Manufacturers' Monthly - December 2016

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Editor: Branko Miletic Ph: (02) 8484 0976 Fax: (02) 8484 0722 branko.miletic@primecreative.com.au Assistant Editor: Brent Balinski Ph: (02) 8484 0680 Fax: (02) 8484 0722 brent.balinski@primecreative.com.au Editor-at-Large: Alan Johnson Ph: (02) 8484 0725 alan.johnson@primecreative.com.au Art Director/ Production Coordinator: Michelle Weston michelle.weston@primecreative.com.au

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Editor’s Comment

18 Instrument Manufacturing 32 Industry 4.0

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Market Analysis

20 Industry Opinion

34 Internet of Things

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Industry Comments

36 The Last Word

12 IT@MM

22 2016 Top 100 Manufacturers

14 Lean Manufacturing

28 Energy Management

39 New Products

16 HR Management

30 Facilities Management

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 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 information published.

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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 All articles submitted for publication become the property of the publisher. The Editor reserves the right to adjust any article to conform with the magazine format.

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Average Net Distribution Period ending Sept ’15 18,371

Behind the cover IBIS has noted that the slow decline of Australia’s traditional manufacturing industry looks set to continue, with a disappointing number of winners in this year’s manufacturing report.

One of the more interesting winners in this year’s Top 100 manufacturers feature is the specialised explosives manufacturing industry, with companies like Orica and Downer taking advantage of a substantial increases in coal prices.

With the price of coal rising 200 per cent in the past three months, production is being ramped up in Australia many coal mines are being

re-opened and a substantial increase demand for specialised explosives used to clear overburden in coal mines. In fact, half the demand for explosives comes from coal miners. In line with this, the explosives industry is expected to grow by 5.2 per cent in the coming year to reach $3bn. While the mining equipment manufacturing sector has declined considerably year on year since 2013, the industry may have bottomed out and is now predicted to turn around over the next five years or so. The worst may well be over for this sector.

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Comment

BRANKO MILETIC – Editor

How will manufacturers respond to President Trump?

A

CCORDING to a recent article in Forbes, America’s manufacturers are getting very worried. As you read this, a number of influential US manufacturers and their associated industry representatives are urging President-elect Donald Trump to back off from his most threatening trade rhetoric. They want him to pursue a more nuanced approach to trade with China and Mexico, avoiding unilateral tariff actions and focusing on negotiations.

This rather unusual alliance of corporate lobbying groups, CEOs and pro-trade lawmakers say they are eventually hoping to persuade a soonto-be President Trump that free-trade agreements can help grow the U.S. economy and will create jobs.

4 DECEMBER 2016 Manufacturers’ Monthly

For his part, noted Forbes, Trump has said he would withdraw from the Trans Pacific Partnership (TPP) and the North American Free Trade Agreement (NAFTA) unless it is renegotiated to his satisfaction. He would also declare China a currency manipulator to force negotiations for better trade terms.

His suggestions that his administration could impose 45 per cent across-the-board tariffs on goods from China have drawn threats of retaliation by Chinese state media against U.S. soybean farmers and companies such as Boeing and Apple.

If this were to lead to a US-China trade war, then Australia would quite literally be the meat in this global trade stoush sandwich. Considering that one out of every three Australian

exports lands somewhere in China, this could become a problem and a big one for Australia’s economy, and ultimately our manufacturing sector.

However, that is at present very much in the wait-and-see basket. What seems to be the more immediate effect of Donald Trump’s win the US election is how it’s affected our politicians here in Australia - especially those in who should have more than just a passing interest in our manufacturers.

Take federal opposition leader Bill Shorten as one prime example.

According to the Australian Financial Review (AFR), just days after the Trump win, the right honorable opposition and ALP leader was so anxious to distance federal Labor (and presumably himself) from what he called the “barking mad” policies of Donald Trump that he has adopted the Republican President-elect’s own wilder protectionist rhetoric.

Apparently Mr. Shorten wants to hark back to the ‘good old’ 1890s when it comes to global trade by promoting trade protectionism as the best way forward in order to hold together his party’s uneasy coalition of suburban blue-collar unionists and inner city left-green progressives.

