Manufacturers' Monthly December 2013 by Prime Creative Media

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INSIDER SERIES >> The Top 100 Australian Manufacturers

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Publisher: Martin Sinclair martin.sinclair@cirrusmedia.com.au Managing Editor: Cole Latimer Ph: (02) 8484 0652 Fax: (02) 8484 0722 cole.latimer@cirrusmedia.com.au Editor: Matt McDonald Ph: (02) 8484 0645 Fax: (02) 8484 0722 matthew.mcdonald@cirrusmedia.com.au Journalists: Brent Balinski Ph: (02) 8484 0680 Fax: (02) 8484 0722 brent.balinski@cirrusmedia.com.au Alex Heber Ph: (02) 8484 0884 Fax: (02) 8484 0722 alex.heber@cirrusmedia.com.au Editor-at-Large: Alan Johnson Ph: (02) 8484 0725 alan.johnson@cirrusmedia.com.au Graphic Designer: Dave Ashley david.ashley@cirrusmedia.com.au Creative Director: Julie Coughlan Production Co-ordinator: Mary Copland Ph: (02) 8484 0737 mary.copland@cirrusmedia.com.au VIC/Overseas Sales: Michael Northcott PO Box 3069, Eltham, VIC 3095 Ph: 0448 077 247 michael.northcott@cirrusmedia.com.au NSW Sales: Anthony Head Tower 2, 475 Victoria Avenue, Chatswood, NSW 2067 Ph: (02) 8484 0868 Fax: (02) 8484 0722 Mobile: 0414 644 664 anthony.head@cirrusmedia.com.au QLD Sales: Sharon Amos PO Box 3136, Bracken Ridge, QLD 4017 Ph: (07) 3261 8857 Fax: (07) 3261 8347 Mobile: 0417 072 625 sharon.amos@cirrusmedia.com.au NSW, SA/NT & WA Sales: Cirrus Media Ph: (02) 8484 0868 anthony.head@cirrusmedia.com.au Published 11 times a year Subscriptions $140.00 per annum (inc GST) Overseas prices apply Ph: 1300 360 126

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Inside

For daily news visit manmonthly.com.au

DECEMBER 2013

4 Editorial

■ 2013 - The year in manufacturing

6 Comment ■ Let’s get going on Gas

8 Analysis News ■ What’s happening

12 IT@MM ■ Syspro announces new scalable ERP release

14 Q&A ■ Face to Face with Jake Layes Australian manufacturing retains a ‘glass half-full’ attitude.

16 Health & Safety ■ ■ ■ ■

World’s first ’Green’ hardhats Work boots Dual coverall for hot environments Gloves for chemical applications

18 Insider Series – Top 100 manufacturers ■ Industry remains optimistic ■ We list the top 100 ■ Manufacturers continue to be upbeat ■ Industry minister talks to MM on the future of manufacturing

Cirrus Media Tower 2, Level 3, 475 Victoria Avenue, Chatswood, NSW 2067, Australia Locked Bag 4700, Chatswood Delivery Centre, NSW 2067, Australia Ph: (02) 8484 0888 Fax: (02) 8484 0633 ABN 80 132 719 861 ISSN 0025-2530 www.cirrusmedia.com.au © Copyright Cirrus Media, 2013 18,170* CAB Audited Distribution (*last two issues of Oct-Mar 2013) 16,448, CAB Oct-Mar average Printed by Bluestar Print 83 Derby Street, Silverwater, NSW 2128 Ph: (02) 9748 3411

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ANALYSIS >> TECHNOLOGY >> SOLUTIONS

Est. 1961 DECEMBER 2013

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Industry Q&A >> Gas Policy What’s new >> Body Protection Manufacturing Strategy >> Materials Handling

INSIDER SERIES >> The Top 100 Australian Manufacturers

26 Manufacturing Strategy ■ Five lessons for manufacturers from the Electrolux Orange closure ■ Manufacturing cluster helps members boost capability

30 What’s new ■ Fall protection equipment ■ Integrated scanner improves voice picking efficiencies ■ Fuel cells as back-up power source ■ Discharger dust hood ■ Heavy duty LED lights

■ Temperature sensor with integrated resistance detector ■ Colour label printers for wide labels ■ Updated thermal imaging cameras

36 Research & Development ■ R&D difficulties in Australia

38 Warehousing & Storage ■ Dematic raises logistics performance with new DC

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Manufacturers’ Monthly DECEMBER 2013 3

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Editorial

COLE LATIMER – Managing Editor

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editor@manmonthly.com.au

Manufacturing in 2013 As we all get ready for Christmas, it’s time to take a look at the year in manufacturing. As Cole Latimer sees it, there were plenty of missed opportunities in the sector and it is in need of some genuine government attention.

e’ve finally made it to the end of 2013, and what a shambles and a muddle of a year it’s been. The change of government aside, it was always going to be a tumultuous year for the industry. The Australian dollar finally settling was definitely a high point, especially for our exporters, and finally recording positive PMIs - two in a row - which were the first in two years shone a light on the industry and demonstrated that despite turmoil in the industry and manufacturing shrinking worldwide, Australian manufacturing still has legs. It also brought back some confidence to an industry that has continually been rocked, and to some degree typecast, by the failures experienced in the automotive sector - a sector which seems inclined on tearing itself apart from the inside out. Holden’s heads refusal to even meet with the government in Canberra did not bode well for the manufacturer, and only further turned a negative public view of the industry and those in charge. In fact manufacturing as a whole has been tied, in the public’s mind, to the fortunes of a few automotive manufacturers, basically tarring every Australian maker with the same brush of failure as Ford and Holden. Now, the change in government - what did it mean for manufacturing? It seems worryingly little. The new minister Ian Macfarlane certainly has a lot of his plate, what with mining, energy, science, and manufacturing all being jammed into a single portfolio. The likelihood of manufacturing continuing to be ignored is high. And the massive Smarter Manufacturing paper put together

4 DECEMBER 2013 Manufacturers’ Monthly

There is more to manufacturing than just the auto sector. by the previous Labor Government which was supposed to begin transforming the industry this year is essentially irrelevant. On top of this there still remained the inherent issue of the slowdown of manufacturing combined with a general slowdown in the economy caused by the decline in the mining boom, which has to a degree drawn more focus than the issues affecting manufacturers. So as this year draws to a close we can only look forward, and hope that there is some degree of serious government support in 2014. Because with a strong foundation, and the PMI demonstrating that there is already upwards movement, manufacturing can grow or at the very least stabilise in Australia.

The new Industry Minister has a lot on his plate including manufacturing and mining. manmonthly.com.au

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Industrial COMMENT Innes WIllox – Chief Executive, Australian Industry Group

Let’s get going on gas A comprehensive set of measures is needed to address the expected jump in wholesale gas prices in Eastern Australia. Innes Willox writes.

e’ve seen the backlash on calls for compensation. We’ve heard business being blamed for not planning investments better. But when it comes to the critical issue of gas supply and pricing, the negative finger pointing needs to stop and sensible discussion about possible solutions needs to start. Based on the current situation and without fundamental changes to our approach to gas production and use, wholesale gas prices in Eastern Australia will almost triple in the next few years. That’s going to put a significant dent in Australia’s competitive advantage. It’s going to increase costs for businesses, particularly those businesses that are reliant on gas as a feedstock or a fuel. In short, gas will make it harder for many industries to do business here. For a long time Australian industry has had a competitive advantage when it comes to energy prices. Now business will pay some of the highest prices in the world in one of the world’s most gas-rich nations. This dramatic change has two causes. Liquefied Natural Gas exports from Queensland will soon link our market to high gas prices overseas. Meanwhile gas production is lagging expected growth and the market is tight. In dealing with these problems, increased gas production is an essential part of the solution, but only a part. This means finding ways to safely develop unconventional resources like coal seam gas. Unfortunately the fear in sections of the community – and its flow through to some of our political leaders – is so intense that governments are instead simply banning exploration or production of large parts of the gas resource. Regulation to ensure environmentally responsible 6 DECEMBER 2013 Manufacturers’ Monthly

Innes Willox – Chief Executive, Australian Industry Group. production has taken a back seat to simple bans. The coal seam gas exclusion zones in New South Wales and the moratorium on hydraulic fracturing in Victoria go well beyond what is justified by science. Precaution itself can turn into a kind of recklessness if applied too narrowly. Governments should manage genuine environmental risks through

strong, cost effective regulation of gas production. The community needs confidence in the system – and responsible producers need clear obligations and timely decisions. Unless we get this right, and fast, the gas crunch will worsen. NSW in particular risks an absolute supply shortage and a further loss of manufacturing jobs. But production is only half the

story. As part of the necessary discussions on the gas crunch Ai Group strongly believes there should be serious consideration of a National Interest Test for any new LNG export capacity beyond that which already has a final investment decision. Such a test should not be startling. It is the expansion of LNG exports that lies behind the painful transition in Eastern Australia’s gas market. Current projects were not subject to adequate consideration of economic impacts before approval. For all the demands of the environmental impacts process, in the economic arena they sailed through without real debate. By contrast the United States has a system in place to approve LNG exports to economies with which it lacks a free trade agreement. Approval is granted unless the Department of Energy determines it is not in the public interest. A reasonably public process, considering supply, price and broader economic impacts, has already approved several projects. This process is clearly not an investment-killer. Neither is Canada’s equivalent, which tests whether gas export proposals would leave adequate supply for foreseeable domestic requirements. A similar test for Australia would provide much greater confidence in the benefits of new export projects – and production. There is still more that can be done to manage the gas squeeze; the current market reform agenda should be accelerated to boost transparency and competitiveness, and more options should be urgently developed. The key point is that unless we solve the whole gas problem, we don’t solve any of it. A comprehensive set of measures is needed, and we don’t have a lot of time to put it together. manmonthly.com.au

© 2012 Siemens Product Lifecycle Management Software Inc. All rights reserved. Siemens and the Siemens logo are registered trademarks of Siemens AG. All other logos, trademarks or service marks used herein are the property of their respective owners.

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Analysis NEWS ACCI calls on Labor to allow scrapping of carbon tax

he Australian Chamber of Commerce and Industry (ACCI) has called on the Labor Party to allow the government to repeal the carbon tax. AAP reports that ACCI’s acting chief economist, Burchell Wilson, told reporters in Canberra that “the government needs to move ahead with its deregulatory agenda and its ambitions to lower taxes.” Referring to the opposition’s decision to not support the scrapping of the carbon tax unless it is replaced by an Emissions Trading Scheme, he said, “We need to see the opposition get on board and admit that the carbon tax is orphaned internationally and needs to be repealed.” Wilson’s comments came in the context of the release of ACCI’s small-business survey

for the September quarter. According to the survey, expectations for the economy’s performance are at its highest level in three years, but actual business conditions remain subdued. Its small-business conditions index was 42.4 points, which is up from 41.5 points but well below the 50-mark that separates contraction from expansion. Profit growth remained well below 50 points at 36.2 points, while selling prices fell to a record low of 43.1 points. According to Dynamic Business, ACCI favours a climate policy to reduce emissions “at lowest cost to the economy and in a way which does not adversely impact on industry competitiveness.” As the ABC reports, many within the environmental movement do

The ACCI wants a climate policy that does not impact on competitiveness. not share this view and want the government to take stronger action on the issue. In November around 60,000 around Australia took part in The National Day of Climate Action.

Cost cutting necessary for Toyota Australia’s survival ToyoTA must make significant cost cuts to keep its Altona factory running. News Corp reports that Toyota’s future as a car maker in Australia is looking “increasingly grim”, and that the company’s global CEo and another board member confessed that the cost per making a car in Australia was an issue. Toyota said that supplier costs needed to be reduced. “In Australia currently we are having a difficult situation,” Nobuyari Kodaira, who sits on the parent company’s board, told News Corp. “Because this is a business we need to have economic viability. “In order to continue the manufacturing there, we are cooperating with our suppliers on activities such as rationalisation and also cost reduction. We definitely think those activities are necessary.” In an announcement by Toyota Australia last month in which it said there would be 100 redundancies, the company also made it known that costs per vehicle 8 DECEMBER 2013 Manufacturers’ Monthly

Toyota needs to export to maintain scale. had to be reduced by an ambitious $3,800. The company needs to make its production costs cheaper to renew an export deal for Camry vehicles with Middle East countries, The Australian reports. Toyota Australia loses about $2,500 per car sold to the Middle East, due to the high dollar, though exports are crucial to maintaining scale. It is on track to produce 105,000 cars this year, of which about 70,000 will be exported,

Rallies were held in capital cities and more than 130 towns and regional centres. As part of the rallies, many called on the government to keep the carbon tax.

Melbourne manufacturer installs Australia’s largest smart solar array Upsolar has just completed australia’s largest solar array featuring smart modules: a 98.6-kW rooftop project atop a Hilton Manufacturing facility in Dandenong south, Victoria. The smart array—which will power Hilton Manufacturing’s sheet metal fabrication plant— includes 340 of Upsolar’s smart modules with power optimisation from Tigo Energy, as well as inverter technology provided by aBB. additionally, the system is equipped with Hilton Manufacturing’s dual-axis sun trackers, making this australia’s largest commercial pV system with tracking capabilities. “By combining the performance-enhancing capabilities of power optimisation and sun tracking, this system serves as an undeniable demonstration of the true potential of solar power,” said Maree Viotto, Upsolar’s australia Country Manager. “This array signifies a new era of solar innovation for australia, and we commend all the parties involved for their commitment to fostering development in this ripe market. “The system is supported by an on-site weather station that monitors wind speed to protect the array during periods of high winds. a live webcam also allows viewers to remotely observe the performance of the system. “our collaboration with Upsolar, Tigo and aBB presented a fantastic opportunity to showcase some of australia’s most advanced solar technologies, while also cutting the electricity costs for our facility,” said Jacques Esper of Hilton Manufacturing.

manmonthly.com.au

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Analysis NEWS Food continues to lead way as manufacturing grows for second straight month The Australian PMI recorded a result of 53.2 for October, an improvement on September and the second straight month of growth. The seasonally-adjusted Australian Industry Group PMI is based on surveys of the group’s members, and a score above 50 indicates growth in the sector. The Ai Group characterised the result as “mild expansion”. As with September, the food, beverages and tobacco sub-sector led the way, scoring 65.6, the best result since March 2012. The result continued a month-on-month expansion in the segment which began in March this year. There was also a strong result in

The food, beverages and tobacco sub-sector led the way the petroleum, coal, chemicals and rubber products sub-sector, up to 54.1 in September.

