NZ 2013 Manufacturer August 2013 August
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www.solidtec.co.nz
Analysis
Developments
Analysis
Sucking business out of New Zealand.
Manufacturing investment in Dunedin.
Manufacturing in crisis, but not here.
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Page 21
Counterfeiting affects Medical devices give healthy boost to exports manufacturers
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arry Wiechern, Manager, Maintenance and Reliability Centre, Manukau Institute of Technology has some real concerns about counterfeiting and how this practice affects our manufacturers.
What is the danger of counterfeiting to manufacturers?
Extreme in terms of cost of a product that will not perform as expected, cost of secondary damage upon failure and the possibility that people could lose their lives, and have done so already. And then upon failure having to decide if it could have been caused by a fake product. Having had the chance to look at some major bearing failures it’s too late to ask those sorts of questions when the bearing has been severely damaged. The finger of blame will be directed to the fitter who didn’t check his tolerances, the possibility of any stress raisers, an inspection of any taper or damage to the shaft before fitting. Next in line to blame is the lubrication technician who was responsible for ensuring the correct grade type and amount applied. The last thing anyone will consider is the SKF, NSK, Fag etc bearing manufactured in Germany, when in fact it was manufactured anywhere else but Germany.
How widespread is counterfeiting?
From what we are now hearing it is widespread throughout all countries, every product you care
Larry Wiechern
to mention. Sometimes it is a subtle change in the wording which at first glance is difficult to detect to full blown outright theft of the product. Packaging and tape to seal the product (brake pads filter elements, electrical fittings etc). NASA and the US military are extremely worried as to the affects of this worldwide problem.
Are there key products that are more prone to counterfeiting?
No product is exempt where money can be made, It’s the world known brands that are most likely at risk because companies have invested millions of dollars on research and development to ensure these products will function as designed. Continues page 28
edical device firms have contributed more than a quarter (27 percent) of export earnings to New Zealand’s high tech manufacturing sector, according to a just-released report by the Ministry of Business, Innovation and Employment (MBIE). The high tech manufacturing sector as a whole contributed $1.4 billion in export earnings. Medical equipment accounted for around $379 million in exports to June 2012 and is currently showing a compound annual growth rate of 5 percent. The sector grew by $260 million in the period 2001-2011. Employment in this sector has also grown to 2,940 people from 1,610 in 2002. “We are delighted to see innovation and the investment in R&D paying off for companies in this sector and for New Zealand. The New Zealand medical technology manufacturing sector is expected to double export revenue within the next 3-5 years,” says MTANZ chief executive, Faye Sumner. Ms Sumner says companies such as Fisher and Paykel Healthcare (FPH) and Mesynthes who are highlighted in the MBIE report are leaders in their field and major contributors to this export growth. FPH recorded $287 million worth of exports in 2012 for its therapeutic respiration devices. The company employs 2,600 staff. Mesynthes specialises in medical biomaterial for tissue repair and reconstruction. The company is building a new facility in Wellington and could potentially double in size by 2014.
FAYE Sumner, MTANZ chief executive.
“Clearly Fisher & Paykel Healthcare leads the sector by some margin but there are a number of smaller medical device firms starting to show good potential as large contributors in the not too distant future,” says Ms Sumner. “This is a very exciting and dynamic sector and it’s vital we ensure domestic policy relating to procurement and regulations does not stifle this innovation in New Zealand but supports this sector to reap the rewards internationally.”
Continues page 25
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NZ Manufacturer August 2013
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www.asurequality.com
NZ Manufacturer August 2013
CONTENTS Advisors
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DEPARTMENTS
17 18 20 21 22 25 26 28 29 30
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MANUFACTURING TECHNOLOGY
Is the Manager of the Maintenance and Reliability Centre, Manukau Institute of Technology.
High-tech manufacturing sector continues to grow. • Enhanced integrated electrode solution. • Worldwide manufacturing revolution in 3D printing.
WAIKATO FOCUS
Skill gaps put employees at risk.
Page 6 – PREVENTATIVE MAINTENANCE – Preventative maintenance vs. Predictive maintenance.
Stephen Drain
ANALYSIS
Sucking business out of New Zealand.
Stephen Drain is a Director at PwC specialising in Leadership Development and Forensics.
DEVELOPMENTS
• Success has many faces. • Boosting R&D to meet demand
THE FUTURE OF MANUFACTURING • Nano materials sized up fro strength. • Japan launches humanoid robot.
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Page 13 – THE FUTURE OF MANUFACTURING – Electric buses recharged right from the road.
Is Executive Director of Export NZ and Manufacturing, divisions of Business NZ, New Zealand’s largest business advocacy group, representing businesses of all sizes.
THE FUTURE OF MANUFACTURING • Navman launches asset tracking solutions. • Creaform 3D Pipe check system. • The Internet of Things.
DEVELOPMENTS
Brian Willoughby
Manufacturing investment in Dunedin.
WORKSHOP TOOLS
• Compounder machine chosen for initative. • Versatile swivel lamp.
THE INTERVIEW
Page 18 – WORKSHOP TOOLS – Product lifecycle management.
The meaning of success. Dr. Neil Pattinson tells all.
ANALYSIS ANALYSIS
Chinese/Arrow benefits. To whom?
DEVELOPMENTS
ENERGY REPORT
➡
Is president of the NZ Manufacturers and Exporters Association and managing director of Contex Engineers and Plinius Audio.
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.
Manufacturing in crisis, but not here.
• New website shows diversity of industry careers. • Joint venture proposed for PrimePort; giant boost for port.
Catherine Beard
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Page 24 – DEVELOPMENTS – Combining forces to drive innovation..
Star energy rating to Auckland Council.
Professor John Raine ➡ Is Head of the School of Engineering and Pro Vice Chancellor – Innovation and Enterprise at the Auckland University of Technology.
FOOD MANUFACTURING
• Holland to benefit from NZ formula crisis. • Harnessing bacterial toxins.
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10 11 12 13 14
Larry Wiechern
BUSINESS NEWS
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5 8
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OPINION
Where is NZ’s ‘Welcome’ Mat?
SUPPLY CHAIN
• The magic of wireless for transportation. • The world’s largest container vessel.
Page 31 – REAR VIEW – Rich pickings, says Nick Inskip.
Bruce Goldsworthy
An advocate for NZ manufacturing for 40 years, he was Chief Executive of the Auckland Manufacturers Association for seven years He has been Manager of EMA’s Advocacy and Manufacturing Services, and lately manager for Export New Zealand in the north.
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NZ Manufacturer August 2013
EDITORIAL
Importing coal into a region like this, it just doesn’t make logical sense. – Solid Energy acting chief executive Garry Diack after the debt-laden state-owned enterprise announced the proposed lay offs of 93 Solid Energy jobs at the Huntly East underground coal mine.
Publisher
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Doug Green T: +64 6 870 9029 E: words@xtra.co.nz
CONTRIBUTORS
Wolfgang Scholz, John Walley, Larry Wiechern, Bruce Goldsworthy, Lewis Woodward, John Dennehy
ADVERTISING
Doug Green T: + 64 6 870 9029 E: words@xtra.co.nz
Design & PRODUCTION
Karl Grant T: + 64 6 857 7942 E: daylightmarketing@xtra.co.nz
WEB MASTER
Dan Browne E: dan@membrana.co.nz
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Vol. 4 No. 8 August 2013 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.
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Someone put their hand up
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ounterfeiting. It’s been going on forever. Way back in Greek times and it sure isn’t going to stop anytime soon. Larry Weichern knows that too.
It’s unusual for NZ Manufacturer to run an interview on the front page of an issue, but that’s what we have done in this one. And because counterfeiting takes a huge toll on business it is certainly a responsible and relevant topic to look at. Your company may be affected by counterfeiting in some way. If so, drop a line to publisher@xtra.co.nz and we’ll share your experience as well. Try and sort out the problem. When Fonterra’s issues raised their head last month I had quite a few people asking me not to concentrate solely on the dairy industry and to focus on high value manufacturing and not to have all my eggs in the agricultural basket. Which I don’t do anyway. Well, we’ve followed that advice in this issue and as usual considered manufacturing across the board which is making a difference to the bottom line. For example the medical device firms who are contributing 27 percent of export earnings to New Zealand’s high tech manufacturing sector. This sector contributes $1.4 billion in export earnings annually. High tech manufacturing (see Page 5) includes pharmaceuticals, aircraft manufacture, professional and scientific equipment manufacturing and computer and electronic manufacturing. It is a small but fast-growing part of our manufacturing sector and contributes 3 percent of total exports. Then of course there is medium-high tech manufacturing with products as diverse as domestic appliances, milking machines and insecticides. The sector is almost double the size of the high-tech manufacturing sector at $2.8 billion a year in exports. And, in no particular order, subjects such as local product knowledge, the “star quality fallacy”, and manufacturing moving ahead in NZ, all add to the rich analysis and observations of key New Zealand businesspeople that are looking to the way ahead for our high tech or medium high tech manufacturing. We make things to be proud of. Essential, high and medium tech products that the world is screaming out for. These are not products sitting in a cloud from the start, but products that can be read about in the cloud once they are completed. So get cracking. You’ve been reading this issue of NZ Manufacturer for long enough. It’s time to go back to the workshop and invent the next big thing! And look out for counterfeited products, they’re not doing your company any good at all!
Doug Green
NZ Manufacturer August 2013
Turnaround or growth, it’s getting your people focused on the goal that is still the job of leadership. – Anne M. Mulcahy, Former Chairperson and CEO Xerox Corporation
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BUSINESS NEWS
High-tech manufacturing sector continues to grow
he high and medium-high technology manufacturing sectors have shown growth and resilience despite global economic challenges, a new Government report shows. The High and Medium-High Technology Manufacturing Sectors Report was recently released by Economic Development Minister Steven Joyce. High-tech manufacturing includes pharmaceuticals, aircraft manufacture, professional and scientific equipment manufacturing, and computer and electronic manufacturing. It is a small but fastgrowing part of our manufacturing sector counting for 0.7 per cent of GDP and 3 per cent of our total exports. Medium-high tech manufacturing products are diverse and range from domestic appliances, to motor vehicles and parts, milking machines and insecticides. The sector is almost double the size of the high-tech manufacturing sector at $2.8 billion a year in exports. “These sectors are making
a substantial and growing contribution to our economy,” Mr Joyce says. “Both were affected by the Global Financial Crisis but, as the report shows, they have bounced back, overcome barriers and shown renewed growth since 2010.” “High-technology manufacturing has developed from small beginnings to become a significant export earner – from $139 million in 1991 to $1.4 billion in 2012 – and is now growing faster than the New Zealand wine industry. “The sector spends almost four times the New Zealand average on R&D and this investment is paying off. Firms in the sector are producing smart, innovative products that New Zealand is known for internationally.” The High and Medium-High Technology Manufacturing Sectors Report is the second in a series of seven Government reports that also includes ICT (released last month), construction, petroleum and minerals, tourism, knowledgeintensive services, and an overall report on all the sectors. Together
they will make up the New Zealand Sectors Report 2013. “Under the Business Growth Agenda, the Government has set a target to increase exports to 40 per cent of GDP by 2025,” Mr Joyce says. “Within the BGA there are 58 specific initiatives that directly relate to the high and mediumhigh technology manufacturing sectors. These include establishing Callaghan Innovation to encourage greater business investment in research and development, lifting R&D co-funding to $142 million per year, and helping to better commercialise smart ideas into successful products. “This report shows there is a lot to celebrate about New Zealand’s high technology and medium-high technology sectors. It highlights the exciting opportunities that exist to grow them, and boost investment and jobs for New Zealanders and their families with strong economic policies that keep improving the competitiveness of New Zealand firms.” The High and Medium-High
Shaun Maloney CEO ARANZ Geo.
Technology Manufacturing Sectors report is available at: http:// www.mbie.govt.nz/what-we-do/ business-growth-agenda/sectorsreports-series/high-technologymanufacturing-report.
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NZ Manufacturer August 2013
PREVENTATIVE MAINTENANCE
Growth is never by mere chance; it is the result of forces working together. – James Cash Penney, Founder of JCPenney
Preventive maintenance vs. predictive maintenance
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or some time, a considerable amount of confusion has existed over the appropriate way to inspect for the presence of a given failure mode. Should I perform some type of sensory inspection? Should I perform some type of quantitative inspection? Should I apply one or more conditionmonitoring technologies? Should I apply some combination of these techniques to maximise the conditional probability of finding the defect? Essentially, how do I identify the presence of a defect in such a way as to maximise the amount of time my planning department has to effectively and efficiently develop the job procedures, order the parts, and schedule and complete the work before the conditional probability of failure becomes too high? An explanation of the types of inspections and how they complement one another goes a long way toward clarifying which ones are most appropriate. Sensory inspections have long been considered the backbone of any good inspection program. It was believed that sending someone around often enough to inspect for problems with machinery would result in identifying defects in plenty of time to effectively mitigate unplanned downtime. The inspector would use sight, sound and touch to determine if anything had changed since the last inspection. Any change would be recorded, reported and investigated by a craftsperson on the next scheduled outage. While there is a tremendous amount of benefit to sending someone around to perform inspections, there are so many
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holes in this strategy that it should never be considered the backbone of the inspection program. Sensory inspections typically only identify the most obvious and drastic of problems. It is all but impossible for a sensory inspection to identify early, internal defects in machines. Enhanced sensory inspections fill that gray zone. They are both a sensory inspection and a quantitative measurement with conditionmonitoring characteristics. These inspections utilize instruments like spot radiometers, strobe lights, handheld vibration pens and simple ultrasonic meters to detect defects further up the P-F curve. While these tools multiply the power of the human senses, they have their limit. These simple tools do allow for different failure modes to be detected, but they shouldn’t replace a comprehensive conditionmonitoring program. Quantitative inspections can provide useful information when it comes to generating data for trending and determining the characteristic life of a failure mode. Quantitative inspections require someone to measure something. Very common quantitative inspections include measuring the temperature of a seal on a pump or measuring the backplate clearance on a pump impeller. These measurements provide data to the planner and engineer and help determine the need for further maintenance action. When designed properly, a quantitative inspection procedure details limits and typically expected measurements. Any inspection that requires someone to measure something should have the minimum, maximum and
typical values, with conditional tasks defined for when the limits are exceeded. But a quantitative inspection performed at the proper inspection frequency rarely will have a measurement that exceeds the limits. Condition monitoring, also known as predictive maintenance (PdM), is the application of condition-based monitoring technologies, statistical process control or equipment performance for the purpose of early detection and elimination of equipment defects that could lead to unplanned downtime or unnecessary expenditures. And generally speaking, you must conduct this while the equipment is in normal operation, with little to no process interruption. The purpose of these tools (vibration analysis, infrared thermography, motor circuit analysis, etc.) is to find defects not possibly found through previously available inspections methods, specifically while the machine is in normal operation. Taking advantage of the available technology lets you accurately assess the condition of parts and the presence of defects heretofore impossible to detect. An example of the advantage these tools have in the area of quantitative inspections or sensory inspections is the use of vibration analysis to determine the presence of a defect on a rolling element bearing. Previously, mechanics and millwrights relied on “lift checks” to
determine the amount of clearance in a bearing. Unfortunately, this technique is only valid for bearing defects that resulted in the removal of material from the raceways of the bearing; this bearing would be pretty bad off to have thousandths of inches of play in it. Sub-surface fatigue is easily seen with vibration analysis and at this point in the failure propagation has resulted in no removal of material from the raceways. This is the most common example of the advantages of conditionmonitoring technologies. In summary, there are different types of defect inspection techniques that can be brought to bear on a machine, and each has its advantages and disadvantages. However, these techniques aren’t necessarily exact replacements for each other. Each determines the presence of the defect at different places along the P-F curve and, as a result, each gives the planning function different amounts of time to respond to the defect. A failure modes, effects and criticality analysis (FMECA) can help you determine which inspection techniques should be applied, how often and with what degree of redundancy. Remember, the trick is to balance risk with rigor. How much risk you are willing to take with a given failure mode coupled with how much you are willing to pay for the inspection determines the appropriate strategy.
