Manufacturers' Monthly - Apr 2017 by Prime Creative Media

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MANAGEMENT >> TECHNOLOGY >> SOLUTIONS

APRIL 2017

Powerful Brands. Breakthrough Solutions.

STANLEY Engineered Fastening For many decades, STANLEY Engineered Fastening has been revolutionising fastening and assembly technologies in the oil, gas and mining industries. STANLEY Engineered Fastening, has a number of locations close to our customers worldwide.

A True Partner Our close customer relationships allow for early involvement in the design and development of new projects and programs. From the very beginning of the design process, we are a true partner with our customers, ensuring that the fastener selection, installation method, and assembly layout are optimized prior to the start of production. This also guarantees that fastening will not be an issue when it comes time for product assembly. Our extensive field service network is there to ensure rapid onsite response to any customer issue.

Cost-Effective Process In addition to developing fasteners that uniquely resolve assembly issues, STANLEY Engineered Fastening also provides an extremely cost-effective tooling and installation process. In some cases, we will take full responsibility for the complete design of the entire assembly process. Our emphasis on a total fastening system ensures that a customer's "in place" assembly cost is driven to an absolute minimum.

No Guesswork...Just Safety! Direct Tension Indicating Fasteners l Visual indication – faster inspection time. l Measures tension – the critical factor to determine joint tightness and clamp load. l Completely re-usable.

The Edge is in the Wedge! Superior resistance to vibration loosening l l l l

Improved joint integrity More evenly distributed load Consistent, repeated reusability Elimination of secondary locking devices

Spiralock is a technologically superior fastening system ideally suited for threaded joint applications subjected to heavy shock and vibration, extreme temperatures, long hours of strenuous operation, and millions of loading cycles without the opportunity for retightening. Our proprietary internal thread form features a unique 30° wedge ramp at the root of the thread that locks the bolt securely in the threaded joint.

Lock and Load! High-strength structural assembly Lockbolt System Heavy-duty structural fastening system l l l l l l

No pin break - no metal waste Eliminate dropped stems Collar ‘fit-up’ feature for easy preassembly Quick visual swage inspection upon placing Fine pitch pin groove design for superior vibration resistance Shockless Installation - no noise from fastener

NeoBolt® is a non-breakstem steel lockbolt fastening system designed for use in heavy-duty structural applications.

StanleyEngineeredFastening.com PH: 1800 062 355

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MANAGEMENT >> TECHNOLOGY >> SOLUTIONS

APRIL 2017

BRIDGING WORLDS IN MANUFACTURING INSIDE >>

Print Post Approved PP100007882

Marquee manufacturing event NMW 2017 set to kick off

A peek into rewarding the best in Australian manufacturing

Getting the right talent in the face of Industry 4.0

Universal Data Loggers New Series 4 Loggers launch on 1st March 2017

Rugged. Versatile. Reliable. New dataTaker Series 4 data loggers feature built-in WiFi, programmable analog output, improved sampling rate. Use dEX desktop/mobile app to collect, process and share data anywhere at anytime. • Smart Sensors ( Modbus & SDI-12) & Vibrating wire transducers • Integrated cellular modem • Expandable memory option up to 4GB

Visit www.datataker.com

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Inside

For daily news visit manmonthly.com.au

APRIL 2017

Managing Director: John Murphy Managing Editor: Syed Shah Ph: (02) 9439 7227 syed.shah@primecreative.com.au Journalist: Tom Neale Ph: (02) 9439 7227

tom.neale@primecreative.com.au Art Director/ Production Coordinator: Michelle Weston michelle.weston@primecreative.com.au Design: James Finlay, Blake Storey, Sarah Doyle Sales/Advertising: Bernard Horan

Ph: 0435 946 869 bernard.horan@primecreative.com.au Subscriptions Published 11 times a year Subscriptions $140.00 per annum (inc GST)

Overseas prices apply Ph: (03) 9690 8766

Copyright Manufacturers’ Monthly is owned by Prime Creative Media and published by John Murphy. All material in Manufacturers’ Monthly is copyright and no part may be reproduced or copied in any form or by any means (graphic, electronic or mechanical including information

Editor’s Comment

18 Safety@MM

28 Precision Engineering

News@MM

20 Motors & Drives

10 NMW Preview

22 Industry Focus

34 Supply Chain & Procurement

16 Endeavour Awards Preview

26 Issues & Insights

36 What’s New

and retrieval systems) without written permission of the publisher. The Editor welcomes contributions but reserves the right to accept or reject any material. While every effort has been made to ensure the accuracy of information, Prime Creative Media will not accept responsibility for errors or omissions or for any consequences arising from reliance on

40 Last Word

information published. The opinions expressed in Australian Mining are not necessarily the opinions of, or endorsed by the publisher unless otherwise stated. © Copyright Prime Creative Media, 2016 Articles All articles submitted for publication become the property of the with the magazine format. Head Office 11-15 Buckhurst St South Melbourne VIC 3205 P: +61 3 9690 8766 enquiries@primecreative.com.au www.primecreative.com.au Sydney Office Suite 3.06, 1-9 Chandos Street Saint Leonards NSW 2065, Australia

Average Net Distribution Period ending Sept ’15 18,371

Behind the cover There has been increasing interest in the Internet of Things (IoT) in the past five years and it is changing the way we do things. The IoT is driven by the need to streamline everyday processes to make life simpler through data analytics. This has taken the use of sensors and connectivity in the cloud to another level altogether. In the world of manufacturing, the Industrial Internet of Things (IIoT), is a logical extension of automation and connectivity that has been a part of the plant environment for decades, primarily in the area known

2696 Man Monthly Page_Layout 1 7/03/17 10:12 AM Page 2

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Our close customer relationships allow for early involvement in the design and development of new projects and programs. From the very beginning of the design process, we are a true partner with our customers, ensuring that the fastener selection, installation method, and assembly layout are optimized prior to the start of production. This also guarantees that fastening will not be an issue when it comes time for product assembly. Our extensive field service network is there to ensure rapid onsite response to any customer issue.

In addition to developing fasteners that uniquely resolve assembly issues, STANLEY Engineered Fastening also provides an extremely cost-effective tooling and installation process. In some cases, we will take full responsibility for the complete design of the entire assembly process. Our emphasis on a total fastening system ensures that a customer's "in place" assembly cost is driven to an absolute minimum.

APRIL 2017

Direct Tension Indicating Fasteners l Visual indication – faster inspection time. l Measures tension – the critical factor to determine joint tightness and clamp load. l Completely re-usable.

as machine to machine (M2M) communication. The IIoT movement is, of course, growing and expanding at least as fast as the IoT in the market. Cost-Effective Process This is because smart devices and connected sensors are being used more and more in factories. But the transition from M2M and plant networking to StanleyEngineeredFastening.com full IIoT PH: 1800 062 355 presents interesting challenges that manufacturers must address before the technology gets out of hand and threatens, rather than enhances, the benefits that it promises to provide. A True Partner

MANAGEMENT >> TECHNOLOGY >> SOLUTIONS

No Guesswork...Just Safety!

The Edge is in the Wedge!

Superior resistance to vibration loosening l Improved joint integrity l More evenly distributed load l Consistent, repeated reusability l Elimination of secondary locking devices

BRIDGING WORLDS IN MANUFACTURING

Lock and Load!

High-strength structural assembly Lockbolt System

Heavy-duty structural fastening system l l l l l l

INSIDE >>

NeoBolt® is a non-breakstem steel lockbolt fastening system designed for use in heavy-duty structural applications.

Print Post Approved PP100007882

publisher. The Editor reserves the right to adjust any article to conform

Marquee manufacturing event NMW 2017 set to kick off

A peek into rewarding the best in Australian manufacturing

Getting the right talent in the face of Industry 4.0

Printed by: Manark Printing 28 Dingley Ave Dandenong VIC 3175 Ph: (03) 9794 8337

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Manufacturers’ Monthly APRIL 2017 5

Comment

SYED SHAH – Managing Editor, Manufacturer’s Monthly

The road to growth

T is no surprise that Australia ranks consistently in the upper tiers of the World Economic Forum’s Global Competitiveness Index. In 2016, Australia was ranked number 21 out of more than 120 global markets with Sydney and Melbourne ranking in the top 20 most competitive cities. The country has, for the past decade, done well in categories such as physical capital, financial maturity, institutional effectiveness, global appeal and economic freedom. Despite the complaints about the lack of competitiveness among local businesses in manufacturing, there are a lot of winning factors that put Australia on the cusp of economic superstardom. The government has long pointed out that the country possesses massive economic potential with many MNCs setting up shop for their Oceania operations in Sydney or Melbourne. With the advent of Industry 4.0, data analytics is becoming increasingly important for manufacturing operations as demand

6 APRIL 2017 Manufacturers’ Monthly

and maintenance costs increase. At the IIoT Summit held recently, I had the pleasure of moderating a panel of C-Level personnel that included Bosch and Rockwell Automation. The panel members decided there is less red tape than a lot of countries to set up and do business in Australia. So, manufacturers here would do well to exploit the use of Industry 4.0 tools to get ahead of the game and stay relevant. Australian manufacturers are seeing the greater benefits for automation in their factories for both improved productivity and increased safety. This month at Auspack 2017, there was an increase in the number of robotics companies with their cobot products getting quite a fair bit of interest. A representative at the ABB stand mentioned an interesting experience with regards to how popular these robots have become. He said that 10 years ago at similar events in Australia, you would just find one, or at best, two robot manufacturers, and people would just marvel at their capabilities. I

second his experience, after going to countless manufacturing shows over the years. However, from experience, the novelty lasts for only awhile with not many sales made. This was because, more than 10 years back, the industry did not fully appreciate the feasibility of such technology. Comparatively, in the past couple of years, robots made for the factory floor have increased to a minimum 10 to 15 per show. The increased interest in robots, factory floor analytics and competitiveness are all directly related. The need to stay “ahead of the game” in manufacturing represents a clear and present reality. Make no mistake about it, the term “best value” means the cheapest, fastest and best quality – all in one. So, what’s the next step in the competition? To bridge the gap between the physical and digital realms. Content viewing hardware from head mounted displays and other holographic technology enable the industry to engage and interact with design data

more intuitively. From Microsoft’s HoloLens technology and Google Tango platforms, Trimble developed a mixed reality program which could feed 3D engineering models into the virtual reality environment, including models of large or complex objects. With Industry 4.0 taking the bits and bytes to machines and process controls, it is not impossible to imagine a future where synthetic content will be able to react to, or even interact with, the real world one way or the other. However, before we jump the gun and dream about “staying ahead” with VR in manufacturing, let’s not get ahead of ourselves and instead work on levelling up on operations on the factory floor. The panel at the IIoT Summit did agree that we are at best at 3.2 on the Industry 4.0 scale of one to four. While the potential for growth is great with a strong economy, it’s no good to be left in the lurch and stay at the level of “potential point of growth” while our competitors go past us. Let us reach that “potential” together, please.