So now, said the AFR, we have the mind-bending scenario of both of Labor’s wings – along with the Greens and Pauline Hanson - agreeing on erecting barriers to international trade in the name of protecting Aussie jobs.

“My party will heed the lessons of Detroit, Michigan, of Ohio and Pennsylvania,” Shorten vowed, adding that, “We will buy Australian, build Australian, make in Australia and employ Australians.”

Then he capped off this patriotic chest beating by demonising 457 work visas for undercutting Aussie wages and taking Aussie jobs, even though the number of such visas has fallen by one-third over the past few years.

One could be forgiven in thinking

that the federal ALP will adopt Trump’s ‘Make America Great Again’ slogan - also known as MAGA to the Trumpistas – all they need to do is substitute the word ‘America’ with ‘Australia’ and even the acronym can stay the same.

Not to be outdone, quite a few members of the Coalition, and by that I don’t mean just right wing cheerleaders like Corey Bernadi, have been high-fiving each other over Trump’s electoral success. Much like their ALP counterparts, it seems wallbuilding, even in an economic sense, is now the flavour of the month.

While it’s true that the key Trump economic ideas of cutting company taxes and keeping jobs local are good ideas, along with the need for Australia to not be so liberal with handing out 457 visas, the notion that a trade war with China will benefit anyone – bar perhaps a handful of apparatchiks in the highest echelons of the Chinese Communist Party – is at best fanciful, and at worst, delusional.

Yes, it would be nice to be able to resurrect our near-extinct car manufacturing sector and I would love to see those steel mills in the Illawarra working day and night pouring out ingots as if they were like, well, hot cakes I guess.

However, that is not the reality we live in - neither domestically nor globally.

So while we can admire, and maybe in some cases even emulate some of Donald Trump’s less controversial and more commonsense policies, the idea of marching lockstep with the US into a trade war with our biggest trading partner is about as practical (and economically feasible) as building a 50-foot high wall across the entire 3500km USMexico border.

In other words, the world has moved on and so too has Australian manufacturing. branko.miletic@primecreative.com.au manmonthly.com.au

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Comment

SYED SHAH – Editor of Manufacturers Monthly

Making Sense Of The Emissions Bandwagon Energy management technologies are being adopted by companies these days with rising costs, stricter regulations and the desire to have a sustainable image. Syed Shah looks at some of these trends.

S

OMETIMES it is a genuine drive to reduce carbon dioxide (greenhouse gases in general) emissions. At other times, it is purely to reduce costs and maximise bottomline. Generally, it is always linked to rising energy costs and a competitive marketplace plus possible penalties (depending where one is) on atmospheric emissions.

In other words, it’s a mutually beneficial relationship where companies get to save costs and the environment gets to see a better tomorrow. Other reasons also include corporate image in regards to public perception but it is more than often a combination of a single strong primary motivation and a few secondary drivers that varies from region to region.

Analyst perspectives, government actions With energy accounting for a significant portion of the operating costs within many industries, professional services consultants

6 DECEMBER 2016 Manufacturers’ Monthly

Accenture talks about five actions to manage costs effectively and achieve sustainable business model improvements.

These include: 1. Think of margins, not just production 2. Scrutinise costs, and focus on controlling their drivers 3. Concentrate on improving baseline production 4. Share risks and rewards with suppliers 5. Change one’s culture with greater emphasis on planning, accountability and service quality.

Ultimately, energy management swirls around many factors – peak shaving, load shedding, fuel switching, abnormal situation management, interruptible energy supplies, real-time optimisation, advanced process control, forward planning, captive power production and the list goes on. At other times, it requires a call to action by the powers that be to drive the trends

towards sustainability in businesses.

Australia’s previous prime minister, Tony Abbott promised that his first act in government would be to abolish the ruling Labour government’s carbon tax introduced previously by former PM Julia Gillard in 2014. In place of a market means for fighting action, Abbot wanted to allocate A$3 billion on “inducements” for big carbon emitters to clean up their acts over the next four years following implementation. Moving forward, the current prime minister Malcolm Turnbull is moving ahead with the 2030 reductions of emissions scheme with a target 26 to 28 per cent reductions based on 2005 levels after the 2015 UN Paris Climate Conference.

