be adaptable and address a range of

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complex issues relating to installation and practicality without compromising efficiency.” Stoddart said the solution involved taking a mixed materials approach. “We used a high performance, fire-retardant and chemical resistant plastic for the body, with an aluminium heatsink to reduce thermal load and optimise LED performance and longevity. The resultant low operating temperature provides an additional benefit by reducing the load on HVAC systems in temperature-controlled environments.

NZ Manufacturer December 2015

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