manmonthly.com.au

“We have replaced both AutoCAD and SolidWorks with IronCAD. When it comes to 3D-design, we do see a big advantage by using IronCAD. …Our experience has been that we design faster and easier compared to our earlier solution…” Patrik Kärrvall Hexagon Metrology “IronCAD has made the design process much more efficient and effective allowing our designers more flexibility and freedom in their work than ever before. We could never be this efficient in Pro/E or other constraint based systems.” Anders Uddman Ankarsrum Motors

“I have used pretty much all of the popular and expensive CAD systems, such as ProE, SolidWorks, Solid Edge, Catia, Delcam products, etc, but none were as easy, or as fast as IronCAD is. More things just get done in less time, period!” Mike Walls Microplanet

“With IronCAD’s design collaboration we were able to increase productivity 50% and have our engineers actually become sales persons when visiting with customers due to IronCAD’s unique capabilities” Fredrik Paulsson GRW Produkter

3D design the way it should be

Want more return on investment from every minute you use CAD?

ironcad.com.au/yes

News@MM 1414 Degrees develops silicon battery with cheaper storage cost Adelaide manufacturer, 1414 Degrees, has developed a silicon battery it claims costs a tenth as much as a lithium ion battery to store the same energy. The company has created a molten silicon battery, which it is currently testing at the Tonsley Innovation Hub in Adelaide. The technology is based on patented CSIRO research. 1414 Degrees says its battery prototype can store 500 kilowatt hours of energy in a 70-centimetre cube of molten silicon. This storage is 36 times the capacity of the Tesla’s 14KWh Powerwall 2 lithium ion home storage battery in about

the same storage space. The company’s chairman Ken Moriarty claimed the battery storage is a significant technology improvement. “There’s no comparison. Except for a few specialised circumstances it will make them totally uneconomic frankly,” Moriarty said. “I don’t think it’s dawned on the market yet and it won’t until we get them into a real-world situation.” 1414 Degrees has raised $500,000 of $2 million seed capital issue that it hopes to complete by the end of March 2017. It is negotiating with a hydroponic herb farm and

wind farm suppliers about pilot commercial scale trials of its technology. It is also planning a $10

million public share issue to fund construction of the first two 200 megawatt hour units.

Family company partners with BAE Systems to build next-gen armoured vehicles Melbourne based family manufacturer, Marand, has partnered with BAE Systems to build highly armoured reconnaissance vehicles for the Army. The Department of Defence (DoD) will spend a year testing prototype vehicle contenders, including the Marand/BAE contribution, to ensure they can survive on modern battlefields. DoD is upgrading its current “soft-skinned” Land Rovers

and armoured troop carriers, which cannot survive improvised explosive devices (IED) bomb attacks. Marand chief executive officer, Rohan Stocker, said the collaboration was a “message of hope” to other automotive workers that could successfully move into other industries. “BAE Systems is a great partner. It has delivered on its industrial commitments and transferred

technology which has allowed us to create high skilled jobs and defence exports,” Stocker said. “We have already proven that we can deliver complex defence production technology transfers in Australia with 100 per-cent quality and delivery performance.” BAE Systems Australia chief executive Glynn Phillips said he was delighted that Marand would bring to the program production

engineering expertise gained from the automotive, aerospace, rail and defence sectors to the collaboration. BAE Systems worked with Marand on its transition from the automotive industries to defence manufacturing through collaboration on the global F-35 Joint Strike Fighter program. It also provides Marand with titanium parts that are used to manufacture F-35 vertical tailfins in Australia for export to the US.

Trump to slap tariffs; taxes on Aussie manufacturers US president Donald Trump’s manufacturing advisor, Andrew Liveris, has said that any rise on tariffs on Australian goods imported into the US, could have devastating consequences for Australian industry. Liveris’s comments come as the Trump administration may change tax arrangements that may punish US importers of Australian goods. Ai Group chief executive Innes Willox said that any imposition of 8 APRIL 2017 Manufacturers’ Monthly

border taxes would be very damaging to Australian industry. “Understandably, Mr Trump wants to rebuild the US economy but the imposition of penalties on imports sends all the wrong messages and will only be damaging in the long run,” Willox said. As a way to reduce costs, American manufacturers could also push for the repeal of the Obama administration’s Clean Power Plan,

which promoted the use of natural gas over coal, a change that could raise demand for Australian coal. The possible imposition of import penalties remains the central concern for Australian manufacturers and exporters. One model under discussion for a border adjustment scheme would be a 20 per cent tax credit for exports by companies in the US, offset by a 20 per cent tariff on imports. manmonthly.com.au

News@MM Coca-Cola operations fizzle out in South Australia Coca-Cola Amatil (CCA) will close its plant in South Australia, at the expense of 180 jobs and move its operations to Queensland instead, according to the Sydney Morning Herald. The company said it had reviewed its operations and decided to increase its operations in Queensland and Western Australia. CCA’s managing director Alison Watkins said the layout, infrastructure and logistics of the South Australian plant had prompted the decision.

Ms Watkins said CCA would provide financial counselling and help find new jobs for workers affected by the 180 lost jobs. Existing administrative, distribution, and recycling work would remain in South Australia. The company said it will spend $90 million into a new glass production line and juice and dairy production in its new Richlands plant on Brisbane’s outskirts. The Richlands plants will have lower operating costs than

manufacturing in South Australia due to greater automation. The Adelaide factory currently produces glass bottles, fruit juice, dairy products and some alcoholic beverages. The Coca-Cola decision adds to the list of manufacturers that have left the state. Earlier in February, Pfizer decided to close its South Australian factory, which produces the chemotherapy drug pegfilgrastim. The Pfizer factory also happens to be in Thebarton.

New bidders line up for Arrium South Korean private equity firm Newlake Investments and Australian steelmaker Posco have lined up against opposing bid Liberty HouseCIMEC to bid for soon to be liquidated steelmaker Arrium. Arrium’s liquidation is progressing and advisers are said to be looking for potential buyers. Arrium’s manufacturing business and its Whyalla steelworks are being sold. The Whyalla steelworks is unattractive to buyers because it is

costly and reliant on large volumes of steel output to turn a profit, which has rendered it a loss making entity. Arrium’s voluntary administrator KordaMentha has so far been eager to sell the remaining assets in one sale but a breakup could be inevitable. According to the flyer document obtained by The Australian for the Arrium Australia sale, the company’s Whyalla steelworks was forecast to make an $11m loss for the 2017 financial year.

The South Australian government is likely to cap the environmental liabilities for the Whyalla asset and

also potentially any redundancy costs for any buyer, which means Arrium’s assets may be also more attractive.

QLD train delivery derailed due to manufacturing flaws The Queensland government is refusing to accept the remaining 80 per cent of trains it contracted to an Indian consortium because of design and safety issues. Issues with the New Generation Rollingstock (NGR) trains include air conditioning, brakes, driver visibility and disability access. The previous QLD government contracted the Indian consortium to build 75 NGR trains. Thirteen have been delivered and another two are on the way to Australia. QLD transport minister Jackie Trad said she had “made clear” the consortium was not to send any more manmonthly.com.au

trains until the design issues had been fixed. The Australian Manufacturing Workers Union (AMWU) wants the remaining 80 per cent of trains to be manufactured locally. “The absolute tragedy in this whole story is we have manufacturing facilities across Queensland, from Townsville through to Rockhampton, through to Maryborough, through to Brisbane, laying idle,” AMWU QLD secretary Rohan Webb said. “We’ve got the facilities, we’ve got the skills, we’ve got the know-how, we’ve got people looking for work.” Manufacturers’ Monthly APRIL 2017 9

NMW Preview 9-12 May 2017

National Manufacturing Week 2017 This year’s National Manufacturing Week (NMW) is themed ‘Delivering the Industry 4.0 Revolution’ and will feature the next generation engineering machines and tools for manufacturers.