Initiatives from the industry In the manufacturing space, familiar manufacturing names like Siemens, Sandvik, Schaeffler, Schneider amongst many others, have embarked strongly on corporate social

responsibility (CSR) visions for the products and services suites they are offering customers – simply because of the profitability of offering energy efficient tools to manage operations to help customers who are down the sustainability route themselves with their own products.

Schneider Electric, recently introduced ‘Continuous Efficiency’, a suite of managed services and software that combines the knowledge of its experts with sophisticated tools and technology.

Schneider Electric says that the mix of onsite and remote support, as well as software, allows companies to uncover savings opportunities, implement changes at both the site and enterprise level, and constantly refine performance.

“Mounting pressure to reduce operating costs, coupled with shareholder and customer desire for improved sustainability, has made energy management a priority for companies,” said James Potach, senior vice president of energy and sustainability services at Schneider Electric. “However, organisations are typically presented with services or technology solutions. And the answer for complex operations is often ‘both.’”

Process industries software and services provider Aspen Technology, recently announced that Norwegian energy company Statoil Norway selected AspenTech’s aspenONE (MES) manufacturing execution systems as its (IMS) information manufacturing systems technology standard.

Josh Fredberg, senior vice president, products & marketing, AspenTech was quoted as saying the partnership was formed to “drive performance improvements and save millions of dollars in cost reductions” by presumably streamlining energy heavy applications with advanced visualisation and analysis of its processing plants. manmonthly.com.au

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Comment

INNES WILLOX, Chief Executive, Australian Industry Group

Building a talent pipeline for manufacturing in the era of Industry 4.0

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OR most forward-looking manufacturing businesses, talent planning is becoming a major focus. Skills gaps continue to grow as a result of an ageing workforce, increasing movement within job markets and the impact of Industry 4.0.

Certainly, Ai Group’s own research and policy work supports this conclusion, and it’s echoed by recent market research undertaken by those at “the big end of town”, such as PwC and CEB. Our Members continue to report challenges in filling STEM-related roles, including some engineering disciplines. In Victoria, the fill rate reported by the Department of Employment’s Labour Economics Office is currently at 67%, with companies deeming only 1.9 out of 50.8 applicants per job to be ‘suitable’.

Given statistics such as these, is it time to reassess the way we view

talent and how we are attracting it? Perhaps a longer-term approach would be beneficial to manufacturing organisations, building a talent pipeline of future leaders and innovators who are specialists within their field of production.

According to CEB, when a vacancy arises there are essentially three talent options available, based on the candidates’ ability to execute the tasks and their engagement or communication skills: 1. BUY – buying a candidate who is a top performer in both these areas.

2. BUILD – employ a candidate with potential and build these skills via training and mentoring.

3. BUY AND BUILD – a combination of the two, recognising the need for development by conducting a training needs analysis.

Within technical industries, including manufacturing and engineering, the BUY option is

What university graduates lack in experience, they can make up for in enthusiasm, agility, resilience and the curiosity that leads to innovation.

8 DECEMBER 2016 Manufacturers’ Monthly

proving to be a rarity. Skill sets are short and top performers are in such high demand that the competition is fierce and the costs high.

The BUILD option can potentially be a cost-effective long-term solution.

However, it is worth noting that accurately identifying internal talent before investing in their development is the best way to derive a return on your investment. Most organisations promote for functional expertise without consideration of the “soft skills” required for good leadership – which are usually the hardest ones to find!

The result is that many organisations are led by competent functional specialists, and they then wonder why they continue to underperform.

But what if you were to start the process of building a talent pipeline of future leaders earlier – leaders who can develop both functional competence and the requisite attributes and aspirations to lead manufacturing through the challenges presented by Technology 4.0, internationalisation of service and a world we cannot yet imagine?

New university graduates present the opportunity to BUY AND BUILD talent. No graduate, unless they have extensive work experience, will meet all of the required skill sets for a technical role. But what they lack in experience, they can make up for in enthusiasm, agility, resilience, and the curiosity that leads to innovation.

With the current lack of skills in our market, manufacturing growing month-on-month and global competition taking hold, it is imperative that our industry takes steps to attract, develop and retain the next generation of talent – and to build innovative, forward-thinking leaders of the future.