NZ Manufacturer August 2013
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NZ Manufacturer August 2013
MANUFACTURING TECHNOLOGY
Bear in mind that your own resolution to succeed is more important than any other. – Abraham Lincoln
Enhanced integrated electrode solution
A
range of enhancements has been added to the Delcam Electrode integrated solution for the design, machining and inspection of electrodes. The new version includes support for burn-vector electrodes, automated machining of electrode frames, batch processing of multiple machining projects and faster generation of electrode drawings. Delcam Electrode also benefits from a number of options introduced into Delcam’s PowerSHAPE design software which provides the CAD element of the overall solution. Burn-vector or side-sparking electrodes are used to spark undercuts within moulds, including those needed for submarine gates, or to avoid any possibility of a collision when sparking the base of a deep rib or similar feature. They use an arbitrary axis for their operation, rather than being aligned with the principal axes. Delcam Electrode now allows these electrodes to be designed and used with the same quick and easy wizard-based process available for conventional electrodes. The electrode action can be simulated in the software and the final design passed to the PowerMILL CAM system for machining in the same way as standard electrodes. Electrode frames are used to provide the basis for machining and inspection datums. Delcam Electrode now allows these areas to be modelled and then coloured separately from the electrode blank. This makes it easy for them to be identified in PowerMILL for
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Delcam Electrode integrates the design, machining and inspection of electrodes.
automated manufacture using a specific template. The burn region, extension faces and clearance faces were already able to be displayed and machined with separate colours in this way. The ability to automate programming within PowerMILL as part of the electrode solution does save considerable time for the user. However, when machining a large number of electrodes, it is inefficient to wait for toolpaths to be calculated on each individual project. To overcome this problem, the option to use batch processing of multiple projects has been introduced within the electrode machining wizard. The user now simply allocates
one machining template in PowerMILL to a series of electrodes if the designs are similar, or applies the appropriate template to each example if they differ significantly in size or style. Processing the toolpaths starts as soon as the first project is loaded. Subsequent projects are displayed in a list, with calculations beginning on the next item in the list automatically. At any stage, the user can move items up and down the list, depending on the urgency of the various tasks. If the calculations for a particular electrode cannot be completed, for example, if the software detects a collision, the problem is recorded and PowerMILL moves on to the next item automatically. Thus, a long series of calculations can be left to run overnight if necessary. Alternatively, the complete series of projects can be collected into a folder and moved to a second computer for calculation, while the user carries on with other
tasks on his main computer. The ability to generate customised drawings automatically is another important benefit of the electrode solution. This has been enhanced so that information generated while the user progresses through the electrodedesign wizard, such as the project name or the different spark gaps to be applied, is used to fill in details for the drawings immediately. Generation of the drawings when the design is complete becomes much faster as a result. All of the direct modelling enhancements to PowerSHAPE help to speed the creation of the electrode design. Of particular benefit are the “replace-face” command, which ensures extensions are at the same height when merging electrodes to be machined from a single blank, and the “solid-split command”, which makes it easier to divide unwanted material away from the electrode to create a simpler shape for machining.
NZ Manufacturer August 2013
Failure is simply the opportunity to begin again, this time more intelligently. – Henry Ford
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MANUFACTURING TECHNOLOGY
Worldwide manufacturing revolution in 3D printing
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dditive manufacturing technologies such as 3D printing are the next major movement in manufacturing since the digital revolution. “These technology are good for New Zealand’s small volume, high complexity product manufacturing and open up huge potential with almost unlimited design freedom”, said visiting Hood Fellow, Professor Gideon Levy, a world expert on additive manufacturing. “If you are not using 3D printing for rapid prototyping in manufacturing now, you are making a mistake”, he said. “Industry uptake of this technology for direct manufacture was limited until recently. Now it is taking off around the world.” “The industrialisation age of additive manufacturing is now upon us,” said Professor Levy. Professor Levy has had an extensive career in manufacturing technologies and has been at the forefront of the commercial use of additive manufacturing since its inception. He was named in the Time Compression Technologies List of the Top 25 Most Influential People in Rapid Product Development and Manufacturing.
He told a University of Auckland audience that 3D printing or additive manufacturing was a young technology that had grown in popularity again this year, after it was promoted in a speech by US President Obama, who said “3D printing has the potential to revolutionise the way we make almost everything.” “It’s a very exciting technology with many opportunities and challenges,” said Professor Levy. “It’s also a very complex technology with four key elements that are all essential to it.” The four key elements of this ‘enabling multi-disciplinary technology’ are: • the system and process with dedicated applications depending on its specific physical principle • the materials that belong to it such as polymers, metals, ceramics, composites and biological • the applications already used, such as for aviation, jewellery, automotive and industry and medical devices • and the up and downstream preparation including designs, finishing, modifications and coatings
• 3D printers operate adding layer upon layer laser for manufacturing objects. Seven families were defined by the ASTM standards including powder bed fusion or material extrusion processes. Professor Levy outlined the seven additive manufacturing processes where each can use different combinations of specific materials and the machines that are available. “The material is dedicated to the process that uses the application – it is very tight, but it also has many interesting features.” He said the value chain in product creation included concept modelling, rapid prototyping, pre-serie bridging, and conformal cooling to additive manufacturing. “In a few years it is estimate that 50 per cent of all complex parts will be made using additive manufacturing,” he said. “It is a very agile and innovative technology, and in five years we expect it will be state of the art, and we will also have commercialized 3D bio-printing.” “Today’s interest is high in additive manufacturing, especially for the manufacture of real parts
which are going direct to the final product and to the final customer.” Another development was continuous production, (instead of batch by batch production) achieving productivity and automation, invented by some companies that were focused on getting more efficiency from their system. Biomaterials increasing in use now included polymers that were bio-compatible and synthetic and natural bio-materials, called biological direct cell substances and cellular tissue matrices that acted as biological scaffolds. To meet the need to get closer to nature, we can use two processes – one top down, the other bottom up – to achieve this,” he said. “We try to build scaffolding to fill it with living cells or taking cells and putting it together that way.” “This technique is called tissue engineering where we create real body parts with this technology and produce in situ manufacturing of body parts.” “With additive manufacturing, the sky is the limit,” said Professor Levy.
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NZ Manufacturer August 2013
WAIKATO FOCUS
In order to succeed, your desire for success should be greater than your fear of failure. – Bill Cosby
Skill gaps put employees at risk
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New Zealand study has found that most employees are being put at risk because they don’t fully understand their workplace’s health and safety information, documentation and paperwork. The researchers say this has significant implications for regulators and employers’ efforts to keep people safer while at work, as outlined in the recently released WorkingSafer blueprint. Every year more than 200,000 New Zealanders are seriously harmed and more than 100 are killed in workplace accidents. The study of 466 employees in 23 manufacturing, warehousing, hospitality and other work places was conducted by adult literacy and communication specialists, Workbase. It involved showing employees a sample of their company’s core health and safety documents and assessing what they could understand of the content. The majority (65% overall, 70% in the manufacturing sector) did not fully understood written information about their employers’ health and safety policies and rules, hazard information, and safety procedures. Furthermore, 80% of employees could not accurately complete a hazard report form. The study also analysed the companies’ health and safety documents and found that they were consistently very complex in nature and used dense, indirect and specialist language that was not known by many employees in the study. Many documents also used unfamiliar vocabulary, which caused additional difficulties for employees with English as a second language. Workbase’s Chief Executive Katherine Percy says the study’s findings have serious implications for workplace safety: “The Ministry of Business Innovation and Employment’s recent Independent Taskforce Report on Workplace Health and Safety identified low literacy and poor communication skills as being an issue, particularly in higher risk workplaces, and our study backs this up. The WorkingSafer blueprint also identifies worker participation and engagement as being essential to strong safety performance, and notes
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Katherine Percy
that there are inconsistent levels of worker engagement in workplace health and safety issues. Ms Percy notes that, although supervisors’ literacy levels are generally higher than those of employees, 19% of supervisors also struggle to read and complete health and safety information and paperwork. This affects their ability to convey important health and safety information to their teams. The study’s findings suggest that little will be achieved by providing employees with more health and safety information or guidance documents, or by increasing hazard and incident reporting requirements. Reducing New Zealand’s workplace accident and death rates requires a higher priority to be placed on making health and safety documentation easier to understand. This is important because the study showed clearly that many firms have modelled their in- house health and safety documents on the formal language provided in official government documents. “Regulators and employers therefore need to review their health and safety information and communication, and make health and safety documents more relevant for the significant number of employees who lack the extensive formal technical vocabulary needed for health and safety compliance,” says Ms Percy. She noted that the Government’s new WorkSafe agency was a step in the right direction but agreed with calls by the Employers and Manufacturers Association and others that a higher priority needed to be given to training.
NZ Manufacturer August 2013
For me, the most fun is change or growth. There are definitely elements of both that I like. Launching a business is kind of like a motorboat: You can go very quickly and turn fast. – Tony Hsieh, CEO of Zappos.com
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ANALYSIS
Sucking business out of New Zealand
read with interest all the companies successfully designing, developing and marketing products for the export market. Justifiably these people need to be recognised for what they contribute to the economy. These manufacturers may have the greatest product on the market but without local support; product knowledge and stocking distributors of the overseas made “nuts and bolts” and other imported raw materials, there would never be an export product. However what I do not see is any credit or support being given to the wide range of NZ companies whose business is to represent overseas manufacturers of the components which are not made in NZ but needed to support the successful exporters. By these I refer to the literally hundreds of businesses who import and support with back up knowledge, samples and often stock of the “nuts and bolts” needed to help the exporters with their end product. Talk to anyone in the USA about the “buy American made” program and find the huge passion and considerable support for putting USA made parts into their end products; look at the pride with which Australia labels product as , “Australian Made”. The point I want to raise and get people talking about is why is it so many New Zealand companies seem to have the impression that they have to use a foreign based supplier touting their goods in NZ via a fat catalogue or website? Very often there is no real support from these companies during the development period, just promotion that they offer the widest range of product with the best price and delivery. Regrettably even our own government, and in the writers experience particularly, the defence force, seem to have the attitude, use local suppliers to help identify our requirements and sort out the right part to use but buy direct overseas. This is a trend that seems to be happening all too often and once started, despite recognition of the value of NZ business’s and the input made, once the items are codified in the system, the computer takes over and purchase orders wing their way to USA suppliers. Raise the issue and one is told that there is a need to recognise our trading partners and so we go round and round, sometimes for years. True, we live in a global market and in that there is the message we have to learn to live and trade accordingly. But look at our nearest
neighbour and observe how they support their own industries, both importers and manufacturers. For example I refer to the Hyundai Rotem trains they built for Sydney, basic carriages were imported with a large amount of work done in country. Along with local jobs, it provided trade training opportunities, business for the component suppliers but most important provided stimulus for the local economy. The profits made by those involved were for the most part spent locally, tax was paid locally and so the money went around. Many point out that it is often cheaper to buy direct from overseas rather than local suppliers; wholesalers and distributors are seen as too greedy. Let’s stop and look at this aspect for a moment, the entire NZ population and corresponding market could fit in the greater Sydney area. We don’t have the volume demand that enables importers to get the same buy pricing that the big overseas people get and equally, we don’t have the volume demand that allows us to operate on slender margins. However, many local distributors will provide a technical support service that is quickly forgotten, but often worth more that the difference than just placing an order overseas and hoping the right item turns up. The point I am trying to make is that if the UK, USA and Australia jealously protect their own markets and encourages local support of their component suppliers, why is it that NZ cannot do the same? Bottom line is our importers and distributors are cast aside in favour of an international catalogue distributor who has no investment in this country, leaves none of their profit for reinvestment, pays no
It’s time New Zealand, businesses and Government recognised the huge level of expertise we have in this country.
local tax and in most cases doesn’t provide any employment locally. The thrust of my article is that it’s time New Zealand, businesses and Government recognised the huge level of expertise we have in this country in the area of “support materials” and did more to support these business’s. Let’s stop bleeding the technical knowledge and support offered locally and then taking the end business overseas. Let’s focus on who the supplier is, what they put into the local economy, how many people they employ here in NZ, the tax and wages they pay that contributes to the economy. It’s time to ask, is the supplier adding to the local economy? Does NZ benefit from the business being done locally? Take this to the next level, why have I not yet seen anything raised in regards to how many NZ manufacturers of building supplies will go to the wall with the recent agreement to allow a major international building company have such a large part of the Christchurch rebuild? Building supplies of all sorts from factories owned by the construction company will flow in from low cost product plants, our own manufacturers of the same will be unable to compete and we will see yet a further round of redundancies from our NZ based manufacturers.