HE expo will feature five critical areas facing the manufacturing sector: industry capability development, product and service innovation, technology innovation, process improvement and sustainable manufacturing. These will be addressed by notable speakers such as CSIRO Manufacturing Director Dr Keith McLean, Advanced Manufacturing Growth Centre Managing Director Dr Jens Goennemann, Innovative

10 APRIL 2017 Manufacturers’ Monthly

Manufacturing CRC Chief Executive Officer David Chuter and Australian Advanced Manufacturing Council Chairman John Pollaers. Specific subsections of the industry will be addressed; advanced materials, air technology, automation and robotics, digital manufacturing, electrical, engineering, process control and instrumentation, research and development, safety, supply chain logistics and welding technology. What’s more, live demonstrations of the latest technologies and

products are scheduled to run each day on the exhibition floor, featuring 200 exhibiting companies from around the world. Some of these include Honeywell Safety Products, Tennant Australia, BAC Systems, Robert Bosch, Ezi-Duct and Polex Environmental Engineering. “National Manufacturing Week is Australia’s only fully integrated annual manufacturing exhibition, and provides an unrivalled opportunity for delegates to network, collaborate and learn from one another,” said

2017 event director Robby Clark. “The 2017 theme offers attendees the latest expert opinion on the future of ways in which people will work, advances in new technologies and process improvements as well as taking a deeper focus on global sustainability for the manufacturing industry.” NMW will run from 9-12 May at the Melbourne Convention and Exhibition Centre. To register, visit www.nationalmanufacturingweek. com.au

manmonthly.com.au

ion s

ito b i Exh t + 0 23 ta n e r es es P n e e 30+ Fr Zo r o e ct S t c s 11 Produ ion t a str n o m Daily De

Where Australia’s Manufacturing Value Chain Comes Together

9 – 12 May 2017 Melbourne Convention & Exhibition Centre

2017 SPEAKER PROGRAM

INDUSTRY 4.0:

FREE TO ATTEND Delivering the next Industrial Revolution

nationalmanufacturingweek.com.au Co-Located with

Organised by

NMW Preview Floorplan 9-12 May 2017

GULLCO 6

BUSICOM

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1036 INT

1034 INT

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2012

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1906 2009 9

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12 APRIL 2017 Manufacturersâ&#x20AC;&#x2122; Monthly

DIGITAL MANUFACTURING 3

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manmonthly.com.au

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Bosch Australia Manufacturing Solutions. Your partner in automation & robotics APAS assistant collaborative robot The APAS assistant is a versatile automatic production assistant. As an intelligent and intrinsically safe robot system, the APAS assistant allows direct collaboration with people without expensive additional shielding. This is made possible by the unique sensor skin, which covers the robot arm of the APAS assistant and which reacts, as soon as somebody approaches. With a breadth of industries and products that extend from the automotive industry, to medical, pharmaceutical, healthcare, food, energy, power tools, household appliances and whitegoods. With a strong history in supplying equipment to the automotive supply chain, Bosch Manufacturing Solutions now delivers into a diverse range of Industries. Automation Test & Measurement Process Technology Engineering Services

Assembly Line, Assembly Equipment, Material Handling, Axis /Robotics & Jigs & Fixtures Product Test Systems, Communication Interfaces, Data Analysis & Data Acquisition Dispensing Systems, Riveting, Tightening Systems & Vision Systems Feasibility studies, Lean equipment design, Project Management, System Integrators

The standardized production assistants APAS assistant, APAS inspector and APAS flexpress, as a stand-alone solution or in a manufacturing island, are designed for: ad-hoc small series production, semi-automation, pilot production for safeguarding a process, agile engineering with early interim results and quality tests. To find out more contact John Croft M (61) (0) 434 185 329 T (03)9541 5086 E john.croft@au.bosch.com W bosch-manufacturingsolutions.com.au

NMW Preview Show Highlights 9-12 May 2017

Honeywell Safety Products Honeywell Safety Products helps customers build enduring safety cultures across a wide range of markets. They have united the most respected safety brands in the world to deliver best-in-class safety, quality and performance, creating a unique set of solutions with offerings in hearing, respiratory, eye and face, hand and body, footwear and fall protection. This provides unmatched opportunities to drive value for their customers, whilst bringing the latest innovations to market. For industrial safety and noise control, one of the products on display, the Sync Wireless Earmuff enables the user to connect wirelessly, answer calls, and stream information from their mobile phone while performing their day-today tasks via Bluetooth. It also provides high passive noise attenuation (SLC80 31dB, Class 5) and features over 16 hours of rechargeable battery life while streaming. Honeywell Safety Products will be at Stand 1112 at NMW 2017.

Tennant Australia

BAC Systems

Tennant is a company that is passionate about developing innovative solutions to help customers resolve their indoor and outdoor cleaning challenges. The company’s products are designed to sustainably clean spaces with fewer resources and reduced emissions. This year at National Manufacturing Week, Tennant Australia is unveiling a brand new, fully integrated ride-on sweeper-scrubber. It has the largest battery size in its class, along with innovative new features that deliver reliable, high performance results at a lower cost to clean. Tennant’s new M17 Ride-on Sweeper-Scrubber is a versatile, easy to use machine with unmatched reliability. It reduces the need for multiple machines with exception scrubbing, sweeping, water recovery and edge cleaning performance. Tennant’s Pro-Panel Technology with PerformanceView integrates multiple controls into an intuitive, high visibility touch screen interface that redefines the user experience. Along with Zone Settings and On-board, On-demand tutorial videos, the M17 with Pro-Panel is a highly innovative, high performing battery powered sweeper-scrubber designed to reduce your costs to clean, enhance facility image and provide a safe and healthy environment. The M17 will also be available with Tennant’s exclusive ec-H2O detergent-free cleaning technology. ec-H2O technology electrically converts water into an innovative cleaning solution that cleans effectively, saves money, improves safety and reduces environmental impact compared to traditional cleaning detergents and methods. Tennant will be at Stand 1116 at NMW 2017.

BAC Systems is an Australian manufacturer and innovator, proudly manufacturing its industrial storage and workshop systems in Western Sydney now for 40 years. 2017 marks the 39th consecutive year that BAC exhibits at National Manufacturing Week. Always developing its concepts and systems, the team at BAC are excited to release their latest steel tool-rack product, the BAC Wall Panel. BAC Wall Panel is a perforated steel panel with a large range of hooks, steel tool clips and plastic toolbars designed to hold all of the tools you need to complete your work. The BAC Wall Panel is easily mounted on benchtops, within a BAC Storage Cabinet, or directly to a wall using BAC’s new dedicated BAC Panel Supports. It is quick and easy to change the location of your tool clips and hooks as your needs change. At BAC Systems, the focus is on providing solutions. In designing the new BAC Wall Panel range, the BAC research and development team have taken feedback received over the years and have researched tools and their usage. In doing so they have devised a range of toolbars that are second-to-none, both in terms of functionality and appeal. These toolbars will take care of all common tools, catering for screwdrivers, hex-tools, drills and sockets. The new BAC Wall Panel complements the recently released BAC R series cabinet range as it fits seamlessly into these cabinets, creating a secure tool storage cabinet. The BAC R series, being only 395mm deep, can display your tools in a tidy fashion on your BAC Wall Panel behind a locked door with windows for tool viewing. The BAC R series cabinets can be full height to provide a wall of secure tool storage, or can be low enough to comfortably store your tools beneath your workbench. BAC will be at stand 1830 at NMW 2017.

14 APRIL 2017 Manufacturers’ Monthly

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Robert Bosch Bosch has had a presence in Australia since 1907, opening its first wholly owned subsidiary, Robert Bosch (Australia) in 1954. Bosch generates revenues of more than $750 million dollars annually in Oceania, and employs over 1,400 associates. Their regional activities are operated through six wholly owned subsidiary companies and cover a diverse range of businesses. These include household appliances, security technology, power tools and accessories, engineering services and contract manufacturing, parts and equipment for automotive workshops and motorsport enthusiasts, franchised car servicing, equipment, services and solutions for manufacturers, drives and control technology, software innovations, hot water and heating systems, packaging technologies and service support for Bosch equipped eBikes. One of the technologies and products on display at NMW 2017 will be Bosch Rexroth’s Linear Motion Technology. With Linear Motion Technology, customers can move high loads precisely and find the right solution with just a few clicks, allowing products to be shipped within marketrequired delivery time. This sets the standard for reliability and application adjusted performance. Machine builders and system integrators can also save time, effort and money by choosing Bosch’s ready-to-mount linear motion systems. Robert Bosch will be stand 1900 at NMW 2017.

Ezi-Duct and Polex Environmental Engineering As a gold exhibitor, Ezi-Duct & Polex Environmental Engineering are delighted to continue their long association with the National Manufacturing Week Exhibition. Ezi-Duct is Australia’s largest supplier of dust collection and fume extraction equipment, with factories in Brisbane, Sydney and Melbourne. Associated company Polex Environmental Engineering works with Ezi-Duct on product design and large or technical projects. On display at NMW will be the range of the Polex eMission Control Fume & Dust Collectors, the eCompact 6000 Dust Collector, the huge Ezi-Flex range of top quality Flexible Ducting, the Ezi-Duct Modular Ducting Range, the Eziarm, Eziflex and Eziflex Telescopic Fume arms, the Vehicle Exhaust Hose Reel Electric, Pneumatic slide dampers, Rotary Discharge Valves, Energy Saving Variable Speed Drives, Industrial Quality High Efficiency Fans and more. As Ezi-Duct is currently celebrating its 20th birthday, the company will be offering deals on its large range of Australian designed products for dust collection, fume extraction, pneumatic conveying and mechanical ventilation equipment. Ezi-Duct and Polex Environmental Engineering will be at stand 1920 at NMW 2017.

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Manufacturers’ Monthly APRIL 2017 15

EndeavourAWARDS 2017 Endeavour Awards 2017 to showcase manufacturing sector’s great achievements Manufacturers’ Monthly is proud to hold the premier night for recognising the achievements of the manufacturing sector – the Endeavour Awards.

A TICKETS, NOMINATIONS & INFO Contact Lauren Winterbottom Events Manager, Prime Creative Media event.organiser@ primecreative.com.au 03 9690 8766 Nominations & Tickets Nominations are now open. Visit endeavourawards.com.au to nominate and for updates. Tickets are also currently on sale (the Early Bird rate is $165 + GST for a ticket or $1,500 + GST for a table of 10). To buy tickets, click the ‘GET TICKETS’ button on the Endeavour Awards website, under the Awards Night tab. When Thursday 11 May 2017 Where Peninsula Central Pier Shed 14, Docklands, Melbourne. Time 6:30pm-11pm Dress Code Cocktail/lounge suit 16 APRIL 2017 Manufacturers’ Monthly

KEY event during National Manufacturing Week, the Awards will be held on Thursday 11 May 2017 from 6:30pm11pm at Peninsula Central Pier Shed 14, Docklands, Melbourne. The Awards are a chance for all involved to celebrate the many successes within the industry, share these successes with a broader audience, network, and learn more about Australian manufacturing’s movers and shakers. In 2016, the magazine was privileged to hear from keynote speaker Andrew Stevens, chair of the Advanced Manufacturing Growth Centre, about the era of the advanced manufacturer. We were reminded of the reasons to be optimistic, about the industry’s overall economic importance, and its contribution to the country’s innovation output. This year we will continue to help in telling the story of your industry’s importance, and of the innovators who ensure that Australian manufacturing thrives. Last but not least, we would like to thank our category sponsors SICK and SEW, and ICN who is sponsoring the networking event at Endeavour 2017. Some changes have been made to the award categories since last year’s awards:

Outstanding Start-up Award This category seeks out notable startup manufacturers – the future of our industry depends on them.

innovative Australian-made products designed for industrial applications and turn the spotlight on the people who design and build them.

