NZ 2011 Manufacturer August 2011 August
$7.00
www.nzmanufacturer.co.nz
Business News
From where I sit
SouthMACH 2011 Report
Our evolving global manufacturing economy
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www.solidtec.co.nz
The Interview Greg Cross The Icehouse Chairman and Director of Cross Ventures
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Future “up in the air” – Making replacement aerospace, that is exhausts to the trade By Kevin Kevany
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Peter Smith in a section of the 3,000 sqm RPM shop.
he thousands of North Shore workers and residents who pass along Apollo Drive, Mairangi Bay, each working day, barely take note of the black, modern corporate HQ-type building, just below the crown of the hill. Not that it isn’t a very special ultra-modern building – opened by PM Helen Clark, early this century, if you like to know that sort of thing – with an imposing modern mural, featuring a mix of modern art and a vast range of RPM’s output. In fact, it consists of a handful of offices, mostly shared, and fronts a massive 3,000 square metres, purpose-built workshop housing the best part of $10-mil of specialist equipment, including a 5-Axis, simultaneous milling machine, the largest of its kind in the South Pacific, and the first real hint that RPM International Tool and Die is the biggest, privately-owned tool
and die manufacturer in the country. The company specialises in high-end injection mould tooling and automation for all engineering disciplines in the packaging, electronic, whiteware, plastics and automotive industries, along with precision components for the medical (facial and joint implants), marine and aviation industries. (RPM has been accredited by Air New Zealand since 1995.) With the new state-of-the-art building came a commitment to a lean manufacturing system being incorporated into RPM’s business practice. That continues to be a keydriver in all their processes and products. They pride themselves on delivering what they call a conceptto-completion service. A full inhouse design team enables them to meet the ever-increasing short lead-
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ex Upton’s Christchurch company, Autobend, has 30 years experience in exhausts and mandrel tube bending. The company is big in the business of replacement exhausts, universal mufflers, headers, big bore, extensions, U Bends, tube, flanges, converters, studs and gaskets; you name it, Autobend stock the lot. However, if you are an architect, design engineer, developer, kinetic artist, dairyman or wine, boat or furniture maker. Autobend’s clarioncall is: “don’t weld it; bend it.” You should be dropping by at their Andromeda Crescent premises and stepping into a spotless, engineering shop where their blueand-yellow brute has recently been installed. It is New Zealand’s biggest mandrel tube-bender, the CSM
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100TBRE-RBE, courtesy of Autobend. And they’ve backed that significant investment with a smart, young engineer, one of their own James Patterson, a production manager, who joined them since gaining NZCE . James has alongside him an experienced and highlyqualified CNC machine operator and a “master of the black art of ‘adjustment’ in a precise business”, Lawrence Dunn, also blessed with experienced hands and not that many ‘miles on his clock’ who has just returned from his OE. You get the sense they are up for anything which isn’t dangerous or dumb. Anything from 1-180 degrees (the latter has a u-bend in it). Continues page 18
Operator Lawrence Dunn, checks a product post-production.
• Email: sales@sew-eurodrive.co.nz • www.nz.sew-eurodrive.com www.nzmanufacturer.co.nz
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NZ Manufacturer August 2011
Manufacturing is picking up in these challenging economic times and by keeping your eye on the ball you will find opportunities not far away. Contract manufacturing sees companies doing well closer to home, just as our exporters continue to enjoy success overseas. The mood is changing; optimism is there, conservatively, but enough of it is shining through to show the upward manufacturing trend has no reason to abate. Many fine products are coming out of Christchurch and as the region recovers, the innovators are at it looking after their markets. Even though relocation has been an issue it doesn’t stop these companies moving forward. Tell us your story. Get in touch. Are you a Manufacturing Hero? Do you have a story or opinion to share? Has your company overcome enormous challenges lately? Where is your new market? NZ Manufacturer is for you, it’s your publication both online and in the printed version. Email the editor, Doug Green words@xtra.co.nz to share your story and keep your company moving forward in its search for new markets.
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NZ Manufacturer August 2011
CONTENTS Advisors
www.nzmanufacturer.co.nz
DEPARTMENTS
BUSINESS NEWS
Stephen Drain
New Zealand and Mongolia work well together.
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Stephen Drain is Director at Centre for Innovative Leadership at AUT University, Auckland.
BUSINESS NEWS
SouthMACH 2011 report.
OPPORTUNITY HAMILTON
Integrity paramount in product development.
Page 8 – OPPORTUNITY HAMILTON – Waikato Investment Park seeks private investment.
DEVELOPMENTS
• HotRot enjoys UK success. • User-Led innovation.
➡
FROM WHERE I SIT
Chris Whittington
Technical Director with Camplex NZ Ltd. An experienced Graduate Mechanical Engineer with extensive experience in both Product Design and Manufacture. Considerable recent experience in both rapid prototyping and reverse engineering.
Second of Sir Paul Callaghan’s special reports.
AUCKLAND MANUFACTURERS Do we need a Tobin tax?
Bruce Goldsworthy
COMMENT
Teenage unemployment rate a disgrace.
Page 13 – AUCKLAND MANUFACTURERS – Manufacturers focussed on business awards.
BUSINESS NEWS
• Brightwater appoints new CEO.
• Literacy assessment tool to assist employers.
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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.
MANUFACTURING TECHNOLOGY Toyota Production System means productivity boost.
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MANUFACTURING TECHNOLOGY Canterbury software summit
DEVELOPMENTS
Train and curb the skills shortages.
Page 22 – MANUFACTURING TECHNOLOGY – Top entrepreneurs to gather at Morgo.
PRODUCT NEWS
• Geothermal system among awards finalists. • Chemical milling - a new process.
PACIFIC BUSINESS
John Walley
Is the Chief Executive of the New Zealand Manufacturers and Exporters Association. John consults to a number of overseas companies and is a Chartered Engineer, a Fellow of the Institute of Professional Engineers NZ, a Fellow of the Institute of Management NZ and a Member of the Institute of Electrical Engineers UK.
Hans Frauenlob ➡ Is New Zealand Trade and Enterprise’s Director – Specialised Manufacturing, with responsibility for NZTE’s Specialised Manufacturing team.
Encouraging multi-lateral trade in the Pacific.
LEAN THINKING
Continuous improvement and sustaining the gains. ➡
Page 28 – SUPPLY CHAIN– Dude, where’s my stuff?
October in
Lewis Woodward
NZ MANUFACTURER
The export success issue
Page 31 – REAR VIEW – Small business needs to be an election issue.
sales@plasticweldingtools.co.nz
Catherine Beard
Is Executive Director of Export NZ and Manufacturing, divisions of Business NZ, New Zealand’s largest business advocacy group, representing businesses of all sizes.
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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.
www.plasticweldingtools.co.nz www.nzmanufacturer.co.nz
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NZ Manufacturer August 2011
EDITORIAL
It takes more than capital to swing business. You’ve got to have the A. I. D. degree to get by – Advertising, Initiative, and Dynamics. – Isaac Asimov
Publisher
Media Hawke’s Bay Ltd, 1/121 Russell Street North, Hastings, New Zealand 4122.
MANAGING Editor
Doug Green T: +64 6 870 9029 E: words@xtra.co.nz
CONTRIBUTORS
Peter Allport, Kevin Kevany, Nick Inskip, Catherine Beard, Sir Paul Callaghan
ADVERTISING
Max Farndale T: + 64 6 870 4506 E: max@nzmanufacturer.co.nz
Design & PRODUCTION
Karl Grant T: + 64 6 870 9028 E: daylightmarketing@xtra.co.nz
WEB MASTER
Dan Browne E: dan@membrana.co.nz
PUBLISHING SERVICES
On-Line Publisher Media Hawke’s Bay Ltd
SUBSCRIPTIONS
Media Hawke’s Bay Ltd T: + 64 6 870 4506 E: mediahb@xtra.co.nz 11 issues per year. New Zealand $55. Australia and Pacific $95. Rest of the World $132.
MEDIA HAWKES BAY LTD
T: +64 6 870 4506 F: +64 6 878 8150 E: mediahb@xtra.co.nz 1/121 Russell Street North, Hastings PO Box 1109, Hastings, NZ Publishers of; NZ Manufacturer, Cape & Bay, The Mirror, Asia Manufacturing News. Plus contracted publishing services.
Good things keep on happening
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hrough the winter of our discontent manufacturing keeps on keeping on and good things keep on happening. SouthMACH 2011 has just finished in Christchurch, with positive feedback coming in from exhibitors for the quality of enquiries received.
Sir Paul Callaghan, the Kiwibank New Zealander of the Year, in his second article (Page 12), looks at where New Zealand is as an evolving global manufacturing economy and what and where our prospects are. Morgo, the much anticipated annual (invitation-only) gathering of the country’s top entrepreneurs, founded by Wellington venture capitalist Jenny Morel from No.8 Ventures, gives founders and executives of high growth companies a chance to recharge, connect, learn and be inspired. You can read about this year’s gathering, coming up soon, on Page 22. We look at skill shortages – and how to curb them (Page 23) – and the plight of the nation’s unemployed teenagers which is fast becoming a disgrace. We feature RPM International Tool and Die, based in Mairangi Bay which is the biggest privately-owned tool and die manufacturer in the country currently working on supplying a new tooling package into Iran. They’re pretty good at looking after their staff too! Down south, in Christchurch is Autobend a 30 year old company which specialises in exhausts and mandrel tube bending. Toyota’s Production System (TPS) a source for Lean programmes has its roots way back in 1937 with the establishment of the Toyota Motor Company by Kiichiro Toyoda and the Honsha Plant which was built in 1938.Read all about TPS on Page 21. Dr. Jeffrey Keith Liker is coming to Auckland to talk about The Toyota Way in November. Plenty happening, plenty to look forward to.
ISSN 1179-4992
Vol. 2 No. 6 August 2011 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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Doug Green
www.nzmanufacturer.co.nz/videos PUBLISHER & MAGAZINE DEVELOPMENT– Max Farndale max@nzmanufacturer.co.nz
NZ Manufacturer August 2011
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BUSINESS NEWS New Zealand and Mongolia work well together
The trouble with not having a goal is that you can spend your life running up and down the field and never scoring. - Bill Copeland
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here is a recent history of very cordial relationships between the two countries. At a diplomatic level this has been enhanced with my appointment as Honorary Consul and with the opening of a full Embassy in Canberra with the Ambassador there accredited to New Zealand. My personal experience over nearly 20 years, has been that Mongolians generally appreciate and work well with New Zealanders on the basis that:• We both have a strong pastoral agricultural history. • We both have a pragmatic and “can-do” approach to politics, work and life in general. • We are both relatively small economies reliant on foreignexchange earning businesses to generate the wealth needed to advance the aspirations of our communities. • We have both chosen democratic, market driven pathways as the best means of improving our lot and we are both strong defenders of democracy and the rights of individuals. • We both have to sell our products and services into much larger economies than our own. • We both have transport and logistical challenges associated with getting our products to market and while these are different in nature their impact is similar. • New Zealand is neutral and nonthreatening to Mongolia in a political and strategic sense. The new democratic Mongolia has drawn on New Zealand’s successes in such areas as the structures and machinery of government; the structures of an effective, independent judiciary and the application of regulatory controls that establish an environment conducive to reasonable economic activity, respecting individual freedoms, the principle of fairness and equity, the rule of law and the sanctity of contracts.
kevwrite@xtra.co.nz
Of course the new Mongolia has a very much shorter history than New Zealand in the effective application of some of these principles and, until recently, they have not had the economic where-with-all to ensure effective compliance and adherence to some of the principles that have been enshrined in their Constitution and in legislation. New Zealand Universities have been the choice of many young, ambitious Mongolians to pursue graduate and post graduate studies with the consequence that now Mongolians with a good knowledge and understanding of New Zealand pop-up in senior positions in both the private and public sectors in Mongolia. To emphasise this point, one of these has established the Mongolian Rugby Union – you don’t get much more Kiwi than that! There are also a number of longterm New Zealander residents of Mongolia in such diverse areas from prison welfare, to health services, to gold mining. However, taking my own business experiences as an example, I am associated with the largest mobile phone network in Mongolia (over one million subscribers) and in 2006 we commenced a new domestic and regional airline beginning with 2 turboprop aircraft and now expanded to four turboprops and one jet with a second jet aircraft on the way. With persistence, hard work and a lot of training, both these very technologically demanding companies have grown to be very significant businesses – both leaders in their sectors. Mongolia’s rating moving from 117th (out of 139) on the World Economic Forum’s 2009/10 Global Competitiveness Index to number 99 in the 2010/11 index. This issue is clearly acknowledged by the current Government and it is serious about achieving increasing transparency. Now if this whets your appetite and you think you’d better get up there and see for yourself (I strongly recommend you do), here’s how you go about it: First up, you have to apply to me
peter.isaac@xtra.co.nz
for a 30 day business visitor visa. I suggest you take a look at our website www.mongolianconsulate-nz.com for application details and to download application forms. If you’re passing through Beijing you will likely need a Chinese visa or if you travel frequently you should consider applying for an APEC Card which, for 150 bucks, gives you three years of visa free hassle-free entry into about 20 countries around the Pacific rim, including China but apply early - they about take about 6 months to process.