By Lewis Woodward,
Managing Director, Connection Technologies Ltd When will kiwis wake up and realise unless action is taken now to protect local business by supporting them, they will disappear and by the time anyone realises it, it will be too late? I’m not asking for special treatment for our component suppliers, just the same support that like business’s in other parts of the world get from their own people and governments. It’s all about providing employment for our people. Not everyone can be a super software developer or a budding electronics design engineer; we need people in every support position all along the production line. Let’s have kiwis supporting kiwi business, by this I refer to industry and government needs to buy locally. It’s high time we looked after our own industry and don’t try to tell me that other countries don’t put themselves and their people first. America pushes hard the message, “buy USA”, so what do we do, we have corporates and government telling local business we don’t care about you and prefer to support USA by, Buying USA” www.nzmanufacturer.co.nz
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NZ Manufacturer August 2013
DEVELOPMENTS
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– Alex Noble
Success has many fathers
like a party as much as the next man but there is a dark side, there is the morning after and possibly a false conviction that all is well because, after all, we had a party. In the case of awards, the dark side extends to convincing onlookers that all is well. Worse, it gives permission for politicians to sit back; assured they have nothing extra to do. This extension is the big worry, especially when our policy makers are the ones who tend to lean on the implicit assurance that all is well. I call this the “star quality fallacy”, the idea that because firm A or firm B are doing well, all similar firms are fine. The focus of real growth should fall not on the winners or runners-up in the beauty contest but the other end of the spectrum, the marginal players who operate just above the threshold of failure. Not sexy, not even attractive but much more important. The natural focus on success is a distortion; it is almost an aesthetic that masks the pain of failure, or if all else fails it makes the failure, from a policy standpoint, someone else’s problem. A success focus is like a recurring revenue business focusing only on sales and giving no attention to churn. It costs more to get new customers than to the keep the ones you have. We see this in practice often enough, by Government and industry groups who want to advocate the status quo. This argument became particularly popular during the Manufacturing Inquiry, which aimed to speak with those operating in the manufacturing
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Risk is essential. There is no growth of inspiration in staying within what is safe and comfortable. Once you find out what you do best, why not try something else?
sector everyday; perhaps the ones most qualified to judge the general health of their sector. Those against the Inquiry used these star performers as their reason for dismissal, pointing out that as these firms are successful under current settings, what is the problem? Anyone who points at the stars and says all is well, would do well to look at events and consequences around the failure threshold, it is unpleasant to look where the pain is, but it is much more instructive for policy. When looking to the health of the manufacturing sector as a whole and assessing how policy can be more supportive for jobs and sales, we must look at marginal firms, not the stars who win industry awards. What helps those marginal firms will help all, the opposite is not true and as firms fail we are all the poorer. The nature of New Zealand manufacturing firms, particularly high value manufacturers is they inherently produce niche products. This means the challenges they face are very different and firms are not directly comparable in terms of
John Walley
As a country we need to look to all our manufacturing firms, look beyond the “stars” if you like and get down to earth.
products, development process, and markets, to name a few. So reasons for success by one firm may not have the same outcome for another. That said, operating in New Zealand comes with challenges that have a significant effect on all exporting firms: our policy settings. For an exporting firm, even with hedging, the exchange rate is an unavoidable issue. This can result in good margins with a low dollar, but disastrous effects in times of currency appreciation. These are areas which can be targeted and can bring benefits to all manufacturers and exporters, the “stars” on down. As a country we need to look to
all our manufacturing firms, look beyond the “stars” if you like and get down to earth. It is important that we celebrate those who succeed and do extraordinary things, but we cannot measure the health of the manufacturing sector by those at the top. The belief that star quality will be our salvation and that failures at the margin are the sole responsibility of those failing, results in poor policy and as firm failures and job loses that could be avoided.
the power wheelchair markets, which stood at $1.1 billion in 2011, will reach $3.9 billion in 2018. The independent research organisation says that this sizeable market growth will stem from demand for mobility from people who might otherwise be bedridden. Dynamic Controls, which markets its solutions through health and mobility manufacturers, providers and therapists, plans to target this growing opportunity in established and emerging markets, such as China. Charlotte Walshe, CEO of Dynamic Controls says, “The majority of our business is R&D in home medical technology. We have over 150 staff in New Zealand and 200 in China, Taiwan, the UK and the USA working closely with end users, therapists
and wheelchair manufacturers on developing innovations that will help enhance the quality of life for people with disabilities. Factors such as aging global populations, the world diabetes epidemic, increased spending in countries like China and Europe, and more demand and expectation for quality products with the latest communications and connectivity features, are all contributing to this market opportunity.” At the ICT event hosted at Dynamic Control in Christchurch, Economic Development and Science & Innovation Minister, Hon Steven Joyce, presented the latest High Technology Manufacturing Sector Report. With annual exports increasing from $100m in 1990 to $1.4 billion in 2012, this sector is
an increasingly important part of New Zealand’s economy – creating and maintaining new jobs, skills, innovation and growth. “Research and development is recognised globally as an important driver of economic growth,” says Ms Walshe. “At Dynamic Controls we are developing new technologies to meet the growing demand for home medical innovation. Over the last five years we’ve invested in excess of 10% of our revenue into R&D. The money is spent on employing highly skilled staff to create and deliver market-disruptive innovations to customers faster. Governments around the world are also a key source of funding, and we applaud every initiative that recognises the importance of fast tracking R&D for the benefit of the local economy.
New Zealand Manufacturers and Exporters Association Chief Executive
Boosting R&D to meet demand
ynamic Controls, a leading innovator of electronic solutions for people with disabilities, is investing millions in research and development (R&D) to meet the growing demand for next generation power wheelchair technology. The global organisation headquartered in Christchurch is designing revolutionary features around its new LiNX power wheelchair control system that will significantly improve the health and wellbeing for end users providing freedom through mobility, communication and connectivity. LiNX delivers a major advance in programming through wireless connectivity to PCs and iOS devices. An international study by WinterGreen Research anticipates www.nzmanufacturer.co.nz
NZ Manufacturer August 2013
Success is often achieved by those who don’t know that failure is inevitable. – Coco Chanel
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THE FUTURE OF MANUFACTURING
Electric buses recharged right from the road
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he Online Electric Vehicle (OLEV), developed by the Korea Advanced Institute of Science and Technology (KAIST), is an electric vehicle that can be charged while stationary or driving, thus removing the need to stop at a charging station. Likewise, an OLEV tram does not require pantographs to feed power from electric wires strung above the tram route. Following the development and operation of commercialized OLEV trams (at an amusement park in Seoul) and shuttle buses (at KAIST campus), respectively, the City of Gumi in South Korea, beginning on August 6th, is providing its citizens with OLEV public transportation services. Two OLEV buses will run an inner city route between Gumi Train Station and In-dong district, for a total of 24 km roundtrip. The bus will receive 20 kHz and 100 kW (136 horsepower) electricity at an 85% maximum power transmission efficiency rate while maintaining a 17cm air gap between the underbody of the vehicle and the road surface. OLEV is a groundbreaking technology that accelerates the development of purely electric vehicles as a viable option for future transportation systems, be they personal vehicles or public transit. This is accomplished by solving
technological issues that limit the commercialization of electric vehicles such as price, weight, volume, driving distance, and lack of charging infrastructure. OLEV receives power wirelessly through the application of the “Shaped Magnetic Field in Resonance (SMFIR)” technology. SMFIR is a new technology introduced by KAIST that enables electric vehicles to transfer electricity wirelessly from the road surface while moving. Power comes from the electrical cables buried under the surface of the road, creating magnetic fields. There is a receiving device installed on the underbody of the OLEV that converts these fields into electricity. The length of power strips installed under the road is generally 5%-15% of the entire road, requiring only a few sections of the road to be rebuilt with the embedded cables. OLEV has a small battery (onethird of the size of the battery equipped with a regular electric car). The vehicle complies with the international electromagnetic fields (EMF) standards of 62.5 mG, within the margin of safety level necessary for human health. The road has a smart function as well, to distinguish OLEV buses from regular cars—the segment technology is employed to control the power supply by switching on the power strip
Japan launches humanoid robot
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apan has launched the world’s first talking humanoid robot “astronaut” toward the International Space Station. Kirobo — derived from the Japanese words for “hope” and “robot” — was among five tons of supplies and machinery on a rocket launched Sunday from Tanegashima in southwestern Japan, the Japan Aerospace Exploration Agency, or JAXA, said. The childlike robot was designed to be a companion for astronaut Koichi Wakata and will communicate with another robot on Earth, according to developers. Wakata is expected to arrive at the space station in November. Robot designer Tomotaka Takahashi, of the University of Tokyo, advertiser Dentsu and automaker Toyota Motor Corp. worked on the robot. The challenge was making sure it could move and talk where there was no gravity. Ahead of the launch, the 34-centimeter (13-inch) tall Kirobo told reporters, “one small step for me, a giant leap for robots.” Japan boasts the most sophisticated robotics in the world, but because of its “manga” culture, it tends to favor cute robots with human-like characteristics
with emotional appeal, a use of technology that has at times drawn criticism for being not productive. But Takahashi said sending a robot into space could help write a new chapter in the history of communication. “I wish for this robot to function as a mediator between person and machine, or person and Internet and sometimes even between people,” he said. JAXA said the rocket launch was successful, and the separation of a cargo vehicle, carrying the robot to the space station, was confirmed about 15 minutes after liftoff.
when OLEV buses pass along, but switching it off for other vehicles, thereby preventing EMF exposure and standby power consumption. As of today, the SMFIR technology supplies 60 kHz and 180 kW of
power remotely to transport vehicles at a stable, constant rate. After the successful operation of the two OLEV buses by the end of this year, Gumi City plans to provide ten more such buses by 2015.
Nanomaterials sized up for strength
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xperiments and numerical simulations show that miniaturised ultra-small platinum cylinders weaken when their constituents are reduced in number. Miniaturising micro-scopic metallic objects while enhancing their strength is critical to developing high-performance devices that integrate transistor-like electronics with mechanical components. When these objects consist of small crystals, or grains, such as polycrystalline nanopillars, their mechanical behaviour is difficult to predict because the grains vary in size and orientation. Researchers from the California Institute of Technology, USA, and A*STAR Institute of High Performance Computing (IHPC), Singapore, have now determined how miniaturisation and intrinsic granular structure impact the deformation of ultra-small platinum cylinders?. The team used a combined experimental and computational approach to overcome the knowledge gap hindering the production of reliable micro- and nana-electromechanical devices. Team member Zhaoxuan Wu from IHPC explains that this approach allowed them to reduce the size of the experimental samples to tens of nanometres. It also allowed them to perform large-scale atomic simulations on comparable nanostructures, which provided a means to directly link structure and mechanical properties. “This is rarely achievable in such studies,” he notes. The researchers first generated a template by depositing a polymer film on a gold-coated silicon surface and perforating it with nano- to micrometer-sized cylindrical holes. Next, they synthesised the metal nanostructures in these holes
from a platinum precursor solution. Dissolving the template then produced nanopillars that displayed well-defined grains of similar sizes and grain boundaries, or interfaces. Compression experiments on the nanostructures showed that the thinnest nanopillars remained almost cylindrical under low pressure but weakened dramatically, and bent irreversibly, under high pressure. In contrast, wider nanopillars exhibited a smoother deformation and delayed failure. This ‘smaller is weaker’ trend is contrary to the fate observed for metallic single crystals: they become stronger with smaller diameters. Wu and co-workers also found that reducing the number of grains across a nanopillar’s diameter weakened the structure. In agreement with their experimental results, the researchers’ numerical simulations revealed that the compressed nanopillars gradually underwent reversible and subsequent irreversible deformation (see image). Moreover, the simulations indicated the origin within the nanostructures of the irreversible deformation and dislocation motions. The nanopillars contain a high density of grain boundaries that promote the formation of dislocations. These dislocations, through which a specific type of deformation develops, propagate across an entire grain or from one grain to another inside the cores. Close to the nanopillar surface, the grains easily slide against each other to create atom-sized steps, reducing material strength. “We are further examining the effects of microstructural flaws and oxidations on the mechanical behaviour of nanomaterials,” says Wu.
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NZ Manufacturer August 2013
THE FUTURE OF MANUFACTURING
Life isn’t about finding yourself, it’s about creating yourself. – George Bernard Shaw
Navman launches asset tracking solutions
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avman Wireless has launched the Qtanium 350 and the Qtanium 100, both aimed at giving organisations better visibility of their assets. With full integration into the Navman Wireless software set, these products are ideal for organisations operating in the construction or mining sectors and those seeking a tracking system to reliably monitor their off-road assets, from the largest earthmover to the smallest bobcat. Making sure your assets are being fully utilised is an important KPI in the construction and mining industries and the Qtanium 350 lets organisations know how their most valuable assets are being used through detailed asset reporting and dynamic dashboards. When combined with Navman Wireless’ OnlineAVL2* software an organisation can monitor and manage all vehicles, plant and equipment assets on a single screen. “Understanding how your equipment is being used so you can
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be sure it’s working optimally at all times is crucial in the construction and mining industries,” said Navman Wireless Managing Director Ian Daniel. “We’ve done a lot of ground work and developed new reports specifically targeted at off road assets within OnlineAVL2 which will really help these businesses obtain that knowledge.” Some key asset reports include: • An Equipment Utilisation report that shows usage (ignition on time) broken out by day along with the current engine hours and last update • A Work Versus Idle report that identifies real ‘working times’ by showing the amount of time a vehicle or asset is running-idle and running-working • A Trip Report by Asset showing trips, from ignition on to ignition off, that each machine makes in a given time period • A Jobsite Utilisation report that tracks equipment usage broken down within each geofenced
jobsite, facilitating job costing • A ConEx (Sensor) Use report showing users how long the sensor was engaged and distance travelled while engaged • A Maintenance by Exception report will help users identify which maintenance types for each asset fall within a selected status (normal, due soon, overdue). Like the Navman Wireless vehicle tracking unit (Qube 4), the Qtanium 350 is available with optional satellite communications capability via the Iridium Satellite Network, should your assets be located in areas outside usual mobile coverage. This is extremely important in mining. “This new solution allows for the collection and analysis of realtime and historical data to provide organisations with all the fleet on road and off road asset intelligence they need to make a huge impact on their bottom line,” said Daniel. “The Qtanium 350 has been specifically designed with the construction and
mining industries in mind. Its IP67 rating means it can be submerged in water and it’s also shock tested and can endure harsh vibrations and extreme environments. The unit is tamperproof and affixed with industrial strength magnets. There is no other solution like it in the market.”
Profile: Hydestor Manufacturing Ltd
ydestor Manufacturing Ltd’s managing director, Kim Luxton talks to NZ Manufacturer about where the company has been and where it’s going. Our company’s success has been built around two main factors. Firstly the support of our customers. It is the constant interaction at the coal face that allows us to develop solutions ranging from a unique customised item to a full new development in the shelving range. Fast turnaround from concept to design and quotation ensures a timely and interactive experience for the customer. The second factor is down to Directors of the company working in the business on a daily basis and having the foresight and or good fortune to employ the right staff who have remained loyal for many years gaining the appropriate experience and expertise to offer solutions which customers today demand. We pride ourselves on the level of service we provide from the initial enquiry through to the installed solution Most of our leads are by referral – New Zealand is a small market and you live or die by your reputation. We are fortunate to be prominent in a number of key sectors based on service levels, design ability and manufacturing flexibility. For more competitive market segments we strive to gain an understanding of the balance the www.nzmanufacturer.co.nz
customer requires between a low initial cost and a cost effective solution over time. During all parts of the consultation process our staff are safe in the knowledge our systems will allow us to accommodate almost every need. We are currently involved in a number of key projects within the Museum sector, one recently completed is the design and installation of storage and retrieval systems for the newly redeveloped Hawke’s Bay Museum and Art Gallery Probably one of the most important decisions the company made was to invest in CNC sheet metal punching technology that gave us the manufacturing flexibility that the marketplace was driving towards. The first machine we purchased back in 1998 was so successful that we followed it up with an improved faster model in 2004. By being able to customise the product and solution design we have
Kim Luxton
been able to provide a specialised alternative to our customers rather than a standardised offering which has also allowed us to be more competitive against cheaper imported product. From the outset we have developed a very close relationship with NZ Steel from whom we purchase around 95% of our steel requirements. They have provided us with quality product with a high degree of flexibility. Wherever possible, we source from NZ suppliers where the price is competitive taking into account the minimum order quantities, lead times and quality
Exports
From an initial trade show appearance in Australia during 1992 a network of distributors were set up throughout Australia. Their customers, and indeed most entities involved within our targeted niche market, were accustomed to
purchasing “off the shelf” products as these were all that was on offer. Our philosophy of “tell us what you need and we will make it” together with a very high degree of support from our company principals ensured success. We now enjoy a significant market share throughout Australia which varies from state to state. However, it would be fair to say we are a major player in this niche market. This niche market has contracted rapidly over the last two years due to the local economic conditions and we do not foresee any marked improvement until next year at the earliest. We also export to all the Pacific Islands as and when projects arise. Overall the last two years have proved to be very challenging as the local economic conditions have reduced overall demand and coupled with a high NZ dollar has not been conducive to growing the business.
