NZ Manufacturer December December 2011/January 2011 2011/January 2012
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The Year That Was
Workshop Tools
Worldwide business reflections.
The right tools make the difference.
Page 19
Page 5
Manufacturing Trends Design automation to improve profitability.
Page 30
‘Clustering’ to become a Strategic metals hunt global ‘brain economy’ commences
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ould this be ‘the dawning of the Age of Competitiveness’ for New Zealand? The omens are good at year-end 2011, with all of the right signals suddenly lighting up and a passionate advocate of the need for a country to be both competitive and ‘attractive’ to succeed in the rapidly maturing global world trips through Auckland. That’s Prof Torger Reve, a leading thinker and doer, when it comes to his homeland Norway. He sees interesting parallels between his country and our own which made for a stimulating discussion after his presentation to the 14th Annual Global Conference of The Competitiveness Institute (TCI) held in early December, under the aegis of ATEED (Auckland Tourism, Events and Economic Development). Prof Reve is one of approximately 3,000 leading practitioners –
By Kevin Kevany
‘action people’ – focused on the role of competitiveness, ‘clusters’ and innovation, belonging to that ‘knowledge platform’, who challenged New Zealanders to get with the global plan. The world has moved on from whingeing about manufacturing moving to the East, or our North. He’s predicting it could go to the Middle East next. Oil-rich Norway, encouraged by the likes of Reve, isn’t resting on its petroleum treasures and has already ‘clustered’ itself around existing – and dating – strengths to enjoy the lowest unemployment rate in the world and the highest GDP per capita. They also have the highest labour costs in the world. So they clearly know what competitiveness is all about. No debates about lifting the minimum wage there. Continues page 13
S David McConnell, chair of ATEED (left) chats to Prof Torger Reve
WWW.FOODTECHPACKTECH.CO.NZ
trategic Elements Ltd is involved in an aggressive program of field work on the West Coast of New Zealand. The West Coast field work marks the start of a wider program aimed at discovering large new sources of valuable strategic and precious metals. Results will be reported from each prospect as the Company receives information from its geological team. A company-wide phase of activity is intended over the next few months that includes:
(1) Fieldwork across a number of projects on the West Coast NZ. (2) Fieldwork on the Mandamus rare metals project on the East Coast NZ. (3) Grant and commencement of work on a significant new tungsten/tin project in Ireland. (4) Fieldwork on Australian projects. (5) Airborne geophysical surveys to detect geological bodies hidden under cover. Continues page 10
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NZ Manufacturer December 2011/January 2012
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 December 2011/January 2012
CONTENTS Advisors
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DEPARTMENTS
10 11 12 14 15 16 18 19 20 21 23 24 26 31
THE YEAR THAT WAS
Sir William Gallagher
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• Exporters keep NZ ticking over. • The year in review. • An Innovation story.
Is the CEO of Gallagher Group Ltd. He is also a Fellow of NZ Institute of Management.
BUSINESS NEWS
Go Global coming soon.
BUSINESS NEWS
Hedging policies and managing risk.
Page 5 – THE YEAR THAT WAS – Developing the innovation sector.
BUSINESS NEWS
Stephen Drain
Women in Engineering.
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Stephen Drain is Director at Centre for Innovative Leadership at AUT University, Auckland.
THE ROAD TO EMEX 2012
Universities to be there in numbers.
8-7 WINNERS
Another Kiwi team wanting to dominate.
MANUFACTURING TECHNOLOGY • Technology award to Professor Ryan. • Review: Tom Tom GPS.
WORKSHOP TOOLS
Page 13 – AUCKLAND MANUFACTURERS – ‘Clustering’ to become a global ‘brain economy’.
• 50 seconds to change a blow mould. • Injection moulding machinery supplier announced. • Take the lead ...with ISO. • Hearing protection taken to highest level. • Industrial valves demand increasing. • Optimised extrusion line for TPE/PP. • Bright ideas on lighting website.
MANUFACTURING IN SPORT
Is Executive Director of Export NZ and Manufacturing, divisions of Business NZ, New Zealand’s largest business advocacy group, representing businesses of all sizes.
Bruce Goldsworthy
WORKSHOP TOOLS
Page 19 – WORKSHOP TOOLS – High-quality laser engraving on metal.
Catherine Beard
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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.
The bicycle fork.
ENERGY REPORT
Aid boost for geothermal study.
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OPPORTUNITY HAMILTON
Adam Bennett
Is NZTE’s Director Specialised Manufacturing. He is based in Auckland.
New programme manager to help businesses grow.
DEVELOPMENTS
Green C fixing for a cleaner future.
SUPPLY CHAIN
• Support for global supply chain. • Thank you Mr Jobs.
Page 22 – OPPORTUNITY HAMILTON – KiwiNet to take technologies to new markets.
Sir Paul Callaghan ➡ Is the Alan MacDiarmid Professor of Physical Sciences School of Chemical and Physical Sciences Victoria University of Wellington. He is the Kiwibank New Zealander of the year 2011.
REAR VIEW
Perceptions of potential asset sales.
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Page 28 – MANUFACTURING TRENDS – Project Data Management.
Lewis Woodward
Is managing director of Connection Technologies Ltd, Wellington and is passionate about industry supporting NZ based companies, which in turn builds local expertise and knowledge, and provides education and employment for future generations.
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NZ Manufacturer December 2011/January 2012
EDITORIAL
I have found no greater satisfaction than achieving success through honest dealing and strict adherence to the view that, for you to gain, those you deal with should gain as well.
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
Marcus Phillips, 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, The Mirror, Asia Manufacturing News. Plus contracted publishing services. ISSN 1179-4992
– Alan Greenspan
2011 – Celebrating our manufacturers
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y the time you read this issue, 2012 will be well underway and you will be looking forward to a successful year in business.
It goes without saying that for a nation to be thriving and its people happy manufacturing needs to be flourishing. It’s alright having the latest cell phone or car but what is actually made on our shores is what New Zealand is known for and puts money in our pockets. And gives us a sense of personal satisfaction in our abilities and direction. In 2011 we had the Rugby World Cup – well run and won – which in itself is an example of ‘home grown’ shining through by winning. There are lots of examples of success not only from the ‘big boys’ making the nation well known by their efforts. There are small manufacturers from the top to the bottom of New Zealand finding success locally and on international markets. Products that hold wheels together, or Rex Legs or micro chips, all made by hard work, long hours and investing lots of money. NZ Manufacturer at the end of 2011 salutes all of our manufacturers; which means some of you reading this last issue of the year. In 2012 we will continue to share your stories with our wide reader base both nationally and internationally in such countries as South Africa, Brazil, Thailand and the United Kingdom. We will put before all readers the innovations New Zealanders are renowned for. Usually in these editorials I give examples on some of the stories inside and a special mention needs to be given here to our annual Report on The Year That Was starting on Page 5 which includes insightful observations on where we were in 2011 and where we are going in 2012 from some of our business leaders. Celebrating our manufacturers – a great way to end the year!
Doug Green
Vol. 2 No. 10 December 2011/January 2012 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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www.nzmanufacturer.co.nz/videos PUBLISHER & MAGAZINE DEVELOPMENT– Max Farndale max@nzmanufacturer.co.nz
NZ Manufacturer December 2011/January 2012
Talent is hitting a target that no one else can hit. Genius is hitting a target that no one else can see. – Goethe
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THE YEAR THAT WAS
Developing the innovation sector
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s I write this, the Prime Minister has just announced his new Cabinet. Highly significant is the appointment of Steven Joyce to Science and Innovation, Tertiary Education and Economic Development. In my November column I called for a “whole of government” approach to developing the innovation sector. Short of the Prime Minister himself leading all these Ministries, the appointment of the highly capable Joyce to this overarching role is a very good second best. There is much to be done. First and foremost will be to ensure that the Tertiary Education sector is empowered to assist and accelerate growth in high value manufacturing. Performance Based Research Fund penalties against academic staff who focus on commercialisation of knowledge rather than publishing in international journals, must be removed. The cap on enrolments that prevents Engineering schools taking on students and producing graduates vital to our manufacturing sector must be sorted. The cancellation of postdoctoral fellowships that provide a vital bridge to permanent employment should be revisited. And, while looking at the tertiary sector, the Minister may like to consider the potential for further investment in tertiary science and engineering, ensuring that we maintain competitiveness with the rest of the world.
The key to growing our exports in manufacturing is to be found in boosting research and development and in seeding new companies into the pipeline. If one looks at the companies in the TIN100 list, they follow an interesting pattern. Plotted on a loglog scale as numbers of companies above an annual revenue R, against that annual revenue R, they lie on a straight line. That is what is known as a “power law”. Such power laws are also found for earthquakes, or tree diameters in a forest. What they tell us is that the system is complex and inter connected. What they also tell us is that for every big earthquake, we will have many small ones, and for every big company, we will have many small ones. And that progression of company sizes follows a pattern.
We need to tell the stories of our successful businesses, and to celebrate those successes.
For example, it is unlikely we would have a TIN company 10 times larger than our current largest (around $1 billion per annum) unless we had 10 times as many companies in the entire “ecosystem”. And so we need to seed new companies as well as encourage the established businesses. Recent visitor Oren Gershtein, head of one of Israel’s High Tech Incubators, spoke to New Zealanders on the subject of how Israel went from growing oranges to having the largest number of high tech companies on the NASDAQ after Canada and the United States. Israel is a pathological case, with some extraordinarily well-educated immigrants, and its extensive defence industries, but nonetheless they maybe have some lessons we can learn. One possibility concerns the investment of public funds at around $0.5m per start-up, on the basis that it must be matched by the private sector, and once the company succeeds, the funds are paid back. Another might be the level of public fund investment itself, New Zealand languishing at the bottom end of the OECD, at around 0.5% GDP. But crucial to our understanding of how to grow our high value manufacturing is to understand that we need to nurture the entire ecosystem and all its components, in education, incubators, venture capital, science, engineering and design.
By Sir Paul Callaghan, ‘Kiwibank New Zealander of the Year 2011’ But most important of all is to nurture an innovation culture. We need to start teaching entrepreneurship and innovation in high school. We need to tell the stories of our successful businesses, and to celebrate those successes. I wish Steven Joyce well and hope that he gets some genuine cooperation between his Ministries of Tertiary Education, Science and Innovation and Economic Development.
www.irl.cri.nz
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NZ Manufacturer December 2011/January 2012
THE YEAR THAT WAS
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An innovation story
n my leadership development work we often use story-telling as a tool. It’s got multiple uses: learning to communicate in a meaningful and deep way, building trust though vulnerability and ensuring a truth is communicated in a way that keeps the listener engaged. As we move into 2012, the election is behind us, RWC has been and gone and although we’re not sure whether to be in recessionary mode or not, I’m sure like me you’re thinking it’s time to get stuck in again and grow. In fact you might have already been doing that in 2011. But either way, no excuses, no good blaming Europe or the US, our growth lives with us and even if there are external sources we can’t manage (are there ever not?) they’re not an excuse. And Innovation is without question the way forward for our growth. But how? You could read books about innovation; you could attend a university paper on innovation (I did once and bought a really big textbook) or you could learn about companies that appear to be innovative. But what could you do yourself to actually create innovation? Do you regard yourself as innovative? What about your teams? Are you relying on others to be innovative within your company? Is it someone’s job maybe? One of the programmes I run is the Innovative Leaders GM Programme – a programme for those in or aspiring to general management. You can learn lots of theories by reading or attending lectures. On the programme we cover the essential content of strategy, change, accounting, finance, marketing, governance and people with some operations. The work is embedded with live case studies on-site. I use functional experts when we need
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Commitment is the enemy of resistance, for it is the serious promise to press on, to get up, no matter how many times you are knocked down.
to but the important components of the learning are done by observing, associating, questioning, experimenting and networking. These are the principles from The Innovators DNA (www. innovatorsdna.com) research that uncovered the five skills of disruptive innovators. Recently, on one of the modules for the GM Programme to be held in Queenstown a planned functional expert became unavailable at the last minute. Although I had in the past developed modules that went on-site I took the opportunity to take the learning to another level – rolemodelling innovation to the group through processes. It’s tempting to manage our business networks tightly, only engaging in those that we believe will be of some obvious use, whether because of their position or for a direct business opportunity. The innovator networks, not for any particular purpose, but simply with the belief that those with different ideas and beliefs will be those who have different perspectives and will bring the disruption necessary. My networks allowed me, having never run a programme in Queenstown before, to access a number of businesses for case study work. When a unique rural conferencing venue became available, I was able to associate the business with the marketing objectives of the learning, utilising venue, business and proprietor for one of our case studies. Being on-site enabled unique and powerful observing of the business. Visits to other Queenstown businesses gave deep learnings and opportunities to experiment, just as I
No good blaming Europe or the US, our growth lives with us.
was doing on the programme for the programme. Questioning perhaps goes without saying on a general management programme, however we took this to new levels though appreciative inquiry and action learning methods to uncover the hidden mental models that drive routine and limit the disruption that limits innovation. We interacted with businesses we visited as clients obtaining direct and important insights on the concept of customer experience – real marketing learning and innovation within innovation learning that our participants take back to their businesses. Venues became tutorial rooms, customer experience “on the spot”; local business leaders on hearing of the programme offered their services as case panellists and will become clients in the New Year. Others heard of our visits so we carried out field case studies presenting back on the go and in the premises. Networks were engaged for a Mihimihi to welcome us to Ngi Tahu. We sought explanations and asked why where we went learning about Bungy Strategy and restaurant marketing during our time in Queenstown. Wide and varied contacts on networks came together for the best 48 hours of learning I reckon you could ever have on marketing and leadership learning. So there’s my little story of innovation – taking a 48 hour learning opportunity to innovate to learn and innovate with marketing and leadership. Like all good stories, it won’t be your story exactly, but you can start now by associating these principles to your context. Whether or not you personally innovate, as a leader you can create the environment in your team and business: • Networking - widely and not always for a particular purpose. Who is in your network? Is it all
– David McNally
By Stephen Drain
Stephen Drain is Director of the AUT Centre for Innovative Leadership a leadership development centre with a focus on innovation and authenticity. He developed and runs programmes including the Innovative Leaders GM Programme and Wisdom Retreat for Senior Leaders. In January 2012 Stephen will take up a new role within Advisory at PricewaterhouseCoopers Auckland. your clients and suppliers? Or are you like this magazine that engages me, someone outside of manufacturing to share and learn with? • Observing - going “to the spot”. Get up, visit and watch. You’ll be amazed how businesses will gladly share and allow observation. Doing it yourself will engage you directly in innovation too. • Questioning - why? Encouraging innovation through allowing a culture of questioning in your business will grow innovation from within. • Experimenting - making a mock up. Try it out today! • Associating - the ability to connect seemingly unrelated events. Some of us are better at this than others. There will be those within your business, who will disrupt your routine by drawing connections through seemingly unrelated events. Your challenge: who are they? What is your story of innovation?
The Year in Review
he year started on a positive note with the BNZ – BusinessNZ PMI showing its fourth consecutive month in expansion. The forecast was uncertain but we were hoping at the very least for a continuation of the slow and steady positive steps experienced in 2010. While most of the year saw steady if unspectacular expansion, the last couple of months of 2011 weren’t as positive, culminating in a decline in activity towards the end of the year. Ironically, the successful running of the RWC seems to have contributed to a fall-off in new www.nzmanufacturer.co.nz
orders as attention was diverted elsewhere. In addition the much anticipated Christchurch rebuild has taken longer to get underway than anticipated, and many in a lacklustre building sector have been pinning their hopes on the Canterbury rebuild to kick-start some economic activity in building related manufacturing. Another factor contributing to the challenges for New Zealand manufacturers has been a slowdown of the Australian economy, and we have all heard about the two speed economy they are experiencing
and the negative impact on retail spending. On a more positive note, our manufacturing costs are lower than Australia’s and coupled with a favourable exchange rate our competitiveness is improving. What has to be particularly noted for 2011 is Christchurch manufacturers’ ability to forge ahead despite all the challenges brought about by the earthquakes. Their resilience should be an inspiration to the rest of the country and means they are well placed to succeed in a tough global market going forward.