By Peter Allport, Honorary Consul of Mongolia in New Zealand. Essentially, there are four basic routes to get there – through Tokyo, Seoul, Beijing or Hong Kong. With the exception of Seoul, Air New Zealand flies into all these hubs on a regular basis. Korean Airlines operate between Auckland and Seoul and on to Ulaanbaatar. In recent times I have travelled through Beijing but on my next trip (shortly) I will go via Hong Kong and avoid a stopover either way. Air New Zealand has very good frequencies into Hong Kong. Book your flights early as, particularly into Ulaanbaatar, booking are heavy consequent upon the accelerating economic development. On the ground in Ulaanbaatar there are reasonable hotels (look on the web) but at this time of the year (their summer) hotel bookings are very heavy and unless you are wanting to enjoy some good Mongolian culture your should steer clear of the week
dbk@compublicity.co.nz
sandra@shinegroup.co.nz
around 11 July as this is the national celebration of Naadam where there is a lot of eating drinking and watching (or participating in) wrestling (the national sport), archery and horse racing (25km straight-line drag races). Power in Mongolia is supplied at 240 Volt 50 cycle so all your Kiwi gadgets will work. There are extensive mobile telephone networks throughout Mongolia - your gsm mobile phone should roam there ok. If you want to avoid high roaming fees, prepaid mobile services are very common so you might want to consider getting a local number. Don’t drink the water unless it comes out of a sealed bottle. Be wary of salads and raw vegetables, particularly in the countryside – they may not have been washed in “sweet” water and I can say from experience that one round with Giardia is about all you need. Hotels generally provide daily complimentary bottled of water or drink the beer or the vodka – they are both pretty good. Once you get there make contact with organisation such as the Business Council of Mongolia (Director Jim Dwyer) www.bcm. mn and Government elements such as the Ministry of Foreign Affairs and Trade and industry sector ministries of interest (eg, minerals, energy, transport, housing etc) and the key banks - Khan Bank, Trade & Development Bank, Golomt Bank or XAC Bank are the top four in the country all providing comprehensive services. If you get serious about Mongolia you need to find a good local partner – going it alone can be quite fraught. I can provide some, one to one guidance to people seriously interested in exploring possibilities in Mongolia although, as an Honorary Consulate, our resources are limited. Drop me an email at mongolianconsulate.nz@alpega. com and I will help where I can. Good hunting but don’t forget to leave time to enjoy some excellent Mongolian culture and scenery!
bwhyte@whytepr.com.au www.nzmanufacturer.co.nz
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NZ Manufacturer August 2011
BUSINESS NEWS
An economist is an expert who will know tomorrow why the things he predicted yesterday didn’t happen today. – Laurence J. Peter
SOUTHMACH 2011 SouthMACH 2011 spirit overcame the weather EXHIBITORS
2 Degrees Mobile Limited 3D Printing Systems Ltd A & G Price Ltd Advanced Plasma Technology AEC Systems New Zealand Ltd Alignment Engineering Ltd Alsco Ltd Andar Holdings Ltd Anzor Fasteners Ltd Atlas Copco (NZ) Ltd ATS Pneumatics Ltd Automotives Componements NZ Limited Bay Audiology Bay Cad Services Ltd Brevini NZ Ltd BVT Mechanical C & M Leussink Engineering Pty Ltd Cadpro Systems Ltd Camfil Farr Ltd Camplex NZ Limited Carr New Zealand Ltd Carrel-Eclectrade Ltd Chevpac Machinery (NZ) Ltd CPITechnology Cigweld Pty Ltd CMI Fasteners Ltd CNC Direct Control Devices New Zealand Ltd Courier Post Davin Industries Ltd Design Energy Digitalweld Donco Services Eagle Burgmann NZ Ltd Electronic Imaging Ltd Engineering & Compressor Services Ltd Falcon Electrical Ltd Farra Engineering Ltd Filtercorp International Ltd ForkliftsNZ FW Cave Ltd Hilton Industrial Vacuums Ltd HTC Specialised Tooling IEDA Independent Welding Supplies Ltd Industrial Research Limited Industrial Tooling Ltd Industry Training NZ ITW Polymers & Fluids Kleantech Imports Ltd Linak NZ Ltd Lincoln Electric Co (NZ) Ltd Machinetech Ltd Martin Aircraft Company Limited Metal Spray Suppliers (NZ) Ltd Mulholland Engineering Ltd National Instruments New Zealand Duct & Flex Oil Imports Limited Omron Electronics Pty Ltd Pakrite Systems Ltd Phoenix Wrapping Australasia Ltd PL Berry & Associates Plastic Design Technologies Ltd Power Save Light Company Ltd Powerpac Tools Ltd Prosol Ltd PSL Wholesale Ltd Quickshrink Distributors NZ Ltd Raw Design Limited Revolution Precision Machinery Ltd Roadrunner Manufacturing (NZ) Ltd Rontgen NZ Ltd Schneider Electric (NZ) Ltd Scott Machinery Ltd Seal Imports Ltd Sinot NZ Ltd Specialty Metals Ltd Spraying Systems (NZ) Limited Sprockets New Zealand Ltd Storepro Solutions Ltd Supply Services SI Ltd Syntech Distributors Ltd Taymac Limited The Casting Shop The Front Store Uretek Velocity Trade Viking Ironcraft 1978 Ltd W A Stroud Ltd Waka New Zealand Weldwell New Zealand
www.nzmanufacturer.co.nz
By Doug Green
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ome made it through, some didn’t. But by all accords some good business was done at SouthMACH 2011, held recently in Christchurch. A worthy effort by the show organisers, Hayley Media who had already delayed the show because of the earthquakes only to see the snow come down and the weather pack up during the time SouthMACH 2011 was held. With snow all around, and then black ice the true spirit of the Kiwi businessperson couldn’t be kept away. They turned up to see the engineering equipment and services on display and to ensure their company was ‘on track’. Chris Whittington, from Camplex NZ was happy with the quality of business enquiries, as was Francis Coutinho, general manager of Chevpac. One exhibitor who finally got there through the snow was Gordon Anderson of BayCad. After a delay and overnight stay in Kaikoura, Gordon rolled on down to Christchurch. He found enquiries for his products a bit thin on the ground. Laura Dolphin, marketing manager for Velocity Trade said “SouthMACH 2011 was good and I am confident the efforts will pay off.” Carr Group of Auckland was one of the unfortunate companies who couldn’t make it because of the lousy weather. Their truck full of equipment was held up in the snow somewhere south of Waipukurau in Hawkes Bay and their flights from Auckland so staff could man the stand was cancelled three times. I have included the list of exhibitors (left) to show the support for the event from companies throughout New Zealand for SouthMACH 2011. I commend them for supporting the show and their on- going commitment to business in Christchurch in these awkward times.
Pictures clockwise from top left: Schneider Electric; it’s a lot warmer inside; Scott Machinery displayed the latest in machinery; business being done on the Cigweld stand; Camplex staff deep in discussion.
I commend the various exhibitors for supporting the trade fair
NZ Manufacturer August 2011
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Manufacturers hungry for new work
“ t is business as usual for the majority of businesses including our world-class companies based in Christchurch who operate in niche markets globally - We want your work!!” The large majority have all simply got on with their businesses, meeting local, national and global demand. Most were well covered with insurances and have covered physical loses, however the response from insurers for business interruption insurances have proved to be an on-going headache for some. The NZTE Market Connections grant was a blessing for manufacturers. Many applied for the grant, and around $3.5 - $4 million was used to get Christchurch companies to travel offshore and get in front of key customers, distributors and suppliers. There will be enormous economic opportunities coming out of the rebuild that has been estimated at somewhere around $20 - $30 billion over the next 10 years. Industry groups, CDC, MEA, CECC, NZTE and the NZTE ICN network are all working together to ensure that the local manufacturers are able to take advantage of this opportunity and the rebuild is not lost to large multi-nationals with offshore manufacturing supply chains. – John Hamilton, Canterbury Development Corporation
www.nzmanufacturer.co.nz
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NZ Manufacturer August 2011
OPPORTUNITY HAMILTON
Quite simply, we lost our way.
– News of the World, in editorial that ran in its final edition.
Air sample testing lab offers NZ-first technology
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ill Laboratories now offers New Zealand’s first and only passivated canister air sampling service. Offering the service to customers required hundreds of thousands of dollars of investment into equipment by the company. Hill Laboratories Air Quality Laboratory Manager, Dr Ian Graves, says rolling out the new service is part of the company’s commitment to delivering the latest testing technologies to its customers. “The canister sampling service we’re now offering was previously only offered by overseas laboratories and we’ve introduced
Rolling out the new service is part of the company’s commitment to delivering the latest testing technologies to its customers.
this technology to the New Zealand market. It is such a huge leap forward in terms of technology, cost savings and ease of use for air sampling that Hills wanted to help our customers gain access to it. “Users of the canister sampling service no longer need to go through the timely and costly exercise of calibrating a pump for sample collection. Plus, vinyl chloride can be collected and analysed from the same sample as less volatile, chlorinated VOCs, which also
We have two further courses planned for September:
13th September – Introduction to Lean
• Understand
the basic principles of Lean Thinking and Continuous Improvement philosophies and how they could be applied to your business.
• Learn how you can transform your business through a Lean simulation.
• Help
build confidence by sharing experiences with other participants embarking on their Lean journey, including a company tour.
• Understand
how the tools and techniques transform a workplace
14th September – 5s Workplace Management
• Understand
one of the key Lean tools and see it utilised in a real environment.
• Talk
to employees who have seen the benefits of 5s workplace organisation.
www.nzmanufacturer.co.nz
the past. The cost of the service is justified in the quality and speed of sampling and the accurate analysis received through Hills.” Hill’s canister sampling service has been accredited by International Accreditation New Zealand (IANZ). The canisters can be used for testing: soil vapour, sub-slab and vapour intrusion, ambient air, and grab samples. Canisters are constructed of stainless steel with all internal surfaces coated with Silonite®, making the surface inert. This ensures the integrity of the sample once contained in the canister. Following use, canisters are cleaned through a special process by Hill Laboratories and made available for reuse.
Waikato Innovation Park seeks private investment
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he LEAN GEMBA ACADEMY provides a unique opportunity to combine expert training from New Zealand’s leading Lean training organisations and the chance to see how Lean Thinking has been applied within a real business. Participants can experience the culture of Continuous Improvement, witness the results and hear how employees at a New Zealand company make the most of Lean Thinking in everything they do.
saves a lot of time and money for the user compared to sorbent tube sampling,” explains Dr Graves. Hill Laboratories, through its five labs located in Hamilton and Christchurch, tests over 5000 air samples each year. Dr Graves says since launching the canister sampling service in March, the new technology has especially appealed to environmental consultants working on contaminated sites with vapour issues. Glenn Veart, Managing Director of Air Resource Management Ltd in Henderson, was one of the first consultants to use the service and says “the canisters make the whole sampling process cleaner, easier and quicker than methods we’ve used in
• Understand
the five steps to a successful rollout via a simulation.
• Develop the capability to implement 5s.
• Understand how 5s empowers and engages employees.
The trainer for the course Ian Lines has been helping organisations on their Lean journey for over ten years. In the UK he worked in the automotive industry implementing Lean and taking Leadership Teams on the journey of Lean transformation. Since moving to New Zealand seven years ago he has worked with over 30 organisations, in the service and manufacturing sectors, developing Lean processes and strategies. For more details visit www.leangembaacademy.co.nz
he two shareholders of the Waikato Innovation Park Hamilton City Council and The Katolyst Group – are to approve the Park’s Board of Directors to seek capital investment from an agricultural sector investment company that will in turn take on a 50% shareholding in the Park. The Park’s holding company, Innovation Waikato Limited (IWL), intends to issue 1247 new shares to Eden AgriCapital Ltd in exchange for a 50% interest of IWL valued at somewhere between $11 and $15m. A fair value is to be established by independent valuers. If the transaction is concluded, the new shareholding would see Eden AgriCapital holding 50%, Katolyst holding 40.45%, and Hamilton City Council holding 9.55%. IWL Chairman, Michael Spaans, says the capital investment will help the Park access the cash it needs to achieve its core economic development objective. A shareholding by Eden AgriCapital could see the Waikato Innovation Park model replicated across New Zealand. Mr Spaans said if future Parks go ahead, Eden AgriCapital would provide the funding and get first rights to all investment opportunities emerging from the Parks, and associated companies, while IWL would operate the Parks and provide consulting and management services to the investment companies. Mr Spaans said IWL will enter negotiations with Eden AgriCapital
Michael Spaans
and hopes a successful deal can be concluded within three months. Eden AgriCapital plans to initially raise $50 million to invest in a national network of primary sector focussed innovation parks, establish associated companies to deliver agricultural solutions into export markets, and establish international joint ventures for the ownership of agricultural infrastructure assets. This investment vehicle will be a unique opportunity to participate in the innovation and international commercialisation of New Zealand’s primary sector.
NZ Manufacturer August 2011
The golden rule for every business man is this: “Put yourself in your customer’s place. – Orison Swett Marden
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OPPORTUNITY HAMILTON
Integrity paramount in product development
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ew is not always better when it comes to developing winning products says product developer Timothy Allan. Timothy Allan, Locus Research managing director, addressed more than 90 Hamilton engineering business leaders at a product development workshop recently, telling them being first off the block with a product is no guarantee of success. “New is not always better - being the best is what matters. Research is not negotiable and product integrity is paramount,” he said. Taking a leadership role rather than being led by what others think is an important characteristic of successful product developers, Timothy said. “You can’t deliver what someone thinks they want in their head. You’ll never get there. You’ll be led down the garden path. Get off the fence. Lead or be led.” Giving Waikato engineers and entrepreneurs the tools to develop market-winning products was the aim of the Successful Product
Workshop speakers Dean Prebble of EverEdgeIP, Timothy Allen of Lotus Research, Jonathan Prince of Motovated Design and Analysis and Mark Renner of Tompkins Wake.