NZ Manufacturer August 2013
I feel that luck is preparation meeting opportunity. – Oprah Winfrey
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THE FUTURE OF MANUFACTURING
Creaform 3D Pipe check system
reaform’s Pipe check system is proving its speed and integrity of measurement. The system provides inspection rates up to 10 times faster than pit gauging. At the completion of scanning an Excel report with all calculated data and images can be produced for assessment or transmission to head office within two minutes, for straight pipe sections. More complex geometries can take additional time using other software suites such as Geomagic or Polyworks. The data can also be uploaded into FEA software packages. This can give results in hours rather than days with conventional methods. All raw data from the inspection is stored for any future interrogation or extraction of additional results or analysis at a later time. Apart from external corrosion and mechanical damage analysis, Creaform’s package can now analyse internal corrosion in tanks and pressure vessels when access allows. Using accumulated statistical
analysis Creaform’s results are being correlated to In-Line inspection methods such as MFL pigs to validate this data for further
decisions about dig-ups. In some instances only 60% of areas that have been targeted for dig-up by pig have actually been
assessed as needing that exposure. Cost savings of this scale make the Creaform 3D Pipecheck system a massive cost saver to asset owners.
results.” In addition, the chassis is the first in the NI CompactDAQ platform to offer an onboard watchdog with defined safe states to help protect your tests and equipment. The platform includes 10 chassis options, three buses and over 50 C Series modules with a wide range of connectivity and I/O. The platform also has native integration with NI LabVIEW system design software, which provides signal processing libraries and user interface controls designed for data visualisation. From single-signal benchtop measurements made in laboratories to distributed, rugged or standalone measurements made in some of the most extreme conditions on
earth, it is amazing how applications have evolved over the past 25 years. Another example of NI’s continual investment in the NI CompactDAQ platform is the support for the LabVIEW Electrical
Power Suite. With this toolkit, NI CompactDAQ users can integrate power analysis functions such as energy, frequency, voltage unbalance and event detection into their monitoring systems.
Taking measurements in rugged environments
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he NI cDAQ-9188XT, an 8-slot NI CompactDAQ Ethernet chassis, is designed for distributed or remote measurements in extreme environments. The cDAQ9188XT can withstand temperatures from -40 to 70 ¬∞C, 50 g of shock and 5 g of vibration. Engineers in the automotive, military and aerospace industries have used it to successfully acquire data and avoid costly repeat tests. “We are using the cDAQ-9188XT to track pressure, vibration, velocity and more in our jet - powered vehicle as we try to break the world land speed record,” said Steve Wallace, data acquisition scientist for the North American Eagle Project. “So far it has survived everything we’ve thrown at it and given us great
The Internet of Things
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ven though many physical objects from machinery to equipment are already “smart and connected,” they are typically operated in a standalone fashion and not integrated into existing business processes. Business process integration into systems such as Infor LN and Infor EAM can be achieved using DIGI’s Device Cloud by Etherios and Infor ION. Infor LN Service Management connects to remote physical objects to collect actual usage information from machinery and equipment to feed usage-based, preventative maintenance. Based on sensor readings or error messages generated by the equipment, Infor LN can help remote diagnose the error and initiate a fix, or—if required—schedule services resources to dispatch a service technician. The opportunity to improve customer service and streamline service operations is vast: • Streamlined compliance with
SLAs and reduced equipment down-time help lead to improved customer service levels. • Preventative maintenance lowers the risk of catastrophic failures and extends the useful life of assets. • Better utilisation of field service resources: as equipment cannot only be monitored remotely, but— depending on the problem—fixed remotely or through self-service. Beyond better managing service operations and extending the useful life of assets, the smart sensor revolution promises to revolutionise product design and engineering by providing real-time insights into how customers are actually using products, such as earth-moving equipment.
How connected machines revolutionise service operations www.nzmanufacturer.co.nz
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NZ Manufacturer August 2013
THE FUTURE OF MANUFACTURING
Can anything be sadder than work left unfinished? Yes; work never begun. – Christina Rossetti
Piracy, printing and a new era of manufacturing
3D printed plane.
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topic that doesn’t seem to come up, at least via outlets that are 3D-printer friendly, is the proliferation of piracy thanks to the quickly emerging 3D-printer market. Much like Napster brought a slapped major record labels across the face, 3D printing is poised to make major manufacturers shake in their boots… maybe. At-home 3D printing is certainly growing, fast, and there is a legitimate concern for manufacturers that their patented designs and unique products are going to be pirated and printed at home – effectively removing the manufacturer from the process. It seems likely that this would be almost advantageous for designers, as they can cut design and invent without the need for a cumbersome, capitol-holding middleman, but then the concept of piracy causes many innovators to start pulling the sheet over their designs – and
• • • •
understandably so. Eventually, the old manufacturing industry will wise up, and independent designers will band together to try to thwart physible piracy. Let’s go back to the music industry. When Napster first emerged, the major record labels panicked at the prospect that users could download any and all music at will. It was believed that Napster and its brethren would all together kill the music industry. But now we
3D printing is still in its infancy, and the masses have yet to catch up thus far.
Do you have a story you want to share? Developments? New markets discovered? How are you finding business in this challenging economy?
Email Doug Green at words@xtra.co.nz and share your story with readers. www.nzmanufacturer.co.nz
have iTunes, Amazon, and an ever growing plethora of digital music to appease our fickle tastes. It isn’t a far stretch to compare Napster to 3D printing and the music industry to manufacturing, but there are some major differences. First and foremost, even though Napster emerged some 14 years ago (in 1999), we still have many record labels that make monstrous profits every year. Granted, their surplus has gone down since the advent of digital sharing, but they have survived, even with digital music almost entirely replacing hardcopies. The manufacturing and design engineering industries are much larger Goliaths to confront than the music industry could ever hope to be. I’m clearly not the first to recognise these similarities. Napster was a surprise revolution to just about everybody, including its creators, but lawmakers are already wise to the capabilities of 3D printing and have started to preemptively create definitions for laws and regulations regarding the gray area between copyright and patent and 3D printing. A major flaw in the 3D-printing revolution is that it isn’t referred to as at home manufacturing. These issues will not come to any sort of legislative or legal table until at home manufacturing is truly possible. Right now, 3D printing outside of professional engineering settings doesn’t go far beyond a hobby. There are advantages to customising a housing for a Raspberry Pi or Arduino when you
help your kid build their first robot, but this will, by no means, replace traditional manufacturing. So, for now, we can relegate 3D printing to a complex Pinewood Derby Car. While many [rapidly prototyped] parts are produced directly from CAD design files, a growing trend is the use of scans that can create a part directly from another part without a design drawing. This capability can have a significant impact on the design process by facilitating the ability to reverse-engineer a product or a part. This may present an issue for piracy, but, currently, the cost of scanning, adjusting, and printing a new showerhead far exceeds the cost of just going out and buying one. If Moore’s law continues to prove frighteningly true, we will have to confront these issues sooner rather than later, but not until 3D printers are significantly cheaper, offer better resolutions, faster platforms, and more materials that cost less,. This is without mentioning the need for public know-how, which seems to be the slowest moving portion of our societal adoption of anything. We may be able to download and print anything we find on the internet, but those who understand CAD and design well enough to manipulate these items and true pirate designs are sure to remain few and far between for some time. Though FDM has been around for nearly a quarter century, rest assured that 3D printing is still in its infancy, and the masses have yet to catch up thus far.
NZ Manufacturer August 2013
Accept responsibility for your life. Know that it is you who will get you where you want to go, no one else. – Les Brown
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DEVELOPMENTS
Manufacturing investment in Dunedin
n a reversal of the manufacturing decline afflicting New Zealand’s provinces, one Kiwi company is affirming its South Island presence with an investment in facilities and equipment that makes it self-sufficient in retail product manufacturing throughout the island. Cottonsoft was established in Dunedin with its first tissue and toilet manufacturing plant in the mid-1980s, and later set up a sister operation in Auckland to combat the high cost of transporting product around the country. Now, a four-year extension to the lease on the building the company has occupied since 1999, combined with new embossing rollers that enable the production of additional Cottonsoft brands Paseo and Tuffy, have endowed the Dunedin plant with capacity to meet the demand for Cottonsoft’s retail products throughout the island, a total production of 300 pallets per month. The operational expansion has necessitated the employment of an additional staff member, and there is potential for more. This is heartening news for Dunedinites still reeling from downsizing and closure announcements from Kiwirail Hillside Workshops, NZ Post Regional Distribution Centre and Invermay Research Centre. Cottonsoft’s South Island business thrived for many years, but more recently the Dunedin plant was not expected to survive. It has not only done so but is bucking the industry trend of centralised or offshore production – no Cottonsoft competitor has a manufacturing presence in the South Island. As someone with roots in the region, Cottonsoft Country Manager Kim Calvert says, “I have a vested interest in keeping a strong business presence in Dunedin and expanding our base here – we regard this not only as great news for our business but also a good sign for the city and its economy.” Cottonsoft’s national operations manager Chris Batchelor, who is based in Dunedin, says the investment is against the tide of general industry decline in the city and wider region. “There is a lot of bad news in the local economy, and for several years there was doubt about our viability here. Like other businesses we went through several rounds of redundancy, and we were renewing our lease for only a year at a time. “However, we were able to prove our viability, and this investment represents a huge turnaround. The purchase of embossing rollers means we can now produce the
Tuffy and new Paseo brands as well as CottonSofts and Kiwisoft, so we have eliminated the need to ship product from Auckland to the South Island, which removes a substantial operating cost and reduces our carbon footprint. “Additionally, we have hired two new staff members, one in operations and the other in sales, for the first time in several years, and our landlord has invested in the business with improvements to the building and site, which we have enhanced with new signage. From our point of view, it consolidates our presence in Dunedin and represents a significant ongoing commitment to the city and wider region. We are very happy to have reached this point of stability in what is still a challenging time for the manufacturing sector.” Like Mr Batchelor, most of the company’s 14 full-time Dunedin staff have been with the company 10-plus years, with a total 200 years of service. He notes that the responsibility of the staff has increased with
Cottonsoft Country Manager Kim Calvert.
one final change: the company’s Dunedin footprint has increased due to expanded warehousing in the city that replaces a previous
Christchurch warehouse. Now, all South Island retail warehousing and distribution will be done from under one roof.
balancing presentation of Mr. Leonard offers a lifeline of hope to those determined to reverse the general decline of manufacturing depth and diversity. The northern Carolina manufacturing sector in the last decade was grimly reminiscent of our own local experience with mainstay industries such as textiles and furniture steadily losing jobs to Latin America and Asia. Today North Carolina is the third best US state economy, with a gross state product of US$425 billion, a booming tech sector and a national leader in agriculture, financial services and manufacturing. Meanwhile, Fonterra’s recent highly publicised experiences underline the catastrophic
effects that manufacturing and maintenance staff can have on a site, a business, an industry and indeed, an entire economy. Attendees are keen to take contemporary learning and experiences on systems and processes that can protect and enhance the businesses back to their workplaces. The National Maintenance Engineering Conference is the forum where people who can effect change in the workplace meet to share those experiences and interact with experts, practitioners and even politicians. The conference is presented by the Maintenance Engineering Society of New Zealand, a technical interest group of IPENZ.
Finance spokesman keynote Conference speaker
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he future of manufacturing is at the forefront of discussions at the upcoming SKF National Maintenance Engineering Conference with the announcement of Labour’s Finance spokesman David Parker as the opening keynote speaker at the November event. Preceding American maintenance evangelist Joel Leonard’s revealing presentation on the successful turnaround of Northern Carolina’s manufacturing economy, Mr. Parker will set the scene for the Rotorua two day annual conference in front of a national maintenance and manufacturing audience. The major focus of his opening will be to present the findings of the recent multi-party inquiry into manufacturing and set out Labour’s commitment to the industry. The results of the inquiry will be of particular interest to Maintenance Engineering Society members and conference attendees, who have significant interest and concern for manufacturing in New Zealand. Anecdotal evidence of significant decline in manufacturing presence and the associated demise of technical, supply and training infrastructure is of deep concern to society members and conference attendees, who are quick to point out that lost capability will likely never return. All the more reason why the
www.nzmanufacturer.co.nz
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NZ Manufacturer August 2013
WORKSHOP TOOLS
One of the marks of successful people is they are action oriented. One of the marks of average people is they are talk oriented. – Brian Tracy
Product Lifecycle Management: Per L ooking at the amount of machine tools that are metalcutting worldwide, future oriented service solutions are almost inevitably gaining importance. The provision of spare parts and assignment of service personnel alone doesn’t do the job anymore. This is why modern manufacturers started to look at the whole lifecycle of a machine tool. DMG / MORI SEIKI has set-out to provide 360 degrees solutions helping users to create the best possible environment for their machine tool to run precisely and productive throughout its entire lifetime. Operators’ skills, professional maintenance and fast diagnostics for longer machine tool life Service for commissioning machine tools as well as fast-on-site support in case of a specific damage through skilled personnel and the availability of spares are still the backbone of a long machine tool life. In those classic areas constant improvements have been made. Now modern spare parts logistic networks spread globally serving users fast with the spares they need, service engineer localisation enables fast local language on-site service and remote diagnostics through hotlines or software solutions help to further minimise expensive downtime on the shopfloor. However, around those more and more additional products have proven their stance. There is the operation of the machine, which achieves best results when operated by experienced well-
Remote monitoring.
trained staff. Training has thus become a cornerstone for successful manufacturing. Service training for the correct maintenance of machine tools is another important component. Manufacturers have more and more realised that purchasing a high-end machine is like owning a brand car: the better cared for, the smoother and longer it runs ensuring a high return on investment. Prevention is the keyword. Check-up systems in the control help to plan maintenance intervals and service work, maintenance kits facilitate the process. Software for remote troubleshooting or remote monitoring on smartphone or tablet devices prevents longer machine failure. Productivity: Getting the best out of a machine tool’s life span Periphery products are a crucial component of the product lifecycle
increasing machine and tool life span, precision and thus productivity: the higher the productivity, the better the return over the whole lifecycle. True lifecycle management starts even before the machine is purchased, when it comes to choosing the right machine configuration and continues with training operators to ensuring reliability in the production processes through round-the-clock local support or remote diagnostics. Regularly planned inspections of safety functions, main spindle, hydraulics, cooling units, software status etc. helps minimising unexpected service assignments. Looking at systems around the machine tool, customer specific solutions in automation such as robot and handling systems, engineering and tool pre-setting devices significantly increase a machine tool’s productivity and help to get the best out of the machine tool’s life span.