By Catherine Beard
Executive Director Manufacturing, BusinessNZ
NZ Manufacturer December 2011/January 2012
To turn really interesting ideas and fledgling technologies into a company that can continue to innovate for years, it requires a lot of disciplines. – Steve Jobs
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Opportunities in Australia
ustralia’s mining boom is creating opportunities for manufacturing companies in NZ. The Bureau of Resources and Energy Economics (BREE) reported that in the six months to October 2011 investment in the resources sector rose to a record A$231.8 billion, up from A$173.5 billion in April. 102 projects are either at a committed stage or under construction across minerals, energy and infrastructure. This has created enormous demand for specialised plant and machinery, as well as engineering services and other solutions associated with the industry. The minerals boom is, however, creating tough conditions for manufacturing companies not exposed to the resources sector. A high exchange rate and demand for skilled labour is making it more difficult to remain competitive. While some firms are closing facilities others are investing in capital equipment, notably in the food processing sector. Two examples include biscuit giant Campbell Arnott investing A$67 million in upgrading its Virginia bakery in Queensland, and Nestle investing $18.5 million in expanding its Smithtown factory in NSW. New Zealand manufacturing firms who can offer safe and effective solutions which enhance the productivity and profitability of customers are well-placed for growth in the Australian market. This is equally true for both the resources and non-resources sectors, but one of the keys to success is a
Dan Taylor, Trade Commission, Melbourne
firm commitment to establishing and developing in-market relationships with important decision-makers over a period of time.
THE YEAR THAT WAS We saw:
u National returned to govern the country for another three years.
u The opening of the Foodbowl and its NZ Food Innovation Network.
Building the China capability
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pecialised Manufacturing is not something New Zealand is well known for in China, being better known for high quality safe food products. However, things are changing with two major trade missions this year. The Fit Out mission was focused on specialty building products into high end hotels, with seven companies visiting five cities over 12 days, meeting with management and specifiers. The 2011 Aviation mission had eight fixed wing and rotary pilot training companies meeting with 18 companies in five cities over six days. It’s early days yet, and while the companies have the credibility
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u Further anguish about closing
all the gaps with Australia. At least the Black Caps made inroads!
u The development of relations
between Waikato Innovation Park and the UK Science Park Association.
u The continuing debate about the
exchange rate and its effect on exporters.
u 8-7 u The huge success of The Cloud during the Rugby World Cup. Even New Zealanders who visited were gob smacked by just what we make.
u Indications that the rebuilding of Christchurch is about to intensify.
Patrick English, Trade Commissioner, Guangzhou, China
and capability, China has a set of challenges that mean in order to realise the opportunities, they will need to build their China capability also.
u NZ manufacturers continuing
to excel on the world stage in trying conditions.
u Our manufacturing costs being lower than in Australia.
Doug Green
www.nzeco.govt.nz www.nzmanufacturer.co.nz
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NZ Manufacturer December 2011/January 2012
THE YEAR THAT WAS
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The man who complains about the way the ball bounces is likely to be the one who dropped it.
– Lou Holtz
Exporters keep NZ ticking over
ver the past year New Zealand has certainly been toughing it out, and doing it with extraordinary resilience and good humour. Imagine if we had had the same number of lucky breaks in any one year as we have had disasters, New Zealand would surely be rich beyond thinking. Added to the natural disasters - the heart breaking $30 billion earthquakes in Christchurch, and rupture of the main gas supply in the north - there were the unnatural disasters: Pike River, the PSA virus on kiwifruit, the Rena grounding, the failure of several very large finance companies, and the collapse of the building industry sector. All of this was local! The banking disaster unfolding in Europe and the dysfunction in the US are serious calamities. In spite of it all Kiwis are getting
on with it. The Rugby World Cup showed we know how to party, and it was great to be part of that. By and large we kiwis don’t let stuff keep us down for long. We should all give ourselves a medal! But what’s keeping morale up and the economy ticking over is, I’m certain, our exporters! For the 12 months to October exports of traded goods were up 11% to $45.1 billion! Sure, high commodity prices for primary products, especially meat and dairy, underpinned this success. But export growth went way beyond that headline. Manufacturers’ exports, benefiting from the cross rate with Australia and the lower cost of inputs priced in high US dollars, meant our competitiveness across the Tasman was never better. The rise and rise of Asian markets – China this year became our second
We need to back ourselves
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nnovation seems to be the panacea of all our economic ills; we are exhorted to be more innovative and entrepreneurial. But words are just words without action, and the action that is needed isn’t to do with more innovation or being more of an entrepreneur. What is needed is more commitment to backing ourselves. Backing ourselves does not require the nerve, salesmanship and luck of an entrepreneur, or the dogged investment of high level skills, time and energy into bringing the vision to life, as typically happens with innovation, it is much easier than that. It’s about making sure that the supports are there for those who invest in innovation. What we need is a culture of support that is brave enough to take risks and focused enough to maintain the effort. If we look at an area that New Zealand should be the world leader in, it is ‘Geothermal Energy development’. It is obvious that while we have been users of the technology of others and have developed some skills and even innovative ways of doing things, the support required to make New Zealand a leading name in the world of geothermal isn’t there. Why is that? Simple - we don’t back ourselves! If we did there would be a centre of excellence for geothermal above-ground technologies, there would be international aid monies earmarked for drilling to identify geothermal resources in developing economies, there www.nzmanufacturer.co.nz
By Industry Development Manager, Nick Inskip, HERA would be Government Ministers at geothermal conferences supporting the New Zealand offerings, and there would be access to funding for research and development, and for the deployment of innovative new offerings. Our energy companies would be lining up to support demonstration projects, and investors would be keen to be part of the process. If we really believe that the future belongs to those who innovate, then we have to create the culture of support they need. We are too small an economy to not have everyone lined up to support ourselves: If we are to get the gains we need from innovation, it’s time to back ourselves - We can’t expect others to bring the investment needed if we won’t even back ourselves! After all, innovation is only a word, and backing is action needed to make it more than just a word.
largest trade partner for imports and exports – signals great cause for optimism. In all, manufactured exports, excluding processed agricultural goods, rose 6% for the 12 months to October, to $16.7 billion. Imports of capital plant went up 13% to $8.5 billion. Figures like these go a long way to prove most business people think, like me, that New Zealand is faring better than many other developed nations, and 2012 will see a sustained lift in business.
By Kim Campbell, CEO, Employers & Manufacturers Association
The Bus is leaving – are you on it?
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f you haven’t got the message yet – you may have missed the bus. 2011 has dealt us some hearty blows and some poignant messages. I think that we’ve all seen tightening margins and increased competition for what is a smaller pot. My guess is that 2012 will be even tougher and that a great shake out will be seen. My strategy will be: doing what we do – better for less – and that’s what we all want as consumers, do we not! I’m in the commercial aviation industry. 16 years ago I could fly roundtrip to Brisbane for $1040. Today, it costs just $570 with advance purchase. See the pressure that we the consumers are driving into our markets? We all need a strategy to deal with this. The airlines must have found one as they are still in business. And that’s where we need to be this time next year – still in business. While you are at the beach this New Year consider this:Plan to reduce your overall costs of goods – if not you will suffer in 2012 Can you trim your overhead by one third and still get by? Are your processes and
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By Ken Stevens KNZM, Chairman, Glidepath Group technologies truly world class – someone else’s will be. How are your sales processes – are you connecting effectively – providing real value – what’s your follow up like – do you truly listen to your customer or give them what you think best? These are simple thoughts and well capable of being implemented in 2012. There are no tangible reasons for us to expect an uplift in business confidence in 2012. Export markets will be doubly tough but then exporters are resilient creatures and will get through. The rest of you will be price takers in 2012 and many may struggle to hang in. Look at those costs and get them in line.
Steady as she goes
EW-Eurodrive has found 2011 to be a steady business year with not much movement either way. We are looking forward to 2012 bringing more growth. – Peter Gabites, Managing Director, SEW-Eurodrive (NZ) Ltd
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Strong growth for Pirtek
irtek has found 2011 to be a positive year with strong growth across our national franchise network. “Industry confidence and a go forward mindset will see our
business prosper in 2012. We have many opportunities that will allow Pirtek to advance our market position in the coming 12 months.” – Chris Bourke, General Manager, Pirtek NZ Ltd
NZ Manufacturer December 2011/January 2012
The absolute fundamental aim is to make money out of satisfying customers. – John Egan
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THE YEAR THAT WAS
Celebrating Manufacturers Some of our manufactures who are focussed on success.
Technopak director, Henri Hermans with a part of the latest innovative machine. Dean Anderson (UK office) and GM Rowe of Howick Engineering discuss specifications for a machine destined for Russia.
Chris Vincent, CEO, RPM.
Trade fairs are for manufacturers. Meet Rob Lavender, EMEX 2012, Xpo Exhibitions Ltd.
Vaughn Clark, owner, Primero Profiles Ltd.
Grant Simmonds GM (left), Guy Herd GM and Nick Davenport CEO of Nexus Foams.
Joint directors of National Springs (left) Grant Crowhurst and Graham Burrell.
Rob Craigie, business development manager, Production Machinery Ltd of Fisher & Paykel.
Consistency, quality and transparent pricing are the hallmarks of Pro Sheetmetals production. www.nzmanufacturer.co.nz
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NZ Manufacturer December 2011/January 2012
BUSINESS NEWS Trades academy to open in HB G O ne of ten that will open around New Zealand in 2012, the trades academy will provide practical skills training for secondary school students while allowing them to study for NCEA credits and tertiary qualifications. As lead provider for the trades academy covering the Hawke’s Bay and Tair?whiti regions, EIT will partner up with secondary schools and industries to provide fees-free places for training in hospitality, sport and recreation, automotive and electrical engineering, trade skills, agriculture, land skills, animal care and hair and beauty services while the students remain enrolled in secondary school. The basic model will provide 16 and 17-year-olds with the opportunity to attend EIT one day a week. However, EIT deputy chief executive Claire Hague says the partnerships will be tailored to meet the needs of participating schools and students. Principals who attended a recent meeting with EIT were very positive and excited about the scheme, she said, and now wanted to enrol students into programmes. “They are already indicating the initiative will be oversubscribed. If that’s the case, we may have to look at establishing a mechanism for selecting students.” Places have been capped at 100 students for Hawke’s Bay and 50 for the Tair?whiti region. However, EIT had indicated it may go back to the Ministry of Education if demand From page 1
Managing Director Charles Murphy said ‘an intense period of activity has started that will lead us strongly into the New Year. General market conditions are still tough; however we are positioning ourselves to take advantage of any rebound that may occur in the first quarter of 2012.” The field team has begun to comprehensively explore through a geologically rich belt adjacent to the regional ‘Alpine Fault’ on the South Island. They will progressively commence work on each prospect until the end of January 2012. It is believed the west coast region has considerable mineral potential, however much of the surface area contained within the project is covered by vegetation due to humidity and rainfall. The project area has remained highly underexplored due to the covered surface. Critically, airborne geophysical data that can identify geological bodies under the covered surface has never been available. www.nzmanufacturer.co.nz
Management is efficiency in climbing the ladder of success; leadership determines whether the ladder is leaning against the right wall.
Students from Tamatea High School, which has helped pilot the Trades Academy concept in Hawke’s Bay.
outstrips the numbers approved. New Zealand’s first trades academies opened this year as part of a Government initiative aimed at re-engaging students who may have lost interest in education but were interested in learning practical skills. Ms Hague said trades academies gave the 71 percent of secondary school students who did not go on to university an opportunity to seriously consider alternative pathways. “It’s important to intervene early before they disengage from education, and to direct them into hands-on learning while rebuilding feelings of success as learners and providing them with better pathways for the future.” Trades academy students will be expected to gain at least 24 credits towards NCEA Level 2, said Ms Hague, and for some there would also be the opportunity to gain industry-based qualifications.
– Stephen R. Covey
Go Global
o Global, a one day national exporter conference, will be held on 22 March 2012 at Sky City Convention Centre, Auckland. ExportNZ is working in with NZTE to organise a strong line-up of international speakers for including NZTE’s CEO and Beachhead Advisors who are highly successful business people from various markets around the world, who help NZ companies as part of the Beachhead programme. From India there is Mr. Vijay Crishna, Executive Director of Lawkim Motors Group (Godrej & Boyce Mfg. Co. Ltd). Mr Crishna has had a long and very successful business career (motor vehicle manufacturing, light engineering, IT services, call centre business interests) and is the Chair of the Beachheads India for NZTE. Learn about the India market; the opportunities and the pitfalls. Hear how Mr Crishna turned a loss making company to an immensely profitable company. He serves on the Board of Trustees of the Bombay Scottish Orphanage Society, and is also a member of the Advisory Board of the Institute for Technology Management, Navi Mumbai. He also serves as an advisor on the President’s International Advisory Board of Colorado College, the United States., From NZ Mr. Wayne Norrie, Chair of the Beachhead Programme who has over 30 years IT industry experience, has led the cultural change required to set Hitachi Data
Systems on the path to success. He implemented a programme on organisational culture, demonstrating through life experience the correlation between cultural strength and financial performance. A popular keynote speaker, Wayne speaks regularly for the Institute of Director’s (IOD) Aspiring Director dinner series and on Governance for Hi Growth Companies. Ben Anderson from the USA’s core strength is Talent Management. Hiring the right talent in overseas markets is critical to the success of any business that is internationalising. Hear about the US market, the challenges and opportunities and how to get the right talent on your side. Ben has an international reputation in recruiting for clients across the global Technology, Media, and Telecom industries. He has successfully identified proven talent for senior general management roles, including CEOs, COOs, CFOs, CIOs, and members of the board of directors. Clients enlist him to recruit talent deemed critical to the success of growth initiatives and to re-energize critical functions. Peter Chrisp, CEO of NZTE will be speaking, and some of NZTE’s international Regional Directors will also be in the programme. Go Global will have a mix of international speakers enough, hopefully, to run country specific workshops and panel discussions and feature inspirational exporting heroes from New Zealand.
Strategic metals hunt commences However a sudden escalation in exploration is expected, with the NZ government funding a multi-million dollar airborne geophysical survey to provide information on what lays hidden beneath the surface on the west coast. The survey is expected to commence this month. In combination, the Company has just commenced a geochemical survey over a range of different prospects related to a belt of ten separate granites adjacent to the Alpine Fault. These include French Creek (Rare Earths, Rare Metals) Falls Creek (Tin/Tungsten), Rangitoto (Gold, Silver, Rare Metals) and Bell Hill (Gold). The geological team is currently at French Creek (Rare Earths, Niobium, Tantalum) and are conducting stream pan concentrates and rock chip sampling from altered zones, contact zones and dykes to identify potential areas of economic mineralization. Helicopter support is being provided to enable exploration on the tops of the
Hohonu Ranges (approximately 1300 m in height). Managing Director Charles Murphy said “This is practically a virgin area untouched by modern exploration. It ís hard for Australian investors to comprehend that an area as geologically rich as this has never been investigated by geophysics. “We are excited to have exclusive rights over such an area. Our
project area warrants an aggressive exploration program, we will release ongoing results as we receive information from the geological team”. Strategic Elements Ltd is a Pooled Development Fund (PDF) that invests in the rare earths and rare metals sector. As a PDF, most shareholders pay no tax on capital gains or dividend income.