Development workshop, hosted by Opportunity Hamilton in conjunction with Locus Research,
Roger Evans of Stafford Engineering and Jonathan Prince of Motovated Design and Analysis
EveredgeIP, Tompkins Wake and Motovated Design and Analysis. Opportunity Hamilton business development manager Adrian Dixon said giving business people the best chance of success in a competitive market was the objective of the workshop, held at Waikato Museum’s lecture theatre. “We have lots of great businesses in our region so it’s great to be able to equip them with information from industry experts and give them a greater chance of success. We know Waikato leads the world in many areas of innovation and this is one way to increase our success stories,” Adrian said. Opportunity Hamilton, the economic development agency, organised the workshop in its capacity as Regional Business Partner, a government initiative supporting business growth through subsidised training and research and development funding. The workshop looked at how to assess and identify winning development ideas, developing
successful products, services or machines through robust development processes, how to leverage intellectual property and raising capital. EverEdgeIP ommercialisation director Dean Prebble spoke about the importance of converting intangible ideas into intellectual property and commercialising IP from there. “IP assets are like any other asset. You need to do something with them to generate value,” Dean said. Jonathan Prince, of Motovated Design and Analysis, spoke about using robust processes to develop vision. “Good development processes bring value to both business and customer by improving innovation, directly focusing on the latent, or unmet, customer need and reducing development cost and time to market” Jonathan said. Tompkins Wake’s Mark Renner discussed how to raise capital and the criteria for sourcing venture capital.
www.opportunityhamilton.co.nz www.nzmanufacturer.co.nz
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NZ Manufacturer August 2011
DEVELOPMENTS
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HotRot enjoys UK success
hristchurch-based composting technology company HotRot Organic Solutions recently received assistance from the New Zealand Export Credit Office (NZECO) to enable it to meet the contractual terms of its largest UK sale to date. HotRot’s contract was to build the first sewage grit and screenings composting plant in the UK. The New Zealand designed and made composting units process sewage waste, with the benefits of reducing the amount of organic waste in UK landfills, and producing compost that is safe for farmland spreading. To assist with its working capital requirements HotRot negotiated GBP 760,000 worth of advance payment deposit upfront. However, this had to be matched by a reciprocal advance payment bond by HotRot’s bank. As a small and growing exporter, HotRot did not have the banking facilities, or additional collateral, to secure this bond and therefore access the buyer’s payments. The solution was for HotRot and their bank to seek the NZECO’s support to underwrite this bond. As the Government’s export credit agency, the NZECO offers a Contract Bond Guarantee to NZ banks which guarantees the performance of a proven exporter on projects that require bonds. “It is usual with bespoke manufacturing and engineering projects that buyers request their suppliers provide bonds as it gives them the confidence that the exporter can
deliver on contractual obligations”, says NZECO’s Manager, Carmen Moana. “With our contract bond guarantee we assist banks to provide bonds to proven New Zealand firms to deliver on export contracts.” The NZECO undertook a comprehensive assessment of HotRot’s and their suppliers’ ability to perform. The assessment involved understanding HotRot’s historical and forecasted financials, their technical and management abilities to perform this and other contracts, on-site visits, interviews with their bank, and a review of the bonding documentation. As a result of this appraisal, the NZECO offered its bond guarantee to HotRot’s bankers allowing them to issue the bond to the UK Buyer. “With large orders like this, if we didn’t provide the bond then the buyer would withhold the milestone payments until after delivery, which significantly affects our cash flow”, says General Manager of HotRot, George Pottinger. “We are delighted that the NZECO enabled us to meet out bonding requirements that enabled us to access cash from the customer”. Carmen Moana says ‘we are very happy to support HotRot on a project involving smart technologies and engineering from a range of small New Zealand companies. This project will lift the profile of HotRot in the UK and hopefully pave the way for more orders”. nextSTEP Visit: www.nzeco.govt.nz.
www.nzeco.govt.nz www.nzmanufacturer.co.nz
The fastest way to succeed is to look as if you’re playing by somebody else’s rules, while quietly playing by your own. – Michael Korda
Auckland manufacturer saves hundreds a month
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ith the manufacturing sector continuing to face tightened consumer spending, businesses are looking at new ways to manage their costs as efficiently as possible. Powershop CEO Ari Sargent says he is shocked at how much some manufacturers are paying for power, and urges them to shop around for a better deal. Switching power companies boosted the efforts of one Auckland manufacturer to get its power costs down, resulting in savings of hundreds of dollars a month. Systems Commercial Furniture in Auckland’s Fanshawe Street has supplied office furniture and solutions to customers all over the country for almost thirty years. It designs, measures, custom builds and sells all manner of furniture and fittings for offices, cafes, homes and hotels. Like many in the sector, the company has faced an uncertain sales environment over the last couple of years, with some parts of the business affected more than
others. Although things started to turn around toward the end of last year and are now picking up, operating smartly and efficiently is still firmly on the agenda. Accounting Administrator Vicki Barrat says they’ve done ‘all the usual things’ to save on power costs: “Like taking half the light bulbs out of the showroom, and turning off the air conditioning when we don’t need it. Simple steps that make a tangible difference.” The idea of switching power companies to help the company make larger savings came from Vicki, who had switched to Powershop at her own home early in 2010 and was impressed with the results. Vicki says the savings were immediate and significant. “ In the first six months of being with Powershop, we’ve saved around 17% on our electricity costs. That’s around $1,000. “If you’re a small business like us you should be getting the best rate you can, end of story.” nextSTEP max@nzmanufacturer.co.nz
NZ Manufacturer August 2011
If one does not know to which port one is sailing, no wind is favorable. – Lucius Annaeus Seneca
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User-Led innovation
s nations struggle to drag themselves out of the economic malaise caused by the global economic crisis, the word of the day seems to be ‘innovation’. In New Zealand, we have a newly-named Ministry for Science and Innovation (MSI); in Australia, they have the Department of Innovation, Industry, Science and Research, even the Australian States have picked up on the word with Queensland having a Department of Employment, Economic Development and Innovation. According to the dictionary, innovation is ‘the introduction of something new’ and it is easy to see why countries would be focusing on ‘something new’ in an effort to stimulate growth in their economies. It could be argued that the worse things are the more keen a country might be to innovate. Of course, there are many different aspects to innovation, but one that seems like simple common sense is called Lead user innovation. Lead user innovation refers to a situation where a company will work with one or more of their customers to provide innovative solutions to better meet their needs. This means that the customers get the early advantage of the innovation and the companies gain a customer ready solution, to take to market. There is little question that economically, the UK has some challenges ahead, so it is not surprising to see UKÕs national innovation agency, The Technology Strategy Board talking the issue of
innovation very seriously. In their recent strategy document, Driving Innovation: Concept to Commercialisation where they say their goal is to accelerate the journey between concept and commercialisation using a variety of techniques, but particularly highlighting the role of lead user innovation and public procurement which, at around £220bn per year, offers great opportunities for Government to act as an intelligent lead customer, encouraging and purchasing innovative products and services which can then go on to further commercial success. They go on to say that they will be working across Government to make public sector procurement a force for innovation. In the New Zealand context, the State Owned Enterprises and Government departments like Defence are amongst the largest procuring entities in the country and offer huge opportunities for New Zealand industry to work with them to develop and supply superior solutions to those they sometimes end up with. By any measure, a small economy needs to use all of its assets to support the development of an innovative industry; to fail to do so
Companies gain a customer ready solution to take to market.
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DEVELOPMENTS
just relegates the country to ‘more of the same’. Maybe it’s time for a change in paradigm to one where Mighty River Power works with industry to develop geothermal plants that industry can then take to the world, and Solid Energy works with industry to develop coal briquetting plants instead of buying them from a start-up in the USA. Or Defence works with industry to develop a better silencer, which we can then supply to the world. Government and State owned entities need to be the dynamo driving innovation in New Zealand industry. Otherwise we will be in a race with the handbrake on, rather than out in the field with other leading competitors.
By HERA Industry Development Manager Nick Inskip There is no reason that we cannot perfect the art of lead user innovation, all it takes is the leadership to say, that’s what we are going to do, just like they have in the UK.
Engineer’s passing a great loss
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orld-renowned earthquake engineer and inventor of the base isolation technique Dr Bill Robinson QSO, FRSNZ, passed away this month. The seismic protection and damping equipment developed by Dr Robinson is used in buildings located in some of the world’s most seismically active areas such as California and Japan. In New Zealand it protects several highprofile buildings including the Museum of New Zealand - Te Papa Tongarewa. The rubber-lead bearings he invented while employed at IRL’s predecessor organisation, the
DSIR, have been tested by some of the world’s strongest magnitude earthquakes over the last few decades including the 1994 Los Angeles earthquake and 1995 Kobe Earthquake in Japan. Dr Robinson was a former Director of the DSIR’s Physics and Engineering Lab and the subsequent Physical Sciences division of DSIR. He was awarded the Cooper Medal in 1994 and New Zealand’s top science and technology honour, the Rutherford Medal, in 1998. He was also very active in Antarctic Research for many years. In 1995 he founded Lower Huttbased Robinson Seismic Ltd.
Email: inquiries@brightwater.co.nz
www.brightwater.co.nz
www.nzmanufacturer.co.nz
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NZ Manufacturer August 2011
FROM WHERE I SIT
In this second of three contributions to “Director’s Chair: from where I sit”, the ‘Kiwibank New Zealander of the Year 2011’, Sir Paul Callaghan looks at where we currently are as an evolving global manufacturing economy, and what and where our prospects are.
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eing behind the eightball, he believes, presents opportunities; we have unharnessed capacity to accelerate growth in what is a proven success story, our knowledge-based, export sector. He also happens to have little sympathy with the complaint: “why doesn’t the government buy our locally made product?” saying, “sell to the world-- it is 500 times bigger”. To quote: “If your sights are set on a New Zealand market, you are either making the wrong product or thinking too small. Make it the best in the world and sell it to the world. Let the government buy from whomsoever it chooses.” What are the foundations for New Zealand’s economic prosperity? The foundations for economic prosperity are cultural. Any cursory observation of economies, from the standpoint of GDP per capita, suggests that the essential prerequisites are effective markets, property rights, the rule-of-law and an honest work ethic. Being resource-rich can be an asset, but such an asset, by itself, is insufficient to guarantee prosperity. Most of resource-rich Africa remains mired in poverty, while countries with few natural resources, such as Switzerland, Japan and Taiwan, are wealthy. These prerequisite factors, identified long ago by Adam Smith as the basis of the wealth of nations, are necessary conditions for economic well-being, but they are www.nzmanufacturer.co.nz
certainly not sufficient. For if they were, New Zealand would be one of the richest countries in the world. We operate as an open market without tariffs or subsidies; we are friendly to foreign investment; we are the least corrupt country in the world; our taxation rates are amongst the world’s lowest; we are hardworking and well-educated; and our legal frameworks and property rights are widely admired. Why then have we performed so poorly by comparison with the rest of the OECD over the past 40 years, and especially our nearest neighbour, Australia? What potential have we failed to realise? Before addressing that question, I want to point out a silver lining in the cloud. High prosperity economies find it hard to sustain high economic growth rates. When you are behind, as we are, the opportunity exists to grow faster. Since the Second World War, the most spectacular economic growth performance has been in those countries that started from the lowest baseline. The growth in China’s per capita GDP has been possible because of an unrealised human potential that was waiting to be harnessed. The two most remarkable Asian tigers, Korea and Singapore, have grown at a per annum rate of over 8-percent. Korea’s per capita GDP has moved from around US$100 in 1960 to US$30,000 in 2010. In contrast, growth rates in the developed world have been much lower, with the exception of Germany and Japan, both of whom suffered significant war damage, and had to recover from a lower base. Having re-established themselves, their growth rates are now comparably modest. The lesson from the tiger economies is that underutilised human potential provides the greatest wellspring for economic
If we want to grow prosperity further, we must start to think and act as resourcepoor countries do. We must learn to more effectively export intellectual services, to manufacture, to design, to innovate.
The only way to predict the future is to have the power to shape it. - Eric Hofer
growth. If your population is uneducated, then boosting educational opportunity and performance leads to spectacular outcomes. If you are not providing educational opportunities for a significant segment of your society, for example women, or ethnic minorities, then by ensuring equal opportunity, you gain another accelerant towards prosperity. That New Zealand was once wealthy is due to a singular endowment. We had the prerequisite cultural assets and we had remarkable land-based resources. That was enough to get us to a high plateau, but having reached the limits of land utilisation, which we now have done, further heights elude us. So what should be our next step? If we want to grow prosperity further, we must start to think and act as resource-poor countries do. We must learn to more effectively export intellectual services, to manufacture, to design, to innovate. Currently New Zealand has a $5-billion per annum export industry based on the creative and high technology sector. That’s half the size of our dairy industry. Its productivity is around $250,000 per job instead of our national average of $120,000. It has no resource requirements and no environmental downsides. The degree to which we may grow such businesses is limited only by our imagination and capability. And here’s the interesting bit. We created that knowledge-based sector, unaware that we were capable of doing so. If we expand it by a factor of 10, we exceed Australia’s per capita GDP. That will be music to many ears. Can we really do it? My perspective on New Zealand’s relative prosperity is that we are well-placed to grow rapidly, once we identify and address underutilised capacity. That, to me, means addressing signal failures in our education system, a system which, when judged by university graduate quality and international comparisons of school performance, is apparently one of the best in the OECD. Thus the “New Zealand paradox”, our relatively poor economic performance despite our prerequisite cultural norms and good education, is the more remarkably paradoxical. So what is the failure? Wherein lies the opportunity? First we must address the long “tail” of underachievers, especially Maori and Pacific kids, for whom school provides little value. Sort that problem and we not only
transform their lives for the better, we grow per capita GDP by virtue of harnessing underutilised potential. But there is a second failure perhaps easier to fix. Those who do succeed in education gain inappropriate intellectual tools. Leading secondary schools proudly scorn New Zealand qualifications in favour of foreign diplomas, thus reinforcing a sense of local inferiority. Much of Pakeha New Zealand remains locked in a colonial mindset, seeking opportunities abroad. We neglect to instil in our best and brightest, a sense of local potential and economic pride because we fail to connect national goals to enterprise and technical knowledge. Rather than producing entrepreneurs and engineers, we generate lawyers and doctors, half of whom leave New Zealand, never to return. Our knowledge export sector, with the exception of the film industry, remains invisible to New Zealanders, in part because these businesses make unusual niche products incomprehensible to most of us, and in part because they sell entirely abroad. What would you say is our fundamental problem? Our fundamental problem is that we have failed to articulate economic opportunity; failed to identify the role of enterprise; failed to imbue our youth with a vision of who we can be, and why it is worth being a creative and talented person committed to, and based in, New Zealand. And we have failed to point out that opportunities to offer leadership, to make a difference, are immensely greater here than in any of the world’s metropolitan capitals. But the $5-billion-dollar-perannum fact remains. We have shown we can do it and those who harness their futures to its cause will prosper. Tell your kids. New Zealand has a great future.