The use of tool presetting equipment in manufacturing frees expensive machine tools from unproductive setup times and thus increases their availability ‘in a calculable manner’. Users who configure their tools on the machine waste rationalisation effects that could be freed up easily and reasonably by using external devices. Taking a closer look at software solutions Intelligent software solutions increase efficiency and ensure reliability in production. One focus is prevention of failure. Another angle is the optimisation of performance of the machine tool. Software products involve the complete process chain from drawing, simulation and programming to the final machining of the work piece. They add to fast and efficient manufacturing avoiding unnecessary machine stop or failure through preventive simulation. Remote diagnostic and support software kicks in when technical problems occur, as the operator can setup a secure internet connection right from the machine to the manufacturer’s service department by for example simply pressing a button on the machine tool. The best suited service employee to tackle the issue will be assigned to undertake an immediate and detailed problem analysis and also to rectify a multitude of machine problems directly – as if being right there on site. Another approach is monitoring. The capacity of metal-cutting machine tools continuously
Compounder machine chosen for automotive initative
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n Injection Moulding Compounder (IMC) machine has been chosen for the new Automotive Centre Sudwestfalen in Germany. The centre is a joint venture between local universities and municipalities in Germany to assist the automotive industry with a centre for the transfer of knowledge. The goal of the centre is to encourage automotive manufacturers to develop new light weight solutions for automotive part production as well as looking at alternative materials and new material combinations. The centre provides manufacturers with cutting edge infrastructure, machines, software and personnel for projects and studies into manufacturing www.nzmanufacturer.co.nz
processes for lightweight automotive construction. Krauss Maffei supplied an MX 1300-14000 IMC with bolt-on BO-L 4300 unit and a MC5 Touch control system together with an industrial robot for handling the parts. The machine is ideally suited for the development of new materials with the ability to compound and mould special reinforced resins that can be used in the drive for lighter components in the Automotive Industry. The IMC delivers outstanding melt homogeneity and mixing efficiency, resulting in optimal part quality and enables the manufacture of components with any mix of filler, reinforcement and substitution materials.
NZ Manufacturer August 2013
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WORKSHOP TOOLS
When it is obvious that the goals cannot be reach, don’t adjust the goals; adjust the action steps. – Confucius
riphery products into the spot light reach the end of their lifespan. At DMG / MORI SEIKI professional reconditioning includes thorough incoming inspection and complete cleaning of all components. Defective parts and wear parts are replaced with original
components. Once re-assembled, the machine goes through a longer time operating test and outgoing inspection. Reconditioned in such a way, the quality and efficiency of a machine tool do not depend on the year of its manufacture.
Linear toolshrinking.
increases and production processes become more and more efficient. Efficient handling, prompt provision of manufacturing resources and avoidance of downtimes is an ever increasing demand to reduce costs. This particularly applies to production processes running over long periods. In this environment, the most up-to-date information about operating states of the machines plays a decisive role. Software solutions allow users to check the current state of their machine at any time, independent of their location, and to respond to an error instantly if needed. Immediate text or email messages are one option; other more comprehensive functions collate information to be transferred.
Machine tools reborn with overhauling and reconditioning The provision of reasonably priced machines with comprehensive manufacturer’s guarantees or the repurchase of older machines within the scope of new investment have opened the doors to used machines trading, retrofitting and upgrading. Machine tool users nowadays can retrofit their existing machine park and increase productivity to the latest standards without purchasing new models. Overhauling of complete machines or components as well as giving them in part payment for a new machine (including dismantling and transport), is another way of providing solutions for productive operations using products which
DMG overhaul retrofit.
Versatile swivel lamp
T DMG messenger section.
wo versatile and compact L.E.D interior lamps may well shine more light throughout the interiors of caravans, motors homes and boats. The two newcomers feature a swivel action that allows the lens to be rotated 180º for fast and easy adjustment of the light to where it is required. The new multi-voltage 9-33Volt L.E.D lamps measure just 174mm and 242mm in length, have a simple on/off rocker switch and can be fixed to a ceiling or wall. The smaller lamp has four high performance L.E.Ds delivering a smooth spread of light, with ultra-
low current draw of 0.14A at 12V and 0.7A at 24V, making it ideal for recreational vehicles such as caravans and motor homes, as well as for use in boat cabins, helping to reduce the load on the battery. For those who want more light output, the larger lamp comes with eight high performance L.E.D’s. It has a very low current draw of just 0.28A at 12V and 0.13A at 24V. Both these versatile and aesthetically pleasing lamps are packaged in attractive blister packs for added protection during transit/ display and are available from leading automotive outlets under Part Numbers 87662 and 87664. www.nzmanufacturer.co.nz
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NZ Manufacturer August 2013
THE INTERVIEW
Don’t ask what the world needs. Ask what makes you come alive and go do it. Because what the world needs is more people who have come alive.
The meaning of success
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anterbury Scientific CEO, Dr Neil Pattinson, talks to NZ Manufacturer about success and the value of investing in R & D.
Where has your success come from?
Canterbury Scientific has achieved great success through the development of a product that meets a fast-growing global need. The Haemoglobin A1c (HbA1c) control is used in blood tests for the management of diabetes. Diabetes is a global problem of epidemic proportions; it currently affects 7% of the world’s population – more than 347 million people – and this number is likely to more than double by 2030. There is no cure, only management to minimise the impacts of the disease, which means regular testing. The use of HbA1c as a method of diagnosing diabetes was endorsed by the World Health Organisation in 2011. Canterbury Scientific’s HbA1c control features greater stability and shelf life than any other products available on the market. Plus, the product is distinctive in its ethical development: it is made from healthy blood samples which have had sugar added in a test tube rather than using the blood of diabetic patients whose glucose levels are not appropriately controlled.
How do you look after (and build) your market?
Canterbury Scientific employs an OEM partnering model to sell HbA1c controls into clinics, hospitals and laboratories around the world. The customer or end-user of the product is typically a clinician who is diagnosing or monitoring (every three months) diabetic patients using a Clinical Chemistry analyser. The analysers are provided by global medical device manufacturers including Siemens, Roche, Panasonic, Beckman Coulter, and Canterbury Scientific forms OEM partnerships with these providers who bundle and distribute the control as part of their healthcare technology portfolio. Canterbury Scientific has achieved over 40% market share in the US and 10% in Europe, with sales revenue also coming from South America, India, China, Japan, SE Asia and Australasia. The company leaders travel to annual conferences such as the American Association for Clinical Chemistry, Medica in Germany and the China Medical Equipment Fair where they meet with existing OEM partners and develop future relationships. www.nzmanufacturer.co.nz
The company’s success with HbA1c has allowed it to explore several other ways of diversifying its offering, including contract manufacturing and the development of complementary diagnostic products. We invest 20% of profits on research and development, and has brought together health industry partners to further research in various fields, including pancreatitis, diabetes, cardiovascular disease and pre-eclampsia. A joint study with the University of Canterbury into the secondary complications of diabetes was awarded $1 million in funding from the Ministry of Business, Innovation & Employment in 2012 (one of 31 projects selected under the High-Value Manufacturing and Services Research Fund). It was selected in part due to export potential resulting from Canterbury Scientific’s commercialisation experience and international relationships. Canterbury Scientific prioritises solid partnerships with researchers from the University of Canterbury, the University of Otago, the University of Cambridge in the UK and the University of Shanghai in China. In fact, the company hosted a Science Symposium in 2012 which brought together more than 30 clinicians and researchers from New Zealand and around the world to brainstorm and evaluate opportunities for new diagnostic product development projects.
How’s Business?
Fantastic. Company revenue and staff numbers have both more than doubled in the last 3 years. In 2011, the company moved into a newly refurbished $1.2m world class manufacturing facility in Addington, Christchurch – complete with advanced laboratory space with pressure, temperature and humidity control. It was officially opened in a ceremony by then New Zealand Minister for Research, Science and Technology, Hon Dr Wayne Mapp. In 2012 we held our first Scientific Symposium, out of which developed a joint project with the University of Canterbury to research the secondary causes of diabetes. That project was subsequently awarded $1 million in funding from the Ministry of Business, Innovation & Employment (one of 31 projects selected under the HighValue Manufacturing and Services Research Fund). It has helped to cement our reputation as the commercialisation partner of choice for several academic institutions domestically and overseas.
The growth has also led to greater recognition and accolades within New Zealand industry. The company was named among the Technology Investment Network’s list of top performing technology companies in 2011 (when it was also heralded as a top 10 ‘Hot Emerging Company’) and 2012. That was followed up with award wins at the 2012 Champion Canterbury Awards (Global Operator Award and the Supreme Award in the small enterprise class) and the 2012 NZ Innovators Award in Health & Science. Now the company is up for one of the pre-eminent export awards in the country – the NZTE International Business Awards.
What are you currently working on?
With China and India accounting for nearly half of the worldwide diabetic population, significant focus has been placed on the recruitment of new device manufacturer partners in those markets. In the last couple of years we’ve signed on Beckman and Arkray, and are working on several others. Our current research projects focused on new potential biomarkers for various clinical conditions include: the secondary complications of diabetes, preeclampsia and pancreatitis.
Do you enjoy what you do?
Absolutely. Every day is different. I work with some wonderful people that keep me energised and on my toes. The product is an important tool in improving health outcomes and as a consequence we are making a difference in a real world context. I do however have a few sleepless nights!
Most satisfying business decision? Joining CSL as their CEO.
Favourite quote?
“Life is like riding a bicycle. To keep your balance you must keep moving.” – Albert Einstein “The more I practice the luckier I get.” – Gary Player
– Howard Thurman
Dr Neil Pattinson.
Who is your inspiration?
Dr Seuss. His books bring together a love for reading and the joy of imagination linked with a high moral compass.
How do you see the NZ economy?
Distorted by growth in non productive/value adding activities (real estate). There needs to be created a level investment playing field. Private investment in R&D needs to be encouraged. There is too much emphasis on agriculture and tourism (farm and theme park). A strong and diverse manufacturing and export sector needs to be encouraged. For all that the Government restructuring of the Ministry and CRI (Crown Research Institute) is to be applauded with a much closer link to industry. Also we need to remember that we are in the midst of a global recession. Relatively speaking we are looking pretty good although as witnessed last week in China, due to our high reliance on the dairy sector, potentially very vulnerable.
Do you have a passion for manufacturing? Tell us about it.
Absolutely. It’s an area that requires creativity and continuous innovation. It’s solution focused and in most cases provides outcomes that make a difference.
How do you relax?
I play in our vineyard in the weekends followed by a liberal dosing of wine in the evenings! I also like to play a bit of Tennis and golf.
NZ Manufacturer August 2013
ANALYSIS
If I had asked people what they wanted, they would have said faster horses. – Henry Ford
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Manufacturing in crisis, but not here
he crisis in manufacturing makes grim reading, but thankfully for New Zealand its happening in Australia, not here. Unlike their counterparts across the ditch, Kiwi manufacturers are showing every sign of resilience and investor confidence. The evidence for the Australian story is most bleak in their Performance of Manufacturing Index (PMI). The Australian PMI is operated by the Australian Industry Group on the same basis as here and in every major country. For the past 25 months Australian manufacturing has been shrinking. The decline accelerated in July, with manufactured exports going down even faster than sales on their domestic market. New orders in July were at 40.5 on the PMI. The July result at 42 was down 7.6 points from a rare ‘high’ of 49.6 in June. In contrast, New Zealand’s PMI for July was a seasonally adjusted 59.5, and proving durable. For the first seven months of 2013 it averaged a healthy 56.3 expansion. Remember the farther the PMI measure is above, or below, the mid 50 point the larger the expansion or contraction occurring. The commentary on the Australian PMI is telling. A third of respondents noted extreme weakness in local demand, bad news for our exporters dependent on Australian sales. As it is Kiwi exporters to Australia are finding margins slashed due to the fall in the Australian dollar. In less than two months the currencies switched from 78 cents to 88 cents. But Australia’s manufacturers have yet to see any respite from the fall, though they expect to. Two weeks ago we read of the Business Council of Australia lamenting the drop off of big new investment projects - down 30 per cent – with one of their members, chief executive of Woodside Petroleum, Peter Coleman noting: “Those who had the GFC have shed their fat. Australia didn’t make
the structural changes others were forced to make.” Even the Eurozone, Japanese and US PMIs are at last in positive space, which augurs well for their job prospects, consumer confidence and a global economic recovery. The New Zealand experience for those manufacturers able to last out the recession is to be celebrated. All five seasonally adjusted main indices showed a robust expansion in July. Deliveries of raw materials were 62.3; production 62.2, and new orders 62.1. Employment (53.1) is now positive after dipping in June, while finished stocks (52.6) are holding steady. Another good thing is that the expansion is broad based across all major industries, regions and firm size. Canterbury (62.7) is leading the way, the North (60.2), Central (58.3) and even the Otago-Southland region (54.7) is improving; the last has now been in expansion for three consecutive months despite several high profile layoffs. Nevertheless bouts of post GFC recession restructuring are still with us. The recent loss of 50 jobs at Canterbury Spinners Ltd in Dannevirke is an example. Its also worth recalling New Zealand was first into recession in 2007, a year earlier than the GFC really hit. Though its true the recovery in New Zealand manufacturing is being underpinned by domestic demand from the rebuilding of Christchurch, and demand from a low base for housing in Auckland, that is not the whole story. The recent report from MBIE on hi tech and
The expansion is broad based across all major industries, regions and firm size.
KEVIN KEVANY
09 520 5206 kevwrite@xtra.co.nz
PETER ISSAC
06 340 8134 peter.isaac@xtra.co.nz
medium tech manufacturing holds more interesting insights on the type of business that have carried us through, and on where growth in the future is more likely to be found. High tech manufacturing is defined as those companies spending 8 per cent of their revenues or more on R&D; medium tech manufacturers invest between 2 and 8 per cent. Both sectors tend to do well in good times and bad. The New Zealand high technology sector is said to be made up of over a thousand firms, with 14,000 employees in all each generating an average surplus over and above their costs of more than $21,000. This group includes companies such as Fisher & Paykel Healthcare and Gallagher. Employees of the firms in the medium tech sector each generated revenues over $$340,000. This sector includes companies such as
DAVID BURKE-KENNEDY 09 473 8635 dbk@compublicity.co.nz
By Bruce Goldsworthy Manager of Advocacy and Manufacturing Services for the Employers & Manufacturers Association
Glidepath and Scott Technology and is said to be made up of 4,052 firms employing 33,117 people. The defining characteristic of these companies is their commitment to advancing their growth through applied technology. Hence they never stand still but are constantly introducing changes. That is the lesson they offer. While they are still sub sectors representing the smaller proportion of our manufacturing sector overall, the hope for New Zealand manufacturing is many more will join them, and become like them globally focused, export intensive generators of employment and wealth.