Global Supply Chain Integration of The Year Many Australian companies have developed unique expertise and/or components that allow them to plug into global supply chains. Tell us about your projects and the talented people who make them happen.

Most Innovative Manufacturing Company Award – Sponsored by SEW Eurodrive This award recognises a manufacturer in Australia that has thought “outside the box” to implement a new business idea.

Safety Solution of The Year

Young Achiever Award

– Sponsored by SICK

This special award recognises an up-and-comer (aged 35 or under) who has a bright future as part of Australia’s manufacturing industry.

Safety is of the utmost concern and this category highlights the unique products, solutions and programs implemented by or developed for manufacturers.

Exporter of The Year This category is for companies who have successfully entered or are developing an export market with a new or existing locally-made product.

Australian Industrial Product of The Year This category aims to highlight new,

Manufacturer of the Year From the numerous entries received, one trailblazer stands out for outstanding innovation in the areas of technology, management and product development. This award aims at recognising that outstanding manufacturer. There is no separate form for this category, as all entrants will be considered for this award.

Technology Application Award This category is suitable for those looking to submit successful applications for new technology in manufacturing processes.

Environmental Solution of The Year This category recognises manufacturers who have successfully implemented solutions designed to reduce the environmental impact of their manufacturing operations. manmonthly.com.au

Are you an industry leader? Nominations now open

Tickets now on sale

11 May 2017 Melbourne

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Safety@MM Breathe easy with the right disposable respirator Jobs in heavy industries can be physically hazardous, especially in certain sectors where fumes, gases, vapours and dust can affect workers’ health. A study by 3M shows having the correct protection does matter.

AFE Work Australia has recognised that exposure to airborne particles can be dangerous to employee health and is an issue in some Australian industries. Exposure to irritants such as fumes, gases, vapours and dust can have grave health consequences if not taken seriously by employers. When it comes to dust and other airborne media, disposable respirators provide an essential layer of protection. There are certain industries where employees may need to wear a respirator to limit their exposure to harmful media. For example, coal miners can develop pneumoconiosis, or black lung disease, a potentially

fatal lung condition caused by coal dust. In 2015, two men from the Carborough Downs coal mine in Queensland were diagnosed with black lung disease. A co-worker admitted that when he started working in the coal mine two decades earlier he and his colleagues hardly wore respirators. Since then, Vale, the owner of the Carborough Downs coal mine, has become a leading advocate of workplace safety in mines.

Having the right fit The first issue that needs addressing is proper fit. Respirators that don’t fit properly can result in serious

health consequences, especially in the medium to long term. To ensure a good fit, there are certain issues that need to be taken into consideration. For example, male employees need to be cleanshaven. Improper fitting due to stubble allows small openings to appear between the respirator and skin, which means contaminants can enter airways and your lungs. Also, employees need to ensure that long hair is tied back and jewellery is removed so that it does not interfere with the face seal. Disposable respirators should reduce breathing resistance Respirators are designed with the breathing resistance as low as

possible. Effects of high breathing resistance include sweat and heat, which can cause the respirator to move on the user’s face, thus compromising the wearer’s ability to breathe and function properly in a working environment. Filters are also an important consideration. A blocked filter can cause air-flow issues and therefore wearer discomfort.

The Aura respirators 3M’s Aura series is the ideal solution for anyone’s disposable respirator needs. The Aura series offers an array of standard features rarely seen in similar products: • low breathing-resistance filter technology which offers up to 85 per cent less breathing resistance compared to other products; • a Cool Flow valve that not only removes heat build-up but helps to minimise fogging over eye wear; • a sculpted nose panel that aids with a good face seal; and • a three-panel design that will fit to many face shapes and sizes.

Fit testing kits The fit testing kit in 3M’s Aura Series is designed to check the face-torespirator seal on any particulate respirator or gas/vapour respirator with a particulate filter. A fit test is a way to assess whether the respirator is a good fit for the individual. It works by spraying a sweet or bitter solution into the hood environment. If the wearer does not taste the spray while doing a number of simple exercises, an acceptable fit has been proven. 3M Australia Personal Safety Division 1300 363 565 www.3m.com/au/ppesafety 18 APRIL 2017 Manufacturers’ Monthly

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ADVERTORIAL

AT LAST – 2 X SUPAGAS = ONE! The combined companies now operate nationally as one Industrial gas companies ‘Renegade Gas t/a Supagas NSW and Supagas QLD’ and ‘Supagas Holdings Pty Ltd’ have now joined together due to the acquisition by Taiyo Nippon Sanso Corporation (TNSC). This expansion facilitates the establishment of a nationwide business in Australia. Supagas started as a born and bred company that commenced its operations back in Melbourne in 1985 selling LPG primarily for forklifts. In 1997, ‘Renegade Gas t/a Supagas NSW and Supagas QLD’ were established covering NSW and QLD. As the two companies grew, more products were added and they entered the industrial gas markets quickly, establishing themselves as a reliable supplier of industrial gas and LPG. They have liquid petroleum gas (LPG) filling stations, gas manufacturing plants including air separation units (ASUs), carbon dioxide (CO�), acetylene (C�H�) plants and one of only a small number of liquid helium transfills in Australia. Currently, they have 35 operational sites across Australia, along with multiple agents and dealers giving capability to supply to more areas than ever before throughout Australia. Since the acquisition by TNSC, Supagas has had the opportunity to gain access from its international head office which is based in Japan. This facility has a large technical research centre providing cutting edge technology in providing welding solutions and advice, along with guidance on specialty gases and gas mixes. This access together with the technical skills at Supagas, provides the necessary support to an already experienced team in the gas industry. This expertise has given Supagas the flexibility to offer a range of gas products and custom gas mixes specific to the manufacturer’s needs. Whether your requirements are 1 cylinder, 100 cylinders or liquid gases, Supagas will offer the same exceptional service to everyone. With a NATA accredited laboratory based in Ingleburn NSW, they are also capable of providing specific gas mixtures to suit most of your requirements. At Supagas we believe in ‘You Cannot Bottle Attitude’ and we live by the “Yes We Can” approach at all times.

Please contact Supagas for all your gas needs on www.supagas.net.au or call 13 78 72.

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Manufacturers’ Monthly APRIL 2017 19

Motors&DRIVES Energy savings with compressed air With compressed air being one of the largest energy consumers in manufacturing, understanding how on going energy efficiencies can be achieved is crucial to staying competitive. Compressed air and vacuum product specialist, Kaeser Compressors, explainsÂ more.

VER the past decade, Australian manufacturers have seen a large surge in the price of electricity. Once seen as a relatively low fixed cost, energy has become an important variable cost that impacts on company profits. One of the largest of all energy consumers in a manufacturing facility will be a compressed air system. Almost three quarters of the lifetime costs of a compressor are attributed to energy. If you take the example of a 250kW compressor, running three shifts, seven days a week, with electricity costs at $0.10/kWh, over an average 10 year lifecycle, it will cost $2.19 million to run in electricity costs alone. However, with most compressed air systems, only around 50 per cent

20 APRIL 2017 Manufacturersâ&#x20AC;&#x2122; Monthly

usage. However, the initial stage in optimising the energy efficiency of a compressed air system will be to identify how and where compressed air is currently used. Initial energy savings can be identified by simply observing and listing what compressed air is actually used for. For example, is compressed air being used for tasks which could be performed more cost effectively without compressed air? Using a nozzle or gun for blowing or cleaning your workshop would be an example of an inefficient and inappropriate use of compressed air. A more in depth look into the compressed air usage would also identify opportunities for energy savings. This may include reviewing the existing and future demand for compressed air. As an example, any changes to shift patterns and production patterns will impact the actual demand for compressed air. By measuring the system load profile â&#x20AC;&#x201C; or in other words the demand on the compressed air system over a of the compressed air produced is actually production demand. With the example above, that means over a million dollars is being potentially wasted through compressed air leaks (estimated at 25-30 per cent), artificial demand (estimated at 10-15 per cent) and inappropriate uses (estimated at 5-10 per cent). The good news: many existing compressed air systems hide an energy savings potential of approximately 30 per cent.

Choosing OEM genuine spare parts will impact the overall energy efficiency of the compressed air system.

Assessment pays dividends Without a doubt there are a number of product and service solutions on the market which may well assist a compressed air user in optimising their associated energy manmonthly.com.au

Motors&DRIVES defined period of time – it is also possible to identify how and where compressed air system performance and efficiencies can be made. Compressed air leaks are an unavoidable by-product of running a compressed air system. However, if they are not managed, leaks can squander a large proportion of the compressed air produced by a compressor. Based on a compressor running 24/7 and a power cost of 10 cent/kW/ per hour, just one 2 mm diameter leak could cost over $1,300 per annum. Identifying, measuring and fixing air leaks could therefore play a significant role in reducing the associated all up energy costs. This can be achieved, for example, with the assistance of Ultra Sonic Leak Detection. Furthermore, implementing a leak management program, whereby leak detection is a regular part of the maintenance program, will ensure that the energy savings are long term. Undergoing a compressed air system analysis carried out by a qualified compressed air specialist, will be the most comprehensive method to review a compressed air system and identify exactly where the opportunities for energy savings lie.

Prevention is better than cure Aside from unplanned downtime and even product spoilage, it is also highly likely that energy costs will be unnecessarily elevated if a compressed air system is not well maintained. However, this can be avoided by simply following the Original Equipment Manufacturer’s (OEM’s) recommended maintenance schedule, using only genuine spare parts and selecting only authorised Service Technicians to carry out maintenance work. The consumables within a compressed air system may appear to be a seemingly small factor, however they play a significant role in the overall energy efficiency of a compressed air system. When faced with the decision of replacing manmonthly.com.au

Identifying compressed air leaks with an Ultra Sonic Leak Detector.

consumables with OEM genuine spare parts or non-genuine – spurious – spare parts, it is worth considering that only genuine OEM spare parts have been rigorously tested by the OEM with the compressed air equipment. The durability, performance, efficiency, safety and even the compatibility of spurious parts will not have been tested with the compressed air equipment. Maintaining the integrity of a compressed air system is critical to ensure that it continues to operate at its peak performance – reliably and efficiently. There is no way of knowing how spurious parts will interact and how they may affect the performance of compressed air equipment. They may compromise the reliability, safety of equipment, air quality, and efficiency.