NZ Manufacturer l PRINT l DIGITAL l WEBSITE l YOU TUBE
NZ Manufacturer August 2011
Corporation: An ingenious device for obtaining profit without individual responsibility. – Ambrose Bierce
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AUCKLAND MANUFACTURERS
Manufacturers focused on business awards
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ou could be forgiven for thinking that the manufacturers around Auckland have been a little self absorbed lately – for many there has been a lot of self reflection and assessment. The reason for this preoccupation – they have been developing their entry into their local business awards. Auckland Tourism Events and Economic Development (ATEED) is facilitating the premier business awards initiative, the Westpac Auckland Business Awards, for the entire Auckland region. The awards are an interrelated network of awards, divided into the areas of North (North Shore and Rodney), Central (Auckland central business district and central suburbs), West (West Auckland and parts of Rodney) and South (Manukau, east Auckland and Franklin). The West and South Award’s recognise manufacturing businesses contribute significant employment and export income into their areas through a dedicated Excellence in Manufacturing category. Both south and west Auckland featured a large number of entries in the manufacturing category this year from a diverse range of manufacturing businesses - large scale exporters to small businesses and from manufacturers of plant equipment to boutique health products. The aim of the awards is to celebrate excellence in business and to showcase the best of the best. Many fine examples of Auckland’s strong manufacturing pedigree were highlighted through the awards process, with businesses demonstrating that while manufacturers have faced increasing difficulties flowing from the international economic down turn and the strengthening dollar
The aim of the awards is to celebrate excellence in business and to showcase the best of the best.
they are smart, competent and moving forward with successes. It has been an interesting time for many businesses in the current market conditions, however something that came through in our finalists’ entries, and no more so than in the manufacturing category, was that they were working smarter and adapting quickly to the current markets. That ability to redirect the business, refine processes, invest in technology, to seek out other opportunities and to meet the market is fundamental in their success. Within the Auckland region there are 8,000 manufacturing companies employing around 76,000 people. Seventy five percent of these companies are based in the Auckland South area, so this is a crucial sector for us to support and help grow. While the Westpac Auckland Business Awards recognise the best, they serve to encourage other businesses, teach by example and help drive economic growth. The Excellence in Manufacturing Category follows a strict judging criteria under the international Baldridge Quality Model. Entrants are assessed on their business and manufacturing practices, how the organisation has demonstrated innovation and flair, how they develop new or improved manufacturing processes, their in-house quality programmes, what key processes are involved and how these are designed and implemented to produce business improvements sustainability and increased returns. They are also judged on what technology has been developed by the company to aid in these processes, what benefits has the company experienced and how the business identifies and responds to customer and market needs. Finalists in the Westpac Auckland South Business Awards 2011 Employers and Manufacturers Association Excellence in Manufacturing Award are –
Astron Plastics
Astron Plastics has been at the forefront of recycling plastics for over 20 years. With substantial expertise in helping businesses reduce their
Minesh Patel of GMP Pharmaceuticals being presented with the Finalist plaque for the EMA Excellence in Manufacturing Award by Kim Hughes of EMA at the Westpac Auckland South Business Awards Finalist Function
waste, save costs and become more environmentally responsible, the company has practiced what they’ve preached with manufacturing nous added in for good measure. The company has invested heavily in technology and systems, including developing their own unique collection systems which are fully computerised and allow all collection bins to be monitored in real time. As fitting a recycling company, Astron Plastics has also invested in sustainable business processes to help the environment and their costs. CEO Ken Johns says the company’s investment in and dedication to continually sourcing new technology to improve proceses and maintaining costs has allowed them to compete globally. www.astronplastics.co.nz
Howick Limited
Howick Limited is a specialised steel frame roll former manufacturer. For more than 30 years they have manufactured specialised steel roll forming machines for use in steel
frame construction. Machines are now customised to order to meet specific customer requirements. The company’s innovative engineering has produced steel framing machines that create location dimples and fixing holes through computer control. This allows steel frames and trusses to be manufactured with extreme precision and also enables the frame to be self locating and jigging. The company’s product line includes automated roll forming machines, decoilers, sliding machines, steel framing machines, and the ‘C’ purlin machine. Wayne Rowe, General Manager, states that one of the initiatives the company uses as part of its continuous improvement is an innovation participation programme where staff are rewarded for new constructive ideas adopted by the company, whether it is a process or technical issue. This creates involved empowered staff within the company to speak freely and be part of the improvement cycle. www.howickltd.com Continues page 14
WWW.EMEX.CO.NZ www.nzmanufacturer.co.nz
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NZ Manufacturer August 2011
AUCKLAND MANUFACTURERS
From page 13
GMP Pharmaceuticals
GMP Pharmaceuticals is the biggest supplement manufacturer in New Zealand, contract manufacturing a variety of top quality health supplements for customers in New Zealand and internationally. The company is certified to manufacture pharmaceuticals, dietary supplements, dairy products, restricted animal products, baby foods and organic foods. Their contract manufacturing services also include product formulation, label design, packaging solutions, shipping, warehousing and regulatory advice. The company is one of the only two companies in New Zealand that are able to provide soft gel formulations and have the technology to make soft gel both chewable and non chewable dosages. www.info@gmp.net.nz Finalists in the Westpac Auckland West Business Awards 2011 Tasti Products Excellence in Manufacturing Award (sponsored by the 2010 Supreme Winner of the awards) are –
Absolute Essential
Absolute Essential manufactures a range of botanical products to
help restore balance and support wellbeing. With four product ranges to choose from, business activities revolve around the sourcing of highly specialised raw ingredients and manufacturing and finishing products in Absolute Essential’s own certified organic manufacturing facility. Absolute Essential’s products are distributed both nationally and internationally. Absolute Essential has been in operation for 21 years, with founder Dr Bo Hendgen D.O. N.D crediting the company’s success to their commitment to finding the purest botanical ingredients of medicinal grade, moving manufacturing to their own facility with organic specifications and redesigning their packaging 12 years ago from a floral look to a more medical/professional look. www.absoluteessential.com
Bakeworks
Bakeworks Limited is a gluten free bakery manufacturing company that supplies supermarkets, hotels, health food stores and cafes. Started in 2001 under the name Organic Bakeworks, the company initially began with the intention of being the in-house bakery to health food stores in West Auckland. As the business quickly grew they increased production to supply
QUALITY ALUMINIUM EXTRUSIONS
Hell, there are no rules here - we’re trying to accomplish something. – Thomas A. Edison
baked goods to organic health food stores in the wider Auckland region and now supply health stores and supermarkets throughout New Zealand. Production shifted to 100 percent gluten free in 2006, with the current range including gluten free bread, cookies and bread crumbs. Due to cost restrictions in purchasing equipment, Bakeworks have worked smarter instead, making production changes for efficiency. Business Director Kirsten Unger says one example of this is with their ovens which have a down time of 20 minutes between mixes, equating to approximately 320 minutes or more than five hours. The system that the company will implement to resolve this downtime is increase the size of their proofer to take six racks instead of four, purchase an additional mixing bowl and purchase more bread tins. By making these relatively simples changes the company will be able to reduce the production shift by fourfive hours and allow them to increase production numbers without increasing staff working hours. www.bakeworks.co.nz
Yourspace Developments
Yourspace Development was established in 2007 with the goal of
producing ‘one off’ custom made cabinetry to the highest standard. The company identified a niche in the market for bespoke designs for the top end of the market, largely on commercial but some top end residential solutions. The company largely works though architects, producing cabinetry that is uniquely designed and finished to the highest specifications. The finalists in both the Auckland South and West awards are currently undergoing the final stages of assessment. Winners will be announced at the relevant Westpac Business Award black-tie Gala Dinners later this month. Congratulations to all entrants and finalists in the Westpac Auckland Business Awards 2011. Manufacturers are encouraged to participate in next year’s award process, with entries opening in March 2012. nextSTEP For further information on manufacturing in the Auckland region please contact: Bessie Nicholls, Sector Specialist – Niche Manufacturing, Auckland Tourism Events & Economic Development Ltd. Email: Bessie.Nicholls@em.org.nz.
50 Years of Achievement – Gilbert Ullrich
Ullrich uses only the highest quality primary aluminium billet. No remelt used. Gilbert Ullrich, CEO Ullrich Aluminium Ullrich Aluminium, a market leader in the field of aluminium extrusion manufacturing, fabrication and distribution, celebrates its 50th year in business in New Zealand, Australia and the Pacific markets.
State of the art, modern 2000 tonne extrusion press built by UBE of Japan.
Ullrich designs and produces the highest quality extrusions in New Zealand. Large shapes and hard alloys a specialty.
BRANCHES NATIONWIDE
0800 500 338 www.ullrich.co.nz
www.nzmanufacturer.co.nz
Supported by a loyal team of over 700 personnel made up from many different nationalities, the company operates 43 distribution centers across New Zealand and Australia and exports to 23 South Pacific Island Nations. Its specialized export department features multi lingual employees. This allows Ullrich to maintain a high level of customer service.
Two state-of-the-art extrusion plants, one in Hamilton New Zealand, and the other in the Hunter Valley in Australia, provides extrusion to the company’s manufacturing, fabrication and distribution facilities. Ullrich also operates a small foundry in Dunedin. The company employs a hub-and –spoke system using distribution centers to ship product throughout their radius. The 80 strong fleet of trucks is always on the move. Ullrich states “Our management style is hands on, so we generally know if there is a problem. We have found that by staying involved at all levels works for us best. Many of our branch
managers including a member of our board of directors started at lower level positions such as “store man” In celebration of its 50th anniversary Ullrich Aluminum are holding a series of events at the company’s main locations. The company hopes to usher in another 50 years of continued success, as it demonstrates to its clients and employees just how grateful it is for their loyalty. The company supports a number of NZ Trade initiatives being founder members of the Export Institute of New Zealand and are proud to be supporters of Emirates Team New Zealand and NZ Pacific Business Council (and Chairman’s June report on this website www.adb.org/pacmonitor). For further Information please view www.ullrich.co.nz or www.ullrich.com.au Together with our clients and friends we plan to build a bright future. Gilbert Ullrich, CEO Ullrich Aluminium
NZ Manufacturer August 2011
Corporation: An ingenious device for obtaining profit without individual responsibility. – Ambrose Bierce
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AUCKLAND MANUFACTURERS
Do we need a Tobin tax?
urrency volatility can be a significant issue for New Zealand exporters, making planning ahead sometimes problematic. Now, as with the high dollar, many are wondering if there are tools available to the Government or Reserve Bank to ‘manage down’ the volatility of the $NZ. Suggestions include introducing a small tax on foreign exchange transactions - a Tobin tax. Proposals for a Tobin tax have come from number of political leaders including Labour leader Phil Goff and Mana leader Hone Harawira. The idea behind a Tobin tax is that taxing speculation would reduce speculative inflows and outflows, reducing volatility.
Would it work?
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Before considering that question it’s useful to consider what causes volatility.To a certain extent, it’s a byproduct of a free-floating currency. Most countries have now floated their currencies and have found that some amount of volatility goes with the territory. The demand and supply for one currency relative to another will always bring fluctuations in their cross-rate.Some currencies are relatively stable and their exchange rates do not fluctuate much in the short term, but many others are subject to frequent changes, whether expected or unexpected. New Zealand is a country that can expect a certain amount of volatility, being a participant in the fairly volatile international commodities market. We are not alone in this – many other countries grapple with it
and have investigated whether there are any mechanisms to address it. So far, unfortunately, there aren’t many successful contenders.
Countries have experimented with a Tobin tax
Sweden introduced a Tobin tax in the 1980s, but experienced large falls in trading volumes and higher cost of government borrowing, and abandoned the scheme in 1991. Brazil introduced a Tobin tax in 2009. As in Sweden, it slowed the flow of international capital in and
Suggestions include introducing a small tax on foreign exchange transactions - a Tobin tax.
WWW.NEXUSFOAMS.COM
out of the country, but has been ineffective in curbing volatility of its currency Their experiences indicate that a Tobin tax results in: • fewer foreign exchange transactions • higher interest rates • no evidence of reduced exchange rate volatility This suggests a Tobin tax might not be an effective option for New Zealand circumstances.The free flow of international capital is very important to New Zealand.Our exporters need to be able to convert currencies in order to undertake international transactions. Trading and its associated flow of capital help the process of price discovery, ensure resources are priced appropriately and enhance liquidity. Reducing foreign exchange transactions would bring less liquidity – a particular issue for a small economy.
Less liquidity would mean large individual export or import transactions and individual large scale investments would have a much greater effect on the exchange rate than now – bringing more volatility, not less. It is also likely to lead to higher interest rates, as taxing transactions results in fewer transactions and therefore less investment, the resultant scarcity raising the cost of capital. New Zealand enterprises including exporters would bear the brunt of higher interest rates at a time when markets remain fragile. Unfortunately, a Tobin tax does not hold much promise as a tool to address the volatility of the New Zealand currency. -Export NZ
July PMI O
verall PMI 53.5 (meaning manufacturing is expanding)
Production 58.9
Employment 52.2
New Orders 53.3
Stocks
46.7
Deliveries 51.1 *Above 50 points indicates manufacturing activity is expanding, below 50 indicates it is contracting, and the distance from 50 indicates the strength or weakness of the increase or decrease..
sales@nexusfoams.com
www.nzmanufacturer.co.nz
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NZ Manufacturer August 2011
AUCKLAND MANUFACTURERS The Interview Greg Cross
strategic development of that world leading economic development initiative for the last three years. Recently he talked to NZ Manufacturer:
Why do you do what you do?
I LIKE building global businesses, working with young people and doing things that inspire me. I have to really enjoy the people I am working with and it has to be challenging fun.
If you were not doing this what path would you have chosen?
I’M A great believer that the right paths and the right opportunities come along at the right time as long as you are open to the possibilities. As a kid I always wanted to be a writer but I seem to be doing plenty of that anyway these days.
How do you see the present business climate in New Zealand?
IT’S ALL over the place and really hard to generalise =there are definitely businesses that are doing it tough and there are some that are doing really well. It’s pretty much what I see when I travel around the world.
Is there any point in trying to catch up with Australia?
NO POINT whatsoever, nor is there any point in trying to compare us with Singapore, Ireland or the latest Denmark. We need to be bold enough to have our own unique vision for NZ.
Kiwis are innovators and have produced some amazing products. What do you see as the reasons for their success?
WE TEND to be most successful when it is built around our creative but pragmatic approach to solving
G
reg Cross is The ICEHOUSE chairman and a Director of Cross Ventures an investment/ advisory services group that has built up a portfolio of interests in export focused high growth companies including PowerbyProxi, Nature Baby and SLI Systems. Greg is the Chairman of NZTE’s NZ Beachhead Advisory board where he has championed the
If you are focussed on building a global business you can be successful no matter what the exchange rate is.
Email: graeme@speedfloor.co.nz www.speedfloor.co.nz
www.nzmanufacturer.co.nz
I rate enthusiasm even above professional skill. – Edward Appleton
problems. We could see even more success if we were focussed on the markets we have to sell into and the competitive forces that are at play.
What would you do about the high dollar at the moment? GET ON with what I control. If you are focussed building a global business you be successful no matter what exchange rate is.
can on can the
Greatest achievement?
GETTING TO a point in my life where I can say...I really am living my dream.
Biggest influence?
BILL FOREMAN of Trigon, my first mentor who got me hooked on technology and exporting. Bill Gates who built a whole company around a culture that debates decisions rigorously to make the best one you can, at any given time.