NZ Manufacturer December 2011/January 2012
In the business world everything is paid in two coins: cash and experience. Take the experience first the cash will come later. – Harold Geneen
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BUSINESS NEWS
Hedging policies and managing risk in volatile markets
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or obvious reasons, a mountain climber would not attempt to scale Mount Everest during the monsoon. Even throughout the more sedate months of the year, mountain climbing can still be very dangerous and every expedition requires careful and long term planning in order to eliminate the risks and to manage, as best as possible, any unforeseen circumstances. Exporting also presents risks; however, New Zealand wine growers do not always have the luxury of choosing to exchange their foreign currency receivables during times of fair weather. In recent times, volatility has become more prevalent in currency markets. Therefore, it is very important when managing foreign exchange risk to have a plan. A risk management policy. A set of guidelines that allows your company to protect profits when the level of the currency is favourable and to smooth out the bumps during periods of volatility. The Global Financial Crisis no doubt remains fresh in the minds of most. We witnessed a brief reprise
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during the month of August as the European debt crisis caused stock markets to plummet and the New Zealand Dollar fell from all time highs against the US Dollar above 0.8800 down to 0.7944 - a move of 10 per cent in a little over a week before heading back up to 0.8550. What are some of the considerations for financial controllers and managing directors when it comes to foreign currency risk management? The first step is to determine the type of exposure. Transaction exposure is the most common risk affecting exporters and arises when the domestic currency value of a foreign currency denominated transaction varies due to movements in exchange rates. It occurs between the time of entering into an obligation to supply goods or services in a foreign currency and the date of settlement. If exchange rates move during the period between these two points in time it affects the value of your cash flows. Having identified the manner in which your company is exposed to foreign currency movement, management should determine their
policy, taking into account the size of the company. A net exposure of USD200,000 would be important for a small-sized company, but most probably insignificant to a large multinational. Your attitude towards risk also plays a part however a conservative, small to medium-sized company should consider covering at least a certain percentage of known exposures. Some may consider covering 100 per cent. A forward exchange contract (FEC), which was discussed in the last issue, is a very simple and effective tool in managing currency exposures and protecting the bottom line. Any remaining exposures can be handled by entering into spot transactions at settlement time. Due to the uncertainties involved, forecasting exchange rates is very difficult and, by definition, prone to error. Given these uncertainties, a company’s hedging strategy should be evaluated regularly. This could be based on (i) the forecast for New Zealand interest rates, and (ii) whether the NZD/USD exchange rate is expected to weaken or strengthen. Financial risk not only affects profits, but can determine a company’s chances of survival. Unpredictable movements in
By Marcus Phillips exchange rates, interest rates and commodity prices present risks that cannot be ignored. Just like climbing a mountain, conditions can change without warning. Even if the sun is shining, always best to keep that gore-tex jacket handy. If there is any particular topic related to foreign exchange you would like us to write about in future editions or if you have any questions about this article then email marcusphillips@nzforex.co.nz nextSTEP Visit: www.nzforex.co.nz
Business forms new sustainability organisation
ajor corporates have voted to form a new peak industry organisation to promote sustainable business and policies. Members of the New Zealand Business Council for Sustainable Development (NZBCSD) voted overwhelmingly to form a new Sustainable Business Council (SBC) in association with BusinessNZ. BusinessNZ’s Sustainable Business Forum (SBF) will merge with the new peak body. The new SBC will start with more than 49 member companies, including some of the country’s largest, like Fonterra, in what BusinessNZ Chief Executive Phil O’Reilly describes as an opportunity to build “a strong collective voice” on sustainability led by business. “New Zealand has a strong interest in sustainability. It makes sense for us to have one consolidated voice representing the New Zealand business community, providing businesses with leadership, best practice and advocacy in an area that is now a key issue in mainstream business all over the world,” Mr O’Reilly says.
The SBC will be chaired by Deloitte partner and sustainability leader Brett Tomkins and a transitional executive of nine, while more companies are recruited – and a new executive of 12 is elected in late February. Mr Tomkins says the formation of the new organisation will boost efforts to make sustainable business practices and solutions more mainstream. It will advance opportunities to work with BusinessNZ’s Major Companies Group and the 76,000 companies associated with BusinessNZ’s four affiliated regional organisations throughout the country. The newly formed SBC will provide its members with a range of new benefits as well as continuing existing projects from both groups – including a key leadership platform globally linked to policy, business and sustainability organisations; significant government engagement; diverse company representation; and collaborative partnerships bringing together private, public and community sectors. Two new ground-breaking projects are expected to continue
and benefit from the partnership: the NZBCSD’s Vision 2050 project, which looks at the opportunities and solutions for businesses and New Zealand to survive and benefit in a country where the population nearly doubles, and the Sustainable Business Forum’s sustainable business performance indicators project. With the latter, businesses can measure their performance in sustainability against a set of key performance indicators. These will then be used to develop benchmarking so businesses can compare performance, gauge their competitiveness and publicise their ratings if desired. The indicator set is available to download here at www. sustainablebusinessnz.org.nz. Vision 2050 is bringing companies together to develop a road map towards a New Zealand in 2050 where up to 7million people are living well and within the means of the planet. It explores the roles to be played by business, government and society in achieving this goal. The Vision 2050 report will be published in December. The NZBCSD is in its eleventh
year and has been influential on a number of policies including waste minimisation, emissions management, water allocation and home performance improvement through its research-based projects. Outgoing NZBCSD chair Bob Field says the formation of the SBC is “a great opportunity to join forces with another organisation which will greatly advance the original aspirations of our founders to mainstream sustainability in business”. The SBC began operating as a new entity in January.
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NZ Manufacturer December 2011/January 2012
BUSINESS NEWS
A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort.
– Herm Albright
Engineering innovator recognised for use-inspired approach
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hristchurch-based IRL Engineer Marcus King has been named the New Zealand Engineering Innovator of the Year 2011 by the Institute of Professional Engineers New Zealand (IPENZ). Marcus King is New Zealand’s premier inventor of assistive technology for people with disabilities, especially neurological disorders affecting the upper limbs. Several of his inventions have been successfully commercialised by New Zealand firms. He was presented the award at the IPENZ New Zealand
Marcus King
Engineering Excellence Awards, held in Wellington on 30 November. IRL Chief Executive Shaun Coffey says Marcus King’s approach is an example of what can be achieved through a market-led approach to engineering innovation. “Marcus has a reputation for finding out exactly what practitioners and patients require and working with them in conjunction with commercial partners to create new products from existing technologies that are innovative, user-friendly and cost-effective.” Marcus King has worked with a diverse range of companies in New Zealand and overseas from computer game developers to medical device manufacturers. His patents include the Able-X bilateral exerciser, with virtual rehabilitation; the Giant Mouse, gravity supported exerciser; the BUiLT bilateral upper limb exerciser; the wrist-driven grip orthosis, which restores pinch grip capacity without invasive surgery; the hand held dynamometer for measuring strength and range of motion during rehabilitation. Marcus King says he gains great satisfaction from developing technologies that can improve the quality of life for users and in working with New Zealand companies to commercialise them.
Programme aims to increase number of women on boards
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he Institute of Directors (IoD) has launched its inaugural Mentoring for Diversity programme, aimed at increasing the number of women on NZXlisted and large company boards. The programme will run from 1 January until 31 December 2012. Thirty chairmen and senior directors of major companies will each act as a mentor to one of 30 well qualified women. The programme is designed to help the women mentees gain the skills necessary to achieve board positions. It will also benefit mentors by putting them in contact with women who have the potential to become directors on NZX-listed and large company boards and enable them to develop a greater understanding of the concerns and aspirations of senior women. Research has shown that diversity should bring a new dynamic to the boardroom with a different range of skill sets and perspectives which should ultimately lead to better www.nzmanufacturer.co.nz
governance and better company performance. The IoD is committed to promoting diversity in the boardroom, not just in terms of gender diversity but also in age, ethnicity and background. Companies that embrace the principle of diversity and put it into practice invariably derive a comparative business advantage. According to the Human Rights Commission, women hold only 9.32% of directorships in New Zealand’s listed companies. The 30 women mentees were chosen from over 130 applicants by a selection panel made up of IoD President Denham Shale, Ministry of Women’s Affairs CE Rowena Phair and IoD CEO Ralph Chivers. The women mentees are already highly successful women who are looking to the IoD’s Mentoring for Diversity programme for guidance on how they might better network, position and present themselves to achieve NZX-listed or large company board positions.
“As the global population ages, especially in developed countries, the demand for low-cost, effective, home-based therapeutic solutions is increasing. There are significant and growing opportunities for New Zealand firms to provide costeffective solutions that improve the
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quality of life and earn valuable export revenue,” he says. The award recognises an engineer, engineering technologist, or a team engaged in engineering activities, that has demonstrated a commitment to innovation in engineering.
Women in Engineering
he incoming Women In Engineering President for 2012 Lilly Sanderson is brimming over with enthusiasm. Read on… Women In Engineering (WIE) is an Incorporated Society of the University of Canterbury aimed at raising the profile of female engineers and providing members with support through education and social events throughout the academic year. Each year the club has a student and staff base of around 200 members, including females and males, with the potential to grow in size and in popularity. Lilly’s involvement with WIE began in my First Professional Year of studying Civil Engineering at Canterbury when she decided to take on a leadership role within the University and applied for the role of ‘First Pro Rep’ on the committee of ten female engineers. In 2011, Lilly became the club secretary and was then voted in as 2012 president the following year. The committee is responsible for running all the events with help and support from the UCSA, the College of Engineering, and our sponsors. Females are underrepresented in nearly all Engineering disciplines at Canterbury University and I Lilly hopes to play a role in encouraging more females to choose engineering as a career as well as supporting those already studying. As President in 2012, she aims to boost the membership base, raise the profile of the club, and establish bonds with organisations in New Zealand with similar goals
Lilly Sanderson
to strengthen our society. In addition, the committee is currently in discussion about creating a new event targeting year 13 students and providing them with an opportunity to find out more about studying engineering at a tertiary level. WIE is a non-profit society and relies heavily on sponsorship and in-kind donations from companies to run our events. Each year WIE hosts at least three Company Speaker Evenings and an Industry Connections Evening. These events provide an opportunity for students to meet with company representatives in a relaxed environment and learn more about graduate positions. WIE is currently in the process of seeking sponsors, if you are interested or would like to find out more please contact Lilly on wie. president@gmail.com or check out their website www.wie.org.nz.
www.wie.org.nz wie.president@gmail.com
NZ Manufacturer December 2011/January 2012
I don’t want to be left behind. In fact, I want to be here before the action starts. – Kerry Packer From page 1
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AUCKLAND MANUFACTURERS
‘Clustering’ to become a global ‘brain economy’
And they are prepared to share with a country that has many similarities, or as Reve notes, one that is also: small, beautiful, blessed with resources, and remote. Given there are currently signs that the RWC win on sheer guts and competitiveness has lifted us, are we poised to get up and go? Already the Ministry of Science and Innovation and NZ Trade and Enterprise, both now heavily focused on being business-oriented, are housed in the same building in Wellington are moving into shared premises on Auckland’s Waterfront. Across town the NZ Institute and the Business Roundtable plan to provide a united voice and leadership by the end of the first quarter. On top of this, the new Cabinet will see action-man Steven Joyce head-up the Ministry of Economic Development, the Ministry of Science and Innovation, NZ Trade and Enterprise and continue to have responsibility for tertiary education. It’s not quite the Ministry for Manufacturing, but it’s positive movement. Reve would approve of Joyce combining tertiary education. Norway sets the very highest store in top-rate education, as well as tailoring it to meet the changing industrial needs of the country. “We need to realise that China is not content to merely stay where it is; it is becoming more-and-more a knowledge-based economy. No country can afford to let its education system stand still.” He points to Norway’s School of Anchor Handling as an example of what his country has done to ensure excellence in what they are ‘clustered’ – or specialise -- around: Maritime engineering and finance; food (the dominant salmon farmers in the world); and offshore oil and gas; still their major earner. He asks why New Zealand
doesn’t have a school specialising in dairy farming, producing the best dairy farmers in the world? The Kiwi attendees shift uncomfortably in their chairs muttering: do we really have to go that far? That far, and further, would be Reve’s response. To be competitive you have to be the best there is. Which is why the world’s petroleum industry comes to Norway to build and finance its oil rigs. Houston is only a back-up now. “We had a great ship-building industry, but began to realise that all ships would be built in the East. We had a great fishing fleet. But fishing stocks became erratic, and we realised it would be better to farm fish and be a reliable and sustainable marketer. “But we adapted those shipbuilding and maritime skills to making, manning and funding oil platforms.” If you want an example of specialising, the professor recommends the city in China which produces six-billion pairs of socks a year. Reve confirms the thinking of our own Sir Paul Callaghan that biotech is not for either country. “Boston owns that. They have cornered its research and development and therefore the major biotech corporations have moved there. “Nevertheless, Norway is focussing on biotechnology in the processing of food, since it will benefit production in one of our key areas of specialising.” Like Callaghan, he sees the other sacred cow, tourism as a low-level
Could this be ‘the dawning of the Age of Competitiveness’?
job-creator, on par with burgerflipping, in most cases. He points out that in his celebrated ‘Emerald Model’ of ‘attractiveness’ of an economy, which relies on six points of attraction in a global competition – tailored education; R & D + innovation; ownership; clustering; talent; and the environment – the only point that tourism did well was in its impact on the environment. Given the comparable physical beauty and affluence of the population, is Norway going to cluster around the ‘green economy’ Obama’s America has set so much store in? A grin crosses his normally serious features: “Germany too has gone big on wind-arms and solar power. On the many days when the sun doesn’t shine and the wind doesn’t blow, we sell them a lot of our energy.” But, he noted, given Norway’s maritime engineering skills, offshore wind-power could come into contention for customer-countries with the right weather conditions. Although you suspect with their maritime engineering skills so honed and focused, the more consistent tidal power will be in the works somewhere in the fjords. Reve believes that pure analysis, not overlaid with national emotion and the bonds of history, can guide New Zealand to its areas of real specialist skills and therefore competitiveness. “Remember, you cannot hope to do a bit of everything. Not in this world and where we are moving rapidly to. Understand that China might be the centre of manufacturing right now, but almost certainly that will move to a country like Qatar, which will be closer to the raw materials and especially since it has a vast supply of cheap energy.” He also pointed to the strong commitment and involvement of the Norwegian government in
Roger Haessel, a Canadian delegate at the TCI Conference (left) chats to Prof Torger Reve, during a visit to The Cloud.
ensuring that everything possible was done to assist the selected industries, in particular, to increase their competitiveness. “It is one of the advantages of being small. The Prime Minister is involved and readily available to engage in debates and listen to the needs of industries. “After all, Norway wants to be a ‘brain economy’.” Reve said Singapore was also a small economy showing that it was committed to specialisation and ‘clustering’ to maintain its momentum. Integrated innovation was essential to keep one step ahead. While he was loathe to offer advice on how New Zealand might ‘cluster’, given he’d only been in Auckland for a couple of days, he said instinctively, from what he knew, we should “go with the farmers and maybe seafood”. If we did go that route, a disproportionate amount of R & D and funding should be spent there; education and training should be focused there; and the elements in those areas of specialisation needed to both ‘combine and compete’ (as Brazil and Nigeria, for example, do on oil exploration and production). Real competition should only be at the end-product stage; everything between should be ‘clustered’ to develop the niche into the world’s best. He also warned against relying on the home market. “A home market that doesn’t expect the world’s best will make you lazy. The essential ‘constantly increasing competitiveness’ won’t develop out of a tame home market.” He also noted that politicians looking for a quick fix on unemployment won’t get an immediate solution from ‘clusters’ – since they need well-paid specialists – but the secondary industries which support and spin-off the ‘clusters’ will subsequently create jobs. Finally, given the impact on Finland of the collapse of Nokia from mobile phone dominance, should Kiwis be concerned about having all our milk in one Fonterra pail? “Nokia suffered from a lack of local ownership and competition in its home market, so it was isolated from real global market needs and trends. However, I’m optimistic with heavy R & D investment, they will come back; and Microsoft can provide that.” He’d also leave it to Kiwis to answer the Fonterra question. The criteria are there for us to use on all companies and industries. www.nzmanufacturer.co.nz
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NZ Manufacturer December 2011/January 2012
THE ROAD TO EMEX 2012
Universities will be at EMEX 2012
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Rob Lavender
number of New Zealand universities will be appearing at EMEX 2012. Their appearance should generate huge interest, especially around their Research and Development activities. New Zealand companies are heavily involved in Research and Development and those appearing at EMEX 2012 have a great opportunity to discuss with key university staff the way ahead.
Important link for business
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MEX 2012 will be an important link for connecting NZ manufactures and buyers, as we all need a focus point where we can network our products and ideas. I believe EMEX 2012 is essential for manufacturing and distribution businesses to attend as it is a true reflection of manufacturing and engineering products and services available here in New Zealand.