This has been the inspiration behind Ai Group’s new Graduate Employment Service, which we launched at Parliament House in October. We know many businesses

are keen to employ graduates, but they often need assistance with screening, recruiting, employing and mentoring the graduate to full productivity. Our service is intended to solve this problem.

Our Graduate Employment Service team works closely with businesses, universities and graduates to identify ways in which to connect graduates to real jobs, and provide organisations with the right talent pool for the future. Part of that service includes a mentoring program for graduates to accelerate their productivity and learn how to navigate the rapidly changing business landscape.

A recent placement of the service, Harry, is one fine example of the Buy and Build strategy. He is about to embark on a promising career as a Project Engineer with the highly innovative Adelaide-based company, Sage Automation.

In Harry’s words: “Despite being comfortable in my intern and tutoring jobs, I wanted to take the next steps in my career, and began searching for a full-time engineering position. This led me to the Graduate Employment Service team, which helped with testing me, organising interview times, and providing other behind-the-scenes assistance to ensure I was in the best position possible to succeed at interviews.

“SAGE Automation is renowned for expertise in systems integration and control, and they’re intimately involved with self-driving car technologies and the upgrades to infrastructure these require. I was given the chance of a role as a Project Engineer, and I’m excited about the opportunity to jump aboard and help build the future of our country.”

People like Harry will indeed have a big role to play in building that future, and we’re hoping to give many graduates like him, and the manufacturing industry as a whole, the chance to do so. manmonthly.com.au

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Comment

KEITH MCLEAN – Manufacturing Flagship Director, CSIRO

CSIRO’s place within Australian manufacturing A strong manufacturing sector remains central to any first world economy as a result of its contribution to overall productivity, its input to R&D and innovation, its contribution to exports and its multiplier effects on growth.

T

HE government through its Industry Innovation and Competitiveness Agenda has indicated six sectors where Australia is seen to have competitive strengths and these include in Advanced Manufacturing.

To support this Agenda, the Government established the Advanced Manufacturing Growth Centre (AMGC) which will shortly release its Sector Competitiveness Plan, intended to drive and support an industry led approach to the transformation of Australian Advanced Manufacturing. A draft of the AMGC plan indicates opportunities for Australian manufacturing competitiveness through:

CSIRO Strategy 2020 The CEO of CSIRO, Dr Larry Marshall, has outlined a vision for Australia as a high performing innovation economy in the CSIRO Strategy 2020: Australia’s Innovation Catalyst. Dr Marshall points out that we live in an increasingly interconnected world of fast moving technology driven change in which our future prosperity, health and sustainability is intimately linked to our capacity for innovation.

A number of recent reports, including the forthcoming AMGC Sector Competitiveness Plan indicate the need to markedly improve our performance as a nation in collaboration and CSIRO has a role in helping to create the necessary connections at the intersection of disciplines, industry sectors, science and business if we are to succeed. This success will require us to respond to accelerating global change; digital disruption and a faster more networked world while partnering across boundaries to reinvent existing or creating new industries.

10 DECEMBER 2016 Manufacturers’ Monthly

The Customer First Strategic Action seeks to create deeper innovation relationships between CSIRO and its customers and prioritise our investment decisions.

As part of this action CSIRO will shortly release its Advanced Manufacturing Industry Roadmap which complements the AMGC Competitiveness Plan by providing a longer term perspective of global drivers, opportunities and Australia’s competitive position.

CSIRO Manufacturing CSIRO Manufacturing is one of nine Business Units in CSIRO wishing to play a role in responding to the challenges and opportunities identified above. We have a vision of an Advanced Manufacturing sector which is innovative, economically viable, connected and high-tech which uses advanced materials, systems and processes to deliver products that meet the needs of customers and global markets and is recognised worldwide for its innovation.

We seek to create impact by helping transition the existing manufacturing sector, for by example, developing new processes such as flow chemistry to support our chemical manufacturing sector or by catalysing the creation of new industries and business in, for example, the MedTech/ BioTech sector.

Industries or MDI). Our Clayton and Geelong sites are co-located with Monash and Deakin Universities and each of our sites has company co-locations.

In addition, the AMGC has established a presence in both locations with the National Additive Manufacturing Collaboration Hub in Clayton, and the National Carbon Fibre and Composite Manufacturing Collaboration Hub in Geelong to showcase local technology leadership.