The metal products sub-sector continues to face difficulties, and “remains close to the historically

Caterpillar to cut 200 jobs in Burnie MInInG equipment manufacturer Caterpillar will cut 200 jobs from its Burnie plant in Tasmania’s north-west. Some of the jobs will be relocated to a new facility in Rayong, Thailand. The company said in a statement that the decision came after an extensive review of its Burnie operations which led it to the conclusion that the move was necessary to ensure it remained competitive. “This shift in production will allow us to streamline the Burnie manufacturing footprint and focus on the production of underground mining machine models that are largely used within the Australian market,’’ Burnie facility manager Dan Barich said. “We recognise this will impact our workforce and their families. “We value our employees’ contributions, and these actions are not a reflection of them, but rather the result of a need to make our underground

Some of the jobs will be relocated to a new facility in Rayong, Thailand. mining business more efficient and competitive.’’ Australian Manufacturer Workers Union state secretary John Short described the news as blow to the workforce. he added that the workforce would be cut in half and said that Caterpillar currently “..helps support something like 4,000 households in the area, either directly or indirectly.” The Tasmanian Chamber of Commerce and Industry’s Michael Bailey could see the

10 DECEMBER 2013 Manufacturers’ Monthly

decision coming. “For some time we’ve been hearing from some of our north-west coast members who provide component parts to Caterpillar that there was increasing pressure on their businesses to look at costs which increasingly they’ve been doing,” he said. These aren’t the first job losses from the Burnie facility. In February 100 jobs were cut from the plant and in September another 70 casual workers lost their jobs.

low levels seen in recent months” according to the Ai Group. It was an improved result from August’s result, but with a score of 32.5 continues to be in a period of contraction that began in August 2010. The PMI report did, however, note that businesses were cautious about conditions. This caution matches the sentiment recorded in a recent Ferret poll of the readers of Manufacturers’ Monthly and other websites in the Cirrus Media Industrials group. This poll found that almost fourfifths of respondents believed manufacturing was still in trouble or that it was too early to tell if things were improving.

Combet appointed to SA Advanced Manufacturing Council Former federal industry minister and ACTU leader Greg Combet has been appointed to the South Australia Advanced manufacturing Council. Combet, who retired from politics after Labor’s September election loss and who held the industry portfolio between December 2011 and July this year, was a welcome addition to the council, according to SA industry minister Tom Kenyon. “mr Combet has extensive experience in developing and implementing industry and innovation policy at a national level which Greg Combet (Image: Wikipedia) positions him to make a significant contribution to the council’s work and to SA more broadly,” AAP reports Kenyon as saying. The Council was part of the SA government’s manufacturing Works policy, a ten-year plan announced a year ago in response to a review by Professor Goran roos, who currently chairs the Advanced manufacturing Council. Kenyon said that, a year on, progress had begun. “obviously there are challenges - and there could be more challenges depending on how the Holden negotiations go,” he said. “But we’ve got the foundation set and now we have a chance to really ramp up.” The manufacturing Works plan also includes measures such as innovation vouchers and coming up with a pilot for Small Business Innovation research. of Combet’s appointment to the Advanced manufacturing Council, roos said that securing the former member for the federal seat of Charlton was a “real coup”. manmonthly.com.au

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GE continues investment in 3D printing

The use of additive manufacturing to create nozzles results in a lighter, more efficient and stronger part. BCI devices work by reading electrical signals from the brain

Mind-controlled robots have potential for use in manufacturing Robots that are controlled by the human mind may be able to help workers in the field of advanced manufacturing, according to a Us researcher from the University of buffalo (Ub). Phys.org reports that a team led by thenkurussi “Kesh” Kesavadas, PhD, Ub professor of mechanical and aerospace engineering and director of Ub’s Virtual Reality Laboratory is exploring technology known as brain-computer interface (bCI) devices. According to Kesavadas, while the team is just starting to explore ideas of how the technology could be used, there is potential in fields such as manufacturing and medicine. In the case of manufacturing, Kesavadas says that bCI-controlled devices could be used to leverage the decision making skills of workers. For example, they could help identify faulty parts in an assembly line. In addition, Kesavadas says they could help reduce the boredom associated with repetitive tasks

and improve safety and productivity. A doctoral student from the team at Ub was able, after a few days training, to use the device to control a robotic arm and make it insert a wooden peg into a hole and rotate the peg. bCI devices work by reading electrical signals from the brain and transmitting them wirelessly to a computer which, in turn, sends them to a robot. the technology generally involves a head piece, worn like a hat. the Ub is not alone in developing this new technology. Research is being done by others, including an EU-funded project called brain2Robot (‘A Robotic-Arm orthosis Controlled by Electroencephalography and Gaze for Locked-In Paralytics’). these researchers, who see the viability of the technology for providing extra independence for severely paralysed people, also successfully trained participants to move a bCI-controlled device.

Orica plans to expand Following its profit announcement, explosives and chemicals supplier orica has signalled that it will continue to expand. Chief executive ian Smith said that the company can expand without the need to build as many new plants as it has in the past. He told the ABC’s Inside Business program that the company had invested a lot of capital into converting gas through manmonthly.com.au

ammonia to ammonium nitrate which is orica’s main source of explosives. He added that there was no need for orica to build any more plants because the company is large enough to offer off-take agreements that are long-term and well priced. instead of investment in new plants, orica will focus investment more on the service area. The company expects profits to

increase next year as the north American coal markets improve and the company sells more sophisticated explosives. orica returned a net profit of $602 million for 2013. This represented a jump of nearly 49% over the previous year. The net profit after tax and individually material items was up $199 million compared to the same time last year, when it earned $403 million.

GE plans to massively ramp up its 3D printing capacity to make jet engine nozzles. the company intends to invest tens of millions of dollars, triple its aviation division’s 70-person staff involved in additive manufacturing, and quadruple the size of the factory floor. Bloomberg reports that GE, the world’s biggest maker of jet engines, is investing heavily to act on its plans to make 85,000 3D-printed jet engine fuel nozzles. terryWohlers, author of the longrunning annual Wohlers Report on the global industry of additive manufacturing, called the investment plans “unprecedented”. Wohlers said, “they see a big need, and a lot of demand but the supply is not there.” the benefits of using additive manufacturing to create nozzles include a lighter, more efficient and stronger part, made from only one piece instead of over 20. the first 85,000 nozzles mentioned by GE are for engine orders in hand. the head of business development for additive manufacturing at GE, Greg Morris, said, “With today’s technology, it would take too many machines,” of the plans to create the nozzles for its newest jet engine. He would not say how much it would cost to invest in the new printers, only that it would be worth “tens of millions” to upgrade capacity and buy 60-70 new and expensive machines. “We can start ramping up with the current generation of technology, but within two to three years we’re going to have to be onto the next generation to meet our cost targets.” the plans follow GE’s CEo Jeff Immelt’s comments earlier this year that the technology was, “worth my time, and a lot of investment.” Manufacturers’ Monthly DECEMBER 2013 11

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TechnologyIT@MM An agile ERP offering for manufacturers Syspro has released its latest ERP software offering, Syspro 7. Aimed at the tier-2 market, it includes features which are likely to prove attractive to Australian manufacturers. Matt McDonald reports.

hen it comes to enterprise resource planning (ERP) software, the top tier is comfortably covered by the two big players, Oracle and SAP. Now, most people reading this article (Australian manufacturers) are from SMEs and don’t really require the functionality (or expense) of such packages. They would be better served by a less comprehensive tier-2 product. Syspro offers a tier-2 product for on-premise and cloud-based utilisation across manufacturing and distribution. The latest version, Syspro 7, is in beta roll-out across Australia. Manufacturers’ Monthly caught up with Phil Duff, the company’s Founder and Global CEO; and Shaun Butler, General Manager of Syspro APAC to talk about the release. For them, the strength of their product centres around its agility. Companies who use Syspro ERP take ownership of their ERP system. They can customise it to suit their own business and they can update and upgrade it without undue hassle. Butler explained that Australia is a very mature market and most companies have already had one, two or three ERP products in their lifetime. He said that in Australia the challenge for businesses “... has always been to maintain competitiveness and keep their product up to date.” 12 DECEMBER 2013 Manufacturers’ Monthly

He said that technological change is now fast and, for manufacturers, it is often technology that gives them their edge and allows them to compete internationally. “Syspro ERP gives them agility so they can move to the next upgrade seamlessly and more often,” Butler added. And with each upgrade, work is done to improve on its highly flexible and scalable suite of ERP

solutions. So the hope is that businesses who upgrade to the latest version (Syspro 7 in this case) will experience better productivity and grow their businesses. Butler explained, “Customers can take ownership of the system themselves without having to rely on the vendor.” This is a significant point, because traditionally it has been the other way round. Using Syspro ERP,

customers can do an update, change fields, or change screens without any interference from the vendor. And any changes made last week or last year will be carried through when they upgrade to the new system tomorrow or next week. According to Duff, this agility has been the key to Syspro’s success. That agility was made possible by a key technical decision. Duff told the story: “About 10 years manmonthly.com.au

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Phil Duff, Founder and Global CEO of SYSPRO. ago, we made the decision to separate the database layer from what happens at the front end.... Security rules and how it interacts with database are controlled in a ‘black box’.” “User interface is written in such a way that customers can change the entire look of the product, either using drag and drop or scripting techniques, to change the behaviour of that logic.” According to Duff, that technical decision (along with some subsequent technical decisions) has meant that Syspro’s customers enjoy an agile, customisable product. He believes that these decisions are why the company today has a customer retention rate of about 95-98 per cent.

Syspro 7 According to Duff, Syspro’s new release brings customisation to a whole new level. “For me Syspro 7 has been like an amalgam of the last 10 years...we’ve been on a journey and what we’ve wanted to do is make a product that’s highly customisable,” he said. The latest version features an enhanced user interface (UI). It is styled along the lines of Windows 8 and includes active tiles and touch capabilities. As such, those who use Syspro 7 will be able to create personalised solutions for their businesses. manmonthly.com.au

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Shaun Butler, General Manager of SYSPRO APAC. To support large-scale customisation for businesses, the new UI also enables enterprise-wide modifications and themes. The new industry layouts are intended to be helpful for corporate alignment within specific vertical industries such as food, medical devices, machinery/equipment, electronics and pharmaceuticals/chemicals markets. Syspro 7 has also been designed with improved productivity requirements in mind. Recognising the necessity among mid-sized manufacturing and distribution companies for faster performance, capacity and volume requirements, the ERP software provides processing for higher transactional throughput whilst building on Syspro’s scalability for enterprises of all sizes.

New mobile device platform Syspro Espresso is a new mobile platform, which will soon be released in Australia. It allows users of Syspro ERP to access their business data in any location, at any time, for device-agnostic data collection and transaction processing. It is one of the first platforms of its kind to use a single source codebase to create native applications for any mobile device,

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with built-in powerful customisation capabilities for both the end-user and developers to engage. It is intended to provide users with anywhere access to their business information. Its enhanced reporting capabilities are intended to ensure customisable reports are efficiently supplied anywhere, even without the need to have Syspro installed on the desktop. In addition, said Butler, customers will be able to design their own Apps to use with Syspro Espresso. “We don’t limit you to the 40 or 50 applications that come with Espresso. You can develop your own application and it doesn’t even need to be a Syspro App. It can be across the entire enterprise...it might be HR system,” he said. What’s more, customers will be able to upload the Apps they develop onto the Syspro App Store for use by other users.

One-click installation Syspro’s M A Software 1 0 1 3 _+0Services 0 0 _ MI T deployment methodology enables

Syspro 7 to be installed easily and remotely with just one click, and allows organisations to run Syspro ERP whilst also providing greater control over security and firewall settings across the network and/or internet. Syspro ERP presents itself as a viable tier-2 alternative to the larger ERP software developers. According to Butler, it delivers the functionality that most people want most of the time and it is particularly suited to Australian manufacturers and distributors. When asked if Syspro tends to lose some of its customers to those larger players, Duff answers in the negative. “The trend is the other way round,” he said. “We’re getting more and more of their customers coming to us. The tier-1 starts to come down to tier-2 and we’ve come up...so we’re colliding at the top end of tier-2.” Syspro 1 2 0 1 3 - 0 9 - 1 6 T 02 1 9870 2 : 5555 0 1 : 2 9 + 1 0 : 0 0 www.syspro.com

Mitchell & Cheesman Pty Ltd Engineering Since 1957 3-5 Acorn Road, Camden Park, SA 5038 Peter Schwertfeger - General Manager T: +61 8 8294 3344 | F: +61 8 8376 0313 M: 0403 460 790 E: peters@mandc.com.au n Design & Engineering Service § Product and tooling design § Prototyping facilities § Reverse Engineering § Engineering and Project Management n Fabrication, Tooling & Equipment Manufacture § Fabrication & equipment § Thread repairs and cutting § Machine repairs and maintenance § Gear box design and repair § Drill bit spares and manufacture § CNC machining & turning § Robotic Manufacturing Cells/ Lines § Jigs and fixtures § Press metal tooling § Sand blasting, priming and paint § High frequency MIG & TIG n Quality Assurance § Technical documentation § Statistical reporting § AS/NZS ISO9001:2008 Manufacturers’ Monthly DECEMBER 2013 13

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Q&A:THE PEOPLE OF MANUFACTURING Q&A: Jake Layes, Head of Sustainability & Clean Tech, APAC, Autodesk As part of our Q&A series we interview you, and find out what your job is day to day. In this edition we speak to Jake Layes, Head of Sustainability & Clean Tech, APAC, Autodesk. Manufacturers’ Monthly: What are your primary roles and responsibilities in your job? Give us a day in your working life.