How do you relax? RIDING my bike.
October NZ Manufacturer THE EXPORT SUCCESS ISSUE • FINDING MARKETS OVERSEAS! • SUCCESSFUL EXPORTERS TELL HOW THEY DID IT! • WHERE OVERSEAS OPPORTUNITIES ARE! To take part in this issue and for more information contact: max@nzmanufacturer.co.nz
NZ Manufacturer August 2011
AUCKLAND MANUFACTURERS
Our intention creates our reality. - Wayne Dwyer From page 1
times required by clients. Utilising the considerable experience within the design team, RPM has expanded into other markets, including purpose-built, specialised equipment. Over the past two years, RPM has developed three distinctly different types of specialised machines for the plastics and beverage industries. “One of the more challenging projects was the development of ‘in mould labelling’ (IML) equipment which has been extremely successful. To-date seven machines have been built, all for overseas markets, but we are keen to get our technology into the Australasian market. “A German competitor in the IML market was present at the trial of the mark 1 version and they were astounded at the performance and ease-of-use of the entire system. Another tick in the box for Kiwi ingenuity,” says Chris Vincent. If you are wondering where the German built DMU2OOP 5-Axis machine fits into the scheme of things, it is in the words of one of the two major shareholders, Mark Vincent, “high service delivery standards and capacity previously only available overseas”. It’s primarily used for heavy tool manufacturing and mould construction and capable of machining work weighing as much as six tonnes. Certainly it is large enough for Vincent, not a small man, to stand freely inside it; has a spindle speed of 10,000 RPM; and a “pickup speeder head” operating at 42,000 RPM. It is machinery like this, plus the 70-something years of shared experience that qualified toolmakers Peter Smith and Mark Vincent have in the game, which is creating opportunities from global markets – including Australia, USA, Mexico, Thailand, Germany, UK and Iran export markets. This has caused the two founders to see their future growth opportunity as being “up in the air”. No, not indeterminate, but very definitely in the challenging and lucrative aerospace industry, as it gears up to deliver a staggering number of aircraft, primarily to Asia.
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Future “up in the air” – aerospace, that is Chris Vincent (Mark’s younger brother, with an independently successful career in the finance and manufacturing industries before joining RPM some three years ago), has all the figures at his finger-tips: “some 26,000 aircraft in the next 15 years”. He is committed to seeing RPM expand into complementary markets, given the company’s existing reliance on the tool and die markets, which have proven to be unpredictable in this time of global financial uncertainty. So how did the tentative little start-up on the North Shore, not far from its present base, turn into today’s tool and die powerhouse? What’s been the secret of their success? In essence: expertise, experience, a commitment to reinvest (even in tough times – and as you would expect over two and a half decades in manufacturing – tough times come when you least expect and are least convenient) and, they all stress, outstanding, dedicated qualified employees. Mark Vincent is unequivocal: “Our success has been established on carefully nurtured, longterm relationships with local and international customers, with the consistent backing and continuity of our reliable suppliers. “We would like to think, in turn, those relationships were underpinned by our own uncompromising commitment to consistently excellent delivery and high service standards.” Talking of which, that commitment to quality is reflected in an ISO 9001 certification, since 2000 and supported and certified to the current standard -- AS/NZS ISO 9001: 2008. And they are Telarc SAI Ltd registered too, as you’d expect. Peter Smith is quick to point out that local customers – and there are a
They’ve never forgotten the role their employees play.
number of household names which have been with RPM since the getgo in 1986 – will not be impacted at all by the company’s ambition to move into the aviation sector in a bigger way. “In fact they won’t notice anything but our increased experience in the most demanding engineering industry in the world, being passed on to them in what we supply locally and we will be investing in additional plant, equipment and the latest in measuring technologies too,” he says. The brothers Vincent recently returned from a global marketing tour aimed at negotiating existing contracts onto a long-term basis. The biggest feather in their collective cap was a commission from a German manufacturer and supplier to Rolls Royce – “the top of the tree”, as far as many are concerned. Not that other leading brands like GE, Pratt and Whitney and others aren’t on that list too. And it’s the Rolls Royce connection which brings up a shared tale between the two Vincents and Smith, which seems to have been downplayed up to now, but has resonated through Europe, and brought New Zealand manufacture seriously to the fore. In summary, when the now highly familiar Qantas A380 Rolls Royce Trent 900 engine lost a key component, which blasted a hole in the fuselage, late last year, it was RPM and Metaltech Engineering Ltd, out of Hamilton (and another Kiwi company), who worked together to manufacture jig-andfixture parts in two weeks, versus two months out of Europe. “RPM’s capability to run a graveyard shift on top of its standard two shifts gives us the ability to react to urgent demands,” Smith emphasises. As you might expect, when two skilled craftsmen have spent most of their working lives together the banter is sharp and the discussions robust. They are concerned at the rapidly aging skilled workforce both globally and locally. They’ve
done their bit over the years with “at least 30 apprentices” and continue to be committed “even though the successive governments have done nothing to incentivise us”. And they are recruiting from around the world as their 40-odd workforce increasingly represents the changing composition of the nation. Instead of whingeing about that, they have, typically, embraced it and turned it to the company’s advantage. They are currently working on supplying a new tooling package into Iran, thanks to an Iranian member of staff. Over the 25 years, even in the volatile times that have often battered the manufacturing industry, they’ve never forgotten the role their employees play. That of course, is something every company puts out. Peter, Mark and Chris, however, do it; most recently they have made full use of IT technology, coupled with some very flexible management thinking to keep two members of staff involved in the company, when circumstances outside their control – family in the one instance, and health in the other -- would normally have dictated otherwise. “They are online for our morning meetings and then get on with their tasks as they would if they were here. And, of course we could always make our man across in Australia work until six, local time,” jokes Smith, who has 45 years in the game and “is still excited everyday about what we do”. One thing they are deadly serious about is the way modern society, and the schools in particular, seem to be discouraging youngsters to look at “hands on engineering – a trade, rather than going off to university where far too many of them end up doing media studies and physical education”. They do have contact with the local schools and organise a “Royal Tour” to show the industry in its best light, but “don’t feel the love”. Something, no doubt, they’ll get round to sorting later. Right now every working moment is focused on maintaining quality and service, while increasing the RPM presence in their current export markets for their specialist products.
www.nz.sew-eurodrive.com
www.nzmanufacturer.co.nz
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NZ Manufacturer August 2011
AUCKLAND MANUFACTURERS
If all the economists were laid end to end, they’d never reach a conclusion. – George Bernard Shaw
From page 1
Making replacement exhausts to the trade
The CSM bender is world class technology, offering high-precision bending and rolling of tubes, supported throughout by an internal mandrel – a series of inter-connected metal ‘balls’ of a matching diameter – and a carriage boost. This results in an absence of humps, bumps and wrinkles, or any elongation of bend. According to Patterson, Autobend staff can programme variable radii (when rolling tubes) or produce straight and concentric coils, with CNC precision, as well as repeat bending and rolling to the original specifications. Furthermore, the five axis, CNC-controlled bender has the latest software for fast and efficient programming, with data being entered using an XYZ table or co-ordinates from clients’ CAD drawings (or a similar file). “Most importantly, the twinstack tooling allows two different CLR bends; or bending plus rolling into one tube – making it the only mandrel bender/roller machine in NZ with this capability. This opens up huge creative options. “We can bend a range of materials, including EWS mild steel, stainless steel and aluminium. We’ve also purchased a large inventory of tooling to cover round, square and oval tubes for both jobbing work and the production of stock bends,” says Patterson, who is clearly enjoying the variety of tasks they
The CSM bender is world class technology
have been challenged with already – handrails, works of art, decorative balconies, centrifugal and complex liquid distribution systems, Snorkel components, and more. And just in case you think this is all a bit too much Hollywood for you, the direct clamping capability of the new machine, provides the ability to bend a variety of aluminium profiles, such as window frames, on dedicated tooling. Patterson again: “All tubes have ‘spring-back’ when bent. So we’ve installed a tube-measuring table which can scan a pipe, be it a sample, or the first tube off the machine, and then make correct adjustments for spring-back and elongation. “The degree of bend - the distance between straights, tube-stretch and spring-back - can all vary from the tooling set-up and material, so we carry a full-range of tubing in stock. This also allows us to guarantee the finished pipe will fit correctly, while providing a printout of the dimensions for the client’s QA department, if required.” Patterson reckons this is a costeffective solution for ‘one-off’ jobs, prototypes or runs of 1,000 units, with CNC precision and accuracy. “The four-metre ‘over mandrel’ bed allows multiple bends/rolls, thereby reducing welding, which, in turn, improves efficiency and profitability for clients. “Over the years, Autobend has saved customers thousands of dollars in reduced scrap thanks to less welding, precision fitment, specialist knowledge; as well as bending and rolling of the same tube. Try us.”
New Zealand’s biggest mandrel tube-bender, the CSM 100TBRERBE, courtesy of Autobend.
How’s Business?
Have contracts in place, waiting for customers to take them up, business looking good. -Stuart Cumming, ETEL Transformers
Business ticking along quite nicely. We are finding that business activity in Christchurch is building again. -Richard Higham, Hi-Q Components Ltd
• Concept to Completion; Product Design, Tool Design, Manufacture & Mould Trials • Large Capacity/Work platforms with extensive plant & equipment • 40 qualified specialized staff; Designers, Toolmakers, CNC Operators • 20 yrs export experience to global markets • AS/NZS ISO 9001:2008 certified
Tel 09 479 8844 34 Apollo Drive, Mairangi Bay, Auckland sales@rpmtoolanddie.com • www.rpmtoolanddie.com www.nzmanufacturer.co.nz
Business is good. This year seems to be a continuation of 2010. -Doug Burt, Eric Paton Ltd
Ahead of last year and the outlook is for further improvement (yet) next year. -Bevan Gracie, Apex Valves
NZ Manufacturer August 2011
COMMENT
The herd instinct among forecasters makes sheep look like independent thinkers. – Edgar R. Fiedler
T
Teenage unemployment rate a disgrace
wo months ago it was twenty six percent of teenagers 15-19 who were looking for work, now that figure has risen to twenty eight percent in the same age group. It’s getting harder to find a job if you are a teenager and, if you do, to know how long the job might last. The fluidity if today’s markets leaves a lot to be desired and is rapidly festering on our youth an unemployment sore which is getting harder and harder to clear up. It’s actually at the stage that those in their ‘50’s, with their own home and assets are the lucky ones; we’re looking at generations here who may never have that level of security. And it’s not just New Zealand, the youth unemployment problems are worldwide and causing massive social unrest, especially in European countries. So what has brought us to this day? What is causing these huge imbalances in opportunities for our young people which, incidentally, places huge stress on their families who are supporting them through awkward economic times, they are, possibly, experiencing themselves? Do we say that globalisation has ‘tightened’ up the markets and not as many people are needed in the workforce due to enhanced technologies? Or is it the population of the world which has ‘overrun’ the number of job vacancies available leaving a huge chasm that teenagers are slipping into? This all sounds a bit too simplistic to me. It’s about better business planning for the future and considering again youth employment rates which allows for experience on the job and a start into a meaningful life.
It’s about forward-thinking policies being put in place to look after the future, so that our youth have real incentives to stay here and not just drift across ‘The Ditch’. It’s a given that we all travel – per ratio per population Kiwis travel a lot. It’s about companies training staff and putting the incentives in place so they don’t lose them. May be a dedicated, young, trained staff member has half payment on a $60,000 house paid for them by the company they work for as a bonus for loyalty if they stay 10 years? Got a better idea? How is your company dealing with skill shortages, not being able to get staff when we have this huge number of idle teenagers in our society? Maybe the swings and roundabouts allow you to hire someone on term so that your contract manufacturing job can be completed on time. We have an election coming up in November and the leaders of both Labour and National need to show what they are doing for the youth, the future of the country. If they don’t have a vision, a picture, a plan what is Joe Public expected to do? If there are no industry visionaries planning for success then just how does the nation get ahead? The Icehouse may hold workshops and
It’s getting harder to find a job if you are a teenager and, if you do, to know how long the job might last.
Teenager looking for work
conferences and share ideas, but will those ideas become reality? Will they train the youth of today to share in the future? We have a lot of groups in the
Literacy training yields positive results
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his year’s Skills Highway Award entries show workplace literacy training continues to yield positive results for organisations across the country, says Labour Department Deputy Chief Executive for Policy and Research Jeremy Corban. The Skills Highway Award celebrates workplaces that successfully boosted the reading, writing, maths and oral communication skills of their employees. It is part of the annual Equal Employment Opportunities (EEO) Trust Work & Life Awards. Five companies have entered the third annual Skills Highway Award
sponsored by the Department of Labour. They are Cardinal Logistics, Framework Trust, Snap Fresh Foods, Spicers Paper and Stevenson Group. They represent logistics and freighting; mental health and disability; food; paper; and the quarrying, mining, concrete and engineering sector. The entries show workplace literacy training had several positive results, including improved company productivity, better staff retention, fewer mistakes and improved health and safety practice. “Congratulations and good luck to this year’s entrants. By entering and sharing your success stories, you teach
other New Zealand businesses a lot about the positive impact workplace literacy training can and does have. We can see from your example it works well in large workplaces like Stevenson Group, as well as small to medium enterprises such as Cardinal Logistics,” Mr Corban says. Award winners will be announced at a presentation dinner later this month in Auckland. (Organisations enter the Skills Highway Award by documenting how they successfully boosted their employees’ workplace literacy and numeracy skills with training and the impact training made on their business. They then submit their entry to the EEO Trust.)
country, who at times are competing against each other, to maintain status, looking for the high plateau. They need to be slightly different in their philosophy to keep on going, to be recognised as significant. To focus on issues such as youth unemployment. But with youth unemployment, they are frozen, they do not work together on the issue, they are not challenged enough and they are part... of the problem.