We are also building through Science and Industry Endowment Fund (SIEF) support and in conjunction with Monash University a Biomedical Materials Translational Facility to support MedTech and BioTech companies and expect our Australian Industrial Flow Chemistry Centre to be completed in 2017 to support the adoption of new processes in chemical manufacture.

Breakthrough Innovation To increase our capacity to help reinvent existing Australian industries and create new industries we are implementing a transformative innovation and entrepreneurial program (CSIRO’s ON Program); providing a toolbox of creative commercialisation models, including equity transactions; spin-

outs; co-investments and access to the Innovations Connections Program through our SME Engagement Centre.

Australian industry is, in general, poorly prepared for the digital disruption happening today and CSIRO Manufacturing is working with Data61; the PM’s Industry 4.0 Taskforce and global partners to ensure Australia has a globally competitive digital innovation capability.

We are working directly with a variety of advanced manufacturing SME’s to deliver innovative solutions to their problems and with bodies such as the High Performance Consortium or South East Melbourne Manufacturers Association to provide access to design led innovation or to undertake reciprocal visits to and for industry.

Conclusion A growing and successful advanced manufacturing sector is essential to Australia’s future and CSIRO wants to contribute. By providing technical leadership; deep collaboration; strong partnerships; access to capability; flexible business models and by understanding our customers’ goals we’ll build an advanced manufacturing future.

Inside the CSIRO’s Lab 22 – “Australia’s Centre for Additive Innovation” – at Clayton, Victoria.

Collaboration Hub A second action in the CSIRO Strategy is to act as a Collaboration Hub and we are developing each of our locations to enhance our connectivity to research, industry and Government. We work with several hundred business per annum from Global players (eg.

Boeing or GE) to SME’s (eg Textor Technologies; Anatomics; Norwood manmonthly.com.au

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IT@MM Lack of knowledge leads to lazy decisions from executives The number and size of cyber security attacks are increasing and Australia is one of the world’s largest targets. The Federal Government noted the current impact of such cyber attacks on the Australian economy is A$17 billion annually, writes Craig Horne, Chairman of the Australian Computer Society in Victoria, University of Melbourne.

T

HE reasons are many and include a lack of direction and commitment to understanding information security at the strategic level. Research from the Australian National University shows executive/ board knowledge of cyber risks among medium sized businesses is inadequate and board-level

12 DECEMBER 2016 Manufacturers’ Monthly

governance of cyber security risks varies wildly between organisations.

This is troubling given the ultimate accountability of board directors.

The report found that only 58 per cent of cyber security professionals thought their board had a sufficient understanding of cyber risks.

Less than half (46 per cent) said their board discusses cyber security rarely or never. Almost a third (30 per cent) even said their board does not receive reports of cyber threats to the company.

Research from Cambridge University and retail bank Lloyds also shows this level of uncertainty

is causing boards to realise they have no idea what they are dealing with and giving up. Boards are doing this by simply outsourcing the risk of a cyber attack through the purchase of cyber insurance. The report noted: “The problem with this approach to cyber risk is that too little effort is being made to understand the value,

manmonthly.com.au

IT@MM control and cost of the information that an organisation holds.”

Cyber insurance is a product that covers businesses for the risk of data breaches, employee errors in mishandling data and computer hacking attacks. It covers liabilities and the expense involved in responding to a cyber attack. For example, Sony estimated that it spent US$171 million in cleaning up after its PlayStation Network was famously hacked in 2011.

Simply outsourcing the risk of an attack by purchasing cyber insurance fails to protect an organisation’s reputation from repeated and sustained cyber attacks. Another problem is that the erosion of an organisation’s competitive advantage through the loss of trade secrets through cyber attacks, is difficult to measure and insure.

My research shows executives should be identifying the value and sensitivity of the information in their organisations. Only then can they

make sensible decisions about what IT infrastructure should be used and whether to seek expert help by outsourcing.

However identifying all the information that an organisation holds is not as easy as it first sounds. For example, some business conversations take place on social media platforms such as LinkedIn. Businesses need to consider whether those conversations are within the realms of responsibility for employers and therefore if employees should be admonished or supported for holding these electronic conversations.

Organisations can sometimes hold vast pools of information that are secret. However, holding sensitive, secret information that is non-strategic is costly and may be pointless.