MM: How did you get to where you are today? Give us a bullet point career path.

Jake Layes: In my role I lead and nurture various sustainability initiatives, such as the Autodesk’s Clean Tech Partner Program, which supports the environmental advancements of clean technology pioneers across Asia Pacific. A typical day for me involves many phone conversations, meetings and reading. I usually start the day with early morning calls with my colleagues on the US West Coast, followed by calls or meetings with my team covering Australia, New Zealand, Singapore and Japan. I also connect regularly with customers and strategic partners, which often means frequent business travels. During the rest of my day, I’m typically working to connect with sustainability thought leaders in Asia Pacific, and create opportunities for Autodesk to help and support entrepreneurs and innovators in clean technology and sustainability. MM: What training/education did you need for your job? JL: At Autodesk, we see design as the key driver towards the development of solutions to the epic sustainability challenges we’re facing today. I am trained as a designer (with a BSc from the Art Centre of Design, Pasadena) and worked for years as a designer before I joined Autodesk. 14 DECEMBER 2013 Manufacturers’ Monthly

I’m typically working to connect with sustainability thought leaders in Asia Pacific - Jake Layes. I’m very familiar with the core principles of design - prototyping, collaboration and systems thinking – and now, empowered by technology anybody anywhere can create solutions for sustainability. I also hold an MBA from the

Kellogg School of Management and the Hong Kong University of Science and Technology, which is key to understand the pressing business issues companies and entrepreneurs face and how they can be solved within the planet’s constraints.

JL: From early childhood on I always had a keen interest to understand how things work and what greater structures are in play to enable people to do what they’re doing day-in day-out. Back then, my dream job was becoming an architect. After high school I did an internship in an interior design & architect office and started an interior design study in Germany before switching to studying product design at the Art Center. I found product design most attractive because it gave me the opportunity to positively influence people’s lives through products that are used on a daily basis. After an internship with LG Electronics in Ireland, as well as one at Philips Electronics, I joined Philips Electronics after completing my studies - first in The Netherlands and then in Hong Kong. It was a great opportunity to work on future-looking projects, as well as to gain hands-on experience with the full product development process, from the idea-on-a-napkin to manufacturing in China, and delivery of products to stores around the world. After five years I joined Alias, a Canadian product design software firm, in Japan and Singapore as product design and business development consultant, which gave me a great opportunity to see various product development processes in many companies across Asia Pacific. manmonthly.com.au

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This 3D visualization of Abraham Lincoln, powered by Autodesk, is part of the new Smithsonian 3D web presence. (Image: Business Wire) In 2006, Autodesk acquired Alias, and I became part of a much bigger organization. What amazes me still today is the breadth and collective expertise that Autodesk has and uses to help millions of our customers in many very distinct industries create a better world. In 2010, I started focusing on clean technology, and launched the Autodesk Clean Tech Partner Program in Japan, Singapore, Australia & New Zealand. Since then it’s been super exciting to be part of Autodesk Corporate Sustainability team, where I get to help some of the world’s brightest minds to bring their ideas to life and have a real impact on the well-being of the planet and its population. MM: What tools and/or software do you use on a daily basis? manmonthly.com.au

JL: For my day-to-day work, I’m using the same email, document, spreadsheet and presentation tools on laptops and mobile devices as most do. I occasionally get hands on with Autodesk tools, such as Alias Design software or our 123D family of free apps. MM: What is the one thing that you are most proud of in your professional life? JL: The most important thing for me is having a sense that everything I’ve done so far is connected, and progressing, in a meaningful way as an opportunity for me to make a difference.

JL: I have had two equally large career challenges, both involving a relocation and at the same time a new role: one was the first time I’ve moved to Hong Kong with Philips Electronics, the second time was when I moved to Tokyo with Alias. MM: What is your biggest frustration in your job? JL: Knowing that too many businesses still haven’t recognized the urgency of addressing sustainability challenges despite the real business opportunities that sustainability offers. MM: What is the biggest challenge facing your business?

MM: Biggest daily challenge? JL: My biggest daily challenge is balancing my professional life and the time with my family.

JL: Managing resources and prioritizing where to have the next biggest opportunity for positive impact.

MM: Biggest career challenge?

MM: Is there anything else about your

job you want Australia to know about? JL: I spent four solid days in early October at three sustainability conferences in Melbourne and what impressed me most was the significant amount of really important work being done here to address sustainability challenges, as well as the overall agreement from the conference participants that sustainability is a key opportunity for Australians to contribute to the creation of a better world. Would you like to be featured in our Q&A series? Get in touch via editor@manmonthly.com.au and tell us about your role in Australian manufacturing. Manufacturers’ Monthly DECEMBER 2013 15

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Health& SAFETY MSA develops world’s first ‘green’ hardhats Expected to be available in Australia by early next year, these 100 per cent recyclable hardhats are made from sugarcane.

SA has created the world’s first hardhat made from ‘green’, renewable resources. The company states that unlike normal hardhats made from high-density polyethylene (HDPE) from petrochemical, its V-Gard GREEN hardhat is made using HDPE sourced from sugarcane. The hats are made in Brazil and will likely be available in Australia later this year or early next year. “By developing a hardhat sourced from sugar, we are effectively reducing the overall carbon footprint associated with the life-cycle of this product,” Eric Beck, MSA’s global director of strategic marketing, said. Beck explained that through the natural process of photosynthesis, sugarcane cultivation captures CO2 from the atmosphere, thereby reducing greenhouse gas emissions. In fact, according to a 2007 eco-efficiency study conducted by Fundacao Espaco Eco, for every ton of green HDPE produced, approximately 2.5 tons of carbon dioxide are captured from the atmosphere and environment.

The hardhats are made by MSA in Brazil in conjunction with Braskem.

“The sustainable benefits of using ‘green’ HDPE in a hardhat are what initially captured our interest,” Beck said. “But at the end of the day, the hardhat has to provide the same high level of head protection that our V-Gard brand is known for around the world. That’s what makes this product option so attractive.” The HDPE green hardhats are 100 per cent recyclable, making them suitable for reuse in non-safety products. Like traditional V-Gard hardhats, the new V-Gard GREEN hardhat will be marked with a recycling label to further remind and educate users to recycle their helmet at the end of its use cycle. The new hardhats have also been nominated for an award, having been recently selected by Frost & Sullivan for the 2013 New Product Innovation Leadership Award. “With the rise in green building and construction projects in general, this is an opportune time to introduce an alternative, sustainable safety hardhat that also helps to reduce carbon emissions and demand for fossil fuels in product manufacturing,” says Beck. The hats were made by MSA in Brazil in conjunction with Braskem, the world’s largest producer of green thermoplastic resins.

Boots for workers in safety, security or essential services THE Emergency Services & First Responder range of footwear

solutions includes the established specialist fire-fighters boots as well as two new WB 26 Tacticalstyle Boots. The boots are made especially for those working in the safety, security or essential services industries and are designed with comfort and safety at the top of the design agenda. The WB 26-660 140mm Black Zip Sided and the WB 26-670 180mm Black Zip Sided Boots are specifically designed to provide support, comfort, and traction in highstress situations. Lightweight, durable and shock absorbent, The boots are resistant to most oils, acids and alkali. they feature a Gripthane dual 16 DECEMBER 2013 Manufacturers’ Monthly

density polyurethane sole with a soft shock absorbing midsole and a durable, slip-resistant outer sole. The footwear features the Comfortcushion Impact Absorption System, which combines cellular urethane and Poron to protect the heel and ball of the foot. Further comfort features include a padded collar and tongue. The outer sole is resistant to 130°C of surface contact; and (as a whole) the boots are resistant to most oils, acids and alkali. Further features include excellent slip resistance and Electrical (EH) Hazard resistance. In addition, the boots are fully compliant with Australian and International standards. They have reinforced stitching, polyurethane inserts, and durable arch supports which are intended

to ensure maximum comfort during extended shifts. The zip sided feature is designed to allow quick donning and doffing of the boots The new tactical-style boots also incorporate new innovations like the water resistant, lightweight Cordura fabric for added durability and the Aegis Microbe Shield infused lining to protect against odour, staining and deterioration caused by bacteria and other micro-organisms. The new comfort foot bed with its perforated foam layer enhances natural air flow to the foot and is now infused with AEGIS for added protection. The WB 26-660 and WB 26-670 are available in sizes ranging from 4-13 with half size increments from 6½ to 10½. Oliver Footwear 1300 832 228 www.oliver.com.au manmonthly.com.au

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Dual coverall for hot environments

The coverall is designed specifically for jobs where there are specifically hot frontal hazard exposures.

Gloves for chemical applications

manmonthly.com.au

P R O T E C T IN G O UR IT H EN V IR O NM EN T W S a fe -D -C a n t BUND IN G P R O D UC T S SAFE-D-CANT offers a wide range of spill containment, drum decanting and handling solutions

156 '(('%6+8' +)* 37#.+6; /#07(#%674+0) #0& &+564+$76+10 :%''&5 7564#.+#0 6#0&#4&5

The gloves feature a moisture management technology that mimics a sponge. protecting the protec

moisture management technology. Both gloves feature a highperformance nitrile compound that offers puncture, snag and abrasion protection as well as a reversed diamond pattern palm finish for improved dry/wet grip and a foldable cuff gutter to prevent harmful chemicals dripping onto the forearms. Ansell 1300 187 796 ppe.ansell.com.au

1300 134 223 1300 307 895 sales@storemasta.com.au www.storemasta.com.au

10626

Ansell has released two chemical gloves designed to protect hands against exposure to oils, fuels, solvents, bases and esters in both medium and heavy duty applications. According to the company, the AlphaTec nitrile gloves help to prevent hand injuries related to chemical hazards, while maximizing worker comfort through a breakthrough technology that absorbs moisture accumulated from prolonged glove use. The AlphaTec 58-330 and 58-335 gloves are equipped with AquaDri, a moisture management technology that mimics a sponge, absorbing moisture at a rate up to ten times faster than traditional cotton or flocked gloves (according to Internal testing by Ansell engineers). The technology creates an open-celled foam structure that provides the benefits of a high-functioning sponge with high moisture absorption. The gloves are also the first Ansell product offering designed with the company’s colour technology indicator. There is a royal blue colour scheme on the inside of the glove to indicate the

DuPont has launched the tyvek coverall, designed specifically for hot environments and for jobs where there are specifically frontal hazard exposures. the coverall offers users the protection, durability and comfort of a tyvek suit on the front side complimented with a more breathable SMS back. the tyvek substrate on the front and arms offers users an optimum protection: it acts as an excellent barrier against particles and fibres and also repels water-based liquids and aerosols. According to the company, users are subsequently assured of excellent frontal protection when exposed to liquid splashes and very fine particles or fibres. In addition, the SMS back features a number of sweat points which are located in the under arm, neck, back and crotch areas, with the material providing the wearer comfort due to its high air and water vapour permeability. typical applications include working in hot environments such as mining and mineral processing, brick ceramic firing, foundries and smelting operations, metal fabrication, boat manufacturing and glass manufacturing. DuPont Protection Technologies A D _ L MH P R I F E B _ 1 3 . p d f P a g e 1 1 4 / 0 103/993 1 55610 3 , 2 : 0 9 www.personalprotection.dupont.com

Manufacturers’ Monthly DECEMBER 2013 17

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InsiderSERIES

TOP 100 MANUFACTURERS

Industry remains optimistic Despite recent highly publicised factory closures, Australian manufacturing remains a halfglass-full type of industry as we go into 2014. Alan Johnson reports.

ith high profile manufacturers, such as Ford and Electrolux, announcing they will be closing their manufacturing operations, it’s refreshing to know most manufacturers remain optimistic about their future. According to Innes Willox, Australian Industry Group’s CEO, there are many reasons to be optimistic. “I think manufacturing has a very strong future in Australia, but as in all things, it is subject to pressure and constant change. “I’m very optimistic about the future of manufacturing in Australia, but that optimism has to be tempered by a couple of realisations,

one being the fact that the sector has gone through some hard times recently, and has lost about 14% of its workforce since the first half of 2008, plus the industry has seen sustained pressure from a range of areas, pressure from the high dollar, increased import competition, sluggish consumer spending and a lack of business confidence, all impacting on the sector over the past few years. “The industry has shown resilience to hang on, but those pressures remain and some parts of manufacturing will have to change shape to meet those competitive pressures, so there is going to be greater demand over time for high end, value added manufacturing,

or manufacturing that is closer to market. “Becoming world-leaders around innovation, training, leadership and skills are going to be crucial to the future of manufacturing,” Willox told Manufacturers’ Monthly.

Industry trending upwards Willox said September and October’s PMI (Performance of Manufacturing Index) results of over 50 were very welcome news. (The index was 51.7 in September and 53.2 in October, which are both above the 50 point level separating expansion from contraction.) “The stand out area for me was confidence, the one thing that has been lacking, as the industry has

been under intense pressures from the strong dollar, high energy costs, uncompetitive unit labour costs and fragile demand in domestic and international markets. “The PMIs reflect the confidence looking forward in the hope that conditions will improve and confidence will return into the broader economy and that it will flow through to the sector. “The growth in the PMIs doesn’t reflect the here and now necessarily, in terms of current orders, employment or production, rather they are signs of optimism, and optimism breeds optimism. Plus anecdotally, we are seeing signs of pickup, with member companies reporting significant orders,” he said.