Where the demand for compressed air fluctuates, for example where production is completed in shifts, energy savings may be made by investing in a frequency controlled, or variable speed, rotary screw compressor. Here, only the exact amount of compressed air required is produced at any one time. This optimises the energy consumption. Investing in a compressed air management system – or a master controller - is also a key technology that can assist users in energy efficiently managing multiple compressors. Master controllers nowadays should not only be capable of activating and deactivating compressors according

to demand in order to minimise control-related losses, but should also provide comprehensive monitoring and preventive maintenance features. The ability to display air consumption and energy demand is also essential to ensure that utilisation is compliant with energy management regulations as per EN/ISO 50001. Such advanced master controllers are also a key technology in the advanced world of Industrie 4.0, as the central mastermind that controls the entire compressed air supply system. In this ultra-flexible production environment, intelligently networked compressed air systems provide the optimal compressed air power and quality required, ensuring exceptional efficiency through continuous realtime monitoring and optimisation.

In Summary From assessing and making improvements to an existing compressed air system, to investing in energy efficient compressed air technologies, there are a number of avenues that compressed air users can explore in order to generate significant and on-going energy savings. Kaeser Compressors Australia Pty Ltd 03 9791 5999 www.kaeser.com.au

Opting for energy efficient technologies In addition to optimising the energy efficiency of an existing compressed air system, many compressed air users may find that they can make significant energy savings by investing in energy efficient compressed air technologies. Energy savings of approximately 10 per cent are possible when users opt for compressors that include efficient airends, 1:1 drives and efficiencyoptimised energy saving electric motors such as the IE3 class premium efficiency motors and the IE4 class super premium efficiency motors.

A compressed air management system can assist in energy efficiently managing multiple compressors.

Manufacturers’ Monthly APRIL 2017 21

Industry FOCUS Skilling up for Industry 4.0 Industry 4.0 will take manufacturing to the next level. However, pressing issues about educating the Australian workforce about Industry 4.0 remain. Manufacturers’ Monthly was at the recent Industrial Internet Summit 2017 which grappled with these issues and more.

HE advent of Industry 4.0 and its offspring, the Industrial Internet of Things (IIoT) is set to create great demands for science, technology, engineering and mathematics (STEM) skills. However, there is a disconnect between the skills in demand and what careers people pursue. In a panel called “The Innovation Race”, the discussion on how far behind Australia was in adoption of new technologies took centre stage. The consensus among the panelists was that the Australian

public remains at best, unconvinced, and at worst, ambivalent, about learning STEM skills and entering the manufacturing sector. Then there are ongoing problems with branding of manufacturing related degrees and the gender imbalance in manufacturing. To some degree, the mentality has its origins back at high school.

Changes in the skill profile of manufacturing According to current research, there will be large skill shortages

in Australian manufacturing. Mike Grogan, director of the Advanced Manufacturing Growth Centre, said there will be a need for an influx of 89,000-97,000 people across different industries. In addition, he said there would be changes at the lower skill end of manufacturing. “We are also going to see the exit of about 50,000 jobs at the bottom, and as you’d expect, they are blue collar. It all depends on whether we are going to be looking at our competitive advantage in design and management, R&D, logistics,

marketing and the capacity to add value to products. There is going to be a large change in the skill profile of manufacturing,” Grogan said. Grogan added that Australia is going to have up to 40,000 “high end” jobs in the managerial bracket. He noted that the lead-time on workers gaining highend skills is about eight years. Australia must spend more time on educating people in STEM and manufacturing now or else when demand for skilled labour increases, the country won’t be able to ‘exploit opportunities’, according to Grogan.

With projected skill shortages in Australian manufacturing, there is a need for at least 89,000 – 97,000 people to fill in jobs across different industries.

22 APRIL 2017 Manufacturers’ Monthly

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Industry FOCUS How skills will be used in the 4.0 Age David Chuter, CEO of innovative manufacturing CRC, said that no one can know for sure which skills will be in demand. However, according to Chuter, employees won’t be learning new skills in factories. An example would be car dealership employees being certified to create replacement parts using a 3D printer, instead of having to order the part from overseas. “If you go to car dealerships and today you buy a car and your gearbox breaks down, you may wait two months to get a spare part from Europe. Now, imagine a world where the car dealership is making a replacement part for you and it’s all approved and certified so suddenly now you could have thousands of employees or potentially hundreds of thousands employees making Projekt1 of 21.02.17 09:40 Seite parts 1

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to repair cars,” Chuter said. Ian Burnett, Dean of UTS school of engineering & IT, believes the 40,000 ‘high end’ jobs are going to be for people with a broad set of skills. For example, mechanical engineers are going to need to know about augmented reality which they could be using to maintain their equipment. The manufacturing sector and universities need to be aware of changes to industry’s skill requirements so they can guide children to study the right courses and degrees. Burnett also said the semantics around degrees and certifications significantly affects what careers parents want for their children. “Primary school parents would not be using the ‘word’ manufacturing as something they would like their children to go into. There are only two or three universities that have

‘manufacturing’ in the title of their degrees,” Burnett said. “If you put manufacturing in the degree name, you can guarantee that the quality of your students drops. I

cannot remember the exact figure but my previous university has a degree with manufacturing in the title and I know the ATARs they can get for that degree are some ten points lower than

What manufacturers cannot find locally, they tend to look abroad to fill the gap.

Manufacturers’ Monthly APRIL 2017 23

Industry FOCUS

The manufacturing sector and universities need to be aware of changes to industry’s skill requirements so that they can guide the younger generation to pick the right courses to pursue.

for mechanical engineering. Currently, manufacturing is not viewed as a ‘future’ career path for children and this is a problem.” “What we call the ‘Industrial Revolution’ and what we call the ‘future of manufacturing in Australia’ will have real impact in terms of developing the skills we need particularly if it’s a 5-15 year gestation period.”

Cultural changes needed to get skilled labour into manufacturing jobs Manufacturing has several cultural problems. Firstly, the government does not “do enough” to help provide skilled labour when they clearly need it and secondly, there is the issue of gender disparity in the sector, Grogan said. Grogan also added that the industry expects skilled labour to be available when they need them and the government can’t justify 24 APRIL 2017 Manufacturers’ Monthly

the employment of more graduates without explaining the need to do so. “If manufacturers have opportunities open and they do not receive enough interest from local skilled labour, they will request that the jobs be put on the Skilled Occupations List.” Grogan also said the Australian manufacturing sector is gender imbalanced. He mentioned that the mentioned upcoming 40,000 jobs would be very attractive for both genders because they would likely be “family–friendly”.

Getting the schools involved earlier on The end of automotive manufacturing creates many opportunities for skill development in other developing areas. “If you look at how Industry 4.0 is being described, there are nine industry technologies or toolkits from augmented reality to big data

to simulation. There is probably only two of those, big data and the industrial internet itself, that haven’t been around for the last 15-20 years,” Chuter said. “If you go and look at the automotive industry and 3D printing 15 years ago, I was using virtual reality with glasses that are slow and clunky. We have been using RFID, and also manufacturing simulation. Chuter describes this as “a once in a lifetime opportunity without poaching”. He encourages manufacturers to go out and observe automotive supply bases because these places have skilled people who have used technologies for up to 15 years that has now evolved into Industry 4.0. “We have bodies of knowledge where this capability exists. We just need to make sure that it doesn’t get diluted and disseminated once vehicle manufacturing stops.”

He also noted that students have access to Industry 4.0 skills at primary school level, such as simple coding. “What I hope is that these students get the problem-solving skills and interest in technology from these things because at the end of the day the ability for human machine interaction is where the key to success is going to lie.” Burnett added that there are a lot of international students who come to Australia because they still believe it is an opportunity for them. “They are getting the message about STEM that domestic students are not. Local students have to get a feel for logically solving problems but not all of them need to learn code. They need to learn how to look at the problem and implement a solution. The solution may be implemented overseas and Australia will miss out on the insight and the opportunity,” Burnett said. manmonthly.com.au

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Issues&INSIGHTS Lean Manufacturing saves the day Going lean in manufacturing means understanding and increasing customer value and focusing on key processes. Getting there however, requires all staff on board. Mike Wheeler explores how the Morris Group adopted lean processes and made operations profitable again.

WO years ago the Morris Group of companies was at a turning point. The Newcastlebased manufacturer found that the downturn in mining, mixed in with some outdated manufacturing practices, was affecting its profitability. The group specialised in a range of products and services for mining and other industries, such as temperature sensors, electronic componentry and float probes, as well as CNC machining and fabrication services. Morris Group director, Ash Morris, along with his co-director and brother Linsey, knew that something had to be done or they would be

out of business. More importantly, the 30-plus people they employed would be out of work. In a town like Newcastle, which for decades has been reliant on the mining and manufacturing sectors, the chances of finding employment in a similar field was remote. It got to the stage that one of the companies, Pritchard Electronics, was failing, while unbeknown to the Morris brothers, another of the companies, D&N Engineering, was about to lose one of its major contracts. Realising that things couldn’t continue as they were, they went to local industry body, Hunternet, which put them in touch with Irescot

Learning Services managing director, Pat O’Flaherty. O’Flaherty arranged for the Morris Group management team to visit the Lithgow Arms Factory. In 2013, the factory was about to be closed because it was losing money. Management decided to adopt the Lean Manufacturing approach to doing business. This Japanese-inspired form of manufacturing, at its most basic, ensures waste is kept to a minimum, which in turn improves production times for throughput while reducing costs. O’Flaherty then introduced them to the Institute for Lean Systems (ILS), which showed them the lean way to operate.