Consider for example a retail organisation that has an online ordering website. This sort of organisation shouldn’t be recording and holding the credit card details of customers, if it can be helped.

Outsourcing the payment for goods or services to finance service intermediaries makes good business sense. By not holding credit card details and effectively outsourcing that function, an organisation has made itself safer because it simply can’t end up on the front page of a newspaper for leaking credit card details.

Sometimes sensitive information is necessary for conducting business operations. If this is unavoidable, then organisations might need to ask whether the security controls they have in place to protect their sensitive information are enough. This might also extend to information being used by suppliers or customers.

If the assessment reveals that security controls are not enough, then a business case needs to be made for increased budget to the board. This may be costly, but if sensitive information is necessary for conducting business operations, then it must be protected and the security

budget should be approved.

Organisations routinely fail to fully assess and protect against the risks introduced by storing or sharing information with other organisations.

Examples include sharing with suppliers, customers, regulators and contract staff.

High profile cyber bungles from supplier-side attacks include the Target attack in December 2013, where the point-of-sale machines, supplied and operated by a thirdparty supplier, were infected with a virus that siphoned off all the credit card details of customers.

Board directors not taking the time to understand information security strategy can lead to a blanket approach of mitigating all risk of a cyber security attack by simply purchasing cyber insurance.

This clumsy approach is not sustainable and consumers should be demanding more from our business leaders.

From The Conversation.

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Manufacturers’ Monthly DECEMBER 2016 13

LeanMANUFACTURING Standards for successfully leading temporary employees In many Australian businesses and manufacturing in particular, temporary employees provide an important and flexible element of the workforce. In manufacturing, temporary labour is employed through labour hire agencies. They are legally employees of the agency and the agency is a supplier to the employer. For this reason, some businesses forget that temporary employees also require good leadership, writes Anthony Clyne.

L

EAN leadership is a key element of lean manufacturing and provides a framework for maximising the value of temporary employees.

Standardising leadership of temporarily employed people can transform the effort and effectiveness of each individual. This includes: 1. Standards for on-boarding, inducting, and training.

2. Standards for basic needs 3. Standards for respect and trust 4. Standard leadership walk around 5. Standards for setting expectations 6. Standards for giving feedback 7. Standards communication methods for seeking feedback

Each temporary employee should meet their supervisor before they start working and the ideally before the induction tour takes place.

The induction tour needs to be in a structure of • What, • How it is, • How it is not, • Why and then the rule for each area.

Here is an example that could apply in any work place: • What – “This is the lunch room.”

• How it is – “You can see the dishes are washed, the lunches put away and the fridge has only labelled containers for meals.”

• How it is Not – “We used to have meals in plastic bags.”

• Why – “Plastic Bags take up too much space and often meals

would be left in the bags and have to be thrown out.

• You can see from the photos of how it used to be and how it is now.”

• The rule – “All meals need to be in a plastic container with your name labelled clearly.”

2. Standards for basic needs Basic needs are about providing employment and income and having

1. Standards for on-boarding, inducting, and training.

For new tempora ry employees, a proper induction is essential before starting work. It is a legal obligation in many countries.

However, temporary employees don’t just need to be inducted in to the physical workplace (e.g the location of the toilets) and the safety rules, but also need to be inducted in to the culture of the business.

When introducing the employee to the work place the initial tour of the premises is a crucial forum to set expectations. When this induction is only done by the employment agency it misses the cultural induction.

Often the induction tour will be completed by another front line employee.

This is okay as long as the person doing the induction is properly trained, understands their responsibility and properly represents the supervisor.

14 DECEMBER 2016 Manufacturers’ Monthly

manmonthly.com.au

LeanMANUFACTURING

accurate expectations of work hours and income.

Consider what each person needs to have their basic needs met.

3. Standards for respect and trust Have your frontline leaders define how individuals are to be spoken to and write down examples. Help the frontline leaders adapt their personal style in brief role play. Equipping leaders with simple phrases can make a big change to individual temporary employees.

Temporary employees need a lot of reassurance. Often supervisors, managers, and frontline leaders don’t have time to get to know each short-term temporary employees at a personal level.

Ideally it is better if you can get to know each person and understand their motivations.