I’m very optimistic about the future of manufacturing in Australia – Willox (third right) at Ampcontrol’s Ringwood facility. 18 DECEMBER 2013 Manufacturers’ Monthly

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Willox is optimistic the PMI will stay up in 2014, but says that will all depend on confidence turning into activity. “Hopefully we will see some signs of that over the next couple of months,” he said. According to Willox, the recent federal election played a key role in industry’s confidence. “The election was a big drag on the economy through the first nine months of the year, ever since it was called. “It put a dampener on demand and on investment, because companies were waiting to see what happened in the election, before making decisions around investment. But once the election was out of the way, we saw a return in confidence,” Willox said.

Government change positive As well as being optimistic about manufacturing’s future, Willox believes the change in government will have a positive effect on Australia’s economy and the manufacturing sector. “We have had discussions with the new industry minister, Ian MacFarlane, about industry policy and putting in place the right settings. “We believe we will get some policy stability from this government, and an expectation that ‘no harm’ will be done and that business can get on with doing business. “I think the government is prepared to make the tough decisions needed. For example, they are in negotiations with the auto sector at present about its future and what support the government can and should give and under what circumstances they should be given. “But while the car industry is very important, manufacturing sometimes gets entwined with the auto sector, when in fact there is a lot of activity going on out there, particularly in that value-add manufacturing, integration into global supply chains,” he explained. However, Willox admits some manufacturers need to change. “Australian manufacturers can’t compete straight out on cost, manmonthly.com.au

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3:28:02

we have to compete on access to markets, innovation, after service and/or high end value add manufacturing and innovation. “To compete we need to find new and smarter ways to compete. “If we can get our links with research institutions right, our R&D right and our innovative capacities right that will give us an enormous competitive advantage,” he said. However, looking into his crystal ball, Willox expects the volatility of the dollar to continue to have a major impact on industry. “It makes planning and making business decisions very difficult. Movements of a cent or so can be critical to businesses. “The reality is Australia does not control the value of its dollar, we are at the mercy of others. It’s like a cork in the ocean as a result of that. “We believe the dollar will remain relatively high, the best we can see is it in the high 80s for a time. But it will continue to fluctuate. “The other big issue that will emerge in late 2014 are proposed free-trade agreements especially the one with China, as well as Korea and Japan,” he said. However, Willox says manufacturers will enter 2014 confident the carbon tax will soon be part of history. “It is very important that the cost is taken off manufacturing’s shoulders as quickly as possible and we get a least cost replacement. “The carbon tax has cost industry hundreds of millions of dollars in money that could have been spent much more productively in terms of investment and employment creations. “It has been a dead weight cost for industry and the sooner it goes the better,” Willox said.

Gas supply Aside from the dollar, Willox says one of the key issues facing Australian manufacturers in 2014 and onwards will be the supply and cost of gas on the East Coast. “Manufacturing is very reliant on energy, which was one of our competitive advantages, but now through electricity and now gas price increases, this will be a huge issue. “Access to supply, and supply

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issues are going to be company defining issues in many cases. “If we don’t get this right, it will have catastrophic consequences for Australian industry. “The first problem is supply. The Ai Group surveyed gas users across NSW, Victoria, Queensland and South Australia earlier this year.” “Of those who were looking for a gas contract one in ten were unable to get an offer at all; a third were unable to get an offer they considered serious – whether because of the volumes on offer, the contract term, conditions of supply or price; another quarter were able to get a serious offer, but from only one supplier; and only one third enjoyed multiple offers and the sort of competitive market for gas supply that we would like to see. “But with the imminent commencement of LNG exports from Queensland and a trebling of gas demand on the east coast, this can only mean an even tighter market.” Willox said the second problem, often considered a solution to the first, is rising prices. “The LNG boom has long been expected to lift domestic gas prices substantially, but this is happening even faster than many expected. “The survey confirmed that for those gas users who were being offered contracts, wholesale prices had risen from the long term average of $3-4 per gigajoule to more than $5 for short term contracts starting this year, and to nearly $9 a gigajoule for contracts over longer terms or starting later. “This is a huge transformation. It will take Eastern Australian gas prices from among the lowest in the world to among the highest. “Energy users’ costs would increase by around $5 billion a year. That’s more than the gross revenue the carbon price would raise in 2015-16, and comes without any compensation.” Willox points his finger at the Commonwealth and the States who took the decision to allow the Eastern Australian gas market to be linked to the high-price East Asian gas market. “They should not escape responsibility for the unintended consequences.”

For answers, Willox points to the US. “There they have a system in place to approve LNG exports to economies with which it lacks a free trade agreement. “Approval is not granted unless the Department of Energy determines it is the public interest. “It has already approved several; so this process is clearly not an investment-killer. “Neither is Canada’s equivalent approvals process, under which the National Energy Board determines whether a proposed export arrangement would leave adequate supply for foreseeable domestic requirements. “What these processes achieve is to provide important transparency, information and opportunity for discussion. “This ensures that major impacts are considered and debated ahead of time, not just when they materialise. “The process Ai Group proposes would see proposals for new and significantly expanded LNG production subject to economic approval by the Federal Treasurer, who would receive advice from an expert body – not unlike the Foreign Investment Review process.” Willox explains the expert body would make a published assessment based on input from all relevant stakeholders of three matters: • Whether approval would leave adequate gas supply for domestic requirements in relevant Australian markets over the life of the facility; • Whether approval is in the national interest, taking account of economic, strategic and social impacts of the proposed expansion; and • Whether opportunities for and net benefits of parallel supply to domestic and export markets have been adequately considered by proponents. “The National Interest Test could do a lot to help answer community doubt about the benefits of production. “In terms of governance and regulation Australia would be no less attractive than the US and Canada. Export and domestic uses of gas would genuinely be able to thrive together,” Willox concluded. Manufacturers’ Monthly DECEMBER 2013 19

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InsiderSERIES

TOP 100 MANUFACTURERS

RANKING Current

1 2

ENTERPRISE

YEAR’S REvENuE (’000)

Company

State

Manufacturing Category

Caltex

NSW

BP Australia

VIC

Shell Australia

Amcor

–

Sims Metal Management

NPAT (’000)

Current

% Change

Petroleum Refining and Petroleum Fuel

23,569,054

22,599,170

Petroleum Refining and Petroleum Fuel

23,057,000

21,347,000

VIC

Petroleum Refining and Petroleum Fuel

21,987,700

VIC

Converted Paper Products

12,638,900

NSW

Primary Metal and Metal Products

9,133,500

EMPLOYEES

Current

% Change

Current

4.29%

56,777

-713,514

107.96%

3610

3550

8.01%

270,000

793,000

-65.95%

7640

7463

22,241,900

-1.14%

-288,800

-495,200

41.68%

–

12,352,600

2.32%

600,600

412,600

45.56%

33000

–

8,895,400

2.68%

-521,400

192,100

-371.42%

6600

–

Toyota Motor Corporation

VIC

Motor Vehicle and Motor Vehicle Parts

9,011,373

7,385,717

22.01%

149,097

-32,574

557.72%

–

ExxonMobil Australia

VIC

Petroleum and Coal Products

8,756,000

6,950,000

25.99%

419,000

347,000

20.75%

1831

1793

–

BlueScope Steel

VIC

Iron Smelting and Steel

7,488,700

8,585,600

-12.78%

-84,100

-1,043,500

91.94%

17063

18344

Perth Mint

Jewellery

6,833,274

0.00%

27,603

0.00%

357

Orica

VIC

Basic Chemical and Chemical Products

6,774,500

6,300,400

7.52%

402,800

642,300

-37.29%

15000

14000

–

Arrium

NSW

Primary Metal and Metal Products

6,162,600

6,410,200

-3.86%

-694,700

57,700

-1303.99%

10078

11007

CSL

VIC

Pharmaceutical Products

5,608,595

4,623,700

21.30%

1,329,902

982,600

35.35%

11285

10515

Boral

NSW

Non-Metallic Mineral Products

5,267,800

4,938,300

6.67%

-212,100

176,600

-220.10%

12610

14740

Coca-Cola Amatil

NSW

Food Products

5,175,000

4,867,900

6.31%

459,900

591,800

-22.29%

15154

15278

Lion Nathan National Foods

NSW

Beverage

5,067,900

5,162,600

-1.83%

-300,800

-1,172,100

74.34%

6534

4401

Visy Industries

VIC

Pulp, Paper and Converted Paper Products

4,100,000

3,900,000

5.13%

–

9600

GM Holden

VIC

Motor Vehicle and Motor Vehicle Part

4,089,833

4,406,971

-7.20%

-152,776

89,689

-270.34%

–

ConocoPhillips Australasia

Petroleum and Coal Products

3,581,260

3,569,480

0.33%

537,912

591,672

-9.09%

–

Incitec Pivot

VIC

Fertilisers

3,541,300

3,952,600

-10.41%

510,700

463,200

10.25%

5242

4910

–

Alcoa World Alumina Australia

Alumina Production

3,276,900

3,814,500

-14.09%

106,200

569,000

-81.34%

–

JBS Australia

QLD

Meat Processing

3,235,035

0.00%

-39,021

0.00%

6701

Ford Australia

VIC

Motor Vehicle and Motor Vehicle Part

3,207,460

2,854,686

12.36%

-141,429

-289,846

51.21%

–

MML Holdings

NSW

Basic Non-Ferrous Metal Products

2,828,565

3,055,519

-7.43%

109,619

103,678

5.73%

–

Murray Goulburn Co-op

VIC

Food Products

2,377,000

2,361,000

0.68%

–

2100

Nufarm

VIC

Pesticides

2,303,460

2,207,772

4.33%

80,999

72,594

11.58%

–

3400

Nestle

NSW

Food Products

2,204,397

2,448,556

-9.97%

107,554

193,639

-44.46%

–

Teys Australia

QLD

Food Products

2,196,488

1,876,000

17.08%

–

4500

4300

169.78%

Goodman Fielder

NSW

Food Products

2,172,400

2,223,200

-2.28%

102,500

-146,900

Inghams Enterprises

NSW

Poultry Processing

2,100,000

0.00%

–

9000

Food Investments

NSW

Food Products

2,064,536

2,222,564

-7.11%

-177,677

-23,227

-664.96%

8000

Mondelez Australia

VIC

Food Products

2,034,148

1,941,808

4.76%

74,921

45,820

63.51%

3341

2634

British American Tobacco (A’Asia Holdings)

NSW

Cigarette and Tobacco Products

1,960,981

1,842,637

6.42%

691,009

612,732

12.78%

1200

–

Boart Longyear

Mining and Construction Machinery

1,945,108

1,993,552

-2.43%

65,710

157,105

-58.17%

9162

– 1836

Pfizer Australia

NSW

Pharmaceutical Products

1,892,941

2,036,310

-7.04%

-5,566

61,148

-109.10%

1356

BAE Systems Australia

Computer and Electronic Equipment

1,890,475

1,790,879

5.56%

105,057

-49,699

311.39%

–

Sucrogen

NSW

Sugar

1,820,200

1,856,000

-1.93%

63,300

42,300

49.65%

2188

–

Holcim Australia

NSW

Cement, Lime, Plaster and Concrete Products

1,805,580

1,849,903

-2.40%

83,958

137,935

-39.13%

3503

3384

Foster’s Group

VIC

Beverage

1,754,300

2,564,900

-31.60%

194,200

-89,000

318.20%

1941

2239

Treasury Wine Estates

VIC

Wine Production

1,730,700

1,716,600

0.82%

42,300

89,900

-52.95%

–

3129

CSR

NSW

Non-Metallic Mineral Products

1,696,600

1,861,900

-8.88%

-146,900

76,300

-292.53%

3218

–-

Hanson Australia Holdings

NSW

Cement and Lime

1,667,100

1,566,500

6.42%

106,400

115,300

-7.72%

–

Unilever Australia

NSW

Food Products

1,566,260

1,603,059

-2.30%

43,132

74,787

-42.33%

1581

1631 1554

GlaxoSmithKline

VIC

Pharmaceutical Products

1,535,594

1,500,893

2.31%

34,695

37,904

-8.47%

1479

Siemens

VIC

Machinery and Equipment

1,521,946

1,109,943

37.12%

–

2107

2040

–

Johnson & Johnson

NSW

Pharmaceutical Products

1,382,263

1,298,038

6.49%

71,642

50,210

42.68%

1600

1450

Ansell

VIC

Natural Rubber Products

1,351,300

1,225,100

10.30%

136,800

130,000

5.23%

–

Bradken

NSW

Machinery and Equipment

1,332,022

1,458,098

-8.65%

66,937

100,533

-33.42%

5800

– 2000

Mars

Baiada Poultry

BOC

MA 1 2 1 3 _ 0 0 0 _ I F M1

VIC

NSW NSW

Other Food Products

1,311,448

0.00%

132,898

0.00%

2000

Poultry Processing

1,285,000

1,250,000

2.80%

–

Industrial Gas

1,244,795

1,632,386

-23.74%

281,376

703,766

-60.02%

–

2 0 1 3 - 1 1 - 1 5 T1 2 : 1 5 : 0 3 + 1 1 : 0 0

Did you know... We make more than you think!