It got to the stage that one of the companies, Pritchard Electronics, was failing, while unbeknown to the Morris brothers, another of the companies, D&N Engineering, was about to lose one of its major contracts.

26 APRIL 2017 Manufacturers’ Monthly

“ILS ran a course onsite here where we got a group of about six local manufacturers in Newcastle to come to our factory,” said Ash Morris. “ILS ran a Certificate Three in Lean Manufacturing processes for our local community. From there, we starting implementing those processes.” Both Morris brothers knew that some of their staff would push back, while others would embrace the new regime. “Some of the team leaders were a bit sceptical about the whole thing at first,” said Ash Morris. “They thought it was all about costs and that their futures were under threat and they weren’t very happy about change. Their attitude was ‘I’ve being doing it for 20 years - why would I change now?’ However, as they learned more about Lean they realised it was pretty cool. They found that they had to work smarter not harder. They realised that they didn’t have to do any more work than they did now. They realised that it would improve production output. Working smarter does that. We eliminated a lot of waste. “From the team leaders back to the workers, there were a few chaps that left. Their attitude was ‘well, I’m not going to do that’. So we said, ‘This is what we are going to do. If you’re not going to come on board the door’s open but you don’t have to come in’. We had a few people kick and scream. A couple left, but overall it has been embraced at the Morris Group.” What sort of results have the new processes brought to the company? “Savings have been across the board,” said Ash Morris. “For example, our purchasing staff don’t buy extra stock if it isn’t needed. This frees up space. We’ve eliminated waste from our standardised work so manmonthly.com.au

Issues&INSIGHTS

Productivity in lean manufacturing systems eliminates time wastage and improves cost savings. workers are not wasting time. They’re not standing around waiting for work or waiting for a part to come in so they can finish the job. It’s there before they start. By having these things in place we’ve been able to put more throughput through the factory and workshops. We’re putting out more work with less staff but working smarter. By being able to do

that, we’re more profitable.” It wasn’t only the way they worked that changed, but also job role descriptions – something subtle like changing a supervisor’s designation from ‘foreman’ to ‘team leader’ was implemented. “Foreman gives the impression of lauding it over others,” says Ash Morris, “while team leader means

they work with a team of people.” More importantly, the bottom line in terms of productivity and profitability has increased significantly. There has been a 25 per cent reduction in man hours and a 10 per cent increase in throughput. There has also been a lift in net profit margin of 17 per cent across all the companies.

“Two years ago D&N Engineering, on average, took one week from purchase order to finished goods,” said Ash Morris. “Now it takes a day to turnaround the same goods. The companies are now beginning to increase capacity so much so that we don’t want people to know.” They still believe there is a lot to do. “Our efficiency went from about 40 per cent and is now about 75-80 per cent,” said Linsey Morris. “We want to get those efficiencies up to 95 per cent. A lot more work is involved in that. Continual improvement is our model.” As for advice they would impart to other companies struggling in the manufacturing space, there are a couple of things they should take on board. “We used to wait for the phone to ring. People who do that now in manufacturing? The phone doesn’t ring,” said Ash Morris. “We don’t say much when we meet a client. We just listen and then go back [to them] with problems we can fix. You have to be proactive with your sales people and you have to go out and solve your clients’ problems for them.” Morris Technology Group 02 4952 6344 www.morristechnologygroup.com.au

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Manufacturers’ Monthly APRIL 2017 27

Precision ENGINEERING Wired For Success It is a challenge to design superior parts and to ensure the best welding quality in an increasingly demanding market. Customers expect quick deliveries and best results, having the best wires is critical. Fuhai Liu, product and sales manager – filler metals and Craig Robertson product specialist – filler metals from Welding Industries Australia explain.

CCORDING to a 2014 report by the Reserve Bank of Australia (RBA), the world price of Australia’s mining exports has more than tripled over the past decade, while investment spending by the mining sector increased from two to eight per cent of GDP over this period. It is one of the largest shocks to hit the Australian economy in generations. Despite the economic slowdown in Despite global financial uncertainty, heavy industries still have a part to play in Australia and they require maintenance and engineering services.

28 APRIL 2017 Manufacturers’ Monthly

the past few years, there has been no avoiding the exponential growth that the industry has gone through for the decade. In addition, the Minerals Council of Australia has predicted a further pick up of the mining sector amid overall economic uncertainty, from the second half of 2016 onwards. Despite tough economic conditions and global financial uncertainty, the industry continues

to play an important role in contributing to the Australian economy to improve living standards and create jobs. Moving into the future, manufacturing techniques and technologies have also evolved and improved to help businesses move along. In heavy industries, better tools, machinery and services are always present. As the industrial landscape becomes increasingly

competitive, it is imperative that costs need be kept low. Construction and engineering solutions companies like Finco Engineering have been striving to ensure that maintenance services are kept down with superior engineering support services.

Quality service through quality welds Finco Engineering is a Mackaybased business servicing the mining, marine, earthmoving and agricultural industries in that area which offers mobile mine maintenance services and engineering services including welding, fabrication, heavy structural steel, stainless, aluminium and general welding. Founded in 2009, the company continues to thrive in the Queensland mining industry as expert service providers in quality custom equipment repair. Finco prides itselfon the quality of theiritsce with qualified fabricators and welders who have extensive experience in the mining industry. The team at Finco offers professional on-site and workshop based services and can design and fabricate replacement parts supplied by OEMs. Adam Finch, director of Finco, an experienced boilermaker, welder and certified International Welding Inspector explained: “With mobile mine maintenance services on standby 24-hour per day, all our resources entirely equipped to BMA (BHP Billiton Mitsubishi Alliance) specifications and are readily able to dispatch personnel such as diesel mechanics, trades assistants, auto electricians and boilermakers – as per requirement by clients, with minimal notice.” manmonthly.com.au

Precision ENGINEERING

Downtime can cost hundred of thousand of dollars on profits.

“Whether it is designing superior parts or ensuring the best quality welds, it is a fine balance between offering very good price and ensuring the quickest delivery,” said Finch who does his best to pitch his products with after-market prices. Within mining, having downtime due to damaged dredges and buckets could mean hundreds of thousands of dollars of potential profits lost in a financial year. “We understand that downtimes are detrimental to businesses so we needed to customised our approach in delivering our services to match demands for quickness and guaranteed quality. Hence investing in the best engineering tools is essential,” said Finch. manmonthly.com.au

Having the edge over the competition Finco services excavator buckets like the EX3600 of the Hitachi 5500 series excavators that are commonly used in the mining market. Different products use a range of base materials from 140mm plates down to tungsten hybrid pipes, which are welded with the Hobart FabCo 81N1 wires. For onsite work, they serve Middlemount Coal, a joint Peabody - Yancoal venture, BMC (Billiton Mitsui Coal) at Poitrel coal mine and at BMA at Peak Downs, they are the main service providers for Ausdrill’s tractor maintenance – all utilising Miller welding equipment and the Hobart FabCo 81N1 wires. Due to its reputation for quality

The second pass of welding follows the shape and contours of the first weld so if it is ugly the first time around, you will get an overall bad looking finish. With the FabCo wires, the set-up process is quick because you only need to get the weld to touch the needle gun and remove the slag and then you are all good for the second round. and price point, the company has also been approached for numerous projects including one where it was approached to provide a cost-cutting solution for the removal of mid-life

dump truck engines. It provided a solution that consisted of a unique design of an efficient, certified lifting frame. Meeting such demands require Manufacturers’ Monthly APRIL 2017 29

Precision ENGINEERING the correct welding setup – in this case Miller welding machines right down to the Hobart wires, such as the FabCo 81N1 used in the process. “Onsite work is always a challenge because you are up against the elements. Some of these challenges include times where certain other products that require a 280 deg C preheat and are not user friendly.” Finch added that at those temperatures the slag (non-metallic by-products from metal smelting considered to be waste though largely environmentally benign) does not cool fast enough causing an undesirable weld appearance with low-quality wires. “The Hobart wires get around that preheating issue and my employees enjoy using them because they are easy to use,

reliable and ensure very neat welds that clients are absolutely happy with.” Clients in the mining industry spend millions of dollars on high-end machinery and equipment. Therefore, they want to see the return of investment of these products with the most cost-efficient maintenance as possible. According to Finch, because of this, their equipment needs to be kept running continuously and consistently. “If we are going to be using substandard wires, then the work is going to end up being substandard and frankly, in such a competitive engineering maintenance industry, we want to be re-contracted continuously by our clients and have a reputation to maintain at both ends – us and the clients”.

Challenges in maintenance “We have absolute trust in the Miller engine driven welder products like the Big Blue series plus other WIA products that we use across our business, said Finch. “The reliability of the Miller engine driven welding machines is of paramount importance to us because that means downtime is kept to a minimum. We use 12.5mm gouging rods, which other machines on the market cannot handle because of the lack of power.” The challenges are mainly that of the preheating to 280 deg C and the welding stability afterwards will be difficult unless there is a greater amount of power in the machines, which then enables the saving of time by using a bigger gouging rod Maintaining a good travel welding speed with wire feed is important.

30 APRIL 2017 Manufacturers’ Monthly

that makes material removal faster and welding the FabCO 81N1 wires quicker.

The blend of speed and reliability Maintaining a good travel welding speed with wire feed is important to achieving the desired weld. According to the welding tips guide published by Hobart, there is a need to check the molten weld puddle and listen to the arc for evidence of traveling too fast or too slow. Moving at a high travel speed or too fast causes insufficient penetration, plus there will be popping sounds as the wire comes into contact with the cold metal just ahead of the puddle. Welding at low travel speeds, or moving too slow, will cause the weld metal to pile up, resulting in poor fusion. “Having the other wires on the market does limit the speed in which we can meet the customer’s demands in terms of quantity delivered,” Finch mentioned. He further explained that since this means spending more time on labour – which eventually translates to money. In the case of multipass welding, if the first weld run through is a neat one, then there is no need to prepare much more for second run through. “Man hours means more labour and that’s where the money is, so if we keep our man hours down, it is a win-win scenario for both us (who saves money on man hours) and the client who is kept happy (with faster product back to floor). So, a product like the FabCo 81N1 wires is a good solution,” said Finch. “The second pass of welding follows the shape and contours of the first weld so if it is ugly the first time around, you will get an overall bad looking finish. With the FabCo wires, the set-up process is quick because you only need to get the weld to touch the needle gun and remove the slag and then you are all good for the second round.” In an industry where the fastest manmonthly.com.au

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to the market wins, the ease of use and the after weld appearance of the product is important. Ensuring the after weld appearance does take up time especially at those high preheats where there is metal on metal and risks of a bad weld because the slag doesn’t cool well. Finch mentioned, “With the Hobart wires, we were able to put those worries to rest about the slag not cooling down quickly enough.”