-Doug Green
NZ Manufacturer l PRINT l DIGITAL l WEBSITE l YOU TUBE www.nzmanufacturer.co.nz
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NZ Manufacturer August 2011
BUSINESS NEWS Brightwater appoints new Chief Executive Officer Biodegradable plastic B L
The only problem with common sense is; it’s not common! – Anonymous
IN BRIEF
ow-value animal protein is being given new life as a high-value biodegradable plastic with the discovery of a new manufacturing process by University of Waikato scientists. The new process, developed by Faculty of Science and Engineering senior lecturer Dr Johan Verbeek, takes bloodmeal, a by-product from meat processing, and puts it through a chemical and biological process turning it into a biodegradable plastic. l l l l
Pre-work valuable for infrastructure planning T
he latest National Infrastructure Plan does not yet help businesses see where they can best invest, but it does indicate significant preparation towards this in the future. The Government has released the National Infrastructure Plan 2011 which reports currently reasonable outcomes in most areas of infrastructure and, in a Three-Year Action Plan, commits to developing infrastructure performance indicators, publishing a Capital Intentions Plan, debating demand pricing, and improving public access to information on infrastructure performance. At this stage the priorities described in the Infrastructure Plan are too high-level to provide businesses with specific information to guide investment decisions.
rightwater have announced the appointment of Chris Ellis to the position of Chief Executive Officer at Brightwater. Chris is currently Chief Executive of the Building Products Division of Fletcher Building Limited. This role involves the leadership of a portfolio of businesses across Australasia. In this role he is also a member of the Senior Executive Committee of Fletcher Building. Chris has been in his current role for five years. He was previously General Manager of Winstone Aggregates, and prior to that General Manager of Fletcher Construction Engineering Division. In addition to his Fletcher roles, Chris is Chairman of the Business Leaders Health and Safety forum,
Chris Ellis
New literacy assessment tool to assist employers
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he Department of Labour has developed a new tool called Take the test to help employers assess the literacy skills of their workforce. Take the test is a leaflet designed to help employers work out – in just five minutes – if a business is affected by poor workplace literacy and numeracy.Department of Labour, Skills Highway Information and Promotion Manager Lisé Hutcheon says: “It collates the basic data a manager needs to talk about literacy and numeracy issues with colleagues. “An employer might find reading is a particular issue in the workplace. Alternatively, he or she may find writing, maths and oral
www.irl.cri.nz
Working in partnership with business www.nzmanufacturer.co.nz
and a member of the Minister of Building and Construction’s, Construction Strategy Group. He is a qualified engineer and a graduate of executive development programmes at Stanford and Wharton Universities. On welcoming Chris to Brightwater Chairman Mike Simm says “The Brightwater story to date, company culture, and the growth aspirations in New Zealand, Australia and beyond, have all attracted Chris to this position. His focus will be on applying his industry experience and leadership skills to assist Brightwater to achieve its Strategic Goals.” Chris commences with Brightwater in late August.
communication are crucial skills gaps.” “Overall, we want employers to use Take the test to measure the issues, as well as think about ways to address them.” See Take the Test at: www.skillshighway.govt.nz/test (Research shows about four in every 10 New Zealand employees have difficulties with reading, maths and communication. The country’s poor adult literacy rates have long been considered a serious issue that costs business through accidents and injuries, high wastage, mistakes, missed deadlines and low productivity. Read more about skills training online at: www.skillshighway.govt.nz/ind)
Take the test, a Skills Highway publication from the Department of Labour.
NZ Manufacturer August 2011
Our intention creates our reality. – Wayne Dwyer
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MANUFACTURING TECHNOLOGY
Toyota Production System means productivity boost
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ncreasing productivity, efficiency and staff engagement to drive business gains is the goal of most growth oriented organisations, but most don’t seem to be able to adopt a system that can help them achieve this. The Toyota Production System (TPS), the main source for Lean programmes, is the universally applicable and accepted system that has proven the test of time in improving business productivity. The roots of TPS were formed with the establishment of the Toyota Motor Company by Kiichiro Toyoda in 1937 and the Honsha Plant being built in 1938. Toyota achieved production of 100,000 vehicles by 1947. In 1959, production started in Brazil, and 1962 saw the production of the millionth vehicle. Kiichiro developed, new processes for internal production and procurement that were “justin-time” to avoid waste. With a new factory layout, a process flow was implemented that resulted in an improved flow of operations and a tremendous growth rate for the company. The chart above shows sales of Toyota vehicles from 1935 to 2010. This success comes from focusing on customer value in terms of quality and cost. Although TPS originated in Japan and comes from an automotive business, it’s not country specific and its principles can be applied to any company’s processes. New Zealand has the challenge of being located far away from its customer base, and as
By Ian Lines
a result it can be argued that going ‘Lean’ is of greater importance for us to remain competitive in today’s global market place. When Lean programmes that use TPS are implemented correctly companies can expect to see improvements in quality and delivery whilst reducing costs. They can also expect to see greater employee engagement and empowerment. Skills4Work is one of New Zealand’s largest Lean providers with expertise in organisational transformation, cultural change, foundation and advanced tools directly from the Toyota Production System. Key New Zealand companies that supply the NZ and export market and who have benefitted from the Toyota Production System include
Proform Plastics, Compac Sorting Equipment, Pacific Aerospace, Stainless Design, NuFarm and Image Holdings. Alf McLaughlin, General Manager, Pacific Aerospace is immensely satisfied with the productivity outcomes for his company as a result of using this programme. “I think our results have been excellent in terms of morale, staff buy- in, and change of culture. Skills4Work knows the right process - the 5S process has been critical for staff, particularly the guys on the shop floor, to understand productivity improvement,” Alf says. Image Holdings supplies specialty nutritional and agricultural compounds to the NZ and South Pacific markets. Andrew Murray, Managing Director, said in relation
to their recent Lean programme, “Our skills training has been excellent. Morale has improved, lines of communication are open and organisation in the work place improves daily. Skills4Work have supplied a professional, easy to follow approach and given us the confidence and the tools to drive continuous improvement throughout our business. With our on-going commitment we look forward to a prosperous future.” Our next article will answer the question “What Really Happened at Toyota?” We discuss recent issues at Toyota and whether they pose any challenges for the TPS model. Ian Lines is the National Productivity Manager at Skills4Work nextSTEP www.s4wbusinessimprovement.org.nz
Polyamide Cable Protection:
30 years of experience, now ATEX 95 certified Products for the protection of cables, wires and hoses against not only mechanical damage but also the influences of UV radiation, weathering and chemicals. Products made of specially modified, load discharging Polyamide materials (PA11, PA12) for use in explosion endangered zones 1/ 21 (gas / dust)
TEL: 04 566 5345 • FAX: 04 566 5347
sales@connectors.co.nz www.nzmanufacturer.co.nz
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NZ Manufacturer August 2011
MANUFACTURING TECHNOLOGY
If you listen to your fears, you will die never knowing what a great person you might have been. – Robert H. Schuller
Top entrepreneurs to gather at Morgo
M
orgo is the much anticipated annual invitation-only gathering of the country’s top entrepreneurs. This year the ninth Morgo will be held in Wairakei Resort in Taupo on 27 and 28 October. Wellington venture capitalist Jenny Morel from No 8 Ventures founded the event to give executives and founders of high growth companies a chance to recharge, connect, learn and be inspired. This year the theme is Ecosystem – with a little help from your friends. Speakers include US-based Neville Spiteri, the Founder and Chief Executive of WemoMedia, a next-generation digital studio focused on globally shared media
and storytelling. WemoMedia is developing an online platform for peer-produced entertainment products that connect people around the world. He is credited on critically acclaimed franchises including Apollo13 and Terminator 2/3D and has worked in collaboration with James Cameron, Hironobu Sakaguchi and Steven Spielberg. Also from the US is Scott Yara, Vice President, Products and Co-Founder, Greenplum, a pioneer of Enterprise Data Cloud™ solutions for large-scale data warehousing and analytics. Prior to Greenplum, Scott served as vice president for Digital Island, a publicly traded Internet infrastructure services company that was acquired by Cable & Wireless in 2001.
Jenny Morel, Morgo founder
UK-based Simon Cartmell, the former Chief Executive of ApaTech, will talk about he drove the development and commercialisation of ApaTech’s products into Europe and the US and turned it into Britain’s fastest growing private medical technology company. ApaTech was sold to Baxter in 2010 for $330 million. David Hanson the founder of Hanson Robotics from the US will talk about how his company develops and manufactures humanlike robots and smart software that bring our robots to life. Hanson robots include the world’s first expressive biped robot, Albert-Hubo, heralded by WIRED as “genius”, and the small Zeno robot, a low-cost child robot who is evolving into a family member. Local speakers include Rod Drury, the Chief Executive and founder of NZX-listed Xero an
T Shaun and Grant Ryan
photoetch@xtra.co.nz www.nzmanufacturer.co.nz
photoetch.co.nz
online accounting solution for small businesses. One of New Zealand’s leading technology entrepreneurs, Rod is also a Director of the New Zealand Stock Exchange and a founder and Director of Pacific Fibre, a new international fibre cable project connecting Australia and NZ to the USA. Wellington-based David ten Have the Chief Executive and co-founder of Ponoko will talk about Personal Factory, the world’s easiest making system. The system allows users to turn their design ideas into custom products using a global making network. Over 100,000 customer designed products have been made so far. Ralph Highnam the Chief Executive at M?takina Technology, a medical imaging expert, also joins the top-flight speaker lineup. Ralph was formerly Chief Executive of Mirada Solutions, one of the University of Oxford’s most successful spin-outs of recent times. Ralph has over 20 years’ experience in breast imaging commercialization bringing several products successfully to market and successfully taking his previous medical imaging company from start-up through to commercial sale. Morgo 2011 has the support of a number of sponsors who help make the event possible including Ministry of Research Science and Innovation, Air New Zealand, NZTE, PricewaterhouseCoopers, Bell Gully, 2degrees, Meridian and No 8 Ventures.
Canterbury software summit
he Canterbury Software Cluster is hosting the annual Canterbury Software Summit on 8 September at Addington Raceway in Christchurch. The event is free to attend for members of the ICT industry because of sponsorship from Clarus, NZTE and IBM, and NZICT. NZICT are including the event as the first in the series of the Rutherford Innovation Showcase. Attendees to the half-day conference will get valuable insights and lessons from successful technology entrepreneurs and prominent speakers including: • Dr Craig Nevill-Manning, Engineering Director at Google (Keynote) • Andrew Lark, Chief Marketing Officer at Commonwealth Bank of Australia and former Dell Enterprise Chief Marketing Officer (Keynote) • David Scott, Head of Business Technology and Transformation for Z Energy Limited • Scott Bradley, CEO & Founder of
VoucherMob • Sam Gribben, General Manager of Serato • Tyrone McAuley, Technical Director, Co-Founder and CoOwner of Sidhe • Steve Orenstein, Founder, Connect2Field and • Dave Fellows, CTO at GreenButton. Separate business and technical breakouts ensure appeal to managers and developers in the ICT industry. Chair of the Canterbury Software Cluster Committee David Johnstone says the 2011 Summit promises to be bigger and better than ever. “The theme this year ‘Can you compete in the international market?’ will inspire technology entrepreneurs, developers and IT professionals alike with stories from those who have jumped hurdles, tested waters, and are now succeeding on the world stage. ”The event will especially appeal to businesses in growth mode or looking for an injection of enthusiasm.”
NZ Manufacturer August 2011
There are two kinds of companies, those that work to try to charge more and those that work to charge less. We will be the second. – Jeff Bezos
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DEVELOPMENTS
The time is now to train and curb skills shortages
f New Zealand manufacturing companies think they are going to be able to hire skilled staff to fill their skills gaps without an investment in training over the next two years, they’d better think again. That’s one clear message to come from a survey into companies’ skills needs commissioned by Competenz, the industry training organisation for the engineering and food and beverage manufacturing sectors. From May to mid-June this year, 270 companies were asked about their on-the-job training needs now and in the future, and how they might meet those needs. Competenz released the results in a paper entitled ‘Do we have the skills?’ which highlights the need for companies within these sectors to train their staff to meet increasing skills needs. The research sheds light on whether industry will have enough people with the right education and skills to meet the government’s strategic growth goal - to treble the export value of our high-value manufactured goods over the next 15 years. Unless we act now, says Jim MacBride-Stewart, General Manager of Traineeships at Competenz, the answer is no. To illustrate the looming skills needs issue, 64% of engineering manufacturers and 53% of food manufacturers believe they’ll need more skilled staff over the next two years. However, the vast majority of engineering manufacturing companies also reported a staff turnover rate of 10% or less – this suggests recruiting staff with the required skills will not be a sustainable solution. Worryingly, almost half the engineering companies surveyed indicated they would prefer to hire skilled staff to meet their skills needs while only 18% said they’d prefer training staff. In comparison, 41% of food manufacturers had a preference for hiring skilled staff while a third acknowledged they’d need to train. “It’s time for businesses to address the skills shortage through a focus on training. Employers must invest now to build capability for the future,” says Mr MacBride-Stewart. The good news is 99% of food and beverage manufacturers and 97% of engineering and metal manufacturers train their staff, and companies in both sectors have a significant history of investing in on-the-job training. Companies in the food manufacturing sector are particularly committed to training as they typically employ large workforces. Furthermore most engineering manufacturing companies and 61%
of food manufacturers see the skills of their staff as a cornerstone of their competitive advantage. Across both sectors the majority of companies agreed they faced training challenges, including downtime for supervisors and learners, finding good trainers, engaging learners, language barriers, and numeracy and literacy issues. “Despite these challenges companies must be prepared to train their staff as a long term solution to NZ Inc’s skills needs – hiring skilled workers here or from overseas is not a sound long term solution,” says Mr MacBride-Stewart. “Training is vital for the success of individual businesses and for the New Zealand economy. With the sector increasingly lacking in the number and level of skilled workers, it’s only going to become more difficult to fill the needs to manufacturers.” Across the manufacturing sector companies believe they stand to lose customers and experience declining profits if they cannot find the skilled staff they need. The research results support the assertion that companies should take the lead in hiring staff with the intention to train them, to upskill their existing staff, and promote the wider economic value of skilled workers. For its part, Competenz is dedicated to ensuring high quality trainees are attracted into these industries and trained to a high standard. “Government needs to look at how it invests in apprenticeships and other on-job training - and recognise the contribution companies make to industry training and the value they place on training staff to stay competitive,” says Mr MacBride-Stewart.
Companies that want to take the initiative and maximise the benefits of staff training and apprenticeships can contact Competenz today on 0800 526 1800. Copies of Competenz’s paper
‘Do we have the skills?’ with key findings and full results from the survey are also available on request. nextSTEP Contact: Competenz Tel: 0800 526 1800
ATNZ.org.nz
www.nzmanufacturer.co.nz
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NZ Manufacturer August 2011
PRODUCT NEWS
The difference between failure and success is doing a thing nearly right and doing a thing exactly right.