20 DECEMBER 2013 Manufacturers’ Monthly

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manmonthly.com.au

MA1213_021.pdf

Page

27/11/13,

8:47:26

AEDT

Research by IBISWorld

RANKING Current

ENTERPRISE Company

State

YEAR’S REvENuE (’000)

Manufacturing Category

Current

NPAT (’000)

% Change

Current

EMPLOYEES % Change

Current

Previous 2604

James Hardie Industries

NSW

Cement, Lime, Plaster and Concrete Products

1,386,237

1,190,795

16.41%

47,388

578,315

-91.81%

2738

AstraZeneca

NSW

Pharmaceutical Products

1,242,467

1,339,143

-7.22%

75,807

131,307

-42.27%

876

916

Adelaide Brighton

Cement, Lime, Plaster and Concrete Products

1,185,900

1,112,800

6.57%

154,200

148,400

3.91%

1600

Frito-Lay Australia Holdings

NSW

Other Food Products

1,181,779

1,187,318

-0.47%

36,410

49,553

-26.52%

1916

2141

Simplot Australia

VIC

Food Products

1,165,877

1,166,795

-0.08%

26,383

45,305

-41.77%

2697

2444

Manildra Group

NSW

Food Products

1,150,000

1,100,000

4.55%

–

750

740

ResMed Holdings

NSW

Medical and Surgical Equipment

1,137,281

945,925

20.23%

280,307

214,429

30.72%

2367

1400 1313

Kimberly-Clark Pacific Holdings

NSW

Pharmaceutical Products

1,129,683

1,129,717

0.00%

77,736

-10,446

844.17%

1241

Duluxgroup

VIC

Paint and Coatings

1,088,461

1,064,507

2.25%

86,264

93,237

-7.48%

–

Hills Holdings

Fabricated Metal Products

1,034,170

1,084,811

-4.67%

-94,125

26,021

-461.73%

–

2642

Bega Cheese

NSW

Dairy Products

1,018,771

935,893

8.86%

25,445

17,534

45.12%

1629

1360

–

PMP

NSW

Printing and Printing Support Services

1,008,928

1,101,641

-8.42%

-69,743

-24,525

-184.38%

1587

2159

SunRice

NSW

Cereal, Pasta and Baking Mix

1,000,370

0.00%

33,911

0.00%

1858

Arnotts Biscuits Holdings

NSW

Biscuits

996,064

1,031,294

-3.42%

59,952

89,307

-32.87%

3600

4000

Philip Morris

VIC

Cigarette and Tobacco Products

983,682

909,514

8.15%

429,479

376,428

14.09%

705

–

Joy Global Australia Holding Company

NSW

Mining and Construction Machinery

979,745

721,211

35.85%

35,357

48,181

-26.62%

1670

1471 1606

Asahi Holdings

VIC

Beverage and Tobacco Products

977,881

814,856

20.01%

-46,720

5,058

-1023.69%

2075

Thales Australia

NSW

Measurement and Other Scientific Equipment

977,665

964,139

1.40%

44,683

33,877

31.90%

–

3300

ABB Australia

NSW

Machinery and Equipment

956,655

841,721

13.65%

20,922

23,004

-9.05%

1494

1378 3300

VIP Packaging

VIC

Basic Chemical and Chemical Products

952,000

986,000

-3.45%

–

3200

Parmalat Australia

QLD

Food Products

949,267

906,424

4.73%

38,473

35,543

8.24%

1427

–

Carter Holt Harvey Australia

NSW

Transport Equipment

937,139

980,812

-4.45%

-326,466

-181,733

-79.64%

1997

–

Pentair

NSW

Fabricated Metal Products

918,888

1,102,054

-16.62%

16,405

56,035

-70.72%

2471

2,471

Boeing Australia

NSW

Aircraft and Repair Services

907,370

1,038,309

-12.61%

61,558

40,201

53.13%

3188

–

PACCAR

VIC

Motor Vehicle

893,163

667,405

33.83%

112,637

69,381

62.35%

822

695

RCR Tomlinson

Machinery and Equipment

878,632

809,939

8.48%

37,324

27,275

36.84%

2655

2316

H J Heinz Company Australia

VIC

Food Products

870,060

1,170,253

-25.65%

-42,753

26,281

-262.68%

1208

1637

Owens-Illinois

VIC

Glass and Glass Products

869,600

1,091,300

-20.32%

-910,500

57,700

-1677.99%

1950

5800

–

Australian Consolidated Food Investments

NSW

Cured Meat and Smallgoods

851,205

–

-12,049

–

3350

–

ASC

Shipbuilding and Repair Services

803,768

699,784

14.86%

14,660

10,577

38.60%

2270

1059

Australian Paper

VIC

Pulp, Paper and Paperboard

777,204

791,746

-1.84%

-20,302

-40,915

50.38%

1377

1368

Norske Skog Industries Australia

NSW

Pulp, Paper and Paperboard

767,730

0.00%

10,438

0.00%

–

Aspen Asia Pacific

NSW

Pharmaceutical Products

762,599

287,681

165.08%

101,129

32,514

211.03%

823

–

Cochlear

NSW

Medical and Surgical Equipment

755,759

782,593

-3.43%

132,563

56,803

133.37%

2531

2390

Ridley

VIC

Prepared Animal and Bird Feed

736,571

0.00%

19,253

0.00%

961

Qenos Holdings

VIC

Basic Chemical and Chemical Products

705,026

0.00%

2,568

0.00%

722

–

Gunns

TAS

Log Sawmilling

702,937

680,554

3.29%

-355,486

28,498

-1347.41%

–

Bridgestone

Motor Vehicle Parts and Accessories

688,439

679,137

1.37%

14,996

21,739

-31.02%

–

Nippon Meat

NSW

Meat Processing

685,437

0.00%

-53,941

0.00%

1719

Austal

Other Transport Equipment

680,814

0.00%

11,043

0.00%

3237

–

AGC Australia

Fabricated Metal Products

632,033

561,621

12.54%

7,306

-100.00%

2500

2000

105

Weir Group (Australian Holdings)

NSW

Pumps and Compressors

618,852

518,396

19.38%

66,601

63,214

5.36%

1500

1139

Roche Products

NSW

Pharmaceutical Products

614,536

611,342

0.52%

22,776

25,016

-8.95%

357

338

Brickworks

NSW

Non-Metallic Mineral Products

614,342

556,911

10.31%

85,165

43,304

96.67%

1366

–

Merck Sharp & Dohme (Australia)

NSW

Pharmaceutical Products

612,075

0.00%

-2,763

0.00%

750

Nexans Australia

VIC

Electric Cable and Wire

611,515

554,221

10.34%

-17,616

-51,874

66.04%

700

906

GUD Holdings

VIC

Machinery and Equipment

597,035

609,935

-2.11%

31,464

92,762

-66.08%

1474

1590

Robert Bosch

Aristocrat Leisure

100

BASF

MA 1 2 1 3 _ 0 0 0 _ I F M2

VIC

NSW VIC

Automotive Electrical Component

588,874

0.00%

9,045

0.00%

1070

Gaming and Vending Machines

588,000

713,030

-17.54%

45,507

66,140

-31.20%

2135

2111

Basic Chemical and Chemical Products

582,995

535,591

8.85%

-4,749

-6,470

26.60%

–

437

2 0 1 3 - 1 1 - 1 5 T1 2 : 1 5 : 1 7 + 1 1 : 0 0

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Manufacturers’ Monthly DECEMBER 2013 21

MA1213_022.pdf

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AEDT

Insider SERIES Industry minister talks to Manufacturers’ Monthly Manufacturers’ Monthly’s Editor-at-Large, Alan Johnson, questioned manufacturing’s new industry minister, Ian MacFarlane, on the major issues facing industry going into 2014. Johnson: Australia’s manufacturing industry has been in decline for many years. What are your plans to slow or reverse that decline? MacFarlane: In 2012-13, the Australian manufacturing industry contributed $105.5bn to the Australian economy and employed around 950,000 people. Our Government is committed to working with Australian manufacturers to make our manufacturing industry globally competitive and a source of jobs growth and investment. We have appointed a Minister for Trade and Investment, Andrew Robb, to encourage direct investment in Australia and our industries. We will also: • Remove cost barriers for manufacturers by cutting red tape for businesses by $1bn per year. • Develop and implement Action Agendas to encourage investment in high growth manufacturing industries. • Introduce a $50m manufacturing transition grants programme. • Improve incentives for businesses to invest in technology, and research and development. • Build Australia’s manufacturing export base, by restoring funding to the Export Market Development Grants initiative with an initial $50m. • Create a level-playing field for Australian manufacturers by strengthening the anti-dumping regime and reviewing competition laws and frameworks. Johnson: The US has a number of strategies to reverse the decline of its manufacturing industry, one being its very successful ‘Buy America’ campaign. What are your thoughts on replicating that with a boosted ‘Australian Made’? MacFarlane: The Government is committed to building a stronger more productive and diverse economy. We will reduce red tape, cost and the regulatory burden imposed on industry. 22 DECEMBER 2013 Manufacturers’ Monthly

White Paper and work on a gas supply strategy for the East Coast gas market to the year 2020.

Although we encourage Australians to ‘buy Australian’, forcing companies to buy Australian (products) would increase costs with associated risks of reducing competition and moving projects offshore – MacFarlane. Although we encourage Australians to ‘buy Australian’, forcing companies to buy Australian would increase costs with associated risks of reducing competition and moving projects offshore. Johnson: Low-cost energy has been one of our industry’s strategic advantages, but that is changing. Many are calling for Australia to follow the US and Canada’s example and quarantine a percentage of our gas for domestic consumption. Your response? MacFarlane: The US and Canada do not actually reserve a percentage of domestically produced gas for local consumption, instead both countries apply an assessment of gas exports to ascertain if there is sufficient gas for the domestic markets, although, in the US, if a country has a free trade agreement, approval to export

is granted. However, neither country has declined an LNG export licence application or determined that LNG exports are not in their national interest. The Australian Government supports market based outcomes as the most effective way of stimulating investment to develop Australia’s gas reserves. Interventions such as reservation policies to force price or supply outcomes are more likely to impede than promote supply. The Government does not support a retrospective or blanket gas reservation policy, but one possible alternative would be an acreage system, where some of the gas from future investments and future projects could be set aside for domestic use. I’ll continue to consult with gas producers and consumers as the Government prepares a new Energy

Johnson: When it comes to our car industry, we have a very open market, but that’s not the same with our competitors. While they may have low import duties, our competitors have numerous ‘strategies’ to limit imported cars. How can we ensure we have a vibrant car industry – long term? MacFarlane: Australian consumers benefit from one of the most open and competitive automotive markets in the world, with more models available to local buyers than in the US and the UK. This open market, the high Australian dollar and relatively high manufacturing costs have created a challenging business environment for our automotive manufacturers. Yet, last financial year (2012-13) they exported $3.7bn of cars and components, a 6% increase on the previous year. As some economies apply ‘non-tariff measures’ to restrict the import of vehicles into their markets, the Australian Government is committed to pursuing an ambitious trade policy, particularly in the Asian region, which recognises the importance of dismantling barriers that restrict trade and investment. The Government has initiated a Productivity Commission inquiry into the Australian automotive manufacturing industry. The inquiry will ensure that any support for the local automotive manufacturing industry is accountable, transparent and targeted at the long-term sustainability of the industry. It will also provide the Government with the information necessary to provide policy certainty to the industry. Only when the Government has all the information, can any decisions or plans be made about the future of the automotive industry. I strongly encourage all stakeholders to provide a submission to the inquiry. manmonthly.com.au

FN1113_000_FER

2013-10-21T15:08:04+11:00

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MA1213_024.pdf

Page

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8:22:33

AEDT

Insider SERIES Manufacturers continue to be upbeat In spite of our volatile dollar, this year’s Endeavour Awards Manufacturer of the Year and major exporter, ANCA, remains positive. Alan Johnson reports.

ike most manufacturers, Pat Boland, director and co-founder of ANCA, the market-leading manufacturer of CNC tool grinders, is a half-glass-full type of person and remains cautiously optimistic going into 2014. “Our trends in the business are all slightly up, with our major market in the US going very strongly at the moment. “And while it has been very tough selling into China in recent years, our Asian sales have now plateaued and are now increasing, plus Europe is performing very well for us,” Boland told Manufacturers’ Monthly. He said he expects the team at ANCA will be very busy going into 2014. “As well as developing a new platform for our machines in our product development area, we will also be upgrading our ERP system and building a new European headquarters in Germany. “Plus there are a number of internal issues we have to get right over the next 12 months and then there’s the market and the currency. They are the major issues facing us in 2014,” Boland said. He readily admits that manufacturing in Australia is not easy. “It’s tough. When you look at the cost structure we have in Australia, unless you have a very high value niche product, it’s very difficult . “That’s one of the keys to our success; we do actually have a product. We are not selling a service or whatever, we have a product that we can sell and support and build our business around. “I think that is the core difference between ourselves and many others. The reason we can survive in this hostile high dollar environment is that we have a product in which we can invest R&D in and develop technologies that people want. “Our investment in innovation is a key part of our success, but fundamentally you need that. We have something around which to develop our technologies,” he said.

24 DECEMBER 2013 Manufacturers’ Monthly

It (the carbon tax) was a stupid, ill-thought out policy – Boland. Boland believes the reason many manufacturing companies have been closing their doors in recent years is because much of Australian industry is off-shore owned with absolutely no loyalty to manufacturing in Australia. “Often the future of an operation here comes down to a decision made in the boardrooms of Detroit or Stockholm, or wherever, with no sense that there might be a need for manufacturing support around their head office,” he said.

Carbon tax While Boland said the recent federal election and the change of government had no impact on the company’s future plans, he did say the scrapping the carbon tax was a minor positive for ANCA.