Ready supply and affordability With the growing demand for maintenance of machinery parts in the mining industry, engineering solutions companies are constantly hard pressed to maintain a ready stock of consumables for their fabrication services. This could manmonthly.com.au

mean increased downtime in the form of service delays to customers which could be detrimental to engineering solutions providers. “We buy the FabCO 81N1 wires by the pallet and we have never had any issues in terms of getting a ready stock from WIA,” Finch said. “In addition, pricing for the Hobart product is very competitive as compared to the generic brands in the market when you talk about price by the pallet. So, for a product that adds value to both us as an engineering solutions provider and in terms of quality plus speed to market for our customers, the choice is really a no brainer,” concludes Finch. Welding Industies of Australia 1300 300 884 www.welding.com.au

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193-195 Power Street, Glendenning NSW 2761 Tel: (02) 9832 2777 Fax: (02) 9675 3645 www.bacsystems.com.au Manufacturers’ Monthly APRIL 2017 31

Precision ENGINEERING Extending the life of your bearings Bearings play a crucial role in machine productivity. Changing them too often results in downtime and increased costs. Jeff Gordon, Schaeffler Australia industrial heavy industries manager, tells Manufacturers Monthly how it’s possible to extend bearing life by 50 per cent with a new housing unit that can save money for companies across the country. Maintaining production is vital to energy and resources sector where short interruptions and maintenance outages can cost a lot of money.

HE industry is demanding extended bearing life, to reduce their maintenance and total cost of ownership (TCO). Schaeffler Australia is listening, and has launched new plummer block housings for the bulk handling market in March 2017. The new generation of FAG (Fischers Aktien-Gesellschaft) plummer block housings are largesize bearing housings, engineered to increase the service life of fitted spherical roller bearings by up to 50 per cent compared to conventional plummer block housings. This reduces the downtime needed to change the housings. “Maintaining production is obviously vital in our energy and resources sectors – where even short interruptions and maintenance outages can be measured in millions of dollars – but whole-of-life performance is equally important to

32 APRIL 2017 Manufacturers’ Monthly

the broad spectrum of industry,” says Jeff Gordon, Schaeffler Australia industrial heavy industries manager. He notes that Schaeffler has made numerous advances on these new models, including increased strength and shock resistance thanks to the use of EN-GJS-400 grade spheroidal graphite cast iron as standard. The results make the SNS suitable for a broad diversity of applications where spherical roller bearings are widely used, including machinery operating in aggressive environments. The patented design of the FAG SNS plummer block housing allows the distribution of the load on the bearings more uniformly than alternative housings. Using its in-house developed bearing design, calculation and simulation software, Bearinx, Schaeffler can analyse different housing designs with various

combinations of bearings, enabling the optimisation of the complete system. The FAG SNS housing design is a

split plummer block, which allows maintenance crews to carry out their work more efficiently and quickly by providing easier access to the bearing. Additionally, a special split labyrinth seal facilitates the use of the FAG split spherical roller bearing inside the housing. These roller bearings simplify cutting, mounting and maintenance downtime by 50 per cent or more, reducing costs by eliminating complicated bearing replacement procedures in machinery and plant. Four different seal variants including high-speed labyrinth seals, split labyrinth, clip-in and bolt-on taconite seals ensure effective sealing of the SNS housing to protect the bearing from harmful contaminants. An axial lubrication groove in the upper section of the housing ensures optimum lubricant supply for bearings in every bearing position. For example, the FAG Concept 8 compact lubrication

The new SNS housing design distributes loads more evenly in the rolling bearing, extending the operating life of the bearing, while mounting, lubrication and condition monitoring are made much easier by numerous details of the new housing design.

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Precision ENGINEERING Schaeffler has designed the housing to integrate effective anti-corrosion characteristics.

system can be used to supply grease and oil. Schaeffler has designed the housing to integrate effective anti-corrosion characteristics and reduced cleaning requirements by including inclined run-off areas and a projecting upper housing section.

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“The focus during development of the new SNS housing was on compliance with customer and application-specific requirements,” says Gordon. “Criteria such as the bolt-on taconite seal, single branded solution of bearing, housing and sleeve, were used to increase plant

reliability, robustness and improved condition monitoring.” To enable this improved condition monitoring, Schaeffler has provided the housing connections on both sides as a standard for its FAG SmartCheck condition monitoring device. In cases where these two

connections are not accessible, a centre mark in the upper section of the housing indicates the optimum mounting position for condition monitoring. Schaeffler can also supply a housing with connections for its new Concept 8 automatic lubrication system. The new plummer blocks are available for for shafts from 115mm to 530mm and from 4 7/16 inch to 19 1/2-inch diameter. The housings are ideal for all industries that can’t afford breakdowns or production stoppages, such as mining and minerals processing, quarrying, cement, manufacturing, oil and gas processing, bulk materials handling (including port loading facilities), manufacturing and steel, primary product and food and beverage processing, pulp, paper, packaging and forestry, and major infrastructure and water and waste water plants. Schaeffler Australia Pty Ltd +61 2 8977 1000 www.schaeffler.com.au

Manufacturers’ Monthly APRIL 2017 33

SupplyCHAIN & PROCUREMENT Racking done right BAC Systems is an Australian manufacturer that has specialised in industrial storage and workshop systems for over 40 years. Manufacturers’ Monthly spoke with BAC marketing director, Robert Griffin, about BAC’s culture of continuous concept and system development.

ITH facilities located in Western Sydney, BAC Systems is 100 per cent Australian owned company that provides industrial storage and workshop systems to many different sectors. “Every industry requires some form of racking and we have a wide range of solutions for just about every sector in the market.” The company was founded by Walter Bachmann, who is still the CEO. With over 40 years in the market, it keeps its design conceptualisations and manufacturing

in-house. “At BAC, we look after the products from conceptualisation until it is ready to go into the market – and this is all done by our in house national sales, manufacturing and assembly teams” said Robert Griffin, BAC marketing director. While BAC pride themselves as a racking specialist, they are best known for their drawer storage cabinets – used for high density industrial storage for warehouses, parts and tool stores. In addition, they produce strong steel shelving and pallet racking plus a wide range of benches.

Over the years, the company has provided racking to most of the industries in the market. “Anybody that needs storage can benefit from our product. Over the last four decades we have provide our equipment to all industries, most notably the automotive, defence, food, manufacturing, health, education, to private garages, to art galleries and museums, and even to Parliament House.” In the manufacturing industry, BAC provides their customers with both fixed and mobile storage

solutions, especially for their tools. “We have an excellent reputation for outfitting parts stores. Our high-density drawers are the most effective way for these stores to store their small and medium sized components. They create new efficiencies for our customers. For example, high density drawer storage greatly reduces your storage footprint and your staff end up not having to walk as far when picking each day,” said Griffin. Additionally, the drawers integrate well with inventory management systems.

BAC Systems is 100 per cent Australian owned company that provides industrial storage and workshop systems to many different sectors.

34 APRIL 2017 Manufacturers’ Monthly

manmonthly.com.au

SupplyCHAIN & PROCUREMENT Easing through the systems Griffin explained that most customers usually have an existing management system to keep track of storage and racking systems. In most cases, they would have selected or already have the required software management solution for their business needs. BAC’s storage and racking products can then integrate into the set up that the company may have. “It actually works quite well because our cabinet layout is very logical. The software will generate a part location by beginning with the cabinet number, the drawer number, and then the column and row number within the drawer.” Griffin said. He said that the systems are organised in such a way that customers can adapt it to their storage needs quickly. When the BAC team returned to check on their customers, they found that many of these customers have already adapted well. “Some of them have already generated labels and barcodes for the drawers and cabinets with all new part locations entered into their software system. All our dividers and plastic bins have a dedicated flange for part numbers and barcodes for each storage location. These are easy to scan and to locate, especially when you are stocktaking,” said Griffin.

Keeping up to date with developments Recently, BAC has released a new steel tool board, much like a classical pegboard that they call the ‘BAC Wall Panel’. The BAC Wall Panel is a perforated steel panel complete with dedicated hooks, toolbars and pegs that can be used to hang tools. “It is based upon a very successful existing product and we are excited by its new potential.” Griffin said. The BAC Panel maintains the previous panel’s ability to integrate with other BAC products. As an example, Griffin mentioned that it will fit seamlessly into their BAC Flightline Toolboard where these panels will be mounted at a slant, such that that the tools are held securely to the panels, enabling the whole cabinet to be wheeled manmonthly.com.au

freely. “In addition to this, we have now added the capability to mount the BAC Wall Panel vertically on walls using some specially designed brackets. This simple upgrade opens new opportunities for our customers,” said Griffin. “We are also especially excited about our new dedicated toolbars, hooks and pegs. It took lots of research and design to finalise these, especially the new toolbars, but we are confident that, with our range, we can store nearly all kinds of hand tools. We have also added a parts tray to the range to store some regularly used small parts on the BAC Wall Panel in small bins. This could be useful in lean manufacturing,” he added. “Our products are a cut above the competitor because of the quality control in the manufacturing process with every component checked before they are sent out,” said Griffin. He added that all cabinets and benches are assembled by hand by a skilled assembler who inspects every component before it is put together. “The experience that we have to offer is coupled with the great work and attention to detail of the BAC design team who have had some great award-winning innovations over the years. Our products are designed to be modular to help us be flexible for our customers. This allows our sales team to serve our customers by providing genuine solutions rather than something generic,” said Griffin.