Ian Fowler
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You’ve got to seize the opportunity if it is presented to you.
– Clive Davis
Ford gets behind Kiwi businesses
ord Motor Company of New Zealand Limited has cemented its commitment to Kiwi businesses with a two-year partnership that will see six new Fords given away to visitors at NZ’s largest and longest running sector specific exhibitions and events. XPO Exhibitions Ltd, leading business-to-business (B2B) event organiser, has partnered with Ford to give trade visitors to the country’s leading food technology, packaging technology, engineering, manufacturing, gift & homewares, build, design, architecture and business services sector specific exhibitions. It’s an opportunity for our business visitors to add a brand new Ford to the company asset register, says XPO Director Brent Spillane. “It’s great that one of the country’s oldest and most-respected motor companies with a passion for this country has recognised the same in our DNA. XPO has the country’s longest-running successful trade exhibition portfolio. We’ve been successful because we focus on sector specific businesses. We work hard to make our trade events the place that businesses can come to compare, research and buy world leading products and services face to face. It’s about ensuring ongoing value for exhibitors as well as visitors. “Ford has the same values in supporting New Zealand business. Ford dipped its toe in the water at our biennial ‘buildNZ designex’ event earlier this year by giving away a new Ford Ranger Utility to one lucky trade visitor. The response from the trade was brilliant. Ford saw genuine value from the captive market and an intimate way to market its’ leading vehicles to Kiwi businesses,” says Brent Spillane. The XPO/Ford partnership gives the motor company exclusive access
Ford has the same values in supporting New Zealand business.
as our preferred vehicle partner at the country’s premier business and trade events. “XPO events attract more than 35,000 genuine trade only visitors every year, and the majority of them are return visitors proving the enduring value of these events. Visitor numbers have been on the increase too. The agreement will allow Ford to capture its own rich business profile data of those attending and entering the prize draws or simply interacting with Ford on their prime exhibition space.” The business events that Ford will be supporting and providing a vehicle prize giveaway include the New Zealand Gift & Homewares Fairs; the EMEX engineering, manufacturing and electronics sectors event; FoodTech PackTech which is for the food, packaging and
technology sector; buildNZ designex which supports the building, construction, design and architecture sectors; and MyBiz Expo which helps small and medium enterprises source competitive business services for their companies. Ford will run a number of showonly promotions before and after the events, giving visitors a genuine reason to buy. Chris Masterson, national marketing manager at Ford says, “It’s an exclusive business target audience and one that we just had to jump at – and we are the first major vehicle brand to partner with XPO in this B2B exhibition space. Our vehicles are a great value match for specific business sectors looking at fleet or even personal needs. This is a fantastic new marketing launch pad.” nextSTEP Visit: www.xpo.co.nz
Exciting technologies on show
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xciting technologies and cutting edge manufacturing expertise from New Zealand’s universities will be on show at EMEX 2012, along with a programme of speakers from research and industry. Expect to see product design, micro-machining, rapid prototyping, wireless power transfer, friction stir welding, nano-structures, chemical engineering, composites, automation and much more!” – Dr. Luke Krieg, manager, commercial research, AUT University
WWW.EMEX.CO.NZ www.nzmanufacturer.co.nz
NZ Manufacturer December 2011/January 2012
You can never conquer the mountain. You can only conquer yourself. – Jim Whittaker
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8-7 WINNERS
Another Kiwi team wanting to dominate
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uring the recent Rugby World Cup, another kiwi team unveiled its plan to take on and dominate the world. The team from Jetblack, led by kiwi entrepreneur Richard Nowland, have plans to make an attempt on the World Land Speed record by 2016. Richard and his team unveiled a model prototype of the vehicle ‘JetBlack’ at Auckland’s Queens Wharf as part of the ‘Real New Zealand Innovation Showcase’ held adjacent to the Rugby World Cup 2011. Richard originally manifested the idea to attempt to break the New Zealand and Australian land speed records in 2007. Shortly after, he successfully bid for two exRAF Rolls Royce Avon 206 turbojet engines in an online auction. Since then Richard has built a team around him that he believes will highlight the potential of engineering and innovation in New Zealand. “My goal for Jetblack is to promote New Zealand’s engineering and innovation capability. Every single part of the car must be designed – there is almost nothing we can take off the shelf. And that poses great opportunities and challenges for our technology, engineering and manufacturing industries”. The Jetblack team includes an aerodynamicist, Richard Roake, an engineer, Glynn Bowsher, who also happened to be the engineer for the current world record holder, and driver, Royal NZ Airforce Wing Commander, Stephen Hunt. The vehicle itself has is being modelled in the powerful 3D CAD software SolidWorks, and will have its parts manufactured in different areas of the world. When asked about the design challenges faced during JetBlack’s creation, Richard Askin, designer and SolidWorks user, commented “One of the biggest challenges has been bringing in different forms of data together from different sources and different design/analysis software. Converting surface data has posed problems as imported geometry does not contain the design history
and therefore is not directly editable. There are various specific software packages which are required for the range of areas we work in such as aerodynamic analysis, animation and visualisations.” Because of SolidWorks ability to integrate various design tasks such as 3D modelling, design analysis and powerful surfacing tools, the task of bringing together new data from different parts of the project has become much easier for the JetBlack team. “Because all the team members have different specialities, some of which need different software packages for their particular purpose, Solidworks has worked well as a central hub to feed data into and out of during the design phase” says Richard. “Excellent surfacing tools eventually allowed us to overcome most of the challenges posed through data exporting/importing” says Askin.
Richard originally manifested the idea to attempt to break the New Zealand and Australian land speed records in 2007.
When asked about his thoughts on the most valuable features of in relation to the JetBlack project, Askin commented that “for this project specifically, it has definitely been the ability to use the surfacing tools to their fullest potential. The iterative nature of the aerodynamic design has resulted in various changes which needed to be adapted. ‘The ability to move up and down through the design history when new data comes in from other areas of the project has proved invaluable, and definitely sped up development and production. The ability to quickly convert new design ideas into tangible models has also been helpful during the production of the full size prototype”. Solidtec Solutions is a specialist company offering design and manufacturing solutions in 3D CAD Software, Design Validation and
Simulation, Design Automation, Product Data Management (PDM), Documentation Software and CAD Tools. They focus solely on the SolidWorks community and its range of products and have been excited by the innovation and progress made by the JetBlack team. “Solidtec have provided us some really positive support and great advice during this project and I’ve been happy to associate with some of their knowledgeable New Zealand based team. They’ve been an important contributing sponsor,” commented Richard Nowland. The race to finish the design, manufacture the vehicle, and have their name etched in the history books is now on for the JetBlack team, who are on track to showing the world the capability of New Zealand based engineering and innovation.
FEBRUARY 2012 ISSUE FEATURES • Manufacturing Technology • Workshop Tools • Environmental Technology • The Road to EMEX 2012 • Manufacturing Heroes For further information contact:
Managing Editor: Doug Green P: 06 870 9029 E: words@xtra.co.nz
Advertising Booking & Copy Deadline – 13th February 2012
Sales Manager: Max Farndale P: 06 870 4506 E: max@nzmanufacturer.co.nz www.nzmanufacturer.co.nz
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NZ Manufacturer December 2011/January 2012
MANUFACTURING TECHNOLOGY Exciting changes at Alibre Inc.
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epresented in New Zealand by Bay CAD Services, Alibre, developers of popular Alibre Design software, has found it to be a busy few months. They have new owners providing a huge injection of capital for further development of their design software. A new version of Alibre Design has been released, which has brought the software to a new level of features and functionality that meets the requirements of most designers, and competes very well against other more expensive design packages. And 3D Printers are now available bundled with Alibre Design software, at extremely attractive prices. Back in July of this year, Alibre Inc., was acquired by 3D Systems, a leading global provider of 3D content-to-print solutions including 3D printers, print materials and on-demand custom parts services for professionals and consumers alike. This acquisition is part of a strategy to accelerate the adoption of affordable 3D design productivity tools that are designed to allow professionals and consumers to create, make, and test in 3D. 3D Systems and Alibre Design products are sold in over 50 countries, and 3D Systems is a top performer on the New York Stock Exchange. 3D Systems owns many companies involved in 3D Printing, Rapid Prototyping, and Digital Manufacturing. They have the resources, technologies and global reach, to expand the breadth and reach of the Alibre Design productivity tools and bundles even further, and will continue to develop affordable, high quality 3D design and modelling software and 3D Printers. One of the immediate benefits of this acquisition is the availability of 3D Printers bundled with Alibre Design software, providing a
complete design-and-make package. We are excited to be able to provide these products while continuing the Alibre philosophy of affordability, which brings rapid prototyping within reach of all New Zealand businesses, and a lot of hobby designers. The bundle deal is so good, that our first shipments of 3D Printer bundles were all sold before they arrived. Currently, there are two models of 3D Printer available sold with a choice of Alibre Design Expert, Professional or Personal Edition versions. Another major benefit of the acquisition, to the Alibre Design software, will be increased emphasis on product quality and features. While price is currently a major value proposition, with increased resources the software will improve with new features, improved user efficiency and ease-of-use, and new tools that address specific markets. Add-ons will continue to be developed, and in 64-bit. The new Alibre Design 2012 version has too many new features to list them all here. A few of the highlights are the option of using a Windows Ribbon interface, or the traditional toolbars, or you can use them both. New sketching tools, including in-place editing, and projecting a sketch to another sketch. Many more surface tools are now available allowing stitching and un-stitching, surface splitting, and converting a solid to a surface. New sheet metal tools enable many more options and uses for sheet metal design and development, including multi-edge flanges. 2D drawing and detailing has been improved to include multi-leaders for annotations, better dimension text positioning, and manual hatching of closed areas. nextSTEP Visit: www.alibre.co.nz
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– Craig Newmark
Technology award to Professor Ryan
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he top award for achievement in technology, the Pickering Medal and $15,000, was awarded to Professor David Ryan FRSNZ, Professor of Operations Research and Deputy Dean of Engineering, at The University of Auckland for developing technology which is at the heart of optimisation software used worldwide for solving complex logistics problems, such as airline scheduling. Professor Ryan is New Zealand’s leading authority on Operations Research and this country’s most influential contributor to the field. He is best known for developing the innovative ‘Ryan-Foster constraint branching’ technology which is now a fundamental component of optimisation software used worldwide for solving complex logistics problems. This technology revolutionised the optimisation landscape by dramatically increasing the range and size of problems to which optimisation could be applied. Professor Ryan is a strong advocate for the use of mathematical optimisation techniques to solve problems of significant industrial importance. In New Zealand his methods have allowed a new range of practical real-world problems to be solved. For example, Professor Ryan has collaborated with Air New Zealand for more than 20
C www.alibre.co.nz Phone: 06 8337093 Email: enquiries@baycad.biz
There’s no genius behind it. It’s persistence and listening to people.
years to commercially exploit his technology. He developed pioneering optimisation software that is now used by the airline to optimally schedule flight crews. The savings from these optimisers were estimated in 2000 as being more than NZ$15 million per year. He has recently worked with Air New Zealand to develop robust solutions that can reduce the impact of disruptions, work which is regarded as ground-breaking and possibly the first airline implementation of this new technology. Other examples of solving difficult practical problems include - selecting the outputs of the New Zealand Aluminium Smelter at Tiwai Point thereby increasing the value of the aluminium significantly and he is currently working on optimisation methods to manage container stacks in a container terminal to get selected containers from a large stack of containers in a minimum number of container moves, and more. Professor Ryan’s contributions have been recognised internationally in numerous ways including his election as a Fellow of the Institute for Operations Research and the Management Sciences (INFORMS), making him one of only 12 such Fellows from outside the United States. Based in the United States, INFORMS is the world’s largest professional organisation for Operations Research.
CoreconLink for MYOB
orecon V7, a web-based suite of construction software for the architecture, engineering and construction (AEC) industry has a solution to integrate their project management and MYOB accounting software. CoreconLink for MYOB will allow Corecon V7 users the ability to combine estimating, project management and accounting into a single, easy-to-use, flexible system. Through this streamlined project management software link, all project team members including accountants and financial controllers can collaborate quickly
and effectively. The CoreconLink for MYOB makes a dual connection to Corecon V7 construction software and the contractor’s local MYOB database for the purpose of synchronizing customer and vendor information and transferring Corecon project financial transactions such as bills, progress invoices, and timecards. This exchange of critical information will help small to medium size businesses that use both products become more efficient by eliminating duplicate data entry and saving them time, money and resources.
NZ Manufacturer December 2011/January 2012
If you wait for the science to catch up, you’ve waited too long. – Dr. Sanjay Gupta
Review:
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MANUFACTURING TECHNOLOGY
TomTom GPS ‘beats’ the quickest route to your destination
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have to admit after the first couple of weeks, I reckoned I was showing up the TomTom GO LIVE 820 GPS when it came to my ability to skirt the motorway traffic in peak times and get to a few different addresses inside Auckland’s claustrophobic Spaghetti Junction. I puffed myself up with ‘local knowledge’ always beats technology. And then I went to Devonport in the middle of a morning. I’d read the TomTom media release which identified Petone and Takapuna as being the two worst morning commutes, but hey this was well outside that period. It was approaching midday when I drove back towards Takapuna and joined a line of cars. “The delay on this route is now 19 minutes” intoned the suddenly gloomy sounding voice. A moment later I was offered an alternate route. I grabbed it and six minutes later was on the motorway heading for the Harbour Bridge. Pain-free. I’d become a believer. Why would you drive in Auckland, of all places, without the constant updating every couple of minutes of changes in traffic conditions and being given the instant antidote? Weeks later, I needed to get to Tauranga in a hurry, take some photos and record an interview, and then get back to Auckland in one of the worst storms ever; certainly by the time I needed to return. I asked ‘the nice lady’ to spare me the ordeal of dicing it out with the container trucks. No problem. I was given empty and sound country roads (don’t ask me which) all the way back, joining the N2 kilometres before the motorway junction and the run into Auckland. I was back half-an-hour less than the earlier run. Since then, I’ve used it to travel down to Wellington, and on down the West Coast to Dunedin and all the way back.
By Kevin Kevany
On a Sunday morning leaving Taupo, on the home-run, I was offered the Old Taupo Road to Cambridge. A ‘Top Gear’ dream route which almost seemed synchronised to the lively CD tracks playing in the background. There was the odd cyclist and what you assumed to be the occasional family, off to worship. It’s a national treasure, which ends up after a challenging section of curves and corners through an ancient volcanic playground, before running along the banks of the mighty Waikato River, backed up by Lake Karapiro. TomTom boast their HD Traffic technology covers the length and breadth of the country, including not only motorways and main roads, but the all important secondary roads too. TomTom don’t really highlight the other great use of the now must-have device(as far as my own experience goes), and that is warning you both when you exceed the speed limit, often hard to spot approaching villages-with-
pretensions; favourite lurking spots for the radar-gun operators; and the dreaded fixed cameras. All to help you improve your driving – and save a few dollars. The suitably PC term TomTom uses for them: safety cameras. Although the 820 has a slightly smaller screen than bigger brothers, it does have a slicker attachment arm
for securing it to the windscreen. And it’s the aural information which you mostly need. I had tested the 1000 without the latest ‘fluid touch screen’, which lets you pinch-zoom in or out of maps, or scroll through menus with finger tip touch. This latest improvement is also so much more accurate when it comes to the all-important typing in your destination before you leave. You don’t waste precious moments backspacing to correct. If you want more than the described essentials – hands-free calling via Bluetooth is particularly useful; the advanced motorway lane-guidance is more than helpful in unfamiliar environs; and the local weather updates regularly: and in New Zealand, on a long trip with the local radio stations skipping about in a bizarre St Vitus dance, that’s more than a nice-to-have – check it out on the website. That’s where you can get extra detail on what services and pointsof-interest options there are as you travel by, especially accommodation, petrol stations, hospitals and parking. The GO LIVE 820 has an RRP of $399; the GO LIVE 1000 $449; and as you’d expect, the GO LIVE 1050 World is $649. They all come with a free one year LIVE services’ subscription.