“I’m a significant believer in climate change, but I struggled to see how a government could introduce a policy that only applied to Australian manufacturers with no impact on imported goods. “The end result, if Australia reduces its carbon production to zero, would have been zero impact on the climate. “The only way to achieve a significant impact on the climate is by combined international cooperation, which is just not there. “Switching all our factories over would only have been a token gesture, with the rest of the world doing nothing. It was a stupid, ill-thought out policy,” Boland said. He explained that one of the biggest issues facing ANCA is the

volatile Australian dollar, with 99% of its revenue coming from off-shore. “The value of the Australian dollar has a huge impact on the company. This can’t be understated. “In fact, the dollar has a huge impact on every exporting business in Australia. “Our basic strategy is to build into our business as many natural hedges as possible. That was one of the major reasons for shifting some of our manufacturing off-shore. “The dollar is very volatile, we honestly don’t know where it will be in 2014. “In fact we deliberately have a policy of not knowing what the dollar is doing. It’s so unpredictable. Some are saying it’s going to fall in 2014, while others are talking about returning to parity,” Boland said. manmonthly.com.au

MM3606_EN_2014_FP.pdf

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MANUFACTURERS Nominations are now open for the 11th annual Manufacturers’ Monthly Endeavour Awards. Be apart of the national awards program that celebrates the industry and recognises and rewards manufacturing excellence. Join us for Australian Manufacturing’s night of nights by nominating your business or employees.

WHY NOMINATE?

• Exposure and publicity • Recognition for your hard-working team members • Valuable networking opportunities with key industry leaders

THE CATEGORIES ARE • Technology Application of the Year • Environmental Solution of the Year • Safety Scheme of the Year • Consumer/Trade Product of the Year • Industrial Product of the Year • Australian Steel Innovation Award • Global Integration Award • Exporter of the Year • Young Manufacturer of the Year • Lifetime Achievement Award • Most Innovative Manufacturing Company • Manufacturer of the Year

VISIT

www.manmonthly.com.au/awards For further information please email awards@manmonthly.com.au

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MA1213_026.pdf

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ManagementSTRATEGY Five lessons for manufacturers from the Electrolux Orange closure

As we all know, Electrolux will close its Orange factory in 2015 and, in so doing, put 500 locals out of work. According to Jason Furness*, there are some things we can learn from the operation’s demise.

26 DECEMBER 2013 Manufacturers’ Monthly

Boards want Growth Electrolux’s local business is very profitable. It is however in a mature market where just about every household has a fridge. The marketing approach being taken is defensive and basically one of defending the current position without innovating. The strategy has been to try and resist share and margin erosion rather than investing to enhance a strong position and growing further. It has been a “me too” strategy of being second to market. Boards want more than just a defensive strategy. They want to see high growth and through the closure of the plant in Orange are now sacrificing very good cash flow to position themselves for what they see as higher top line growth in the future in Asia. They intend to service this growth with local production and supply the established market from their Asian supply base.

Lesson: If you don’t have a marketing plan or mindset to continue to grow and innovate then you will be left behind.

Politics Matters In a corporate environment it is not enough to be good, even very good, in your performance. The Australian organisation is a tiny outpost in the corporate environment that is far from the centres of power, has no political allies internally, and therefore has no one to strongly support their case to the corporate decision makers. Its enemies were far better connected to promote their own interests and had the time to play the politics whilst the locals were building fridges. You have to perform at an outstanding level AND be able to manoeuvre through the politics, especially if you represent only a small and barely visible part of the empire. Lesser performing factories which

have greater political power will no doubt be reinvested in. Lesson: Being very good, even World Class does not guarantee success. You need to be absolutely World Class, and develop enough corporate clout to be able to influence the internal political issues in the corporation.

Play the Long Game Your operation must make money now, and have an eye firmly on the future. Any change you make that increases the structural cost base of the business needs to be carefully considered for its long term ramifications. Trading away flexibility, wage rises, any increase in input costs may be a slight issue now, but over five years or more these things add up and they can become a significant hurdle to overcome in your cost base in the future. The supposedly ongoing higher operating costs were cited manmonthly.com.au

MA1213_027.pdf

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AEDT

as one of the reasons for the decision. Lesson: Ruthlessly resist any increase in structural cost that does not have a clear and solid commercial benefit.

Measures Matter The decision taken has been referenced back to the cost of production between Thailand and Australia. Standard Cost Accounting was most likely used which can produce a skewed picture if it is not properly applied. What I am curious about is if a cash flow analysis of the two options was fully developed. In order to provide the same level of stock availability to the Australian customers the local Sales Company will have to store dramatically more stock, possibly six times more. This is a lot of money to tie up in cash. They will have to invest to expand their distribution centres to hold this stock. So while the cost of conversion cost of production may go down, many other costs may go up. Instead of having a factory that can change its production in line with the fluctuations in market demand, they will now have to forecast demand to a much higher level of accuracy than they can. No one does this well with seasonal products where the lead time to supply is far greater than the time frame in which the market demand can vary. So in addition to potentially non-existing cost savings, the end result could include stock outs and losses in market share. This is proven by their experience in supply chain management of other imported products. Lesson: Both alternatives need to be well developed and look at the cash impact of the alternatives. It is hard to go broke if you are choosing an option that maximises cash flow.

Strategy is Not a Reason to Lose Money Asia has a much lower market penetration for fridges and other manmonthly.com.au

500 will lose their jobs when Electrolux closes its Orange factory. (Image: Central Western Daily) white goods. It is a huge growth market that Electrolux has failed to build share, volume, and earnings in. They need to change that or they will be left behind as the Asian producers expand back into Electrolux’ traditional home markets in Europe and the US. Those home markets are flat and the company has failed to fix that problem. Asia is the focal point for growth. So that now appears to be their strategy. The purpose of any strategy is to give the decision makers a reference point for their decisions. I have never seen a strategy document where losing money was a key outcome. Investing in new markets and operations and budgeting for them to take a few years to begin to return funds to the shareholder is valid if you have a plan to win over that period. Sacrificing a cash cow whilst you build capability to support a growth market is just dumb. They are losing cash flow unnecessarily. They could easily build capability in Asia and continue to milk the cash cow in Australia. Tooling and equipment investment to run the two production sources will be very similar. Was this studied in great detail? Unlikely, but we will never know.

Lesson: Does your strategy maximise returns? Be ruthless in determining if your strategy is driven by returns or ideology.

In Conclusion, It’s now too late, it’s gone! All the hand-wringing, the tears, the demands by unions for ministers to get on planes and fly to Stockholm are a waste of time. The time for that energy and emotional commitment was two years ago, probably longer. When any organisation announces a review of the plant viability, they already have a preconceived preference of what outcome they are after: it’s only natural, we all have our preferences. The biggest lesson in all of this for any business, not just manufacturers, is that every day you need to get up and build your business to the highest level of performance that it can possibly be at. You need to use the brains of every employee, every book you can read, every external piece of expertise you can lay your hands on, and to never, ever, become content with the status quo. There is no such thing as status quo. While you may not notice the

Electrolux intends to supply the Asian market through its Asian supply base. changes from day-to-day, you are either going backward or moving forward. There is no in-between, so make sure you keep moving forward every day.

* Jason Furness is the CEO of Manufacturship, a training and consulting company that specialises in helping manufacturers boost their cash flow. He was the General Manager of Electrolux’s Orange plant from 2007- 2010 and led the team that took the plant from breakeven to a very profitable business in just 3 years. Manufacturers’ Monthly DECEMBER 2013 27

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Management STRATEGY

From strength to strength: manufacturing cluster helps members boost capability

Manufacturing is a significant employer in the southern Sydney area.

The Southern Strength Agile Manufacturing Network, a network covering businesses in the southern Sydney area, is proving that quite often there is strength in numbers. Brent Balinski reports.

28 DECEMBER 2013 Manufacturers’ Monthly

rom education to exchanging notes to being able to “say yes more” as a supplier, the benefits of clustering are wellknown. And for a little over two years, these have been among the goals of the Southern Strength Agile Manufacturing Network. “The analogy we use in a lot of our discussions is that Australis Engineering couldn’t build a train,” Peter Gustafson, managing director at Australis Engineering and a board member with Southern Strength, explained when asked of what a business could gain by joining the cluster. His own company, which specialises in areas including palletising, conveyor systems and materials handling solutions, would not be able to put together a strong case if a tender for a train was put

out. However, by joining forces with other local manufacturers, capabilities would be increased. “For example, we could build the wheels and somebody else could supply and manufacture an air conditioning system and somebody else can supply the upholstery for the seats, etc. etc. etc.” he told Manufacturers’ Monthly. “And if a tender came out for a train we wouldn’t be able to do it. But by being in the network with other manufacturers it gives us the opportunity to be able to participate in that kind of work. So obviously that’s a fictitious analogy, but that’s the concept.” The southern Sydney region that the Southern Strength network serves counts manufacturing as one of its most important sectors. Sutherland Shire Council

area counts the industry as its third-biggest employer, following retail trade (beefed up by hubs at Miranda, Caringbah and Cronulla) and Health Care & Social Assistance. It’s even more important in the Bankstown Local Government Area, where manufacturing is the main employer. According to the most recent census figures, it provides jobs to 23.1 per cent of the local population. Manufacturing is so important to both LGAs, that both Councils are members of the Network and Sutherland Council is also represented on the Board, said Gustafson. What Southern Strength hopes to do with the huge concentration of local manufacturers is to support them through things such as increasing opportunities as suppliers, manmonthly.com.au

area.

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boost their business education, and help them share their own hard-earned wisdom with each other. “Southern Strength provides a sounding board for people in the SME space”, the group’s chairman, Steve Atherton (who is also CEO of Air Change Australia), told Manufacturers’ Monthly. “There is an opportunity for some business-to-business, which has happened, and an ability to source products from companies at competitive rates,” he said. Regular presentations from corporate clients and business management experts with advice on how to earn more contracts and be innovative in business are also features. “Recently we had the procurement officer from Caltex attend a meeting to tell us of upcoming opportunities where Caltex believe they have capacity issues,” said Gustafson. Defence has also emerged as an area where local business has opportunities, with many members having past or current defence industry supply capabilities. Former head of Defence Lieutenant General (Retired) Ken Gillespie has presented to the group on how defence industries seek out and encourage clusters in order to create efficiencies in R&D and product development. “And one of the things we identified during his presentation was a large number of our members have a defence track record,” noted Gustafson, who states that the defence segment will be a large part of the group’s plans for 2014. He eagerly added, “We’ve got confirmation that Thales and BAE Systems will also come and address our members to discuss the capacity constraints they have in their supply chain and how our members can benefit.” Local educational institutions have also been heavily involved, Atherton pointed out. “We have had presentations from a couple of universities and TAFEs and certainly for 2014 we recognise we need to do more of that,” he said. “And we do have some great facilities in the local area south of Sydney, we’ve got UTS, we’ve Uni of NSW and Western Sydney, as well as Wollongong University, which have presented to us.” manmonthly.com.au

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Peter Gustafson, managing director at Australis Engineering and a board member with Southern Strength.

Gustafson also says that partnering with these local educational institutions is key to any future development of a Defence Hub for the area and so fostering these relationships is a key outcome for the Network as it continues to grow. A significant portion of the group’s current members work in metal related industries, though the cluster is open to all types of manufacturers. “We are on a membership drive,” said Atherton, and we are calling upon any manufacturing business located in southern Sydney to join the network and build upon our capability areas. “Increasing our membership is important because it will provide a critical mass that will encourage more potential corporate clients – the ones such as Caltex, Thales and BAE to come directly to the Network members to discuss their procurement needs.” Southern Strength is also open to local non-manufacturers offering professional services to manufacturing businesses. In theory, even out-of-towners could join. “We’ve not said no to anybody,” said Atherton. “We’re generally from southern Sydney and most of our functions are in southern Sydney, and we’re aware that there’s another manufacturing cluster in Wollongong and there’s another one in Newcastle and in western Sydney, so we tend to try to use the southern geographical area as our hub.” Manufacturers’ Monthly DECEMBER 2013 29

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What’sNew see more new products at manmonthly.com.au

Fall protection equipment CApiTAl safety has released the DBisala Kernmantle rope pole strap range of fall protection equipment for work positioning, restraint and assisted climbing. Constructed from hi-vis yellow kernmantle rope for easy identification and added visual safety, the rope pole strap is available in various lengths with a variety of connector configurations including double or triple action for easy connection to the user’s harness, and include a heavy duty integral woven polyester wear sleeve that provides abrasion resistance and extends product life. The range features fully compatible hardware with 16kN gate strength on all hooks to remove the risk of accidental disengagement from excessive gate loadings and forced roll-out.