- Edward Simmons
New versions added to range Wedgelock launches I-Lock TILT
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H
ammond Manufacturing has added the AA, the A and C sizes to its 1553 family of soft-sided hand held enclosures; all models feature an ergonomic curved shape that fits comfortably into the hand. The AA measures 75 x 50 x 17mm, the A 100 x 61 x 17mm and the C size, available with or without a battery compartment is 117 x 79 x 33mm. The C size is a deeper version of the existing B size, which has a depth of 24mm. Available in RAL 7035 light grey or RAL 9011 black, both colours feature RAL 7012 grey overmoulded soft side grips. The units are moulded in general purpose ABS and are ideal for housing small hand-held instruments, remote controllers, flying lead machine controllers and many other applications where a small stylish, easy to hold enclosure is required. The top cover is recessed to allow a membrane keypad to be flush mounted and PCB standoffs are moulded into the base. Battery versions are supplied with clips for two AA and one PP3 batteries. All 1553 enclosures can be
supplied factory modified with machining and silk screening to the user’s specification; to help the design process, AutoCAD and PDF dimensioned drawings are readily available by downloading from www.hammondmfg.com. nextSTEP Contact sales@hiq.co.nz Tel. 0800 800 293
ew Zealand-based Wedgelock Equipment’s revolutionary quick couplers for excavators, have been combined with a world leading technology, providing the ultimate tilting and rotating Quick Coupler solution available. The unique I-Lock TILT already has market traction in New Zealand, Australia and parts of North America but Conexpo will be the stage for its international launch. The I-Lock TILT has the same ease of use and safety features as Wedgelock’s patented I-LOCK quick coupler system, now in use around the world, combined with the ability to tilt and rotate the head assembly. The I-Lock TILT creates unparalleled advantages for contractors operating a wide range of equipment from under 3 tonnes up to 35 tonnes. “With safety and efficiency prime concerns for the industry, we offer a significant competitive advantage. The I-Lock TILTTM system offers versatility leading to greater efficiency using the exacting mechanism of the I-LOCK™ safety system.” The I-Lock TILT offers 60 per cent
Matthew Calvert (CEO / Managing Director, Wedgelock Equipment Ltd)
more digging force at the bucket tip than other comparative systems can achieve. Our customers have identified this as a further key reason for choosing the I-Lock TILTTM coupler over competitor products. I-Lock TILT has been several years in development and includes the patented rotary head features developed by Kinshofer of Germany. The assembly is compact and built of rugged lightweight materials proven to endure the tough working conditions in which the equipment is expected to operate.
Attachment pulls out posts and vines Geothermal system among awards finalists
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hy didn’t somebody think of this before? From the invention shed of Malcolm Webster another breakthrough doit-yourself innovation. It looks like a giant rope jammer fitting off a sailing boat. It fits to the 3-point linkage on your tractor. No electrics, no hydraulics. You simply stay in the driver’s seat while reversing down the line, lifting posts and pulling out vines by the roots (they won’t grow back). The efficiency, simplicity and ruggedness of this contraption is really surprising. Any tractor driver can do it. The pulling jaws open wide when you lower the linkage, (actioned by two ropes tied to the top of the tractor roll bar). Positioning up to a post or vine is easy, as you are looking right down on to it as you back up. The jaws slide easily on ground skids and automatically grab when you lift. If a second pull is required, the jaws slip back down for another grab. The new Post and Grapevine Lifter is available now fresh, from
the Mystery Creek field days. There are lots of other great new ideas and products on Malcolm’s website to make life on a rural property easier and more enjoyable. nextSTEP Visit: www.fencershand.co.nz
When you come to a post – simply pull it out.
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major highway scheme and a world-first geothermal steam separation system are among Bay of Plenty finalists in the Inovate NZ Awards of Excellence 2011. Organised by the Association of Consulting Engineers NZ (ACENZ), the Awards recognise innovation in consulting engineering both in the structures or processes developed and in the means of providing engineering services to the client. Sinclair Knight Merz features for two BoP projects - for the many innovations used in the East Taupo Arterial (ETA) project, the 16.4 kilometre state highway bypass to reduce heavy vehicle traffic through Taupo, and for the Geothermal Steam Separation System at the $430m Nga Awa Purua power station at Rotokawa, Taupo. Innovative measures on the ETA project, included a steel network arch bridge over the Waikato River which reduced impacts on the river and addressed iwi concerns about placement of piers in the waterway.
www.baskiville.com www.nzmanufacturer.co.nz
Wood pellet plant
SKM was engineering designer for the Nga Awa Purua project, the largest single shaft geothermal steam separation system in the world, which provides enough electricity to power 140,000 homes. Aurecon came up with a solution for a dynamic Flow Remediation in High Demand Wastewater Manhole project which was part of an overall sewer rejuvenation for Tauranga City Council.
info@baskiville.com
NZ Manufacturer August 2011
PRODUCT NEWS
In modern business it is not the crook who is to be feared most, it is the honest man who doesn’t know what he is doing. – William Wordsworth
Chemical milling - a new process
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hemical milling is the term to describe the fabrication of metal parts by etching away unwanted metal by acid etching. A special ink called a ‘resist’ is printed onto a flat sheet on both sides in exact register, and this defines the shape of the part. It is then exposed to aggressive chemicals that react with the metal and it dissolves away. Chemical attack is from both sides and the result is a quick, clean edge free from burrs and rags. The unique propositions of this process are speed, accuracy, metal utilisation, initiation costs, time, and part complexity. Etching rates do vary from job to job, and a rate of 0.025 mm. per minute is readily achievable, this multiplies out to 0.6 m2 per hour on 0.2 mm sheet. As the resist pattern is generated by computer the initial image is ‘perfect’ and dimensional control is usually better that 0.1 mm. after etching on thin sleet (0.2 mm.). Thicker metal will have a slightly lower tolerance. As the initial drawings are done in a CAD programme, it is a simple task to turn the drawing into the required photographic imaging, advantage can be made of ‘dovetailing’ the parts
together to achieve a high packing density and minimise scrap, very high yields can be achieved. The time taken to go from CAD drawing to production ready camerawork is as long as it takes on the keyboard ! The same applies to drawing revisions. The metals that can be etched are copper, brass, nickel silver, bronze, and some stainless steels. Nickel silver and bronze make good springs. By etching the sheet prior to resist application any thickness metal can be produced, thus solving the supply problem with metal merchants. If the sheet is etched more from one side than the other a profile can be made, and if different images are used on each side some very complex sections can be done. Metal as thin as 0.02mm. can be successfully worked. All the usual metal fabrication processes can be used once the ‘blank’ has been etched: forming, presswork, plating, painting, screen printing, PEM inserts, etc. The process is outstanding in producing very complex parts with high aspect ratios. As some of the costs are based on an area function the cost of doing a 10 mm. disc with 20 x 0.2mm. holes is about the same as doing a 10 mm. washer. nextSTEP Visit: www.photoetch.co.nz
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Now you see it!
he Veo 16:64 Phased Array instrument is highly capable with multi-technique functionality, including TOFD; fast data recording, a simple to use interface and rugged housing. It is ideal for Pipeline Weld Inspection, Corrosion Mapping, Aerospace and Composite Testing. Veo’s design has made simple controls and menu workflow of paramount importance. The Veo display features full 3D views of the user’s test set up including probes, wedges, the weld and geometry, with phased array beams. Onboard probe and wedge databases are incorporated in the Veo for fast
setups. The Veo has TCG and ACG, a superior encoding speed with fast A-scan recording and excellent reporting functionality. Two separate conventional channels provide simultaneous Phased Array and TOFD scanning to speed inspection and ensure correct data referencing for improved defect characterization. Real Time Focal Law calculations allow the user to change scanning parameters instantly, reducing the time spent on setup and defect investigation. nextSTEP Contact:max@nzmanufacturer.co.nz
Inspection system for packaging
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BarrierWatcher Inspection system is able to inspect EVOH (Ethylenevinyl alcohol copolymer) barrier layers for defects. EVOH is used as plastic packaging for food, medical, pharmaceutical and cosmetic goods. It multilayer structure with regular plastic materials such as PP or HDPE. However, the continuous production of evenly distributed
EVOH layers can be challenging. There are currently two versions of the BarrierWatcher: a laboratory system with manual handling, or as an inline system integrated with an injection moulding machine. Typical parts inspected are multilayer preforms, tubs, cups or barrier closures nextSTEP Contact: max@nzmanufacturer.co.nz
www.nzmanufacturer.co.nz
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NZ Manufacturer August 2011
SUPPLY CHAIN
Success is the good fortune that comes from aspiration, desperation, perspiration and inspiration. – Evan Esar
Uni-Lift sets astronomical standards of precision positioning
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he B and M series Uni-Lifts – utilising respectively ball screw and machine screw mechanisms with strokes up to 6096mm – are designed to set a new standard for linear motion control in precision positioning and control in a mechanical package. They are so accurate and reliable that, in addition to positioning heavy machinery and plant, they have been used in roles such as satellite dish positioning and solar panel tracking. Ball screw jacks, with load capacities up to 100 tons, are well suited for high-cycle, high-speed applications Machine screw jacks, with load capacities up to 250 tons, are ideal for low-cycle, high-load applications needing a self-locking load screw. Unilifts complement an extensive range of high pressure (700 bar) compact and powerful hydraulic lifting and manoeuvering technologies, which range from the new RC-Series Duo and other cylinders from 1-1000 plus tons capacity, through to synchronous PLC-controlled systems that can lift bridges, drilling platforms
and structures weighing tens of thousands of tons. Uni-Lift accessories allow for easy connection and precise synchronised control of multiple actuator systems. Tight tolerance thread forms, heattreated gear sets, and pre-loaded bearings ensure repeatability and durability of these linear actuators. “Every Uni-Lift actuator has over 30 years of product design and manufacturing know-how behind it. Coupled with proven application engineering and sales experience, Uni-Lift mechanical actuators have solved the most challenging linear motion projects. In addition to heavy machinery and plant lifts, they have been used by industries requiring the highest standards of precision, including aerospace, telecommunications, medical research, defence, and microchip production, to name just a few of the challenging industries that have benefitted from Enerpac’s Uni-lift actuators. “From ? ton mini jacks to 250 ton multi-jack systems, Enerpac has one of the broadest and most reliable mechanical actuator lines in the industry.”
Visit www.konecranes.com.au
www.nzmanufacturer.co.nz
Uni-Lift mechanical actuators are available in capacities up to 250 tons.
maerskline.com
NZ Manufacturer August 2011
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www.nzmanufacturer.co.nz
E nezsalins@maersk.com
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NZ Manufacturer August 2011
SUPPLY CHAIN
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Cannibals prefer those who have no spines. – Stanislaw Lem
“Dude, where’s my stuff?”
f you run a warehouse, how would you feel if a customer imposed a financial penalty on you every time you mucked up an order? That’s actually happening now. A leading retailer is imposing a penalty of between $15 and $20 on its suppliers for each incorrect item they send it. The retailer asserts that’s fair compensation for the cost of contacting the supplier, re-ordering, and returning the unwanted goods – not to mention the frustration of having to tell a customer that the item they want isn’t available. In the tougher economic climate, businesses are less tolerant of errors. If goods wanted can’t be supplied by one outlet, there are others which can be approached. And if they can fill an order that you can’t, they also get the chance to take more business from you. Prompt delivery is crucial to some retailers whose market is dictated by the seasons; clothing, for example. Winter goods not delivered before autumn are less likely to be sold, and could even be returned to the wholesaler for that reason. Too often, such hiccups are simply the result of human error. People aren’t that hot at performing dull, repetitive tasks: keeping track of inventory, re-ordering before it runs low, or informing customers about the status of their orders. Supply chain and distribution software takes over many of those dreary tasks, issuing alerts and requesting approvals as work is completed or goods picked & packed – it can also notify customers. But it’s mobile devices and automation
that are revolutionising the supply and service chains; moving vital information in real-time, and freeing staff from the drudgery of paperwork.
Tracking the invisible
Keeping tabs on an order used to be a time-consuming chore, dependent on phone calls, scraps of paper and word of mouth. But while online processes have brought increased efficiency, they’ve also made tracking a bit trickier. “You don’t have much visibility along the way, and people want to track where it’s at,” says Stephen Sims, Greentree’s Product Director. “They want to know the status of their order, especially if it’s coming from overseas.” Automation can solve this problem. Electronic data entry (EDI) means an order flows easily from a single entry. Built-in validation rules mean orders are prioritised, ensuring urgent requests are handled promptly, and automatic notifications mean the customer is kept informed at each stage. This kind of service is crucial for maintaining good customer relations, since electronic ordering means less personal contact.
In the warehouse, a staff member equipped with a mobile device can receive an order on their screen, then see where to find it. They can pick it, see instantly whether they have enough in stock to fill the order, and mark it for packing and despatch. The order is processed, the customer notified that their goods are on their way, invoicing is authorised, and the inventory is also updated so the warehouse manager knows whether it needs replenishing for further orders. These devices can scan barcodes, reducing errors, and simplifying both ordering and replenishment. “Your accuracy of information to the customer is so much tighter because you’re collapsing the time to collect the information,” Stephen says. “You’re talking about small time savings, but they all add up.”
Going mobile
The other major imperative in running a supply chain today is the ability to do more with less; in the warehouse, it’s storing, picking and packing large numbers of items, employing only what used to be called a ‘skeleton’ staff. Mobile devices are delivering better results.
www.autobend.co.nz www.nzmanufacturer.co.nz
It’s in the plan
Of course, none of the above functions can be carried out properly unless the back-office knows what’s going on. Their tool for this is the graphical planner. It can be configured to trigger alerts for such things as inventory shortages, or even to notify of special authorisations required. For instance, if a particular customer placing an order has an unpaid bill, an alert could pop up saying no further goods are to be despatched until the account is settled. What you’ve just read is merely a brief overview of the sort of efficiencies possible from the latest supply chain and workflow software. A 2008 IDC survey of companies using mobile business applications noted a 15-20% increase in staff efficiency and a close to 100% reduction in data errors.