Partnerships are the key When it comes to giving customers insight about what works best, BAC likes to work with customers from the beginning of their planning stages. This allows the customers to make better decisions to maximise their storage needs while keeping costs down. “Well, our BAC sales team can actually help with this. We will come to your own site to discuss with you your needs and how you work. We will then survey your inventory, if required, and take all of the measurements,” said Griffin. In addition, the survey is complimentary – an important value added service.

BAC uses this information to put together a proposal that aligns with customers’ needs and provides flexibility for further change or customisation should the customer request for it. Griffin said that it is important that the best solutions are those that are built to last. “If you consider the features of the BAC product, to compare with other solutions, you will find that we use a higher

usable space for Schweppes within their depot. According to Griffin, the solution combined the BAC Drawer Storage cabinets, each with custom partitioned drawers, with heavy duty benchtops to make a workstation. This solution reduced the clutter, future proofed the depot, and ensured the maintenance team fit comfortably into the new depot space.

BAC drawer storage cabinets are used for high density industrial storage for warehouses, parts and tool stores.

strength steel, much larger roller bearings and that our products are more modular and flexible. We have built these cabinets to last for decades. We find that some of our cabinets still being used by our customers are older than many of our staff! Qantas is an example of this, still using cabinets purchased from us around 30 years ago.” To cite an example, previously, the maintenance department of Schweppes Australia (Asahi) engaged BAC Systems to devise a solution to compress their escalating storage footprint and to reduce the clutter of their parts and tools as they were moving into a new space which was not large enough to accommodate their current storage system. The Queensland BAC technical sales representative visited the site and completed a complimentary site survey. He then devised a solution that met the workers’ functional requirements and generated more

In support of bringing manufacturing back to Australia To further grow the manufacturing sector with the creation of more jobs, the local companies need to be on the same page as the government’s initiative. “As an Australian manufacturer, we (BAC) work very hard to maintain local manufacturing jobs and, as such, believe that we are contributing to the good of the wider community and the economy,” said Griffin. “A strong economy isn’t just about farming, mining and retail. I feel that, once manufacturing is playing its role in Australian to its fullest, the Australian economy will find stability and prosperity. Keeping manufacturing here is very important to us,” he concluded. BAC Systems Pty Ltd (02) 9832 2777 www.bacsystems.com.au Manufacturers’ Monthly APRIL 2017 35

What’sNew Multi-purpose intelligent data loggers Manufactured in Australia, DataTaker is one of the world’s leading brands of general purpose and specialised data loggers and data recording equipment, which is used by customers across many industries including environmental, industrial, construction, manufacturing, process management, scientific, laboratory and education. DataTaker data loggers are designed to be compatible with almost all types of sensors, with a strong focus on communications to make data easily accessible. With over 30 years of experience in data acquisition, DataTaker can help its customers select the most suitable model based on their application requirements. Pacific Data Systems 07 3361 2000 www.pacdatasys.com.au

WASP stability protection unit The Warning Alarm for Stability Protection (WASP) is an innovative, light-weight and simple to use monitoring system suitable for various emergency scenarios. It can be deployed in a range of positions thanks to its various attachment capabilities. It provides a visual and audible early warning detection system for any movement or vibration that could potentially put rescue personnel or the public in danger. Developed in the UK by experienced fire fighters in conjunction with Datum Group, a structural monitoring specialist company, the WASP is designed to meet the rigorous and precise technical specifications for use in the harshest of rescue environments. Designed to detect the slightest movement, the WASP is ideal for collapsed buildings and structures, structural fires, road traffic accidents and collapsed trenches. The WASP can also monitor structural and mechanical failures and disturbances. PT Hydraulics Australia 03 9562 8800 www.ptrescue.com.au

36 APRIL 2017 Manufacturers’ Monthly

Double Deep Pallet Racking Double Deep Pallet Racking is the best compromise between a selective and high-density pallet racking system. By storing pallets two deep, operators can achieve higher storage density and still be able to access stock easily and relatively quickly. Double Deep Pallet Racking is used in conjunction with special forklifts, often fitted with a pantograph mechanism specially designed to reach the second pallet location. For businesses needing both storage volume and selectivity, double-deep pallet racking may be the solution. The system can be easily adjusted or relocated at any time, or even added to current set-ups. It increases storage density compared to single-deep racking, reduces space needed for aisles and is suitable for

high-throughput stock where restricted access is not a problem. Colby Storage Solutions 1800 265 291 www.colby.com.au

Osaka Jack NEX-2EGS electric hydraulic power pack The Osaka Jack NEX-2EGS electric hydraulic power pack pump is suitable for various applications to power small to medium sized hydraulic cylinders and tools. Being lightweight and extremely portable at 14kg, it is easy to transport between on-site and factory based operations. The NEX-2EGS is a suitable product for workers who need a reliable and compact hydraulic electric pump to power their hydraulically driven gear with ease. Cylinders, jacks, flat bar cutters and benders can be powered. All Osaka Jack products and equipment

are designed and precision manufactured in Japan to the highest of international standards. Stainelec Hydraulic Equipment 02 4871 2121 www.stainelec.com.au

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Manufacturers’ Monthly APRIL 2017 37

The LastWORD Time to put good policy ahead of politics on energy Rising energy prices could pose a serious problem for manufacturers in Australia – especially the energy intensive ones – with potential loss of jobs.

USINESSES and households across eastern and southern Australia are starting to see a new wave of energy cost increases. These will be painful for many, and a serious blow to the competitiveness of some trade-exposed industries – manufacturing certainly among them. Just last month, a new Ai Group CEO survey added to the weight of evidence that rising energy prices are exposing businesses and their employees to heightened risks and may see Australia losing jobs and business activities offshore. The survey report, Energy shock: No gas, no power, no future?, drew on multiple lines of evidence to confirm that energy prices are rising fast across the National Electricity Market and Eastern Australian gas market. Business and households are going to see severe increases in their costs. An Ai Group member running a national company with an international parent recently showed me his electricity bill. It had doubled in the past year. His European head office pretty much told him to forget further investment while they considered their options. This is a typical experience and our close liaison with our industrial members finds that the cost of electricity for many industrial users (excluding network charges) has risen over the past two years by 106 per cent in Queensland, 150 per cent in NSW, 163 per cent in South Australia and 168 per cent in Victoria. It is not surprising then that power has in recent years gone from a top-10 to a top-four expense for a wide cross-spectrum of businesses. Wholesale electricity prices are roughly doubling. Wholesale gas prices are at least doubling and may well rise much further. Spot prices

38 APRIL 2017 Manufacturers’ Monthly

are becoming more volatile. The dollar impact of the current and forecast price increase is staggering. Once fully passed through, the electricity and gas price increases will cost energy users as a whole $10 -$12 billion per year. Households will pay up to an extra $3.6 billion a year, and business up to $8.7 billion a year. Within business, energy-intensive manufacturers will be particularly

mean more risk for users (especially large ones). Politics-driven energy policies are making a bad situation worse. This includes decisions to put gas development on hold in NSW, Victoria and the Northern Territory, partisan warfare on energy and climate at the Federal level, and entirely uncoordinated State renewable energy targets. Several factors are driving up wholesale electricity and gas prices.

More available gas will help electricity, as will meeting the existing renewable energy target (RET) and settling national coherent energy and climate policy reforms to ease transition and reward low-cost flexibility. Energy efficiency and productivity and demand response will help with affordability and reliability for all. hard hit, paying up to $4 billion a year. This will worsen margin pressures for business, with some manufacturers questioning their ongoing viability as a result. Such businesses will be looking closely at options to move operations offshore, reduce their local workforces or both. Our survey found over half (51 percent) of businesses expected price increases in the coming year and only four per cent expected a decrease. Most businesses sign energy contracts of more than one year, and price increases take time to filter through. Wholesale prices have continued to worsen since the survey. Long-term gas contracts are getting harder to obtain (worsened by a non-transparent market) and onerous take-or-pay provisions

These include the closure of some baseload electricity generators; the unprecedented LNG developments placing strain on both the gas market and the cost and availability of gasfired electricity generators; record electricity demand related to the pumping of LNG gas; the recovery of global coal prices; and the restriction on the development of additional onshore gas supplies. Achieving lower energy prices will not be easy: gas faces international price parity and rising production costs, while all new electricity generation looks expensive and new investment is needed. Easing production, an import terminal and pro-competitive market reform will help in gas. More available gas will help

electricity, as will meeting the existing renewable energy target (RET) and settling national coherent energy and climate policy reforms to ease transition and reward low-cost flexibility. Energy efficiency and productivity and demand response will help with affordability and reliability for all. Further reductions can be driven through well-designed policies, including State efficiency schemes, support for audits, product standards and more, that have benefits both for direct participants and the wider market. The time for a reality check is now. When South Australia’s industry and the shipbuilding program should install expensive, dirty and typically idle diesel generators just to keep their doors open, you know we have a problem – if not a crisis. With Hazelwood closing, South Australia becomes perilously dependent on supply conditions in NSW and Queensland, not just Victoria. As an Ai Group member told me, that’s a very long extension cord. We now have a national economic security problem. If global boardrooms turn their back on Australia over energy or businesses are forced offshore, it will represent the biggest collective policy failure in decades. Delivering the much-vaunted trifecta of energy reliability, affordability and sustainability needs bipartisan and national cooperation. Fixing the current debacle is a massive test of our political leadership and our federal system.

Innes Willox, Chief Executive, Ai Group manmonthly.com.au

Low-cost level measurement. Radar sensor for water management. Reliable level measurement in water treatment facilities, pump stations and rain overflow basins. Open channel flow measurement and water level monitoring.

VEGAPULS WL S 61 ▪ Measuring range up to 8 m

▪ Can be used outdoors without restriction ▪ Flood-proof IP 68 housing

▪ Operation via Bluetooth with Smartphone, tablet or PC

Further information: www.vega.com/wls61

Phone 1800 817 135

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To find out more, please contact: Bosch Rexroth Pty Ltd Phone: (03) 9580 3933 Bosch mel@boschrexroth.com.au Rexroth AG Email: Visit: www.boschrexroth.com boschrexroth.com/lt Bosch Rexroth AG boschrexroth.com/lt