The rope pole strap range features fully compatible hardware with 16kN gate strength on all hooks. DBi-sala’s i-safe intelligent safety system utilising RFiD technology is built into each pole strap to track inspections, control inventory and manage information. Capital Safety 1800 245 002 www.capitalsafety.com.au

Integrated scanner improves voice picking efficiencies WhEN Dematic’s new scanning-capable Talkman A700 series is combined with Vocollect’s recently released Talkman sRX2 headset, the wide-ranging productivity and performance improvements are said to be substantial, offering an ROi of 12 months or less. With the new A700 series voice computers supporting an optional imaging unit, the Talkman A730 combines the power of voice with flexible Dematic’s new scanning-capable Talkman A700 Series. scanning functionality. The scanner can be used hands-free for applications like inducting conventional RF terminals – operator totes or gathering information for product comfort is said to be substantially traceability, or the wearable voice improved. computer can be quickly removed from Operator start-up is also said to its holster and used like a conventional be improved, with the A700 series hand-held scanner when required. supporting ‘touch pairing’; now all As well as eliminating the cost of operators have to do to pair the Talkman equipping and supporting a picker sRX2 headset to their voice computer with a conventional RF terminal and is to lightly tap the two items together to scanner, the time operators normally link them, and they can begin working spend picking up and putting down RF immediately. terminals and scanners is eliminated. Dematic And – because it is wireless and 02 9486 5555 around one-third smaller and lighter than www.realtimelogistics.com.au 30 DECEMBER 2013 Manufacturers’ Monthly

Discharger dust hood This dust hood for Flexicon bulk bag dischargers contains spillage and dust that can escape through seams in the bag and folds in the spout. The enclosure contains incidental leakage of fine powders from seams in the bag, as well as material released from bag spout folds during connection and disconnection activities. Constructed of stainless The discharger dust hood contains bag spout steel finished to food, leaks and spills. pharmaceutical and industrial standards, the Dust hood is offered on all Flexicon dischargers, including models requiring forklift loading of bulk bags. it is also offered on models that load bags using an electric hoist and trolley, half-frame dischargers that require a forklift or plant hoist, and split-frame dischargers for forklift loading of bags in low headroom areas. All can be integrated with the company’s mechanical, pneumatic and tubular cable/disc conveyor systems, and are available with controls for automated weigh batching directly from bulk bags. Flexicon 07 3879 4180 www.flexicon.com.au

Fuel cells as back-up power source EhM solutions has released the Roamio performer p250i, a back-up power source for critical, remote applications. Employing solid oxide fuel cell technology, the device provides dependable, portable power using readily accessible fuel. The fuel cells are said to integrate seamlessly with grid, generator, battery, wind or solar power to deliver the assurance needed that critical applications will run, uninterrupted, when other power sources fail. The fuel cells are designed to work in the sun, rain, hot, cold, blowing sand, snow, or wind, providing power for inaccessible, remote, or hazardous locations. Applications include remote security, meteorological stations, data collection and monitoring, pipeline monitoring and protection, telecommunications, primary power for oil and gas wellhead monitoring and site communications. EHM Solutions 0423 316 358

The fuel cells are designed to work in all weather conditions, providing power for inaccessible, remote, or hazardous locations. manmonthly.com.au

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Brought to you by

Heavy-duty LED lights ThE Banner Engineering WlC90 and WlC60 heavy-Duty lED lights are designed to withstand high-pressure washdown and exposure to oils and coolants; and are ideal for use in harsh environments. They are suitable for food and beverage processing, machining centres and general industrial automation. There are several lens options and three discrete levels of intensity which are selected via wiring connections. An optional pan and tilt stainless steel mounting bracket adds versatility to the design and allows the light to be directed in any direction. Featuring a conservative mechanical design and state-of-the-art lED technology, the WlC60 protects against liquid ingress, while delivering best-in-class brightness. Available in two different lengths, 340 or 640 mm, it features four energy efficient dimming states to tailor the brightness and power consumption to the specific application. For enhanced chemical and thermal resistance, both lED lights feature durable polycarbonate window or borosilicate glass (BSG)Mconfigurations. A 1 1 1 3 _ 0The 2 7lights _ Nalso O R offer 1 iP68, iP68g and iP69K ratings.

Updated thermal imaging cameras Flir Systems has launched its new Exx series of thermal imaging cameras. The series offers industrial professionals an affordable, yet ergonomic and feature-rich camera which is said to speed up electrical and mechanical inspections. The imaging cameras are equipped with Meterlink and Bluetooth connections that allow for fast accurate inspections. Connecting thermal imaging cameras with other devices or measurement tools allows for easy information exchange with customers or colleagues. That is why the Flir Meterlink technology allows users to save time by transferring, via Bluetooth, the data acquired by an Extech clamp meter or multifunction moisture meter The LED lights may be used in harsh into the cameras. environments. in addition, the cameras can transfer images wirelessly to a smart phone or tablet PC. The lEDs are available with a variety And they have an auto-orientation feature, which of mounting options, including magnetic means that they automatically adjust the measurement mount, daisy-chain power and rear or side information on the display to their vertical or horizontal connector. position. Micromax FLIR Systems Australia 1300 564 230 2 0 1 3 - 1 0 - 2 1 T 1 5 : 11300 0 : 322 5 3536 + 1 1 : 0 0 www.micromaxsa.com.au www.flir.com

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What’sNEW Storage and handling system

The module is intended to reduce burnthrough.

Welding module The Power Wave Advanced Module, available from Lincoln electric Australia, is intended to increase flexibility for manufacturers by expanding their welding capabilities. The module has alternating current (AC) welding capability to run aluminium processes. The new welding system module performs several welding processes, including shielded metal arc, metal inert gas (MIG), pulsed MIG, tungstenelectrode inert gas (TIG) and Surface Tension Transfer (STT). STT is a controlled MIG short circuit transfer process that uses current controls to adjust the heat independent of wire feed speed. According to the company, STT results in improved arc welding performance, good penetration, low heat input control and reduced spatter and fumes. With STT welding capability, the module can also help welding open root gaps with high frequency inverter technology. According to the company, the module reduces burn-through and increases wire feed speed and cleaning. Also, it incorporates a high frequency starting mode that can be controlled at the wire feeder or power source user interface. The careful use of high frequency starting can improve the appearance of TIG welding arc starts and helps to reduce contamination caused by scratch starts. Lincoln Electric Australia 1300 728 720 www.lincolnelectric.com.au 32 DECEMBER 2013 Manufacturers’ Monthly

The Stak System pallet-based storage and handling system is based on a system of dynamically adjustable pallets (rather than fixed shelves) and a captive lifting and handling device. It is intended to help maximize storage density by minimizing the vertical space requirements of each stored pallet and its contents. ergonomically designed, the system is fully modular, with add on bays that allow it to grow as your capacity needs do. Loaded pallets are removed and replaced by guiding the mast to a new position, where the pallets can then be easily extracted. The handling device also manoeuvres on four axes, creating 360° flexibility and allowing for simple, intuitive positioning. In addition, it uses easy-to-learn controls that do not require a license or certification to operate. For the storage, staging, and retrieval of 55-gallon hazardous material drums, the company also offers the hazMat STAK System. The system can be further customized with a variety of pallet styles and sizes, such as tyre, barrel, or reel storage

The system may be customized. pallets, as well as options like Cantilever overhang, safety mesh, or a motorized bridge.

Lista 1300 858 931 www.lista.net.au

Phased array flaw detectors The newest member of the OmniScan family of phased array (PA) flaw detectors, the OmniScan SX, has been introduced to the Australian market by Olympus. The PA instruments produce high speed, detailed cross-sectional pictures of internal structures. PA technology uses multiple ultrasonic elements and electronic time delays to create beams that can be steered, scanned, swept, and focused electronically for fast multiple angle inspections. They also provide full data storage for further analysis. OmniPC is the latest analysis suite and The SetupBuilder software is used to create inspection setups based on the configuration of the component or part to be inspected. This can be programmed offline on a computer and then downloaded to the OmniScan SX unit. According to the company, phased array has a wide range of applications, including the inspection of welds for hDPe gas pipelines.

Checking the structural integrity of a turbine driveshaft using the Olympus OmniScan SX. The OmniScan SX features a 21cm touch screen for displaying the userfriendly and streamlined software interface. The intuitive interface provides smooth menu selection, zooming, gate

adjustments, cursor movements, and text and value input. Olympus (03) 9265 5467 www.olympus-ims.com manmonthly.com.au

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Brought to you by

Temperature sensor with integrated resistance temperature detector Turck’s Ts530 temperature sensor is the latest addition to the company’s temperature sensor line. Featuring an integrated resistance temperature detector (rTD), it combines the display, process connection and rTD all in a single part for fast and reliable performance. simple, push-button programming and large, highly visible LED displays are intended to provide easy operation, while a unique rotatable display that can turn up to 340 degrees allows for flexible viewing in the field. The sensor also sends feedback to a PLc, allowing operators to monitor measurement performance from virtually any location. According to the company, given that the display, control, process connection and rTD are all in a single part, the sensor streamlines temperature measurement for diverse applications. The temperature sensor features a new design for easy mounting and installation. It canMbe directly A mounted 1 1 1 3 _ 0 3 7to_aBtank I Nor pipe with no mounting bracket required.

The sensor is intended as an all-in-one measurement solution. To do so it uses a 1/2NPT process connection. The sensor meets IP69k protection ratings and can operate in temperatures ranging from -50 to 150 degrees celsius. Turck Australia 1 2 0 1 3 - 1 0 - 2 3 T 11300 1 :273 0 687 3 : www.turck.com

Colour label printer for wide labels QuIckLAbEL systems has released the kiaro! 200, a widewidth inkjet colour label printer designed to meet the short-run labelling needs of manufacturers of large products in the chemical, dietary supplement, and food industries. The label printer produces labels up to 203.2 mm wide and 431.8 mm long, and operates at 8 inches per second. It joins the standard label printer in the range, which prints labels from 25.4mm to 101.6 mm in width. According to the company, it produces labels of consistent quality in 1200 dpi high The label printers are easy to use. resolution. The label printer automatically detects when it needs to be cleaned and performs automatic cleanings without wasting any excess labels. It can print on several substrates including gloss paper and polypropylene. The label printer is easy to use, operate and set up. Its print drivers are compatible with all major labelling software including QuickLabel’s included custom QuickLabel and third-party software. Metromatics 1300 589 932 0 0 + 1 1 : 0 0 www.metromatics.com.au

EWR. Weld more efficiently Maximise your cost savings! Optimal use of all resources is essential for an economic and efficient welding process, be it manual or robotic. However, options for shielding gas consumption are often given too little consideration. The EWR (Electronic Welding Regulator) system can save up to 60% of shielding gas and at the same time provide superior gas coverage during the welding process.

Manufacturers’ Monthly DECEMBER 2013 33

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What’sNEW Screw compressors

The simulation tool helps the decision-making process.

Simulation tool for automation processes Krauss Maffei has developed an animated simulation tool that is designed to allow customers to visualise complex automation processes. The tool allows users, via a computer, to visualise complete production processes with injection moulding machines and automation, as well as individual processes, such as part de-moulding. The idea of the tool is to help users M A 1 decide 2 1 3 which _ 0 0 solution 0 _ P RtoOuse . pd when using different processes.

It also offers numerous advantages when commissioning a production line, as it can be used in the preliminary stages to check the existing processes between machine and automation and simulate expansion options. The simulation is available as an animated, interactive simulation in the form of a PDF file. HBM Plastics and Packaging Technologies f P a g e 1 8 / 1 1 /1300 1 3903 , 9631 www.hbm.com.au

Now available in australia, Hitachi’s 55kw oil-lubricated screw compressors add to the (11 kw - 37 kw) range released earlier this year. The screw compressors offer a number of energy saving features, including VsD, multiple staging, magnetic rotor, inverter driven cooling fan and lower oil usage. Consumable parts can be accessed simply via The screw compressors the front door, making offer energy saving features. periodical maintenance easy. In addition, the compressors and they can operate in so-called have a long maintenance cycle – six Ecomode, which automatically reduces to eight years between major cut-out pressure to further reduce power services. consumption. The osP-55kw model has direct The units offer further energy saving coupling drive for V-type (Variable speed) options such as schedule operation, and gear drive for M-type (fixed speed), (allowing users to have two pressure eliminating the need for belt replacement settings for day and night), Lead-Lag, and tension adjustment. and Dual operation modes. Fixed speed compressors have loadHurll Nu-Way 1300 556 380 0 unload : 0 8 capacity : 0 9 control, A M Aallowing E D T for energy savings. www.hnw.com.au

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Effective Cutting Width: 2.0 - 8.0m Effective Cutting Length: Inﬁnite Fabricated longitudinal rails with 60mm Machined hardened billet Integrated active rail cleaning system Extensive range of custom options Machine shown is optioned with EHD category, 10HP multi spindle drill and plasma bevel.

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Brought to you by

Simulation and analysis software

Draft range pressure transmitter

FemAP 11, the latest version Bestech Australia has partnered of siemens’ Femap software with Validyne engineering in providing is intended to increase low to ultra-low differential pressure engineering productivity. transducers and transmitters. Due to enhancements in the Validyne DR800 Draft Range data handling and graphic Pressure transmitter is designed for performance, the software low pressure measurements. It has a increases engineering ‘true’ full-scale range as low as ±0.25” productivity in product h2O, making it suitable for air flow development simulation and control applications. analysis. the device has an adjustable scale, According to the company, able to go to as low as ±0.1” and in this version data’s speed ±100”. It offers a 0.5% accuracy and access is increased by up to operates in temperature range of -29°c twenty five times and memory to +85°c. usage is cut by up to 80 the transmitter has simplified the percent. these factors result zero and span adjustments and uses a in a smaller more manageable programmable circuit board jumper in model file. unison with a 20-turn potentiometer to The software features improved graphic performance. In addition, dynamic rotation ensure the zero adjustment performs of large, complex models is optimally. said to be at least five times faster underlying geometry is available. this It has an input range of 12 to 45VDc The transmitter is ideal for low pressure measurements. than in the previous version. enhancement is intended to simplify and has a protection for reverse polarity the software is a contributor to siemen’s modification and enable legacy finite and short circuits. It is a true two-wire product lifecycle management (PLm) element models that previously took hours system, and has a standard output of 4-20mA. the zero and span adjustment software business unit. to update to be done in minutes. potentiometers are tamper proof as they are protected by a cover plate. It creates further engineering productivity Edge PLM Software Bestech Australia support 1300 209 261 M Athrough 1 2 1 3the_ creation 0 0 0 _ofPgeometry I E 1 2 0 1 3 - 1 1 - 1 5 T 1 5 :1300 4 5883 : 653 2 5 + 1 1 : 0 0 from a finite element mesh when no www.edgeplm.com.au www.bestech.com.au

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Manufacturers’ Monthly DECEMBER 2013 35

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Research& DEVELOPMENT R&D difficulties in Australia Held late October, the Productivity, Process and Innovation conference assembled a host of experts to address the key challenges facing the industry. Brent Balinski took notes regarding what a panel discussion, titled “Challenges in Australian Productivity”, had to say about the challenges of innovation.