BuiltWorks 1.4 released
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uiltWorks 2010 is a structural steel design and engineering add-in application for SolidWorks CAD environment. Version 1.4 of BuiltWorks is the last release to be supported on SolidWorks 2010 version, as well as a cardinally new step in BuiltWorks development due to major refactoring of core code of the application. Although this version of BuiltWorks is designed
and compiled against SolidWorks 2010, the rework in application core was aimed to better prepare for BuiltWorks certification with SolidWorks 2011 version. Despite that internal refactoring of BuiltWorks the code will not be seen for the casual user, it will be recognised through the performance improvement of the application, especially with models of larger steel structures.
www.asiamanufacturingsummit.com
www.nzmanufacturer.co.nz
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NZ Manufacturer December 2011/January 2012
WORKSHOP TOOLS
Make the workmanship surpass the materials.
50 seconds to change a blow mould Injection moulding machinery supplier announced
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new patented tool-free quick mould changeover system designed for the SFR Rotary blow moulding range of machinery, reduces the time required to change from one bottle format to another, with a tangible decrease in the machines downtime. The system is available as an option for all models of the range of SFR EVO from six blowing cavities to 24 blowing cavities. The system reduces the time it takes to change a blow mould to
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only 50 seconds, which represents a saving of 70% compared to the previous system. The changeover is very simple, safe and completed by un-locking / locking the two mould shells (cavities) and the mould base. All tool-free operations can be performed by only one person. This represents a substantial improvement of the availability of the stretch blow moulding machine. nextSTEP Contact:max@nzmanufacturer.co.nz
rauss Maffei of Munich Germany, a world leader in plastics processing machinery, will install a number of Injection Moulding, reaction process and automation machines and systems for BMW, which will support series production and further develop the BMW’s move of substituting conventional materials used in the production of their cars with plastic materials. The machines will be used to produce and finish components made of thermoplastics and reactive resins for vehicle interior and exterior, as well as for load bearing structures. Parts for the vehicle body will be produced on 9 high pressure resin-transfer moulding machines
– Ovid
at the BMW plants in Landshut and Leipzig. Two 4000-tonne Injection moulding MX 400017200/12000/750 WL double swivel-platen machines will produce components with an outer skin and a thermoplastic substructure. The outer skin and substructure will each be separately injection moulded, joined together as the two swivel platens rotate and tightly connected with a third plastic component. The BMW plant will use their large MX 4000-24500 Injection Moulding Machine to produce instrument panels in the BMW 1 and 3 series vehicles, using a structural foam process. In this process components are produced with a compact outer skin and a foam structure inside.
Take the lead ...with ISO
HP have extended their quality range of ISO plugs and sockets to include 3 Round Pin, 20 + 32 amp single phase straight plugs, socket outlets, combination switched socket outlets and surface switches – all of which are available in both grey and chemical resistant orange. The 3 Round Pin series is ideal for applications where high current capacity is required in a single phase power situation such as data centres. Following in the successful footsteps of previous ISO products, the new 3 Round Pin series incorporates the same stand out features such as AS/ NZS 3123 compliance, a large ribbed locking ring and handle for easy
installation in wet or dry conditions and a large latch for easy opening and closing. The range also includes a padlock able switch handle in either the On or Off position and all switches come complete with two switching poles supplied as standard and an IP66 Rating.
www.hiq.co.nz
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Hearing protection taken to highest level
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matta earplugs, new and disposable have been made to combat the growing problem of noise-induced hearing loss. The plugs are certified AS/NZS 1270 Class 5, SLC (80), 27db. With appropriate noise control measures now an essential element of OHS regulations, the provision of the right earplugs is not a decision to be taken lightly. The Umatta Class 5 earplug is the result of world class testing and has been certified to the strictest Australian and New Zealand safety standards to give workers peace of mind, at an affordable price. With a noise absorption of 27db, there is no risk of worker isolation or over protection in medium to high noise areas. Available as individual plugs or corded together, they are manufactured from high quality polyurethane foam which is hypoallergenic, smooth and soft. The plugs are sealed on the
surface to prevent foreign materials penetrating the ear which adds to wearer comfort, even when worn for extended periods of time. The distinct blue colour also helps identification easier in production areas and limits risks of contamination in production processes. The plugs are cone shaped for easy insertion and a gentle rolling action creates an excellent seal.
NZ Manufacturer December 2011/January 2012
WORKSHOP TOOLS
Only those who risk going too far can possibly find out how far they can go. – T.S. Eliot
Industrial valves demand increasing
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lobal demand for industrial valves is forecast to increase 5.4 percent per year through 2015 to $93.5 billion. Gains will be driven by continuing robust gains in the Asia/Pacific region, as well as strong recovery in the US and West European markets from a weak 2010 base. In the developing world, especially in China and India, valve suppliers will benefit from rising urbanisation. Valve demand growth in the US will outpace the global average through 2015 due to recovery in the domestic economy after the 20072009 recession. Valve demand in Japan and Western Europe will also recover from recent declines, but advances will continue to considerably lag the world average through 2015. The oil and gas industry will see strong growth in valve demand, with increasing offshore, shale and tar sand related exploration activities helping boost sales of higher-end products.
Among the countries that will record robust increases in the unconventional oil and gas sector are Brazil, Canada, Nigeria and the US. The nuclear power market for valves will see weak gains in the developed world in the aftermath of the 2011 Fukushima disaster in Japan. Weakness in the nuclear power generation sector will be offset by increasing valve sales to coal-fired and combined cycle natural gas power plants. The global market for automatic valves will outpace that for conventional valves, due to the continuing efforts of process manufacturers to improve operational efficiencies. The strongest gains will be registered in sales of separately sold automatic actuators, which are used together with standard valves to allow for automated valve functions, and are less expensive than automatic control and regulator valves with actuators pre-installed.
Optimised extrusion line for TPE/PP
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new high-end extrusion line for the production of sealing profiles is designed for processing polypropylene (PP) or thermoplastic elastomers (TPE) of different hardness degrees. Various profile components can be compounded on up to five single-screw extruders with screw diameters ranging between 30 and 90 mm. The new line concept has been developed for sealing system producers in the automotive industry as well as for manufacturers of technical profiles used in other branches of industry.
Machine solutions for any profile
Adopting a customer-focused approach to achieve higher productivity and reliability, KraussMaffei Berstorff has merged the know-how and expertise of the production locations in Hannover and Munich. The new line reflects the plant engineering competence and special expertise in the design of extrusion tools and lines for the production of the most varied sealing profiles developed in Hannover. In addition, it is equipped for the first time with the reliable single screw extruders built for tube and window profiles and sheet
extrusion in the past. The result obtained is a top-end line concept for the production of a wide range of different sealing profiles.
Outstanding versatility
Thanks to the modular design, flexible machine configurations can be tailored to specific applications: from conventional mono-extrusion lines up to hybrid profile production lines with flock-tape system or steel insert. Considering these features, the new line is an ideal solution for customers that process a wide range of different profiles and need a maximum degree of flexibility. The upstream and downstream equipment such as vacuum conveying systems for metering, energy optimised raw material pre-drying, hot-air channel and closed-circuit cooling basin decisively contribute to increased energy efficiency. A central control panel is provided for the line control, i.e. for all line components and the auxiliary groups. The production line for composite profiles with run-in extrusion tools is delivered as a turn-key solution from the metering equipment right through to the depositing table for the finished profiles.
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High-quality laser engraving on metal
he LS100Ex laser engraver is fitted with a pulsed 20 W fibre laser source. With this model you can engrave metals, producing contrast of the highest quality. Its ergonomic design is unique on the market, and it can be used just as easily for part marking applications or in the personalised product industry. LS100Ex Fibre has been developed to enhance the quality and appearance of black engraving on metal parts (steel, stainless steel, titanium, aluminium, metal carbide, silver or brass). You can also engrave near-perfect copies of photos, logos and images at a speed of 1.5 m/s. The ergonomic features of the LS100Ex Fibre are unique: this is the only laser marking machine on the market where parts can be changed via the front panel. This concept, also called ‘Front Loading’ was invented by Gravograph and has now been adopted by some of its competitors. However, their openings are still narrower, with a restricted view of the process under way. This concept has many advantages: it is easier, faster and safer to use. In addition, the operator can remain seated. The working area is 610 x 305 mm, which meets the highest standards on the market, but extra space has been provided to assist in handling parts (740 x 330). This is quite an achievement, because LS100EX Fibre is more compact than other equivalent machines on the market. Information about the process currently under way is available at a glance from the LCD screen. A built-in working area lighting system provides full
illumination of the process under way, and a red laser pointer ensures quick, error-free positioning. Items can be marked individually where dimensions vary, or in series if the objects to be engraved are placed on a die. The machine’s motorised platform can position objects over a 145 mm range. Cylindrical objects can easily be engraved with the corresponding optional attachment. It is worth noting that the LS100Ex Fibre has a CDRH Class 1 safety rating. In other words, it can be used in public areas without the slightest risk. GravoGraph users will find it has the usual control software GravoStyle remarkable for its ease of use and the fact that the same application is used to control the whole range of machines, regardless of the marking technology used. Optional accessories available include a cylinder rotator, cutting tables, focussing lenses and a builtin extractor-filter unit. This ventilation is designed for applications where there are high emission of particles and fumes. The fully integrated extractor-filter is a basic part of the laser, ensuring the system is compact. Clean air ventilation extends the service life of the machine is essential working parts.
Bright ideas on lighting website
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usiness owners or managers looking to reduce energy costs and improve sustainability now have a valuable new online resource. Business Lighting Solutions (BLS) has launched its new website, featuring smart ways to move to more efficient LED lighting. The website is a rich resource for key decision makers – financial officers, facilities managers, designers and architects – seeking to improve energy efficiency and significantly reduce their carbon footprint and maintenance costs. Products include New Zealanddesigned Ecofluro, a cost-effective LED replacement for fluorescent tubes, along with LED and plasma products from LG electronics, which BLS represents exclusively in the local market. The Ecofluro product range has been successfully operating in the market for over two years and has undergone extensive professional review from a financial, performance and safety standards perspective.
A number of leading businesses and public sector organisations are already enjoying the benefits of the range. The Ecofluro LED offers energy savings of up to 60% compared to conventional fluorescent lighting, which contributes up to 39% of an average office power bill. Although LED products are more expensive than conventional systems, Ecofluro provides an annual return on investment of 35-100%, depending on hours of operation and the price paid for power. Where companies are capital constrained BLS provides a fully maintained operating lease, managing the system for the term of the lease and, more importantly, providing a cash-flow positive alternative from day one. The website provides detailed technical information to help those wanting to research the benefits of both LED and plasma lighting systems. nextSTEP Contact: max@nzmanufacturer.co.nz www.nzmanufacturer.co.nz
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NZ Manufacturer December 2011/January 2012
MANUFACTURING IN SPORT He came to stay...thus the bicycle fork M ichael Kemmerer came to New Zealand in 1989 to leave civilisation behind...or so he thought. The plan was to go on an adventure to Australia or Brazil, live in the wilderness, meet the indigenous people who would show me how to hunt animals, how to fish and survive in the bush. Michael does like the outdoors but Australia and Brazil had too
Michael Kemmerer
www.nzmanufacturer.co.nz
many poisonous animals and insects and a friend suggested he went to New Zealand which would be about as far away from home as you can get a subtropical island with no nasty insects. Wanting it to be an adventure he didn’t bother to gather any information and resisted reading a book about New Zealand liking very the beautiful pictures it showed of the country. Michael arrived, ready for the bush and the wild people in their skirts and the adventure in mind, survival you know. He must have looked like New Zealand’s biggest fool at Auckland Airport with his rather too large
Michael does like the outdoors but Australia and Brazil had too many poisonous animals and insects.
A desk is a dangerous place from which to view the world.
hunting knife and stackable bow and arrow. Pretty soon (seconds later) Michael realised he had to change his game plan and five days after arrival had a job in Rotorua fixing vintage Volkswagen Beetles. Today in 2011 he still loves the country and is well settled. Michael says, “I started a company, specialising in product design, prototype engineering and selling or licensing patents and copyrights to interested companies. “Recently, I designed and patented a “Flexible BMX Fork”
– John Le Caré
and am now looking to license or sell the copyright to a wholesaler, distributor or manufacturer. (All options are open for negotiation). “Preferably I am looking for a company which can supply the global market and is interested in the product. The Flexible BMX Fork is different than the steel forks usually used in BMX bicycles and would make a great aftermarket product. as it upgrades every existing BMX bicycle. nextSTEP Contact: max@nzmanufacturer.co.nz
NZ Manufacturer December 2011/January 2012
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ENERGY REPORT
If things seem under control, you are just not going fast enough. – Mario Andretti
Aid boost for geothermal study Photonz transfers process to pilot plant
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eothermal energy has been given a boost with 25 new scholarships available next year for international postgraduate students to study the subject at The University of Auckland. The scholarships are being funded by the New Zealand Ministry of Foreign Affairs and Trade’s Aid Programme. Of the 25 scholarships about half will be for Indonesians - building on the close cooperation between the two countries in the field of geothermal energy. Faculty of Engineering Dean Professor Michael Davies says the University recognises that as a leader in geothermal research and education it has an important role to play in the Government’s plan for geothermal development. “The University and New Zealand have a long history of sharing its geothermal expertise with developing countries.” New Zealand and Indonesian engineers developed Indonesia’s
first geothermal energy in the 1970s, and New Zealand has trained over 160 Indonesian engineers at The University of Auckland’s Geothermal Institute. More than 850 students from more than 50 countries have graduated from the University’s Geothermal Institute with a world recognised qualification in geothermal energy; many have gone on to become leaders in the global geothermal industry. New Zealand Aid programme, Deputy Secretary Amanda Ellis says that the scholarships will help contribute to sustainable economic development in the participating countries. “New Zealand sees access to clean, reliable and affordable energy as essential for sustainable economic development and the New Zealand Aid Programme is pleased to be supporting this innovative partnership with The University of Auckland’s Geothermal Institute.“ Amanda Ellis said.
Assessing the bioproduction of isobutene
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lobal Bioenergies S.A. (FR0011052257 – NYSE Alternext: ALGBE) and LanzaTech Ltd, two industrial biology companies, have announced the beginning of a feasibility study to examine whether Global Bioenergies’ pathway, leading to the direct production of isobutene, can be functionally transferred into LanzaTech’s carbon monoxide using organism. Global Bioenergies’ core technology consists in a proprietary artificial pathway allowing the direct fermentative production of isobutene from renewable resources. This pathway has so far been expressed in a classical production microorganism using carbohydrates such as glucose as feedstock. LanzaTech’s processes use proprietary microorganisms that use nonfood resources as feedstocks. In the study with Global Bioenergies, the focus is on the use of carbon monoxide gas for isobutene production. Carbon monoxide can be readily found in waste industrial gas streams such as those found in steel mills, or can be produced through gasification of waste resources such as municipal waste or other organic substances. The feasibility study to be carried out has the purpose to examine whether Global Bioenergies’ artificial isobutene pathway can be expressed in LanzaTech’s carbon monoxide consuming microbe. Philippe Marlière, co-founder of Global Bioenergies and president of its Scientific Advisory Board, comments: “Carbon monoxide combines the attractive features of biochemical versatility and virtuous sourcing. Metabolic conversions of
this gas are manifold in the natural living world and will be further diversified by synthetic biology. “Most importantly, carbon monoxide retains a large part of the energy stored in photosynthetic biomass when it is generated by pyrolysis from agricultural or municipal waste and non-edible plants. Exploring the strategic potential of carbon monoxide as an agro-industrial intermediate for making biofuels is in line with Global Bioenergies’ mission and we welcome the opportunity to collaborate with LanzaTech toward this endeavour.”
LanzaTech’s chief executive Dr Jennifer Holmgren says “LanzaTech’s strategy is to diversify its product portfolio beyond ethanol to key chemical intermediates and drop in aviation fuels through developing key technology partnerships. Global Biotechnologies’ technology could contribute to this strategy as isobutene can be directly converted to polymers and jet fuel relevant C-12 molecules. This work is a natural extension of the Global Biotechnologies and LanzaTech technology platforms.”