SANDRA LUKEY 021 2262 858
sandra@shinegroup.co.nz
www.nzmanufacturer.co.nz
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NZ Manufacturer August 2013
ANALYSIS
Trade has been a cornerstone of our growth and global development. But we will not be able to sustain this growth if it favours the few, and not the many. – Barack Obama, 44th President of the United States
Chinese / Arrow International JV Will Deliver Benefits - to Whom?
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he announcement by New Zealand Company Arrow International that it had signed a MoU with construction giant China State Construction Engineering Corporation Ltd (CSCEC) to deliver benefits to the Christchurch rebuild will have most members of the New Zealand construction industry asking, what sort of benefits and to whom? Just comparing sizes, CSCEC is today the second largest construction company in the world as a result of focused Chinese government backing, including access to easy finance and export subsidies. CSCECs total annual construction turnover exceeds $NZ100 billion, with $NZ15 billion from outside of China, while Arrow is involved in construction projects worth about $250 million. Arrow International is, as stated on their web site, a project delivery company. All actual construction work is done by sub-contracted construction companies. This is in contrast to the statement by Arrow CEO Hugh Morrison that Arrow was the construction mastermind behind the Dunedin Forsyth Bar stadium. Of course, they did projectmanage for the client, but the actual construction was done by someone else and in this case, these were local companies. Looking at the outlined cooperation, the Chinese CSCEC will be supplying the construction work, including labour, and also Chinesesourced cheap materials, and therefore will have the lion’s share of any project. The local company Arrow International, which will be doing the project delivery, will be what industry insiders call clipping the ticket. It is very clear to me that by the mere volume of work in this giant and dwarf partnership, the main benefit will be with the giant and not the dwarf. However, the project delivery service provided by the dwarf may be very profitable as they may be very well-rewarded as the giant wants to get their foot in the door of New Zealand or better as quoted, the Australasian construction market. However, my main concern is about the likely outcomes of the cooperation, as they target the worldclass cornerstone buildings funded largely by rate and taxpayers such as the new stadium, bus depot and Justice Precinct for which we apparently have not got the local construction capacity. Assuming these buildings would use a seismic forces-resisting structural steel frame, a conservative estimate would put these three www.nzmanufacturer.co.nz
projects at maybe five thousand tonnes of structural steelwork hardly a drop in the bucket of the currently free 30-50 thousand tonnes of annual New Zealand structural steel fabrication capacity. If this free capacity is used, this benefits New Zealand in the form of high value employment and taxes; if however the structures are imported, then these benefits accrue to the offshore suppliers country. Against the economic benefits of doing the work locally, stand the perceived cost-saving for the New Zealand building owners. I say perceived because as I outlined in my July HERA News Director’s comment, if there is full conformance of imported steelwork, the gap in cost is narrow and almost always below the cost of the lost benefits to New Zealand from taxes alone. But let’s get to the core of our concerns - the seismic safety of imported buildings. I heard Arrow CEO Hugh Morrison say on the radio something to the effect of, if you look at what international building icons CSCEC have built, it is embarrassing to ask them about the quality of their work. As stated in my July comment, I outlined the carefully balanced NZ seismic structural steel frame system and its reliance on getting every aspect in this frame to work right. As the Northridge and Kobe earthquakes have shown, there can be a rude awakening when an earthquake has struck and you then realise that hundreds of buildings were severely damaged as a result of over-strength steels, meaning higher than specification strength but with uncontrolled yield/tensile strength ratio, ductility and fracture toughness but also inappropriately matched welding procedures. CESEC icon buildings have not gone through earthquakes to establish their seismic performance record, but our NZ structural steel frames have and we know that we have to follow with great care our Standards and guidelines. Therefore, there is nothing embarrassing about asking the quality assurance question in respect to experience and track record in seismic construction to NZ design and fabrication standards. The question is of course whether you have to ask this as a project delivery service when you deal with experienced New Zealand fabricators? You certainly have to when you deal with a Chinese giant with thousands of employees including thousands of welders and everchanging personnel with little or no
English knowledge, which has not operated in the New Zealand seismic structural steel system environment. One thing is sure, for the building occupiers to benefit in the end from safe buildings, as part of the postCanterbury earthquake wash-up; all rebuilding work will have specified a considerable higher amount of quality conformance requirements which will make all buildings more expensive. And if it is ensured that these requirements will be followed by everyone in the chain either locally or from overseas, and I deliberately include here the New Zealand Government which ensures that fair
It is very clear to me that by the mere volume of work in this giant and dwarf partnership, the main benefit will be with the giant and not the dwarf.
By Wolfgang Scholz, HERA and equal trade practices and the balanced decision-making criteria of the government procurement rules are applied; then without doubt the cost of imports will be much closer to the local cost and as local industry, we will be able to compete. Our industry wants to be a sustainable and competitive industry with high value jobs for our children. Pressure from the announced China deal will challenge local industry to accelerate the innovation game and come up with responses which will make our own packages more competitive. And in my view, herein lies the real longterm benefits to all New Zealanders, the building owners and users, and the local economy that will rebuild Christchurch. HERA and SCNZ in co-operation with its other Metals NZ partners have been working on a strategic approach to support our industry to effectively compete on the world market. The Securing our Industry Future Project is the outcome of the work performed in conjunction with Metals NZ Strategy Advisor Michelle Boag.
NZ Manufacturer August 2013
I am thankful for all of those who said NO to me. It’s because of them I’m doing it myself. – Albert Einstein
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PREVENTATIVE MAINTENANCE
Flaw detector has advanced functions
he Prisma ultrasonic flaw detector can be ordered as a conventional flaw detector (with or without TOFD), or as a flaw detector with the added functionality of Phased Array. The Prisma UT is an advanced portable ultrasonic flaw detector which shares much of the basic performance of the popular Sonatest Masterscan series. Above and beyond the Masterscan it has two independent ultrasound channels with full waveform data recording and 2 axis encoding. The unit also has interface triggering capability with a fast PRF to allow use in high speed immersion, C-Scan applications. The Prisma UT also provides superior state of the art imaging allowing A, B and C scan displays to be viewed simultaneously with a multiple choice of display layouts taking advantage of the 8192 display resolution. By adding the TOFD software option the Prisma UT has even greater inspection and imaging capability with no pre-amp required and lateral wave straightening and lateral wave removal featured.
In addition the 16/16 phased array option can be selected which increases the probability of detection and also improves productivity significantly. The Prisma UT with phased array can show A-Scans, B-Scans, C-Scans in UT or PA. The user can add S or L-Scans in PA, as well as end view and true Top view. Other views available include: Weld overlay, skip cursors, ray tracing, gates that are highlighted in S-Scans, and many more. In addition there is the 3D scan plan feature which includes part, weld, wedge, probe, scan coverage. This feature assists with the setup and assessment of results. Some of the many other features of the Prisma UT are DAC & TCG with DAC to TCG 16 points with fully customizable curves and alignable with the following standards DGS, AWS D1.1, and BEA. The Prisma offers a simple to use interface with handy wizards to further enhance ease-of-use.
Reporting functionality such as UT Studio, PC based documentation and post inspection analysis software provides even greater offline capability. The Sonatest Prisma is configured to the platform needed by the user with in field upgrade feature unlock keys. The entry level platform has two independent ultrasound channels with full waveform data recording, 2 axis encoding and beam visualisation
hanges to the Electrical (Safety) Regulations have caught some manufacturing operations short with new record keeping and certification requirements for the installation and maintenance of electrical equipment. The amendments to the regulations that came into force on July 1 place extra demands on electricians servicing industrial plant to test, record and certify their work. The regulations were previously interpreted loosely when it came to industrial plant, but the amendments demand specific detail and records must be kept for 7 years. While seen by many industrial electricians as draconian, the new regulations do specifically recognise modern maintenance management systems, providing a pathway to avoiding mountainous paperwork and record keeping. On the proviso that the correct information is recorded, a hard copy paper trail is avoided, replaced with a new ability to print out your own electrical certification on demand. BWM is one of the few computerised maintenance management systems in the market to offer compliance with the new
regulations. Written by engineers for engineers, the Australasian program has not only responded quickly to the new regulations, but ensured a rapid and simple process for electricians to follow. As with all generic changes, existing users have received the upgrade at no cost as part of their ongoing support. BWM is an expert system appreciated by engineers and companies wanting to professionalise their maintenance management. The generic package starts at only NZ$6000 and the annual license fee is only $800 for unlimited users! Customisation is possible as is a wide range of data loading, management, auditing and reporting services, training and mentoring, all at affordable fixed cost pricing. Represented by Maintenance Transformations Ltd in New Zealand, BWM is a logical and simple to use computerised maintenance management system backed by recognised leaders in successful reality based engineering management. nextSTEP Contact Craig Carlyle Tel: (09) 292 2919 craig@transform.net.nz or or visit www.transform.net.nz
set-up tools. The options are as follows; ToFD, manual 16:16 Phased Array (PA), scan axis encoding and recoding for PA, second axis encoding for PA, Interface trigger (IFT) for PA, 16:64 PA. Configuring the Prisma for basic 16:16 Phased Array is as affordable today as the rumoured prices of medical PA the industrial sector was green with envy over 5 years ago. To further sweeten these new costs of industrial PA, Sonatest have specials running until the end of 2013 with some of the software features on offer at no charge when other software features are purchased. The Prisma can currently be ordered with 16:16 PA and scan axis encoding and recoding for PA will be added for free. The saving on this configuration is over 20%. Also on offer is free second axis encoding for PA and IFT for PA with the purchase of 16:64 PA.
Bending complex tube systems flexibly
Electrical maintenance compliant to Regulations changes?
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Bend to the right and to the left in one go: the CNC 40 Rotary tube bending machine stands out for shorter set-up times, lower acquisition costs and an intuitive control concept.
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here must be enough room for the broadest range of pipes such as exhaust gas return tubes, injection and cooling water lines in the most confined installation spaces in aeroplanes and cars. To make production of these complex curve contours with the smallest bending radii easier as well as more time and cost effective, there is the fully electric CNC 40 Rotary. Moreover, this machine is also excellently suited to the tubular steel furniture industry. In just one operation, the CNC 40 Rotary tube cold bending machine processes tubes in all current materials, such as aluminium, titanium, copper, steel and stainless steel with a diameter from six to 40 millimetres. Even tubes with
preformed contours on the straight tube can be bent flexibly to the right and left. With the bend former return integrated as standard, complex bend contours can be removed from the interfering contour areas with no problem after bending. The result is a reduced cycle time with no loss of bending freedom and avoidance of damage to the tube surface. The machine works with up to 13 CNC axes. In the development ergonomic design and a high level of user friendliness has been kept in mind. Thanks to the intuitive operator guidance of the cold bending machine, initial training generally takes only one day. The machine requires only one bending head and is therefore exceptionally economical. www.nzmanufacturer.co.nz
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NZ Manufacturer August 2013
DEVELOPMENTS
The man who will use his skill and constructive imagination to see how much he can give for a dollar, instead of how little he can give for a dollar, is bound to succeed. – Henry Ford
KiwiNet and Callaghan combine forces to drive innovation
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he Kiwi Innovation Network (KiwiNet) and Callaghan Innovation have cemented a partnership to help turn more clever ideas and research discoveries into new products and services. By working collaboratively with New Zealand’s research and business communities the organisations aim to accelerate the commercialisation of innovation. Dr Bram Smith, General Manager of KiwiNet, a consortium established by Universities and Crown Research Entities, is enthusiastic about the opportunities the partnership will create. “While Callaghan Innovation is mobilising to boost innovation capability in business, KiwiNet is working to drive greater engagement between the research community and business to convert scientific discoveries into real world applications.” KiwiNet operates an Investment Committee that involves 13 Universities and Crown Research Entities, representing 6000 researchers or two thirds of the researchers in New Zealand’s public research organisations. The group has recently secured $7.5million in Government investment specifically for turning research ideas into commercial value. Dr Smith says, “KiwiNet has deep connections into research organisations across New Zealand and provides a front door for industry and investors to connect with technologies and expertise in research organisations. Likewise, Callaghan will have strong business connections that we can tap into to quickly commercialise new technologies from research organisations out to businesses.” Both organisations play a distinct role in fostering a culture of innovation that will drive economic growth. KiwiNet helps research organisations to produce more commercial outcomes, be more collaborative and better connected
Darren Harpur, CEO, Aduro Biopolymers (left) with University of Waikato researcher Dr Johan Verbeek (right) with Novatein bioplastic from Aduro Biopolymers.
with businesses and international organisations. Callaghan Innovation is focused on helping businesses be more innovative, more collaborative and better connected with research capability and international markets. Dr Smith believes this partnership has significant potential to establish New Zealand as a global leader of the future in high tech innovation and its successful commercialisation. “New Zealand aspires to create an innovation driven economy. Both organisations are working to remove fragmentation and collaborate around New Zealand’s areas of strength through which research and industry can effectively work together.”
Dr. Bram Smith
E-mail: acsdesign@maxnet.co.nz www.nzmanufacturer.co.nz
NZ Manufacturer August 2013
Growth is a spiral process, doubling back on itself, reassessing and regrouping. – Julia Margaret Cameron, British Photographer
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DEVELOPMENTS
New website shows diversity of industry careers
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id you know that scientists, engineers, CNC operators, cabinetmakers and biosecurity are all careers available in the forestry, wood manufacturing and furniture industries? Understanding this diverse range of careers within forestry and its associated industries can be hard. That’s why Industry Training Organisation Competenz has launched woodcareers.co.nz The Wood Careers website was developed for those in secondary school, those thinking of a career change to even people already in the Forest and Wood industries. The website is the ideal way to search, explore and learn about career opportunities. It provides information on study and training options for each job type as well as advice on how to hunt for a job. Check out the website now! Woodcareers.co.nz
Joint venture proposed for PrimePort; giant boost for port
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Joint Venture proposed by Timaru District Council and Port of Tauranga will be a giant boost for PrimePort resulting in a secure future with increased container traffic, employment opportunities and improved financial benefits for the district. Under the proposal, which first must undergo a month-long consultation process with Timaru district ratepayers, the Port of Tauranga would buy 21.43% of PrimePort’s shares from Timaru
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MTANZ represents not only manufacturers, but also importers and distributors of medical technology used in the diagnosis, prevention, treatment and management of disease and disability. New Zealand companies currently design, manufacture and export such devices as machines to manage obstructive sleep apnoea and other respiratory conditions; customised titanium hip, knee and neck implants; specialised dental technology and implants, among others.