“

Australian manufacturing is unique,” explained Innes Willox, CEO of the Ai Group, at the recent German-Australian Chamber of Industry and Commerce event in Melbourne. “40 per cent of our manufacturers within Australia employ less than 10 people. They’re microbusinesses, and usually family-owned businesses.” At a panel of the industry leaders, the unique set of conditions the country’s manufacturers exist in was considered, with difficulties as well as opportunities considered. Early on, and perhaps fittingly, Australia’s preponderance of microbusinesses came up, along with their lack of strong links with research institutions. Fittingly due to the contrast with Germany and its envied Mittelstand - which makes up the overwhelming bulk of Germany’s firms and its overall employment. Australia, in comparison, has what’s been termed a “missing middle”. Where the Mittelstand is heavily R&D-focussed and has successful links with local universities, Australia’s manufacturing micro-businesses have struggled to develop associations with researchers. “And they don’t have often the time, or the scale, or the interest, or the ability to make those broader connections to deepen their interaction with other companies and research institutions such as universities, the CSIRO, NICTA and the like,” said Willox. “We did some work last year that found only five per cent of Australian companies had any sort of active collaboration with a publiclyfunded research institution. Which is a disastrously low figure.” Albert Goller, chairman of the Manufacturing Excellent Taskforce 36 DECEMBER 2013 Manufacturers’ Monthly

Australia and former managing director of Siemens in Australia, agreed that there were challenges of trust and awareness for smaller manufacturers, as well as a lack of focus on producing commercially useful research at universities. “When you try to find a university in a particular area and you are a small or medium enterprise, it’s very hard for you to find the university that might help you,” he said, adding that this was of particular concern for META and its members. “It seems to me that our universities have only one measurement and that’s really their achievements in terms of research, and that’s an incentive, that’s how they get their funding, and there is absolutely no incentive, no KPI in terms of interaction with industry, which I think is a challenge we have. “So for us it’s really a very, very big effort to bring universities closer to business.”

Australia’s tertiary education standards are respected, with five universities in the global top 100 rankings this year. However, studies such as the Global Innovation Index (placing Australia 19th, behind other developed countries such as Canada, New Zealand and South Korea) and the Deloitte Global Manufacturing Competitiveness Index have suggested that there’s room for improvement when it comes to linking researchers with manufacturers’ needs. So where are Australian companies getting their innovation from? “It’s usually from other companies, from competitors, the other companies down the street, basically,” said Willox. “So we have to find ways within Australia to build trust between research institutions and business. And this is a big thing that we’re pushing at the moment through

Innovation Australia [whose board] I sit on. “Research institutions are funded on the basis of research - a lot of emphasis on the R, rather than the D. There’s not a lot of focus on commercialisation, that sort of dirty stuff that people who are profiteers do.” And with the costs of doing business in Australia (as in Germany) high, the need to be competitive through smarts rather than costs is essential, the panel agreed. Jackie Taranto, managing director of Hannover Fairs Australia, suggested that open source manufacturing and co-creation among communities could help drive innovation, citing US company Local Motors. “[Founder Jay Rogers] actually set up an automotive company after he came back from Iraq, specialising in using that open manmonthly.com.au

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source platform to create a vehicle, which he has demonstrated into military use,” she said. “This is something you’d think in the US would not be able to be started from scratch in this day and age. And it just shows the opportunities in leveraging that open source and open collaboration globally. And I think what I’ve seen - not just from the German aspect but in that global perspective - I think that’s where it’s going. And it’s driven by young entrepreneurs. Everything’s driven by tech. You’ve got to be fast.” For one established company operating in Australia, the German industrial lubricants specialist Fuchs, investing heavily in local R&D had to wait. With a presence in Australia dating back many years (over 100 if you count the Steel Improvement Company, an Australian business which it acquired total ownership of in 1989 and which was established M back A 1 2as 1 1911) 3 _ 0 it 0 was 0 _ N ED as far some time before Fuchs eventually

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(From left to right) Wayne Hoiles, managing director, Fuchs Lubricants (Australasia); Jeff Connolly, CEO, Siemens Australia; Albert Goller, chairman, META. opened its Regional Lubricant region - was opened, local R&D Laboratory and Technical Centre in consisted largely of adapting Victoria in 2011. technology conceived elsewhere to Wayne Hoiles, the Australian Australian demands. managing director of Fuchs, “Over a period of time as we Pexplained a g e 1that2 before 0 1 3 -the 1 1Victorian - 0 6 T 1 5 developed : 4 5 : 1 8 + 1got 1 :bigger 0 0 we and lab - which serves the Asia-Pacific then started finding gaps within

the Fuchs network and its R&D activities and we found there were a couple of gaps locally, particularly in the mining sector, where in the rest of the world they’re not really present but in Australia we have a need for a particular product group,” explained Hoiles. “So over time we got our business quite stable, quite profitable, and then we were allowed to get R&D money. We built a new laboratory, we added expansions in our plant. And then we started doing our R&D activities here. And we’re still in the process of doing the R&D activities as part of the global R&D. “So we’ve been able to generate investment here and do that R&D and over a period of time we saw developments here move to South Africa and China and other countries as well.” * Manufacturers’ Monthly attended Productivity, Process and Innovation as a guest of the German-Australian Chamber of Industry and Commerce who also supplied the event photo.

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Shaker mechanism cleaning process

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  

Easy maintenance

Integral fans up to 15 kW

     

Explosion relief St1, St2 or St3 available

      

Large range of flows available from 500 to10,500 m3/hr Clean air access to filter bags Range of base options includes wheelie bin, slide gates and rotary valves. Explosion vent options, side, rear or top Suitable for negative or positive pressure Flexible configuration Sack tipping unit available Open base venting unit available

www.nederman.com.au manmonthly.com.au

Silenced operation Vertical or Horizontal clean air discharges available Dual fans available External mount fan option available Weather lip over door to protect door seal Heavy duty 2 mm steel doors Multiple Starter / Control options Control options include: Automatic shut off timer VSD integration

 Pre-separation chamber option available  Bin balance option available Contact us today: ph: 03 8720 3700 email: csg@nederman.com.au Manufacturers’ Monthly DECEMBER 2013 37

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Warehousing& STORAGE Mammut raises logistics performance with new DC Dematic was given the task of designing an intelligent logistics solution for the Iconic Swiss Alpine sports outfitter’s new distribution centre.

The RapidStore replenishment warehouse.

ammut recently celebrated its 150th anniversary with a new 25 million Euro distribution centre (DC) at Wolfertschwenden in Germany’s Allgäu region, 15km south of Memmingen. In the mid-90s, Mammut had a turnover of around 30 million Euros. Today Mammut’s turnover is more than 185 million Euros. Accordingly, its logistics requirements have increased substantially over the years, with the company’s distribution centre (DC) already having to move twice since its German business was established in 1987. Mammut previously operated two main warehouses in Europe – one at Seon in Switzerland and one at Memmingen in Germany. “By 2009 it became clear our warehouses were too small and we started investigating a new central distribution location in Europe,” explained MSG’s Chief Supply Chain Officer, Josef Lingg. “Since about 70% of our turnover is generated in the EU, we opted for a location directly on the A7 in

38 DECEMBER 2013 Manufacturers’ Monthly

Germany. In addition to locating the DC on an optimal traffic route for distribution and its proximity to Switzerland, the availability of our experienced logistics staff in Memmingen was an important factor,” he said. In late 2009/early 2010 Mammut began working on a concept for a new manually-operated DC, which included renting a three-floor, multifunctional logistics building with a total area of 38,000m². However, projected high operating costs for the DC forced Mammut to revisit the concept before proceeding.

A cost-saving, intelligent logistics solution In March 2010 Dematic was given the task of checking the manual concept against part or full automation. “Dematic has earned a good reputation in warehouse technology with excellent order picking and handling services, and presently justifies its market lead in the area of shuttle technology,” said Mr Lingg. Dematic analysed Mammut’s

Within the Multishuttle picking warehouse put-away and retrieval can be handled simultaneously on different levels. inventory and order profiles during average and peak seasons, forecast turnover and volume growth up to 2015, and also took into account Mammut’s desire to pick and pack according to item type. A new logistics concept was developed with a highly automated solution clearly delivering the optimum combination of return on investment (ROI), performance and operating costs. Dematic’s automated DC concept reduced the space required for the new DC from 160,000m³ to 130,000m³, which enabled Mammut

to lower the total investment in buildings and logistics from 27.5 to 25 million Euros. “Construction costs could also be reduced from 22.5 million Euros to 15 million Euros,” added Lingg. As well as reducing fixed costs, Dematic’s automated DC concept also significantly reduced operating and labour costs. Dematic’s solution also minimises energy use, with only minimal heating and lighting required in the 90,000m³ Multishuttle warehouse. From signing the contract in May 2011 to the scheduled manmonthly.com.au

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commencement of operations on November 1, 2012, Dematic only had 17 months in which to implement the new DC.

A chance to refresh the supply chain Mammut took the opportunity presented by building the new DC to optimise its entire supply chain and, with its suppliers, to implement a new uniform packaging concept. Cartons with snap-on lids in two basic sizes – small (400x600mm) and large (800x600mm) – are geared to the new system, eliminating the need for trays or bins. After picking, the cartons can also be reused for shipping, saving around 200,000 cartons per annum.

Key elements of the DC include: Inbound goods: Stock is typically received in shipping containers and unloaded onto a telescopic conveyor, where carton weights are automatically checked for accuracy. RapidStore replenishment warehouse: All cartons are initially stored in the six-aisle, 140,000 bay replenishment warehouse, which has a total of six RapidStore SRMs capable of handling two small cartons at a time, and can store or retrieve cartons up to three deep per bay. Items required for picking are moved from here into the Multishuttle warehouse. The warehouse is also utilised as temporary storage for pre-labelled customer cartons, which can be cross-docked directly to the shipping area. Multishuttle picking warehouse: The heart of Mammut’s new DC is the four-aisle Multishuttle picking warehouse with 12 storage levels providing a total of 20,000 bays. Each storage level has its own shuttle and each aisle has its own lift, so that put-away and retrieval can be handled simultaneously on different levels, with up to 600 double cycles per aisle per hour. A feature of the system is the first use of Dematic’s new lighter, faster and more economical Multishuttle 2. “As a result of the new control, communication and sensor concept, the Multishuttle 2 can process the cartons directly without the manmonthly.com.au

Mammut’s new 25 million Euro distribution centre in Germany. use of additional trays, and this was an important requirement for Mammut,” said Dematic’s Project Manager, Udo Rogowsky. Within the Multishuttle system, only items required for orders are kept in stock, which enables the system to be half the height of the replenishment warehouse. Because of this it was possible to house the Multishuttle system on the upper floor, enabling additional space on the ground floor to be kept free for inbound goods and shipping functions. Inventory staging buffer: A sequencing tower pre-sorts cartons from the Multishuttle system and conveys them in the required order assembly sequence to nearby order picking stations. “This enables heavy items to be sorted first and then the sorting of clothes according to size and colour, so that they are shelf-ready when they arrive at the store,” said Mr Rogowsky. Goods-to-Person (GTP) picking: With the aid of a pick-to-light (PTL) system, up to three orders can be processed simultaneously at each of the four order picking stations. PTL displays indicate how many items must be removed from each carton and put to the relevant orders. Approximately 400 order lines with an average of three items per line can be processed at each picking station each hour. Value-added services stations:

Some orders must be processed at the value-added services stations, which are situated beside the picking stations and are connected to the conveyor system. Here special tags or customised label sizes and label designs are attached to the goods, coat-hangers are removed or special cartons used. Packing stations: Orders received by 1.00pm are processed the same day and assembled for shipping. From the picking station, the order goes down by lift to four packing stations on the ground floor. Here the operators insert consignment notes and other shipping documents into the cartons, and label the sealed cartons. Outbound goods: Cartons are then either conveyed to a palletising station to be shipped by a freight contractor, or to one of two telescopic conveyors in the outbound area for packages going to Germany and Switzerland.

Dematic system scores top marks Dematic’s Material Flow Controller (MFC) receives transport orders from Mammut’s Warehouse Management System (WMS), calculates the route distances, and generates and manages transport orders according to priority, sequence and status. In addition, MFC controls the conveyor system and manages system operation, with any bottlenecks, disruptions and

Dematic developed a new logistics concept for the DC. system capacity issues considered when orders are issued. Dematic’s Logistics Cockpit gives the warehouse manager information about the current state of the entire system, and provides the necessary tools to supervise the processes and functions efficiently. Commenting on Dematic’s performance Mammut’s Chief Supply Chain Officer, Josef Lingg, said: “It was a great achievement that we could actually start operations with such a complex project on the exact date. Dematic for us is not only a supplier, but a long-term strategic and fundamentally important partner.” Manufacturers’ Monthly DECEMBER 2013 39

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INDUSTRY REPORT # C1133c :

BUTTER AND DAIRY PRODUCT MANUFACTURING IN AUSTRALIA

WHO’S REALLY MILKING IT? The industry generates about $3.8 billion in revenue annually.

The top four players account for about 70% of industry revenue.

Almost 50% of dairy is produced in Victoria, the largest dairy exporting state.

Fonterra Co-operative Group Limited is the largest player (37.3% market share), followed by Murray Goulburn Co-operative Co Limited (23%).

The primary products manufactured are butter products, yoghurt, condensed milk, cassin and whey powder.

Exports account for nearly 20% of industry revenue.

Australia produces about 120 kilotonnes of butter and 162 kilotonnes of yoghurt each year.

With 1000s of industry and company reports, constantly updated, you’ll find the answer at IBISWorld — whatever the question. www.ibisworld.com.au