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iotech company Photonz Corporation has achieved a major milestone on the path to commercially manufacturing, by fermentation, the high-value omega-3 fatty acid, eicosapentaenoic acid (EPA). It has successfully transferred its strain and fermentation process, developed in Auckland, to a contract facility in Canada, which has then used that process to ferment material from algal biomass in a 7.5 tonne industrial scale reactor. This demonstrates the feasibility of commercial production of EPA from marine microalgae. The Canadian facility has a battery of reactors and support utilities that enable it to operate multi-tonne scale fermentations under industrial conditions. During the project it produced sufficient biomass for Photonz to complete development of the downstream purification processes for its EPA product, also at pilot industrial scale. The work has been carried out in three stages. The first was the process transfer phase, where the Canadian team ran Photonz’s process at a large laboratory scale, growing Photonz’s proprietary organisms in media that they had sourced and prepared. Then, in the process duplication phase, the Canadian team successfully duplicated Photonz’s process on its first attempt. This was conducted at a large pilot scale, similar to that operated by Photonz in its Auckland facility. The product was comparable to that produced in Auckland, indicating that the process is robust and can be reproduced by following Photonz’s procedures. Finally, the team scaled the culture up through a complete ‘seed chain’ and transferred into a 7.5 tonne fermenter. They grew this culture to harvest density and then operated successive harvests and refills in a semi-continuous mode, ultimately producing about 20 tonnes of fermentation product. Photonz will now use the harvested biomass to accelerate development of its downstream purification process. “To transfer our process to other hands at a second facility, with no material alteration to performance or product, is a huge achievement, because what works in one plant doesn’t always work in another,” says Photonz Chief Executive, Greg
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Moss-Smith. “It demonstrates the robustness of our processes and the quality of work done by the team to date. “The success of this project also represents a large reduction in the risks involved in implementing our process at full industrial scale. We are now highly confident that the process will work in the kinds of plant and operating conditions typically available at industrial facilities.” “Furthermore, by successfully operating the process at 7.5 tonne scale we have also greatly mitigated the risk of other unknown factors interfering with our ability to run industrial scale processes,” he said. “Scaling up production from hundreds to thousands of litres is far more difficult than scaling up from thousands to tens or even hundreds of thousands of litres. “As a result of the success of this project I have confirmed to our investors that we remain on track to manufacture, in 2012, an industrial scale end-product that addresses a massive opportunity in the US$60 billion cardiovascular disease market.” Founded in New Zealand in 2002, Photonz Corporation produces the high-quality, high-value omega-3 fatty acid, eicosapentaenoic acid (EPA), a critical ingredient in novel therapeutics for the cardiovascular disease market. Photonz has developed a unique fermentation process that allows it to produce EPA directly from marine microalgae, making it a reliable and sustainable ingredient for the pharmaceutical industry. Photonz currently has a pilot industrial scale plant producing samples and aims to begin manufacturing at industrial scale in 2012. nextSTEP Visit: www.photonzcorp.com.
LanzaTech contract announced
anzaTech has received a US$3 million contract from the United States Federal Aviation Administration (FAA), through the Department of Transportation’s John A. Volpe Center, to accelerate commercial availability of the next generation of alternative aviation fuel. LanzaTech’s unique, clean energy technology enables low cost production of sustainable alcohols and chemicals from waste gas resources that are completely outside the food value chain. www.nzmanufacturer.co.nz
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NZ Manufacturer December 2011/January 2012
OPPORTUNITY HAMILTON
If we did all the things we were capable of doing, we would literally astound ourselves.
– Thomas Edison
KiwiNet to take technologies to new markets
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iwiNet, a commercialisation consortium of universities and crown research institutes, has announced a new cooperation agreement with The Texas A&M University System, one of the largest and most respected research organisations in the United States. KiwiNet and the A&M System will work cooperatively to identify commercialization opportunities, particularly in agriculture. KiwiNet and the A&M System Office of Technology Commercialisation will identify and bring forward client companies that have an interest in moving into the New Zealand and US market respectively under the memorandum of understanding. The parties will also identify companies and technologies that could expand through cooperative development and commercialisation opportunities in other regions. Duncan Mackintosh, Chief Executive of WaikatoLink, a KiwiNet member says, “Sharing each other’s technology, capital, entrepreneurs, incubators, and
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partner networks will open up an array of opportunities that would otherwise not be available to us. KiwiNet represents a new generation of collaboration and alignment as we’re connecting technologies and expertise across the country, providing a national support network, and working to take technologies offshore through international connections like this.” Brett Cornwell, Associate Vice Chancellor for Commercialisation, The Texas A&M University System says, “This agreement signifies a real commitment to work together. KiwiNet’s national portfolio approach is a very attractive proposition for us to connect with as it has scale and credibility in the region. Our visit to New Zealand has been a great opportunity to solidify this agreement and further get to know the people we’ll be working with.” The visit was funded by the Ministry of Science and Innovation. Agriculture and sustainability is a key area of focus for cooperation and KiwiNet and the A&M System have started to identify synergies
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.
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.
Our courses help you to:
For more details visit www.leangembaacademy.co.nz
• 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.
• Understand
the five steps to a successful rollout via a simulation.
• Develop the capability to implement 5s.
• Understand how 5s empowers and engages employees.
www.nzmanufacturer.co.nz
Duncan MacIntosh and Brett Cornwell
around projects. They will work together to realise market studies, business plans, market validation and market entry strategies. A collaborative approach will also be employed to encourage multinationals in the R&D field to participate in research programs both within the A&M System and at research organisations in New Zealand involved in projects. Cornwell continues, “By building a stronger global innovation network we can achieve greater impact. We’re keen to replicate the success we’ve had with a similar agreement with AWEX, the Wallonia Foreign Trade and Investment Agency in the Walloon region of Belgium, which has linked us into Europe. KiwiNet will be a great way for us to connect into Australasian and other markets. KiwiNet will be able to tap into our networks to help move technologies into the US and Europe.” The Texas A&M University System boasts a network of eleven universities, seven state agencies and a comprehensive health science center. The A&M System educates more than 120,000 students and reaches another 22 million people
through service and outreach programs every year. With 28,000 faculty and staff, the A&M System has annual research expenditures exceeding US$ 772 million. KiwiNet was launched in July to increase the scale and impact of commercialisation in New Zealand by facilitating a more collaborative and capable commercialisation system. The core organisations in KiwiNet have a research spend of over $500 million and covers 6,300 research staff and 127 commercialisation staff. KiwiNet, which acts as a hub for commercialisation for its member organisations as well as the wider innovation system, is also supported by the Ministry of Science and Innovation as part of its commitment to commercialisation. Mackintosh says, “Where we are influences how and where we do business. For every node we add to our network we see exponential benefits. We’re really keen to work with others who share our vision both nationally and internationally to create as many benefits as we can by transferring technologies to the marketplace.”
River clean-up reaps reward
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leaning up Waikato River will have positive economic impact for Taupo and the region, starting with a new multimillion dollar funding pool for clean-up projects. The Waikato River Authority is calling for applications for the funding pool, to be annually allocated for river clean-up projects. Opportunity Hamilton business development manager Adrian Dixon is encouraging Taupo businesses and organisations to step up with clean-up proposals for the authority, which will distribute $6 million in its first year. “Cleaning up the river needs to be a community-wide effort. It will take time but ultimately a clean
river will have widespread positive impact on the economy through industry and community benefits. It will also benefit cultural, social and recreational pursuits,” Adrian said. The Waikato River Authority is a co-governance body established by the Crown and Waikato River iwi to restore the river. The authority, formed late last year, will consider funding applications of all sizes from organisations, from Huka Falls to Port Waikato. Projects should focus on protecting and restoring the health and wellbeing of the Waikato River and its catchment. nextSTEP Visit www.waikatoriver.org.nz
NZ Manufacturer December 2011/January 2012
Opportunities multiply as they are seized. – Sun Tzu
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OPPORTUNITY HAMILTON
New programme manager to help businesses grow
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ducating SMEs on the business capability support available to them is a key focus for the new manager of Regional Business Partners Waikato. RBP Waikato manager Novell Gopal joined Opportunity Hamilton recently to manage the initiative giving regional business owners access to tens of thousands of dollars of funding and advice to help them innovate and grow. “The big challenge with SMEs is they don’t have time to lift their heads to see what is available to them. If we can help educate them about Regional Business Partners they will find a simple way to improve their business capabilities,” Novell said. RBP Waikato was established late last year, with Opportunity Hamilton and Waikato Innovation
Park jointly appointed one of 14 regional partners of New Zealand Trade and Enterprise (NZTE) and TechNZ for the programme. Since then the programme has supported dozens of regional businesses, from Tuakau to Taupo, with tens of thousands of dollars funding for training, workshops, coaching and other business capability tools. Novell’s vast global experience in the business and technology arenas sets him in good stead to manage the programme. Originally from Malaysia, he has worked in pivotal roles for organisations including the University of Malaya and Sapura Advanced Systems. In the mid-1990s he helped establish a turn-key radiation-based cancer treatment unit at University
Hospital (University of Malaya) and later was involved in technology transfer projects for various Malaysian government ministries and agencies such as Malaysian Administrative Modernisation and Management Planning Unit (Prime Minister’s Department), Ministry of
Mapping, Change Management and Strategic Leadership and Communication, with the aim of transforming organisational culture, engaging their staff and reducing staff turnover. The last PIT finished in September 2010. This fairly disciplined rollout through the company with Skills4Work facilitation was followed by a period of internal training, where existing PITs extended their footprint areas and taught the techniques of lean to their workmates, with support from the SLT as required. One year later, the success of their lean roll-out comes down to the people involved. Some areas of the laboratory are charging ahead with improvement projects, others are progressing more slowly and in a few areas there hasn’t been sufficient progress and the general manager has had to get quite directive with one or two people to get progress. David Havard, the Lean Implementation Manager says, “Some areas have fought against implementation, while others have really taken it on board and have
raced ahead. It’s hard to know what the reason is – maybe workload, maybe lack of direction?” The last twelve months have been a period of consolidating the Skills4Work teaching and materials into the culture of Hill Laboratories. They have re-written the 5S Audit by developing questions that are more relevant to the operations in the laboratories. The staff at Hill say the new audit is much better and easier to use. The audit frequency has been reduced from weekly to fortnightly now that 5S is more firmly established, and audits keep stimulating discussion and identifying improvements each time they are done. The original philosophy for doing lean remains strong, which is that the driver for change comes from the laboratory staff. It is up to the bench staff to drive the improvements. Managers don’t dictate how to improve things; they let staff decide their own improvements. David says, “The benefit is not for us – it is to make things easier for staff; not to prove a dollar-value to the board.” When asked about the return on
Novell Gopal
Education and Ministry of Defence. Since arriving in the city he has gained a Postgraduate Diploma in Management Studies and a Master of Business Administration from the University of Waikato and is a mentor for Business Mentors of New Zealand. He also has a Bachelor and Master of Science (Physics) from the University of Malaya. In 2008 he was appointed Administration Manager for the Waikato Institute of Education and was the Business Manager at Relax English for two years. RBP Waikato can support eligible businesses with up to $5000 funding each year to pay half training costs. To be eligible for the voucherbased funding system business owners must demonstrate a desire to innovate and grow their business.
Lean programme at laboratory still going strong
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rganisations following the Lean principles understand customer value and focus their key processes to continuously increase it. The ultimate goal is to provide perfect value to the customer through a perfect value creation process that has zero waste. Hill Laboratories, founded in the early 1980s, started its own lean journey in 2008 when it had approximately 250 staff in five laboratories – four in Hamilton and one in Christchurch. The company has grown to become the largest independent analytical laboratory in New Zealand. The lean programme at Hill started with Strategic Leadership Team (SLT) training at the senior leadership level of the Environmental Division. In early 2009, a pilot Productivity Improvement Team (PIT) was run in the Waters General laboratory with much success. Over the next two years, eight PITs were run, with approximately 100 staff directly trained by Skills4Work. The focus of the lean training was 5S (Workplace Organisation), Root Cause Analysis, Value Stream
By Graeme McMillan investment Hill’s General Manager, Steve Howse said, “It is really hard to measure tangible, bottomline improvement. For a repeat manufacturer it is relatively easy to measure, but for us we have literally hundreds of equivalent sample tests, which are each slightly different, so it is really difficult to measure overall.” That’s not to say that there haven’t been significant improvements. A recent value stream map literally halved the time between sample reception and results being returned to the customer. Another improvement was extracting a batch of samples in one-half day, where previously the same numbers of samples were extracted in three halfdays. The responsibility of management is to have a company that is growing in terms of revenue, productivity, profitability, and has staff who are well engaged and enjoying their work. Lean is just one of the mechanisms to achieve that. Graeme McMillan is Competitive Edge Programme Manager at Skills4Work.
www.opportunityhamilton.co.nz www.nzmanufacturer.co.nz
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NZ Manufacturer December 2011/January 2012
DEVELOPMENTS
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There’s no good idea that can’t be improved on.
– Michael Eisner
Green C fixing for a cleaner future
opper–carbene catalysts reveal the critical interactions needed to turn waste carbon dioxide into chemical feedstocks. Using fixation reactions to convert free carbon dioxide (CO2) into different organic molecules is an attractive strategy to cut industrial greenhouse gas levels with marginal waste. Now, broadening the scope of CO2 fixation is possible using a method developed by a research team in Japan led by Zhaomin Hou from the RIKEN Advanced Science Institute in Wako1. The method uses a ‘green’ catalyst system that transforms alkyl– boron molecules into carboxylic acids—an important ingredient for pharmaceutical production. Organic boron compounds are attractive fixation substrates because they readily participate in carbon– carbon bond-forming reactions. Recently, chemists have used transition metal catalysts to activate hydrocarbons bonded to oxygenated boron esters; addition
Isolation of a new copper–oxygen–boron complex (left) revealed that carbon dioxide (CO2) can insert into its chemical framework (right) by eliminating the organo-boron component (middle panel, lower structure).
of CO2 then splits off the activated group and generates a carboxylic acid derivative. However, attempts to reproduce this chemistry with alkylboranes—a widespread class of important synthetic reagents—have had limited success because the socalled ‘catalytic transition metal alkyl’ intermediates are usually unstable and decompose before reacting with CO2. Hou and colleagues turned to an innovative chemical system to resolve this instability. By combining electron-donating, bulky molecules called N-heterocyclic carbenes
(NHCs) with copper atoms, they made metal alkyl complexes that can promote carbon–carbon bond formation with CO2 under mild conditions and at lower cost than most precious metal catalysts— ideal characteristics for sustainably recycling CO2 emissions. First, the researchers produced an easily activated alkylborane by connecting borabicyclononane (BBN)—a highly strained set of boron–hydrocarbon rings—to the terminal atom of a carbon–carbon double bond. In this approach, the target hydrocarbon for CO2 addition is physically and electronically quite
different from the two carbon–boron bonds of the BBN rings. They then mixed the alkylborane with the copper–NHC catalyst, a base, and CO2 in a pressurized chamber. After one day at 70 °C, they found that the target had transformed into a new carboxylic acid with near-quantitative yields. Diverse molecules bearing aromatic, halogenated, and bulky functional groups could all act as CO2 fixation substrates using this technique. The copper–NHC catalyst offered another advantage to the team: a unique chemical environment that enabled isolation of several catalytic intermediates as solid crystals. X-ray measurements of these structures provided the first hard evidence that bonding interactions between alkoxide base molecules, copper atoms, and alkylboranes are critical to enabling CO2 addition (see picture). “Fine-tuning the combination of central metals, bases, and supporting ligands will eventually lead to more efficient and selective catalysts,” notes Hou.