NZ Manufacturer August 2011
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PACIFIC BUSINESS Encouraging multi-lateral trade in the Pacific R The secret of success in life is for a man to be ready for his opportunity when it comes.” - Benjamin Disraeli
ecently, New Zealand Pacific Business Council organised a trade mission to Vanuatu and the Solomon Islands. Planning for an event such as this starts some months in advance and includes input from local businessmen, the NZPBC Trade Analyst (the latest trade statistics and trends), New Zealand Trade and Enterprise and its Trade Commissioners, the Ministry of Foreign Affairs and its local High Commissioners, NZ resident consuls for the Pacific Island countries, local Pacific Island Chambers of Commerce, the local branches of ANZ and Westpac Banks, Kiwi business clubs and ‘friends’resident in the target Pacific Island countries.
Based on input from the above groups we prepare a report highlighting prospective business and circulate this to all members asking for expressions of interest. A lot depends on timing, on what prospects are available, the current plans of individual members and who might be going. WE also have to ensure that there are no clashes with local holidays or competing
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trade delegations from Australia or elsewhere. The last mission was led by John Hayes, MP (Chairman of the NZ Government’s Foreign Affairs, Defence and Trade Select Committees), and Gilbert Ullrich (Ullrich Aluminium) and Kayhan Khadem (ProDesigners Architects) on the business side, with our Executive Officer managing the mission on the ground. Although we would like everybody to go on these missions, from a practical sense 12 – 20 delegates appears to be an ideal number. The cost of a mission is prepaid by the delegates and usually covers flights, hotels accommodation, airport transfers, administration and any function costs such as a conference room to host a mini expo. Port Vila in Vanuatu was the first port of call and that (Sunday) evening the NZ High Commissioner briefed us on local affairs and the business climate. On Monday we held a miniexpo at the hotel attracting local business people and giving our delegates an opportunity to make initial contact with prospective customers. Lunch was hosted by Westpac Bank who introduced even more business people. On Monday evening the NZ High Commissioner hosted a cocktail party to which he had invited many of the local business people and once again the delegates were able to engage in discussion on prospective business and further build relationships. Early Tuesday morning we were off to Honiara in the Solomon Islands. The NZ High Commissioner and staff met us at the airport, ensured there were no baggage problems and transported us to the hotel. Another briefing that night showed once again how invaluable is the
presence of NZ High Commission staff in understanding the economic and political realities of a foreign country that influence business success. Again a mini expo was held for one day but after being featured on local television we found a lot of value in continuing it for a second day. Attendees included government department staff as well as private sector businesses. During these two days some of the delegates were taking time out to visit prospects, their displays at the expo being covered by other delegates and the Executive Officer. The NZ High Commissioner for the Solomons hosted the first cocktail evening which again produced more business contacts. And later in the week the ANZ Bank, Honiara, hosted an evening at which nearly one hundred people turned up – twice what they expected and another amazing networking opportunity.
What was achieved?
As with past trade missions the delegates agreed they probably made three times a many contacts as they would visiting the country on their own. A high-profile delegation with local media coverage makes the local business people well aware of the fact New Zealand wants to trade with them and such a visit can be cost effective (we continue to receive emails requesting supply of various goods).
Comments from delegates
“Thanks you for your e-mail and thanks again for your leadership and organisation during the trade mission. I will know for sure over the next few months but my initial feeling is that it has been well worth it for us.” – Jeroen Brand, MD, Alphatron
Reading, Maths and Communication skills are used in areas such as; • Working with production schedules • Taking phone messages • Using equipment, computers or tools correctly and efficiently • Following instruction manuals • Reading dials and gauges • Complying with health and safety requirements • Estimating lengths, quantities and weights • Completing forms and orders • Making sense of performance and sales graphs • Participating in team meetings • Acting on verbal instructions
Gary Breed, Executive Officer, New Zealand Pacific Business Council Inc
“Thanks again for all your help on the trip, lots of potential, we have been flat out this week pricing tyres and talking with suppliers re new lines for the islands.” – Peter Maddren, Director, Tyres Direct Ltd “… not only was it a fantastic opportunity to get re-acquainted with both markets but with the introduction of MFAT in both markets as well as the help of ANZ in Honiara and Westpac in Vila, the networking opportunities were many within a short timeframe. No doubt the companies’ part of the mission will now capitalise on the information gathered during this trip. I do hear that some of them have found themselves very busy upon their return which is very pleasing.” – Richard Godin, Trade Commissioner, NZTE A trade mission is planned for New Caledonia in November 2011 and in 2012 we look forward to further trade missions in conjunction with other business councils.
and your employees. These programmes can be around workplace health and safety, customer service, communication or relevant workplace needs. Employees will be up-skilled in a workplace applicable environment contributing towards individual and workplace improvements. The programmes a fully funded therefore there is no $ investment required by the company.
t is increasingly apparent that difficulties with reading, maths and communication have a Employers have observed: significant effect on business performance. • Increased levels of engagement in the workplace; People with gaps in these core skills are often valued • Increased interest in higher level jobs and further study; and employees. Although they have difficulties with core • Increased confidence of their employees skills, this doesn’t mean they are unintelligent or unmotivated. They may be capable, hardworking Employees are able to: Source: Department of Labour • Participate fully in the workplace; and loyal. But their difficulties will make it hard for them to get ahead and hard for your business to Skills4Work offers a solution to these challenges that • Cope better with rapidly changing workplace demands; achieve best performance. businesses in NZ are currently facing through a series of workplace • Develop higher-level technical skills; and training sessions that assist and support the employee to grow and • Build confidence to engage in everyday life situations and work The core skills of reading, maths and develop in these skills. communication are fundamental to almost every If you would like to know more about what we can do for you and We tailor our programmes to meet the skills needs of the business the eligibility criteria please contact Tamai Roff on (09) 588 5131. task across any business.
www.nzmanufacturer.co.nz
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NZ Manufacturer August 2011
LEAN THINKING
Excellent firms don’t believe in excellence - only in constant improvement and constant change. - Tom Peters
Continuous Improvement and Sustaining the Gains
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he large majority of organisations that have embarked on an operational excellence program through lean, six sigma, or lean sixsigma, have found the results at first positive, then reaching a plateau, and then going in reverse. The Shingo Prize committee out of America found that was true of too many of the past award winners. They concluded the difference between those who sustained the journey to excellence and those who did not was leadership and culture. This prompted revising the award to focus more intensely on leadership and culture, rather than just the tools. The Toyota Way to Continuous Improvement (by Jeffrey Liker and James Franz) complements those efforts by providing a thorough treatment of the philosophy, thinking, and methods of a true culture of continuous improvement, and provides case examples of the journey. The Toyota Way was never a process improvement methodology in which we implement change and work to sustain the gains, but rather focuses on a long-term quest for excellence based on creating a system of processes that reveal problems so highly developed people with finally honed problem solving skills can continually improve whatever they are responsible for. This culture of continuous improvement provides an army of process improvement experts in every part of the company who are then aligned through a shared company vision. Separating out “lean processes” as a standalone endeavor does not make sense for any organisation, and, in fact, treating lean and six sigma like a technical toolkit to fix processes is why most companies fail to achieve true operational excellence. “Sustaining the gains” implies that like a machine, once the process is fixed there is a way to keep it fixed. The only sustainment mechanism
Jeffrey K. Liker
we know of is leadership. Unfortunately in the West we have evolved a model of leaders as decision makers who can remain distant from the actual core of the company that makes things or provides services. Employees throughout the company model senior leadership. If senior leadership manages only by the numbers and emphasises results only, no matter how they are achieved, then employees will focus only on getting the results that are measured and improvements will not be sustained. At Toyota they emphasise results through their annual planning system of hoshin kanri (aka policy deployment), but equally care about the process used to get those results. The process requires careful planning, finding the root cause of problems, then doing (trying countermeasures), checking to learn from the experiment, and making further adjustments based on what is learned. That leads naturally to the next PDCA cycle and through repeated cycles team members and leaders at all levels learn and strengthen their capabilities. Equally important in this PDCA process is how you engage team members
Employees throughout the company model senior leadership.
so they can learn and develop. In Toyota they say that results without a good process results from luck, but a good process can always be adjusted to get consistent results. Of course leaders need to lead a good process, which means they need to be masters of problem solving. Leaders who come to the worksite and are well trained in problem solving can guide and coach the work groups to solve problems at the root cause and then audit the process to find additional opportunities for improvement. If continuous improvement stops it is only natural that entropy kicks in and the process will degrade. So sustaining the gains is an active process by work groups who own the process continually surfacing problems and solving them one by one. There is much to learn about creating a culture of true
continuous improvement to become an exceptional organisation that can continually adapt to the many significant challenges that face any modern organisation. For more information see: Jeffrey K. Liker and James K. Franz, The Toyota Way to Continuous Improvement: Linking Strategy and Operational Excellence to achieve Superior Performance, McGraw Hill, April, 2011. Dr. Jeffrey K. Liker is Professor of Industrial and Operations Engineering at the University of Michigan and author of the international best-seller, The Toyota Way: 14 Management Principles from the World’s Greatest Manufacturer, McGraw Hill, 2004 along with six other books about Toyota. His articles and books have won nine Shingo Prizes for Research Excellence.
Cultural shift at Proform thanks to Lean
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n early 2010 Proform Plastics took the first steps on a journey that would change the culture of the company by opening up conversations and challenging processes like never before. As one of the leading producers of pickup truck bed liners, cargo liners and canopy shells, supplying a network of distributors and OEM customers in over 50 countries around the world, Proform’s success has been innovative thinking coupled with a strong desire toplease customers. Proform combines novel materials, tooling methods and manufacturing technologies to produce world-class products at competitive prices. Proform has a simple customer philosophy = they aim to achieve the very best in product design and development, lead times, product quality, value and responsiveness to meet customer’s needs. After attending a Lean Provider workshop in Hamilton in mid2009 and researching a number of companies, they chose Skills4work to
deliver the next phase of their Lean training. Skills4Work’s approach differs in that they aim to teach managers and staff how to do lean themselves. Talking to Nick Smith, the General Manager, it soon became apparent that the programme has given the company a common language to address issues. As a result, functional and cultural silos have been broken down and people are now communicating better. Another benefit of the programme has been the understanding that people now manage the ‘Value Stream’ rather than their individual ‘bit’ of the business. There is a renewed focus on doing the right thing for the customer to make product flow through the facility. Proform is now looking at taking the next steps in its Lean evolution and identifying ways in which to add greater value to their customers. More advanced techniques such as flow, SMED and TPM will lead to greater customer intimacy and profits.
For further information visit www.pslglobal.net www.nzmanufacturer.co.nz
NZ Manufacturer August 2011
Most of what we call management consists of making it difficult for people to get their work done. – Peter Drucker
Small business needs to be an election issue
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ith an election looming, every small businesses in New Zealand needs to lift their voices and be heard, asking each electoral party what they will be doing to help the SME sector. Paul Kane, a partner in New Zealand accounting firm Grant Thornton, said that for a sector that plays such an important part in the New Zealand economy, it is plaqued by a defeaning quietness. “Businesses employing five or fewer staff make up about 84% of New Zealand enterprises and businesses employing fewer than 50 staff make up nearly 99% of enterprises. “Yet, when it comes to the Budget or elections, what do you hear from small business? Normally, very, very little. Minority groups of all shapes and size are out beating their drums, but small business seems to be paralysed by stereophonic silence. “Most small business owners obviously do not know what other countries do for their small to medium enterprises otherwise they would be up in arms,” he said. The United States, Canada, the United Kingdom, India and Germany, to name but a few, all offer assistance to the SME sector. “One of the best examples and one that could be easily copied in New Zealand, is the United Kingdom’s Enterprise Finance Guarantee (EFG), which is a targeted measure intended to facilitate additional commercial lending to viable SMEs unable to obtain a normal commercial loan due to having insufficient or no security.
“EFG facilitates lending that would not otherwise be available by providing lenders with a partial guarantee,” he said. Kane said that undercapitalisation is perhaps the biggest single reason for SMEs to fail in New Zealand. “The number of new businesses that fall over in the first few years is disastrous. Just think of the loss that occurs every time this happens – losses by the owners of the business, and losses for subcontractors left high and dry up the river. “In the United Kingdom, decisions on the use of EFG, eligibility, and lending terms in individual cases rest with the lender. There is no automatic entitlement to receive a guaranteed loan and nor is there any pre-qualification process for it. “Any loan application will first be assessed via the lender’s own commercial criteria before any consideration of the EFG eligibility criteria. “The loan facilities, which are varied, may be used under EFG and are usually repayable over terms between three months and 10 years. They may include • new term loans (unsecured or partially secure)
The SME sector can play an even more important part in the recovery and growth of the New Zealand economy.
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REAR VIEW
• refinancing of existing term loans • conversion of an existing overdraft into a term loan
• invoice finance guarantee (available
for terms up to three years) guarantee (available for terms up to two years) ”A premium (equivalent to two per cent per annum) is payable to the relevant Government department, in addition to regular capital and interest payments to the lender, and any arrangement fee which they may charge. It is not an insurance premium. “Lenders are allowed to require personal guarantee and/ or security where available (except the borrower’s principal private residence) in line with their standard normal commercial lending practices. “EFG is intended to support lending to viable businesses that can ultimately repay the loan in full. The government guarantee is a guarantee to the lender. Neither
• overdraft
Paul Kane, a partner in Grant Thornton the guarantee nor the premium provides insurance for the borrower in the event of default. The borrower remains fully liable in the event of default. “Hopefully, if the Government can be coerced into providing such a scheme as is available in the United Kingdom, then the SME sector can pay an even more important part in the recovery and growth of the New Zealand economy,” he said.
SEPTEMBER 2011 ISSUE FEATURES • Manufacturing Technology • Manufacturing Heroes • Sustainable Business For further information contact:
Managing Editor: Doug Green P: 06 870 9029 E: words@xtra.co.nz
Advertising Booking & Copy Deadline – 12th September 2011
Sales Manager: Max Farndale P: 06 870 4506 E: max@nzmanufacturer.co.nz
Or visit: www.filtercorp.biz
www.nzmanufacturer.co.nz
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NZ Manufacturer August 2011
Kiwis are innovators and manufacture many fine products for local and overseas markets. It is vitally important for the future of the country that we continue to do so. To be the best and show the world that by focusing on what we do best Ðbe it dairy products, computer software, marine products or electrical equipment Ð we punch well above our weight and succeed! NZ MANUFACTURER believes in our manufacturers and the levels of excellence they achieve. But more can be done. The opportunities are out there; letÕs grab them with both hands for the future benefit of us all. www.nzmanufacturer.co.nz
www.nzmanufacturer.co.nz