The high tech manufacturing sector as a whole contributed $1.4 billion in export earnings.
District Holdings Ltd, a wholly owned subsidiary of the Timaru District Council, and the 28.57% of shares that are held by a group of local investors who make up Port Industry Holdings Ltd. PrimePort would maintain 100% ownership of all operational land and buildings at the port, along with all port infrastructure. It would still operate the trade and marine facilities while the Port of Tauranga (through a subsidiary) would purchase and operate the container
handling assets of the port and would be offered a long-term lease of the North Mole, guaranteeing an income stream to PrimePort. Timaru District Holdings Limited would gain 100% ownership of investment properties surrounding the port. The Mayor of Timaru, Janie Annear, said that this agreement, initially for 15 years with two further rights of renewal of 10 years, would secure the profitability of the port well into the future. “After 18 years in local
Medical devices give healthy boost to exports
government, this is the most exciting proposal I have seen. Port of Tauranga is anticipating a significant increase in container volumes through Timaru, something PrimePort would be less likely to achieve on its own. “The flow on effect could be an increase in investment into infrastructure, storage and other related services and opens possibilities for more jobs. “Timaru District Holdings will acquire full ownership of investment land which will provide a more secure dividend stream than the Port alone was able to offer. Timaru District Holdings will receive net proceeds of approximately $2 million from this transaction, which will be used to pay down debt.” PrimePort is one of New Zealand’s smaller commercial ports and as such is at the vagaries of world trends. Container traffic through the port has decreased by two thirds over the last five years as the world container trade changes to larger capacity vessels and shipping companies look to rationalise port calls. “The proposal reduces the Council’s risk due to leasing the container operation instead of operating in isolation in a volatile shipping market.” Port of Tauranga is a world-class operation. It is the biggest container port in New Zealand and the most efficient in Australasia. It promises to bring expertise and a new vitality to the whole port that will benefit all residents and businesses. www.nzmanufacturer.co.nz
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NZ Manufacturer August 2013
ENERGY REPORT
Growth demands a temporary surrender of security. – Gail Sheehy, New York Times Bestselling Author
Auckland Council awarded 3.5 star NABERSNZ energy rating
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uckland Council’s Graham Street Service Centre has been awarded 3.5 stars for energy use under NABERSNZ™, the new office building energy measurement and rating scheme. A 3.5 star Certified Rating reflects above average energy performance for New Zealand office buildings. It’s only the second Certified Rating released under the scheme which launched in June, and the first for a whole building. Providing ratings from one to six stars, NABERSNZ is set to become an industry standard for benchmarking and improving office building energy performance in New Zealand. Auckland Council Chief Executive Doug McKay says the Council has made a strong commitment to NABERSNZ, including getting an in-house staff member trained as a NABERSNZ assessor. “We aim to set the standard for other building owners in the CBD. Rating the real-life energy performance of our buildings is a powerful tool to help us improve. Getting the rating is just the start – we’ll be looking at what we can do to boost energy efficiency. “The region possesses around 3 million m2 of office floor space. Our aim of making Auckland the world’s most liveable city has to include measures to improve the sustainability and performance of buildings we work and do business in.”
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A NABERSNZ Certified Rating involves a qualified Assessor examining 12 months of energy use data, taking into account equipment used, staff numbers and occupancy hours. Ratings can be obtained for tenancies, base buildings or whole buildings. Doug McKay says Auckland Council intends to get NABERSNZ ratings for its other commercial properties, including the 135 Albert St property which is being retrofitted. New Zealand Green Building Council chief executive Alex Cutler said the Council’s early adoption showed leadership for other Auckland owners. “NABERSNZ creates a market value for good energy management – reducing costs for tenants and improving capital value for building owners. Smart design principles create a blueprint for energy
efficient buildings, but how they’re commissioned, maintained and used is crucial in day-to-day energy performance. “NABERSNZ has strong buy-in from business and the public sector. It’s off to a very promising start.” EECA Chief Executive Mike Underhill says NABERSNZ ratings help building owners and tenants easily understand energy use information, providing a benchmark to compare and improve energy performance. “Savings of up to 25% are achievable for most commercial office buildings and tenancies. This scheme helps simplify the process – getting and improving a NABERSNZ rating is the best way to make these savings. The rating was carried out by NABERSNZ Assessors Michael Gray from Prendos and Adam Benli, who is Auckland Council’s in-house
Assessor. NABERSNZ is based on the National Australian Built Environment Rating System, a scheme that has rated building energy performance for more than a decade. The scheme is licensed to the Energy Efficiency and Conservation Authority (EECA) and is administered by the New Zealand Green Building Council (NZGBC). The Energy Management Association of New Zealand (EMANZ) adapted it for New Zealand conditions. NABERSNZ has two commercial sponsors: DNZ Property Fund and Precinct Properties. The New Zealand commercial sector uses around $800 million in electricity each year. Annual energy savings are worth around $200 million to businesses and the wider economy.
Latest developments put LED in the spotlight
ocal and regional councils should accelerate plans for introducing LED road lighting because of its fast-growing cost competitiveness and ability to deliver higher safety outcomes than the High Pressure Sodium (HPS) road lighting currently used in New Zealand says lighting research and consultancy company Strategic Lighting Partners Ltd. An announcement that US-based specialist LED lighting company, CREE, could now supply LED road lighting at US$99 per light fitting– less than half the previous US market price –signalled it was time for New Zealand to wake up to the performance advantages of LED
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road lighting. CREE’s announcement is a market game-changer. LED road lighting is now undisputedly better value than the old HPS. It has lifetimes of more than four times longer, saves more than half the electricity, allows for easier and more precise lighting control, and helps create safer conditions for drivers and pedestrians because it delivers a white light, not yellow light. Competition to supply the Australasian market is also growing. Recently, another huge multinational American company, Eaton’s Cooper Lighting, launched a new LED residential road light tailored to Australian and New
Zealand applications and its representatives are in NZ this week visiting potential customers. A report, presented to the Australasian Road Safety Research, Policing and Education Conference last year, linked poor New Zealand road lighting with a three-times higher ratio of night-to-day injury accidents and fatalities than in other developed countries. It has been identified that the Australia/New Zealand Standard for road lighting required our highways to be lit to only threequarters of the levels enjoyed in the UK, Europe and the USA, and our residential roads to be lit to as little as a quarter of the lighting levels required in these other countries. Field measurements of NZ road lighting indicate that even these low lighting requirements are frequently not being achieved by many NZ councils. The Bridger and King report, Lighting the Way to Road Safety
– A policy blindspot?, presented international research indicating that white street lighting may provide better, safer driving vision than yellow lighting, and suggested that better New Zealand road lighting would reduce the $1.2 billion annual cost to the country of night-time road deaths and injuries. With 9.4 fatalities per billion vehicle-kilometres, New Zealand’s traffic safety is 19th out of 23 OECD countries, ahead of only Belgium, Czech Republic, Malaysia and Korea. Other independent research suggests raising New Zealand roadlighting levels would improve traffic safety A 2012 report by independent New Zealand road lighting researchers Mike Jackett and Bill Frith, Quantifying the impact of road lighting on road safety – a New Zealand Study, related night-driving accident rates to the level of road lighting for the first time in road safety research.
NZ Manufacturer August 2013
Do just once what others say you can’t do, and you will never pay attention to their limitations again. – James R. Cook
BUSINESS NEWS
Beyond book value – Understanding intangible assets
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f you don’t have a competitive edge - then don’t compete!” Jack Welch - CEO General Electric. I love this quote. As investors and business owners, you know that businesses need to maintain a competitive edge to give back far more than the original investment. Most of that competitive edge is provided by intangible assets. When you compare market value to book value, the difference is the intangible assets sometimes referred to as intellectual property or intellectual capital. These assets on average account for 80% of the worth of a business. Yet many business owners and investors dont apply the critical thinking needed to this crucial area with intellectual property (IP) being an afterthought - rather than an integral part of business strategy or valuation. Applying appropriate due diligence involves asking many questions. Essentially the business model needs to be understood along with the “edge” that gives it sustainability. Once I understand those aspects, I look at how the edge falls within the following four broad categories: intellectual capital (including barriers to entry), function, look and brand. Then I can look at what mechanisms are in place (or ought
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to be) to preserve and/ or make the most of the edge. These are considered alongside the business model, competitive environment and exit strategy. From this, the relevance of the mechanisms (say patents, agreements) can also be evaluated. Are they there: a) as a deterrent? b) to give leverage c) because of defensive or litigation potential, or d) to grow the worth of the business for ultimate sale or further investment? Or are they there at all? To be blunt, the value of a business can be wiped out by an illtimed impact with a bus. To give an example, if a competitive edge were to arise from intellectual capital supplied by a skilled researcher, questions to ask would include: How well are they being looked after? What happens when they leave? Can they take their/your knowledge with them? What does the employment agreement say? Is their knowledge well documented in the company? Is there succession planning? Does key person insurance cover them? If intellectual capital is recognised as valuable, then there needs to be good systems (preferably documented) and agreements
in place to provide a measure of control. Maybe, a business’ value arises because it has a product or process that looks or works better than a competitor’s. A question to ask here is: How Quickly Can A Competitor Start To Compete? As soon as other players see another’s success, it is very easy to come into the market with a cheaper or more profitable alternative. It takes time, effort and money to develop a new product. That investment needs to be recovered and forms part of the price on the final product. If a competitor can short-cut the R&D process by copying a product, then they have no need to recover the full investment made in R&D in their pricing model. Therefore an identical product can be developed quicker, produced and sold cheaper. If your investment feels vulnerable, then look at whether it has some IP protection – even if the intention is merely to use it as a deterrent for a period of time. The semblance of IP protection can give a competitor “cause to pause” and any time you have to gain more traction in the market is usually worth the initial expense of applying for it. It should be noted that IP protection does not need to be
continued with if the desired effect has been achieved, such as market dominance or sufficient revenue. Importantly, in many cases IP protection (such as patents and design registrations) must be applied for before there is any public disclosure or business done in relation to the attribute to be protected. If your investment relies on reputation to be sustainable, then make sure its brands are registered. Often these are the most valuable part of a business. Apple’s brand for example is worth in the order of US$153 billion. Finally, is there a robust IP strategy in place? If not, get one! Otherwise the sustainable potential value of a business cannot be realised.
Four network BYOD impacts every organisation should be aware of: 1. Unplanned devices compete for scarce airtime and drain WLAN capacity. Network planners have traditionally designed for the capacity required by corporate assets such as the number of ITprocured laptops. However, the number of smart devices carried by each individual continues to grow, surging in unpredictable ways. When employees return to work after a holiday with new BYO smartphones and tablets, capacity planning assumptions can be quickly blown out. Not only does competition for shared channels grow, but Wi-Fi chipsets in consumer electronics differ. 2. BYODs behave in unexpected ways, degrading overall performance. When IT departments select a smart device, network planners can first verify interoperability and isolate constraints like unsupported WiFi data rates or modes that cause some clients to use more airtime. However, IT has little control over BYOD selection. Most BYODs are less robust consumer-grade
devices. For example, although iPads support 5 GHz, they aggressively prefer 2.4 GHz, which can lead to unexpected starvation of Wi-Fi phones and other singleband devices sharing limited 2.4 GHz channels. Android tablet and smartphone Wi-Fi behaviours are even more varied. 3. BYODs may operate insecurely, jeopardising corporate assets. Today, virtually all Wi-Fi-certified smart devices, including BYODs, are capable of supporting WPA2Enterprise security. However, corporate WLANs secured with WPA2-Enterprise are sometimes off-limits to unapproved BYODs that aren’t enrolled in directories or issued certificates for 802.1X authentication. These unapproved BYODs may then resort to using open guest WLANs where they expose traffic to eavesdropping and various man-in-the-middle attacks. When IT does not monitor BYOD activity, such exposures go undetected. 4. Even approved BYODs can be difficult or costly to troubleshoot. Consumer-grade smart devices often lack remote diagnostic interfaces and tools for help
desks to investigate and resolve problems. For example, remote control agents supported on laptops and Windows phones are unavailable for iPhones and iPads due to Apple iOS restrictions. While some Android original equipment manufacturers (OEM) offer proprietary extensions for logging and diagnostics, the vast majority of Android BYODs support very limited administrative application programming interfaces (API) that don’t help IT troubleshoot remotely. As a result, malfunctioning BYODs often remain a mystery, sapping WLAN performance indefinitely. Further, BYODs have grown so numerous that IT departments may not have sufficient staff to troubleshoot them. Ignoring the BYOD impact on corporate networks can degrade business efficiency and increase operating costs. Until organisations acknowledge and address these challenges, they can’t harness the business benefits such as using BYOD to reduce monthly telecom spend and liability for personal use of corporate phones.
By Kate Wilson,
Partner & IP Strategist, James & Wells Intellectual Property.
Four network BYOD impacts to be aware of
usinesses have much to gain by embracing the bring-your-own device (BYOD) trend. While most organisations are already moving in this direction, many have yet to fully understand and address the multitude of effects that BYOD has on enterprise WLAN performance, security and compliance. Fluke Networks shares four network BYOD impacts every organisation should be aware of when monitoring the corporate network. IT initiatives to tackle BYOD challenges often focus on mobile device and data management. Those measures can be critical for successful BYOD adoption. For example, using a mobile device manager to provision secure WLAN settings and remove them after device loss, theft, or retirement. However, these do not fully address the many ways in which BYOD affects corporate networks. Today’s BYOD challenge is to find effective methods and tools to discover smart devices used in the workplace, assess their impact on the corporate network, reduce unwanted side-effects and facilitate trouble-free business-appropriate use.
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NZ Manufacturer August 2013
FOOD MANUFACTURING
The happiness of your life depends upon the quality of your thoughts. – Marcus Aurelius
Holland to benefit from NZ formula crisis
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top Kiwi milk powder manufacturer is warning the latest infant formula crisis will see western European competitors take advantage of New Zealand’s tarnished brand, and secure contracts in our key export markets The CEO of Peak Nutrition, Stephen Julian, says Holland and Germany are already well positioned to profit from New Zealand’s dairy issues and sign deals with some of our traditional export partners like China. Julian says Holland currently exports around eight billion dollars in dairy products compared to New Zealand’s ten billion annually. “If you look at the global players, the Dutch market has been hot on our heels for a long time, they are renowned for their dairy production and have much to gain from our latest dairy crisis and Germany isn’t far behind.“China is a critical market for us and this is not the first time we’ve been embroiled in a dairy scandal, we know how particular the Chinese are about standards and this will impact heavily on our industry as a whole.”Julian says
while his milk powders are not affected by the crisis, as they are made using wet blend technology and are produced and packaged locally, he sympathises with Kiwi parents who are confused about what products are safe for them to purchase for their children. Julian says it is these Kiwi mums and dads who have most to lose from the latest crisis and the loss will be twofold. “Not only are these parents faced with a situation where they are unsure of which formula is safe for their child, the on-going economic repercussions for the nation as a whole could be catastrophic,” he says. “It is sad to see our global reputation as one of the most trusted dairy producers damaged once again in such a high profile way. We have to hope that this crisis does not affect the New Zealand brand so gravely that it impacts our other primary food producers.” Julian says compounding the issue for New Zealanders is the frustratingly slow release of information preventing local consumers from identifying affected
brands. Julian who has been exporting food and beverage products to China for more than a decade, has for some time been advocating for greater controls around labelling to maintain the integrity of the New Zealand brand to the local and Chinese markets. “Product labels can be very misleading to parents who read them and think they are buying a Kiwi-made product when that’s simply not true at all.” Julian says the “Made in NZ” label should not be used without regulation and should only be used on products that are manufactured as well as packed locally.