Buttons gain TUV safety certification Precision flow control in food industries
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his safety certification allows users to take the certified safety product data and include these products in calculating the safety level of their entire control safety system. As a result, worker safety is enhanced because designers have greater insight into when components, like e-stop push buttons, will need to be replaced or repaired – to help towards control safety system reliability. E-stop push buttons are a critical
The TUV-certified e-stop push button
component for automation systems – they are used to cease motion to help prevent injury to workers or damage to machinery. For example, in an emergency that might escalate into a hazardous situation, an operator would press the e-stop button to stop the machine or equipment, preventing further risk to the worker or the system.
kevinw@solutionm.co.nz www.nzmanufacturer.co.nz
FC series Mass Flow Controllers provide precision gas flow control for a variety of food and beverage processes. The units accurately regulate flow of process gases, attaining and maintaining flow setpoints in less than 100ms. They can be used in sparging, blanketing, filling and injection processes in food and beverage production. The units are calibrated for 30 inert gases and a number of corrosive gases to quickly and accurately measure pressure, temperature and volumetric flow in addition to mass flow. The patented laminar flow differential pressure technology delivers highly accurate results with a much faster response time than that of competing technologies. The MFC has a response time of less than 10ms and a control time of 100ms, making it one of the fastest naturally responding mass flow controllers on the market today. Successful food and beverage
www.solutionm.co.nz/ostendo
MFC installations include: * Air sparging in ice cream production and CO2 sparging for pH control in beverages * N2 blanketing in winemaking * Inert gas filling in meat packaging * Flow control of N2O for whip cream production * Corrosive and carrier gas handling in flavour science and spice production Simple to install and cost effective, the MFC operates simply as a standalone device. Its integrated digital display enables users to change the configuration of the meter without the need for computers, complicated software or scripts. For more complex operation, the MFC also interfaces with most process control software without requiring any additional equipment or controllers. The dependable units deliver NIST traceable calibrations and are backed by a lifetime warranty.
NZ Manufacturer December 2011/January 2012
BUSINESS NEWS
Make your top managers rich and they will make you rich. – Robert H. Johnson
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Hand in Hand with a Robot
ince their introduction quite a few years ago, it has become hard to imagine industry without robots. Their strengths power, quickness and stamina. Their limitation - they can only flex their muscles in separate cells for safety reasons in most cases. The future - an increasing number of safety barriers will fall. The reason is that modern technology is providing such a high degree of safety that people and robots can work hand in hand. The development of “safe robots” enables a space-saving cell concept without rigid barriers on one hand. On the other hand, it opens the door to new applications involving people and robots, for example, in installation, medical technology and the service sector.
Various colleges and institutes have worked out basic principles for this over the years, which link sensor technology with control and process control engineering as well as mechanics and consequently create new automation possibilities. The way into industrial practice is also being smoothed by the norm ISO 10218-1 with respect to the safety aspects of man-robot cooperation (also referred to as human-machine collaboration). This ISO contains safety requirements for industrial robots, so that people and robots can work together in a defined work area without spatial separation using safety barriers or light grids. The Fraunhofer Institute for Production Technology and Automation (IPA) in Stuttgart provides most of the active research
dealing with the safety aspects of man-robot cooperation. Martin Hägele, Department Head of Robot Systems, believes
New technology challenges traditional workplace practices
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he rapid development of new communications technology is challenging the old ways of doing things in today’s workplaces, says David Lowe, Employment Services Manager for the Employers & Manufacturers Association. “New technology such as smart phones and finger scanning are doing away with traditional work records, timesheets and other data entry,” Mr. Lowe said. “Smart phones with global positioning can determine when and where an employee is at any time, so keeping a record of their hours to be charged, and generating an invoice, is much simpler. “They also present new social media challenges for employers. “Finger scanning systems can replace manual timesheets and data entry. “Whereas this sort of technology is totally normal for an entire
generation of newer workers, for others it presents a constant round of surprises. “New systems are also blurring the line between work and home life, often to the advantage of both employers and employees. “The downside is unhappy employees can make damaging comments about their job or employer on Facebook, and others may spend far too much personal time browsing the web at work. “These are just some of the challenges from new technology facing employers who must stay up to speed with what’s becoming possible, and develop clear guidelines on how to use it productively in the workplace. “To help with this, EMA has published Employees and Technology so employers can deal systematically with these workplace issues.”
David Lowe, Employment Services Manager for the Employers & Manufacturers Association.
NZ MANUFACTURER • February 2012 Issue • Features Opinion Manufacturing Profiles Letters to the Editor Politics of Manufacturing Trade Fair World Diary of Events World Market Report Q/A Export News Business Opportunities Commentary As I See It Business News Appointments Around New Zealand Australian Report New to the Market Lean Manufacturing Equipment for Sale Recruitment Environmental Technology Manufacturing Processes
that enormous potential has become available with the standard: “Manrobot cooperation makes it possible to combine the strengths of people and robots and consequently to automate processes, which were previously not economically feasible. “People have high cognitive skills, are creative and can adapt quickly to complex situations. On the other hand, robots have untiring repetitive accuracy, even when there are heavy loads. Thanks to cooperation, workplaces can be designed ergonomically and costs can be reduced overall, thanks to higher degrees of automation.” The German Center for Air and Space Travel (DLR) is also putting this principle to work. The institute is leading worldwide in the area of safe man-robot collaboration. For example, they have conducted biomechanical / medical injury investigations with the goal of developing a “standardised crash test procedure” for robots similar to the automobile sector. One highlight at the institute is a lightweight construction robot, which represents successful technology transfer.
www.nzmanufacturer.co.nz
Manufacturing Technology Workshop Tools Environmental Technology The Road to EMEX 2012 Manufacturing Heroes Advertising Booking Deadline –13th February 2012 Advertising Copy Deadline – 13th February 2012 Editorial Copy Deadline – 13th February 2012 Advertising material is to be sent to: Max Farndale, P O Box 1109, Hastings 4156, Hawke’s Bay Email: max@nzmanufacturer.co.nz Tel: 06 870 4506 / Mobile 027 628 2033
Editorial material to be sent to : Doug Green, P O Box 1109, Hastings 4156, Hawke’s Bay Email: words@xtra.co.nz Tel: 06 870 9029 Fax: 06 878 8150
At NZ MANUFACTURER our aim is to keep our readers up to date with the latest industry news and manufacturing advances in a tasty paper morsel, ensuring they do not get left behind in the highly competitive and rapidly evolving manufacturing world.
www.nzmanufacturer.co.nz
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NZ Manufacturer December 2011/January 2012
SUPPLY CHAIN Distribution centre capacity increased F E or nationwide retail distributor, ITW Proline’s recent move to new premises in Albany gave the company scope to create a warehouse environment that better utilised the space and provided a more efficient distribution hub for its wide range of hardware products. By being resourceful with the site the company successfully managed to not only increase storage capacity by 25%, but also boost the amount of space dedicated to the packing area. ”The additional space, as a result of the shift, was made more functional by configuring half the available area into narrower 2 metre aisles to accommodate the less bulky smaller units of stock such as screws, nuts, nails and chain,” says ITW Proline Operations Manager, Barry Warner. This was helped by using a Raymond Series 9000 Swing Reach Truck as a solution, in conjunction with the help of in-house software which enabled this forklift to meet the specific requirements demanded by the confined space. With its ability to handle pallets on racking up to 10 metres high, the Raymond Swing Reach Truck is used primarily in the ITW warehouse for inwards goods and replenishment work. The operators have been
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impressed with the sit/ stand option which has allowed them to be more productive. They are also impressed with the fingertip operation that helps them to simultaneously control all the functions of the truck as well as the increased visibility, a result of Raymond’s clear mast view. Ergonomically advanced systems like the Intelliguide wire guidance option relieve the operators of steering responsibilities in very narrow aisles, freeing the operator to concentrate on load handling tasks. Raymond’s patented Intellispeed control system provides smooth coordination between travel speeds and load height and weight, and automatically governs the appropriate maximum speed.
The secret of managing is to keep the guys who hate you away from the guys who are undecided.
– Casey Stengel
Support for global supply chain
arlier this month the Government announced that it was widening the accessibility of the New Zealand Export Credit Office’s (NZECO) insurance and financial guarantee products. The main change is the removal of the eligibility criteria that the New Zealand content of the goods and services provided under the export contract must be a minimum 30% of the export contract value. The NZECO can now apply a broader “NZ economic benefit” test, which is intended to enable the NZECO to support a number of NZ companies who are pursuing opportunities as part of the global supply chain, either here or through subsidiaries that they have established overseas. This recognises that many New Zealand exporters are establishing offshore entities to support their export effort from a New Zealand base. These companies retain their top management and a strong local research and design component in New Zealand, and bring profits and other benefits back to New Zealand. An example is a design and manufacturing company that was seeking the NZECO’s support to underwrite performance bonds on a project in Latin America. The NZ company had set up a joint venture with a foreign company in-market to manufacture its goods, in order
to be more cost and time efficient. However as a consequence they were unable to meet NZECO’s ‘30% NZ content rule’. Applying an NZ economic benefit test will now enable the NZECO to assess the above example in recognition that there is New Zealandsourced R&D, specialised ICT, and project management components as well as repatriated profit. The NZECO will prioritise exports with increased New Zealand-value added content for higher-risk transactions or if NZECO nears its own capacity limits. An additional change was adding China’s Renminbi to NZECO’s list of approved currencies that it can underwrite. This recognises that exporters are increasingly under demand from their Chinese buyers to transact directly in the renminbi. Several New Zealand banks have recently introduced the option for New Zealand companies to open renminbi foreign currency accounts, and to convert payments and receipts between renminbi and New Zealand dollars directly. It is hoped that the inclusion of the renminbi as an NZECO approved currency may help support those exporters who are looking to better leverage opportunities in China. nextSTEP Visit: www.nzeco.govt.nz
Mitsubishis to Unilever
his year Centra Forklifts celebrates 30 years of an exclusive partnership with Mitsubishi in New Zealand, after it began to import fully manufactured Mitsubishi forklifts into the New Zealand market in 1981. Five Mitsubishi forklift trucks and two Zowell trucks have recently been delivered to Unilever in Wellington and the company will start using them immediately in
their manufacturing, packaging, warehousing and distribution centres. Unilever’s portfolio features some of Australasia’s best-known household brands including Flora, Lipton, Persil and Dove, which are distributed to retailers around New Zealand. The company moves more than 400 pallets each day by forklift as part of its manufacturing and distribution process.
Web: www.baskiville.com : Email: info@baskiville.com www.nzmanufacturer.co.nz
NZ Manufacturer December 2011/January 2012
SUPPLY CHAIN
The price of greatness is responsibility. – Winston Churchill
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Thank you Mr Jobs
teve Jobs’ recent passing was a great loss, and not just to Apple devotees. Jobs did the rest of us a huge service as well by pushing a fundamental principle to the forefront of the digital age – technology should be as simple and easy to use as possible. The Apple co-founder and chief executive seems to have been crystal clear on this as an imperative for designers of digital technology since he and Steve Wozniack launched the first Apple personal computer in 1976. In the tech-speak of software developers, it is about all about “improving the user interface” (between people and machines). Jobs put it this way in a 1997 speech: “You‘ve got to start with the customer experience and work back toward the technology - not the other way around.” The approach seems to have worked for Apple and over the past decade, Jobs and co. have certainly raised the bar on user interfacing with MP3 players, tablet computers and smartphones. So what about other technologies for computing and communicating? What does the Jobs creed mean for something like RFID (radio frequency identification)? “Come on,” I hear someone yell (perhaps an Apple fanatic),”RFID tags and readers could never be as sexy as my iPod or phone!” Maybe not but the central point is that all technologies can – and if we apply the Jobs principle, should be – designed with the end user top of mind. RFID systems, like any technology, can be made simpler and easier to use, and thereby have much greater value to their users. It is true that the usability of RFID tags, readers and databases has improved greatly over the past five years. Previously vendors offered pieces of hardware and software, and then largely left their customers to go figure out how to create a system. Progress has been made, but reader interfaces are often still clunky and RFID has a long way to go before it works in just the way everyone would expect.
KEVIN KEVANY
09 520 5206 kevwrite@xtra.co.nz
Among Steve Jobs’ other big ideas was an insistence that technology designers have to actually anticipate what users will want. “You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new,” Jobs once said. That certainly applies to RFID with its vast potential for expanding efficiency, transparency and choice in supply chains. Most future users would struggle to know exactly what they want from this technology until it is developed and presented to them. And the easier it is made to use, the quicker they will “get it”. Of course, technologies are developed – and become increasingly understood and easier to use – one in relation to another. With RFID it is probably the Internet that will really make the difference because together, they enable objects (consumer items, assets, buildings or whatever) to be identified and monitored between locations regardless of the distance between them. RFID tags and sensors initiate communication about things for any number of purposes and the Internet extends that potential vastly. A simple example would be a food exporting company monitoring the condition and location of temperature-sensitive products en route to market using RFID-enabled sensors, the Internet and satellite communications: Monitoring can be near real time. Interesting to see Gartner, the technology forecasters, recently list the “Internet of things” among the top 10 strategic technologies for 2012. We have known the concept for years now but Gartner says interrelated technologies – including embedded sensors and the “near field communication” (NFC) form of RFID – have developed to the point where the “Internet of things” is about to have a major impact on
“Make it simple and easy to use ... and hurry up”.
PETER ISSAC
06 340 8134 peter.isaac@xtra.co.nz
DAVID BURKE-KENNEDY 09 473 8635 dbk@compublicity.co.nz
businesses worldwide. Actually, it is only a matter of time before the impact reaches consumers as well. For example NFC can be added to smartphones so that “things” can communicate with us at our instant command. The NFC-enabled phone could be waved at the NFC tag on an object of interest with the phone then performing some useful function like taking you to a specific Web site. That sort of thing could make RFID very sexy! We do not know what Steve Jobs’ advice on RFID would be, but I’m pretty sure it is along the lines of, “make it simple and easy to use ... and hurry up”. “Disclaimer: Gary Hartley has never owned a Mac computer but he recently fell in love with an IPhone.”
By Gary Hartley,
General Manager – Sector Development for GS1 New Zealand
Versatile Vacugrip for lightweight plastic containers
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new Vacugrip technology, designed specifically for handling light weight containers, enables the creation and placing of layers of empty containers and bottles onto pallets. As containers come off the blow moulder, they are positioned in a layer forming station and the VacuGrip gently lifts the bottles including bottom layer pad from the forming station for placement onto the pallet. A top frame is placed on the top of the completed pallet top sheet and the pallets can then be either stretch wrapped and/or strapped before being transported. The system is ideally suited for palletising output from multiple low speed blow-moulders onto separate pallet stations of different container types due to the unique patented design of the universal Vacugrip head technology. This universal tool for palletising and depalletising layers has a layer capacity of up to 40kg and can handle bottle sizes from 200ml to 3.75L.
SANDRA LUKEY 021 2262 858
sandra@shinegroup.co.nz
It can palletise and/or depalletise several product lines with various products consecutively as there is no need for format parts and the system does not require change over time. Conversely the VacuGrip system operates in a reverse sequence when used as a depalletiser where palletised containers are gently removed for feeding to a filler.
BRENT WHYTE
0061 2 9439 9329 bwhyte@whytepr.com.au
JULIE HANNAM
07 929 4970 julie@writewell.co.nz
www.nzmanufacturer.co.nz
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NZ Manufacturer December 2011/January 2012
MANUFACTURING TRENDS
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Up is never where you are now. – Belasco & Stayer
Product Data Managem
ow often do you find yourself spending valuable time searching for a model or a file? Have you ever had to recreate a model because you could not find the original? Have you ever spent time creating a design only to discover later that one of your colleagues had previously modelled a similar design that would have met your needs? If you are not using an integrated product data management (PDM) system, chances are you can relate to these scenarios. In today’s global economy, wasting valuable time looking for or recreating designs that already exist not only puts you out, but also puts your company at a competitive disadvantage. Adapting, leveraging, and reusing existing designs can save you time and save your company money. It can also help you bring new products to market faster, improve your company’s profitability, and win new business. Companies that use an integrated PDM system can maximise the effectiveness of design reuse by efficiently addressing the associated challenges.
Slash design time
Time is more than money. Getting a new product to market or responding to a project faster than the competition is a critical
requirement for success in today’s competitive marketplace. Given these deadline pressures, it does not make sense to start every new product design or new proposal from scratch – especially when studies show that the majority of new product designs (as much as 85 percent in some studies) contain intellectual property from prior designs. It’s much faster to adapt existing components or design elements for use in a new design than to start with a blank slate. The essence of design reuse is to leverage existing designs in some way – either by completely reusing the design, which can eliminate design time, or by modifying or updating the design, which takes less time. In addition to reductions in modelling time, design reuse carries the potential for significant time and cost savings in downstream engineering, manufacturing, purchasing (saves time with fewer transactions, vendors, and material acquisition costs), and assembly operations.
Leverage proven concepts
There is an old saying that if it’s not broke, don’t fix it. Existing designs carry the advantage of actual market circulation, and have already withstood the test of the consumer. These designs
represent proven concepts and are known quantities with established performance histories and warranty return rates. Working from an existing design, a designer can have greater confidence that the design will perform as advertised. It’s less risky from a customer satisfaction and field failure perspective to leverage a validated, proven concept than to go off in a completely new direction. By working from a previous design, a designer can maintain design intent while adding aesthetic improvements. Design reuse can also spark innovative ideas and possible enhancements that a blank slate typically cannot deliver.
Increase quoting speed and accuracy
Winning a competitive bid demands a promptly delivered, accurate quote. Existing designs and proposals typically include accurate estimates about the costs and lead times required in the past. Accessing information on previously used design components and updating that information into proposals can save time and improve accuracy when estimating new projects. In addition to helping companies turn around accurate proposals on bid projects, design reuse can also facilitate and streamline the quoting process between manufacturers
and outside vendors. For example, with an integrated PDM system, purchasing can access models and drawings for quoting purposes without having to take time away from a designer or engineer.
Reduce data duplication and SKUs
Design data is a manufacturer’s lifeblood. However, when data is mismanaged, disorganized, or unwieldy, it can become a burdensome drag on product development. In most organizations, a healthy percentage of engineering data is either lost or difficult to locate due to the misfiling of files and documents. This can lead to data duplication, an unnecessary growth in the number of stock keeping units (SKUs), and additional data storage costs. It’s more cost-effective to reduce the number of parts in your database. In addition to making it easier for designers to locate and reuse existing components, reducing the number of SKUs or part numbers can reduce costs across the entire organisation, because the addition of a single part can add many hours of work and additional costs downstream.
Integrate global resources
For many manufacturers, product development has increasingly become a worldwide effort, with design and engineering resources spanning the globe. While many product development centres once operated independently – each designing and manufacturing products for their own specific markets – more and more companies are taking advantage of their overall design talent by encouraging collaboration on a global scale. It’s much more efficient to leverage existing designs, whether they were created in the next office or on another continent. Although design modifications are often necessary to meet the customer needs and nuances of a particular market, the ability to reuse a design created elsewhere in the organisation can save a substantial amount of time and money.
Find the right design quickly and easily
F. L. Smidth & Co., a global leader in the manufacture and construction of cement plants, integrated its worldwide mechanical design effort by using Enterprise PDM to refine workflows and standardise development processes, reducing the engineering effort by 30 percent in the process. www.nzmanufacturer.co.nz
To reuse a design, you first have to find it. How can you determine if a design like yours already exists? Where do you look for it? How can you know which design has similar characteristics to your needs and if you have the right revision?
NZ Manufacturer December 2011/January 2012
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MANUFACTURING TRENDS
Test fast, fail fast, adjust fast. – Tom Peters
ment –keys to success How do you account for all of the references, associations, and interrelationships between parts, assemblies, drawings, bills of materials, documentation, and manufacturing information? If you are counting on part numbers and file names to provide the specificity of information that you require, you might have a long, agonising search, adding unnecessary overhead to the process. In fact, according to Gartner Research, manual data management costs between 40 to 60 percent of a designer’s time – time better spent helping your company succeed. With an integrated PDM system like Enterprise PDM, you can utilise powerful search capabilities to quickly find the files you need and take advantage of design reuse. Because the system tracks data by design properties rather than project numbers or file names, finding the right file is a snap. For example, locating a 5-inch diameter, (6.35 millimeter) cutting blade that utilises a 6-hole bolt pattern using file names would be extremely difficult compared to searching on any of those properties using Enterprise PDM. With the powerful search capabilities of Enterprise PDM, you can search on design properties and
find the file you need in a matter of seconds. All product related information is neatly displayed in a single window eliminating the need to navigate through a complex maze of separate windows.
Manage access to secure data and control revisions
What happens once you find the file that you need? How do you make sure that you don’t overwrite a file or work with the wrong revision? Do personnel outside of engineering— such as manufacturing, purchasing, and field service personnel —require access to design data? How can they view the file they need without accidentally corrupting, deleting, or changing a design? Perhaps the biggest challenge associated with design reuse is securing data to make sure that no one can inadvertently alter, overwrite, or delete it. Maximising the returns on design reuse demands a guarantee that the data will remain as you found it, for use by someone else. Using an integrated PDM system like Enterprise PDM, you can rest assured that your data is safe and secure. Because the system allows you to implement tight revision controls, formalise workflows,
and administer access rights, you can ensure that only designated personnel can authorise making file alterations or rolling to another revision. Some personnel only require “read” access, while others might not have CAD access but can still access other design documents. Tight revision controls not only safeguard your data, they can open up opportunities for new business with customers that maintain stringent document control requirements. To make finding the required file even easier, Enterprise PDM employs both thumbnail and detailed 3D viewing capabilities, providing a visual way to find relevant models, drawings, and images.
Share data globally while keeping it secure
As design teams grow and become increasingly global, design professionals need to be able to navigate, track, and safeguard digital product design information. You cannot regularly visit a design team member to discuss data management when the colleague’s office is located on another continent. Yet, you still need to collaborate and cooperate with overseas divisions, other departments, customers, and
The Martifer Group, a global construction, energy and biofuels company, reduced the company’s data storage expenses by implementing Enterprise PDM.
external partners, particularly when pursuing a design reuse strategy. In today’s global business environment, geographical barriers have fallen and many manufacturers support and encourage global design collaboration because it’s more efficient, boosts productivity, and makes good business sense. While one group may have originated a particular design, another division might be able to save time by reusing the design, or even offer ideas for making it better. Sharing your company’s intellectual property with an overseas collaborator demands a high level of data security. With Enterprise PDM, you can easily manage access and share design data anywhere in the world, enabling easy, effective collaboration. You can replicate portions of design data to different servers or provide secure web access to design data. The ability to make secure, controlled information available to whomever needs it anywhere in the world can be an important competitive advantage, giving your company the flexibility to function as a truly global entity.
Streamline change management
When you pursue a design reuse strategy, the one thing you can count on is that there will be many changes to existing designs and components. How can you manage these updates, and make sure that you capture and add them to your internal systems? How will design modifications affect your engineering change order (ECO) process, particularly when you are adapting a design from another division or location that might follow a different process? Most manufacturers have their own distinct business processes for introducing new designs and making changes to existing designs. In order to maximize your return on a design reuse strategy, you need a means for tracking and managing the increased volume of changes that you can expect. An effective PDM system like Enterprise PDM can help automate many of these tasks. Enterprise PDM has a built-in engineering change process that can help you standardise your process for reviewing and approving parts by the extended design team. You can also customise your ECO process and automatically revise it if any changes are made to new designs. With Enterprise PDM, you can easily manage the increased volume of design changes that are part of a design reuse strategy. www.nzmanufacturer.co.nz
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NZ Manufacturer December 2011/January 2012
MANUFACTURING TRENDS
It can be done!
– General Colin Powell
Using design automation to improve profitability
A
cross most industries today, profit margins are narrow and will continue to become even thinner. Even in segments where margins are relatively healthy, competition and global outsourcing make cost reduction mandatory. Historically, the high cost of engineering has contributed so significantly to the attack on profit margins that numerous attempts have been made to cut the process time or the cost of engineering activities. Most of these approaches have been point solutions, which can be highly important in their own right, but are not applicable across the board. Design automation, on the other hand, stands out as an effective means of dramatically cutting costs for a well-defined, well-proven range of engineering activities. This is especially so where business needs demand rapid, accurate quoting; consistent engineering; and, most important, minimum time to finished product delivery.
Driving design automation
The majority of companies share a common goal of reducing design costs. Traditionally, they have had two options: (1) to design less and standardise the product range, or (2) to design faster. If you want to limit your customers choices, the first option is fine. However, the pressure to customize products has risen tremendously over the past few years. In a recent study, 73 percent of total respondents viewed product customisation as critical for products over $100,000, while another 25 percent considered it crucial even for products under $1,000. This trend will only grow. The Cincom study revealed that 63 percent of engineers have seen requests for customised products increase over the last five years, and 26 percent anticipate that the growth rate will be between 25 and 50 percent in the next two years. Another survey of CAD users asked key questions about the users’ design processes. All survey respondents were aware of design automation since they work in various industry segments that document paybacks from design automation. These include almost all engineer-to-order products and many custom or customisable products basically, any enterprise www.nzmanufacturer.co.nz
effective and efficient. The benefits of design automation In the table below, the key benefits of design automation are reflected by organisational level.
Organisational Level Benefits
Engineer • Greatly reduces sales support requirements. . Dramatically reduces repetitive tasks.
whose product must be touched by engineering for a significant percentage of orders. A variety of companies across a multitude of industries are searching for ways to save time and lower costs in the engineering process. As a result, various vendors refer to different features or utilities as design automation. Unfortunately, most of these are not useful mechanisms for automation because they cannot handle the entire job. For companies that offer engineer-to-order products, design automation is specifically defined as a system that captures and more or less automatically applies that engineering activity to product variants resulting in finished designs in minimum time. System: a controller, rather than a random assortment of features that provides an overarching workflow. Design automation systems often drive CAD systems and interact automatically with product lifecycle management (PLM), as well as with other engineering and office applications. Engineering activity: all the calculations, rules of thumb, engineering precepts, and product lore that go into a product variant. More or less automatic: intelligent design automation systems automate some things, usually repetitive or
Historically, the high cost of engineering has contributed significantly to the attack on profit margins.
donkey work, and keep their hands off others, generally areas where experienced engineers can quickly assess a design requirement and rapidly supply a creative solution. Product variants: families of products derived from a central or standard design that must be touched significantly by engineering before full product functionality can be gained. From an engineering perspective, you can overcome the difficulties encountered in customising a product by using design automation software. This type of software evolved with CAD technology as a way to streamline customized product development. The idea is to capture a company’s in-house design rules and thereby simplify the creation of variations on a theme.
Is design automation effective and efficient?
Design automation systems have been in use since the early 1980s, helping companies to save time and money. Recently, a machine builder accomplished all the engineering that once took 80 hours in less than one hour by implementing design automation. Within 24 hours, an elevator manufacturer can now create quotes and drawings, including engineering and documentation, which once took weeks with manual methods. A lifting beam company can respond to customer enquiries with general arrangement drawings and a quotation in less than an hour deliverables that previously took 16 hours. Even small products benefit component brackets that took 45 minutes to configure manually at one company are now done in less than one minute. So, yes, design automation is both
Engineering Department • Significantly increases departmental productivity and throughput. • Greatly improves consistency, especially with junior engineers. • Quickly enables first-to-bid on quotes. Company • Easily helps to ensure accurate bid and product costing for predictable margins. • Dramatically shortens time-todelivery after order is signed. • Readily helps develop true teamwork between engineering and sales. Design automation frees up engineering time formerly given to repetitive tasks, recalculation, and specification changes. The resulting benefits apply across the organisation, from the individual engineer to the company as a whole.
Design automation in practice
Design automation should be viewed as a new way of working, not as a single project with a beginning and an end that is only done once. With design automation, you can literally treat every part of an assembly as a variable design that can be automatically modified by inputs. Doing so, however, would be a mistake. Your first step is to determine which variable parts require engineering while they are being varied, and which will generally be a subset of a given assembly. Then select a best candidate from among these to tackle the first design, which is typically a redesign that literally takes more time than it is worth. Choose to design faster and take your inspiration from the many companies who have successfully implemented design automation. It is a perfect means to raise your visibility in the company, increase your company’s profitability on custom sales, and allow you to do what you do best design innovative new products.
NZ Manufacturer December 2011/January 2012
To win without risk is to triumph without glory. – Pierre Corneille
Perceptions of potential asset sales
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inancial analysis and equity research specialist Woodward Research comments in response to public perceptions of potential assets sales by the government of New Zealand. Nick Lewis, Senior Analyst and Partner at Woodward Research said, “We felt compelled to offer impartial comments on the implications of asset sales for the average New Zealander.” The government announced in January 2011 that if re-elected in November 2011, it would proceed with the initial public offerings (IPOs) of four state-owned enterprises (SOEs) including the three electricity generator/retailers Genesis Energy, Meridian Energy, Mighty, River Power, and the coal resource company Solid Energy. The government also said it would seek to further reduce its stake in Air New Zealand from its current 74% interest. The announcement included two key points; firstly, that the government would maintain legal control of the four electricity companies by retaining at least 50.1% interest, and secondly, that the average retail investor in New Zealand would be “at the front of the queue” to gain access to shares in these companies when they come to market. Woodward Research offers comments on the following perceptions: * Foreigners will end up owning these companies: This is unlikely. While some SOE shares will undoubtedly find their way into the portfolios of investors outside of
New Zealand, the reality is that legal control of the companies will remain with the Crown in New Zealand. The IPOs will likely attract overseas investors such as the Australian superannuation funds but they are unlikely to want more than 5% shareholdings and will not want to exert any meaningful influence. The IPOs are also to unlikely to attract overseas strategic investors because such investors would want control (witness Origin Energy’s 53% control of Contact Energy) yet this would not be possible with the Crown as the controlling shareholder and everyone else restricted to less than 10% shareholdings. Finally, there is an additional financial incentive for New Zealand residents to own shares because of the imputation credits that are available to them on the dividends they receive, credits that are not generally-available to non-resident shareholders. * New Zealand government will forego hundreds of millions of dollars in dividends: This is true. The government received dividends of $733 million in fiscal 2010 and $799 million in fiscal year 2011 from the four SOEs (excluding Air New Zealand). Therefore, if the government were to sell 49% of the four SOEs, its dividend income stream from those four companies would likely drop by approximately $375 million per year. However, the Crown would have also gained a one-time cash inflow of $5 to $7 billion dollars. Therefore, in theory, the government will be fully compensated for its foregone dividends. The more important question then becomes, how will
that one-time cash injection likely be used. * The government can pay down a lot of debt with the proceeds of asset sales: The New Zealand government has issued approximately $71 billion of debt (which does not include debt of companies or individuals) so the $5 to $7 billion in IPO proceeds would reduce the government outstanding debt by 10% at most. However, the more likely scenario is that the proceeds will be invested in a combination of public good such as education or health care, and debt repayment. * Public shareholders will demand more operational and financial efficiency of the SOEs: The widespread churn of customers between the generator/retailers today, including NZX-listed Contact Energy, suggests that competitive forces are already creating ample pressure on the boards and management teams to operate the companies efficiently. It is therefore doubtful that there is much more efficiency to be gained from the addition of public shareholders that does not already exist by virtue of the fierce competition in the electricity sector * Once these assets are gone, they are gone forever: This is not necessarily true. While unusual, there are precedents overseas where companies have been sold by governments only to be partially or fully re-acquired by those same governments if circumstances deem it to be in the public’s best interest at that time - the government’s varied ownership interest of Air New Zealand over the past decade is an
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REAR VIEW
Nick Lewis, Woodward Research
example. * Four new listed companies will improve the financial markets in New Zealand: True. Four new billion-plus dollar market capitalization companies will add significant depth and liquidity to the NZX stock exchange. Moreover, the income-oriented nature of these dividend-paying companies will be seen as relatively conservative investments and will broadly appeal to the average retail investor. It would also provide more assets for the growing KiwiSaver funds, and should help to keep more of that money in New Zealand rather than forcing those portfolio managers to seek shares overseas. * In most countries, the government owns the electricity companies: This is generally true for developing countries but not so for developed countries. An informal review of the 34 member countries of the Organisation for Economic Co-Operation and Development (OECD) suggests that the majority of OECD countries have to some degree sold electricity companies via trade sale or IPO.
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NZ Manufacturer December 2011/January 2012
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 – be it dairy products, computer software, marine products or electrical equipment – 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; let’s grab them with both handsfor the future benefit of us all. www.nzmanufacturer.co.nz
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