“Sometimes all of the ingredients cannot be sourced in NZ as they are simply not produced or manufactured here, however this needs to be stated on labels so the consumer is aware and can make an informed decision and this is what we do on our own labels,” says Julian. Peak New Zealand is a 100% Kiwi-owned and operated company established in 2012. Peak New Zealand formula milk and vitaminsenriched milk powder products are manufactured and made in NZ from local dairy cows in state-of-the-art manufacturing facilities approved and audited by the NZ Food Safety Authority.
The genetic sequence that provides the blueprint for the shell is also found in many other species, including animals, and the researchers believe they have discovered a new biological mechanism by which toxins or other sensitive molecules may be stored and released. Dr Lott explains that, based on the discovery, scientists may be able to generate new insecticides or even new medicines: “This is a mechanism for delivery, and you could pack whatever you want into
the shell. You could develop different toxins for use as bioinsecticides, or package therapeutic molecules that you want to deliver only in specific conditions,” he says. The bacterium Yersinia entomophaga was originally discovered in the native New Zealand grass grub by AgResearch scientist Dr Hurst. It was subsequently found to affect other insect pests such as the diamondback moth which damages crop pests worldwide, and the potential for its use as a new form of insecticide
piqued the researchers’ interest. Dr Shaun Lott leads the AgResearch Structural Biology Laboratory based in the School of Biological Sciences at The University of Auckland, and holds appointments at both institutions. The study involved researchers from the two New Zealand institutions as well as the Australian Synchrotron and The University of Queensland. It was funded by a New Zealand Foundation of Research, Science and Technology grant awarded to Dr Hurst at AgResearch.
Bacterial toxins harnessed for bioinsecticides and medicine
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ew Zealand and Australian scientists have found a new way in which bacteria store and release toxins, and their discovery may be harnessed to develop new bioinsecticides for crop pests and even new medicines. The team, led by Dr Shaun Lott from The University of Auckland and Dr Mark Hurst at AgResearch in Lincoln, studied how the bacterium Yersinia entomophaga kills crop pests such as grass grubs, diamondback moths and porina caterpillars. In the process, they discovered a new way in which the bacterium packages its insect-killing toxin in a hollow protein shell. Their work was published overnight in the leading scientific journal Nature. The work was done primarily by AgResearch-funded University of Auckland PhD student Jason Busby, as part of his doctoral thesis supervised by Drs Lott and Hurst. The scientists used high-resolution x-ray crystallography and electron microscopy to determine the threedimensional structure of proteins produced by the bacterium. They found that the proteins form a hollow shell that releases the toxin only when it encounters specific environmental conditions, such as those found in the gut of crop pests. This explains how the bacterium can produce toxins without harming itself, and release them only when needed. www.nzmanufacturer.co.nz
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Is it affecting NZ industry?
It sure is. NSK has just seized 5000 bearings imported by a motorcycle importer and this was only picked up because customers were complaining that the bearing only lasted 10 hours. Could you imagine a failure of the front wheel of a motorcycle should that front wheel bearing collapse? A court case is likely to follow another company having imported a wide selection of counterfeit bearings, but you can bet your bottom dollar it will be very wide spread and only going to get worse. Another Auckland company got caught with $30,000 worth of counterfeit SKF bearings and they still have not got there $$$
Counterfeiting affects manufacturers back.Fortunately those particular bearings did not get installed, which would have caused many millions of dollars worth of damage as the clearances were totally unsuitable for the application. That company did not buy those bearings from SKF, but a local supplier, not an authorised agent of SKF.
Is it costing us money?
It sure is and if not stamped out we might find our manufacturing sector trying to perform with both hands tied behind their back in competing for that very hard to win dollar to keep the business running from fierce competition from overseas.
What’s the answer?
Only purchase from registered approved suppliers. Audit all equipment brought onto site by contractors who may have won the contract, and then to improve their profit, went on and purchased from suppliers they thought were ok, to provide the product at a very competitive price. Many of these counterfeits can arrive as an advertisement on your computer, looking very professional and attractive, encouraging you to purchase direct, cut out the middle man etc, My advice is don’t; you should look after your proven, trusted suppliers.
NZ Manufacturer August 2013
OPINION
Forget all the reasons it won’t work and believe the one reason that it will. – Author Unknown
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Where is NZ’s ‘Welcome’ Mat?
ave a look at the Ireland Development Agency’s website; its stated purpose, robustly supported and championed on a cross party basis, is to attract direct foreign investment into their country. We have no such widely based organisation here. In fact, the OECD regards the New Zealand regime for screening inward investment as one of the most restrictive in the world. As recently as May this year, Economic Development Minister Steven Joyce had to defend, and not for the first time, an overseas investment, this time by Harvard University in a Central Otago dairy farm. Joyce’s protagonist was NZ First leader Winston Peters, who reportedly said: “Every day we lose something else to overseas ownership and soon there will be nothing left for New Zealanders.” The facts do not support Winston Peters, either on a general, or Kiwi-specific, basis. The World Economic Forum best sums up the general case in a recent paper: “Foreign Direct Investment (‘FDI’) is a powerful instrument for growth and development.....in developed and developing countries.” This statement of the obvious is lost on a vocal minority of politicians and activists, the same groups that seem oblivious to the fact that there is a world happening outside of New Zealand. And that world is, by and large, promoting FDI in their individual economies. But not necessarily here. In the last available rankings of countries by gross inward FDI, New Zealand ranked 50th, behind, amongst others, Egypt, Nigeria, Colombia, Angola, Trinidad and Tajikistan. That fact alone should worry anyone not afflicted by the commercial xenophobia suffered by Mr Peters. The National Business Review reported on the sale of a majority stake in Simcro, a Hamilton based company that designs and manufactures animal drug delivery devices. The investor in Simcro was The Riverside Company, a global private equity investor with over US$4bn under management. The tone of the NBR report, and its headline (“Yet Another NZ High Tec Firm Goes to an Offshore Buyer”), does no justice to the facts or realities. Some of the subsequent online commentary on its website then brought the same FDI issues and associated negative comments, a la Winston Peters, to the fore. The realities are these; in the last six years, Simcro quadrupled its product engineering and
design team and further invested considerable sums in its online brand and marketing footprint (a necessity too often ignored for many businesses here) as well as putting people on the ground in Europe, the USA and Asia. Those initiatives among others, sees Simcro export 90% of its output, to the considerable benefit of New Zealand. In doing so it has attracted the attention of potential investors, a clear validation of its strategy. After discussing the various options open to it that would best serve the continued international growth of the company, Simcro invited Riverside to conduct due diligence with a view to acquiring a majority interest. Riverside’s presence here represents a considerable gain to New Zealand in bringing both its extensive global reach and its willingness to back a local company with its considerable resources. Simcro is not being ‘lost’ to anyone or anything meaningful in New Zealand. The CEO and R&D director have remained as investors in the company; Riverside has already put its global marketing team’s resources at the company’s disposal; the company is exploring new opportunities in innovation and R&D opportunities that require additional funding; the technical team assembled in Hamilton recognise the greater opportunities open to them; the loyal and exceptional factory staff have applauded (literally) the announcement. Some of the additional online comments about company owners pocketing large sums should rightly be dismissed as a manifestation of the first cousin of xenophobia, the ‘tall poppy syndrome’. Profitable companies have the choice of taking dividends or reinvesting in the business. The former option is often cited as being a brake on Kiwi businesses (the so called ‘boat, bach and BMW’ culture) so to criticise companies who instead choose to invest in their people, brand footprint, marketing,
Simcro export 90% of its output, to the considerable benefit of New Zealand.
and IP, such that international investors seek them out, is misplaced, given that it is those latter companies that bring domestic employment opportunities and enhance the Kiwi brand internationally. New Zealand is fairly obviously a geographically isolated economy; to further isolate it by not actively encouraging direct overseas investment in companies whose endeavours have brought international recognition and resource, does the country a
By John Dennehy
John Dennehy was executive Chair of Simcro Ltd from 2007 to 2013. disservice. All vibrant economic cultures rely to a large extent on the flow of inward capital and ideas to nurture and expand local capability and talent; to deny that obvious truth is to admit both an inability to grasp the realities of global economics, and of the realities that face any Kiwi business with global ambitions.
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NZ Manufacturer August 2013
SUPPLY CHAIN
Your income is directly related to your philosophy, NOT the economy. – Jim Rohn
The magic of wireless power for transportation
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or more than two decades The University of Auckland has been at the forefront of developing and commercialising wireless technology. This research has proven that significant wireless power can be transferred over relatively large airgaps efficiently and robustly. The first solutions were applied to industrial applications for moving vehicles in factory clean rooms, industrial plants, and in theme parks, but more recently this research has helped develop technology that could impact us directly at home. In his inaugural lecture, Professor Grant Covic from the Department of Electrical and Computer Engineering at The University of Auckland will describe some of the early motivations behind this research. He will introduce some of the solutions which have been developed by the team of researchers at Auckland over two decades, many of which have found their way into the market. He will also describe how the technology has recently been re-
developed to enable battery charging of electric vehicles without the need to plug in, and alongside this how it has the potential to change the way we drive in the future. Professor Covic’s research and consulting interests are focused on industrial solutions using inductive (contact-less) power transfer (IPT). He began his research career at The University of Auckland in 1986 when he started his PhD. At completion he took up a lectureship in power electronics at the University and later in the mid 90s began working with Professor John Boys to develop the technology of IPT. He has since published more than 100 international refereed papers in this field, worked with more than 40 postgraduates in IPT and filed over 35 patents all licensed to various global companies in specialised application fields of IPT. In 2010 he co-founded (with Professor John Boys) a new global start-up company “HaloIPT” focusing on electric vehicle (EV) wireless charging infrastructure. This was sold to Qualcomm, a US
Professor Grant Covic (left) with Professor John Boys.
research and development company, in 2011. Grant heads inductive power research at The University of Auckland and co-leads the interoperability sub-team within the SAE J2954 wireless charging
standard for EVs. He was awarded the Vice Chancellor’s Commercialisation Medal in 2012 and recently received the KiwiNet commercialisation award in 2013 for research which has seen outstanding commercial success.
The world’s largest container vessel, from Maersk
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NZ Manufacturer August 2013
Don’t judge each day by the harvest you reap but by the seeds you plant. – Robert Louis Stevenson
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Rich pickings
nyone who has seen the carnage wreaked on Christchurch CBD by the 2010 / 2011 earthquakes could not help but be shocked by what they saw. The level of destruction to buildings and infrastructure was unprecedented and has required an unprecedented national response that will be needed for decades to come. The earthquakes couldn’t have happened at a worse time as they hit businesses already reeling from the impact of the global financial crisis. If there was anything slightly positive about the earthquakes it is the opportunities provided by the rebuild. Industry and especially those related to infrastructure were particularly hit by the global financial crisis. Many large projects were shelved or delayed and the impact showed as a thirty percent reduction in work for many metal engineering companies.
For Christchurch, this is good news; it meant that there was good capacity available to support the rebuild efforts which would also help New Zealand industry recover at the same time, a win-win all around that will feed into enhanced training opportunities and more jobs for Kiwis as we nurture Christchurch back to health, which will also help the economy. But while we may all see Christchurch as an important member of our community on the mend, many offshore companies see it as a carcass that they can carve the last bits of flesh off, all under the guise of helping out with the rebuild. Which is not to say that we don’t need help; there are many pieces of plant and equipment that we do not make here and will need to be imported as the rebuild gets seriously underway, but there are also juggernaughts aligning themselves with local construction
companies and getting ready to roll over New Zealand industry. Alarmist? No, just fact, as shown by the recent deal between Arrow International Ltd and the China State Construction Engineering Corporation Ltd. CSCEC is the second largest construction company in the world with a turnover of more than NZ$100 Billion. It was originally fully state-owned but is now a listed company with substantial state ownership. The company is also vertically integrated and owns its own steel mills and fabrication plants so they have little need to engage with local suppliers when they operate offshore. But beyond that, they have unprecedented support from the Chinese Government in the form of the Export-Import Bank of China, which is an institutional bank chartered to implement China state policies in industry, foreign trade, diplomacy and the economy and provides financial support to promote the export of Chinese products and services. Government owned, influenced, or controlled, all say that we are not dealing with a company here but with a country and not without concern. In an article in the Wall Street Journal, Fred Hochberg, Chairman of the U.S. Export Import Bank complained that The ExportImport Bank of China doesn’t follow OECD export financing guidelines and so has an unfair advantage.
NZ MANUFACTURER • September 2013 Issue • Features Opinion Manufacturing Profiles Letters to the Editor Politics of Manufacturing Trade Fair World Diary of Events World Market Report Q/A Export News Machine Tools Business Opportunities Commentary As I See It Business News Appointments Around New Zealand Australian Report New to the Market Lean Manufacturing Equipment for Sale Recruitment Environmental Technology Manufacturing Processes
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REAR VIEW
By Nick Inskip,
HERA
This is on top of the fact that there is no visibility of what price the China State Construction Engineering Corporation pays itself for things like steel. Unless it’s the same price that New Zealand companies would pay on the world market, there is no way that they bring fairness to the market and fairness is a cultural trait of our country, and we shouldn’t give that up for a perceived cheap solution. There is a danger that with so much State muscle behind the beachhead being established that New Zealand industry will be driven back to the industrial equivalent of the Stone Age. It’s time to draw a line in the sand and stand up against the juggernauts for what’s best for New Zealand, otherwise we all lose.
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Emerging Technologies The Future of Manufacturing Workshop Tools Business Services for Manufacturers National Maintenance Conference & Exhibition Advertising Booking Deadline – 21st September 2013 Advertising Copy Deadline – 21st September 2013 Editorial Copy Deadline – 21st September 2013 Advertising – For bookings and further information contact: Doug Green, P O Box 1109, Hastings 4156, Hawke’s Bay Email: words@xtra.co.nz Tel: +64 6 870 9029
Editorial material to be sent to : Doug Green, P O Box 1109, Hastings 4156, Hawke’s Bay Email: words@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.
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NZ Manufacturer August 2013
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