Applying these seven steps should free up time more time for your leaders to work on building these relationships.

4. Standard leadership walk around Structure the leadership walk around, which includes doing a set walk around the work place at defined times during the work day.

This includes noticing and giving feedback to temporary employees, not just the permanent team.

What

5. Standards for setting expectations Maintain the integrity of the frontline leaders by having them set realistic and accurate expectations.

Job skills training, job rotation, what is good, what is not good are workplace expectations that can be managed and can help a temporary employee work with certainty.

The standards for setting these expectations needs to be defined by the frontline leaders.

This again can be workshopped by a group of frontline leaders and then role played to refine and standardise.

This process typically takes less than an hour.

6. Standards for giving feedback Giving feedback should follow a consistent methodology among the frontline leaders and be given in a way that maintains personal style.

Coaching frontline leaders in giving feedback is a role of the supervisor and manager.

The way feedback is given is a key way in which your culture will be defined by your employees, temporary and permanent.

7. Standard communication methods for seeking feedback Temporary employees typically feel uncertain and not in a position to raise issues. manmonthly.com.au

Frontline leaders and key influencers in the workplace have roles to observe, ask, clarify, and reassure.

The Toyota standard is to observe, respect the individual by showing empathy and not blame, ask why the observed behaviour is happening (and keep asking why up to a notional five times), challenge the barrier, and then lead the countermeasures to fix the immediate behaviour and the long term behaviour.

Give an expected income range

Lean leadership provides a framework for leaders to provide all employees with the environment to perform and improve the business processes every day.

This applies to all staff including long term full time employees and short term or seasonal temporary employees.

Anthony Clyne is Lean Consulting Director with TXM, Australia’s leading lean consultants

How

Why

Share the roster format and the set an expected income range. Even if the exact roster is known on a daily or hourly basis the pattern or structure needs to be communicated.

People need to budget and the uncertainty of income is a difficult environment to function well at work.

Have a standard way to communicate information. There Communicate using three might be a verbal, a brief mediums of information meeting, a handout, and a notice. Pick three to allow some choice.

Often temporary employees will have language and literacy barriers and need information to be presented in multiple forms to enable understanding.

An example is to communicate any Set an expectation for the overtime before the meal standard communication break. Have breaks at confirming the day’s predictable times, avoid work time. going on impromptu breaks.

People need to make plans and need to communicate with family and friends to work together. It’s no good saying “No” to a school pick up on the small chance a person will be asked to do overtime.

Track individual income.

Have the actual data available to know how many hours each individual is being paid for. This is value the employment agency could provide.

People need to budget and the uncertainty of income is a difficult environment to function well at work.

Manufacturers’ Monthly DECEMBER 2016 15

HRMANAGEMENT Why now is time for manufacturers to embrace the cloud

By Thomas Fikentscher, General Manager ERP, Oracle ANZ

I

N 2017, three key issues will drive Australian manufacturers into embracing the cloud.

First of all, manufacturers more than ever need to drive down their cost of ownership and through that to be able to put more energy into managing change, implementing change, and delivering business value.

The second issue is that companies really need new business functionality to run a modern supply chain. cloud is the preferred delivery system for that new functionality, but a lift-and-shift of old functionality to a cloud deployment is not enough.

Third, manufacturers want systems that are attractive to their users, that are easy to use, that have characteristics that users are now familiar with from their use of everyday technology, and which can help address the skills shortage that exists in the manufacturing and supply chain community. This was a very important aspect of how we built these new solutions.

Not just new business processes, but a new approach to how those systems engage with their users.

Through a combination of those three things, delivered through cloud, we can deliver a very different experience and a very different set of business values.

The cloud is something people have been talking about for a while now as ‘the next big thing.’ Why is now the time for manufacturers to embrace this tool? If you look three or five years ago, cloud was being used for systems that were peripheral to manufacturing, such as customer relationship management, or CRM. Over the last few years many businesses have moved core mission critical enterprise applications to the cloud, such as enterprise resource planning or ERP. This positive experience has increased the comfort level for manufacturers to move their systems 16 DECEMBER 2016 Manufacturers’ Monthly

to the cloud and receiving the reliability, security, and performance that are required by departmental functions. That’s the number one reason: cloud is proven as an enterprise platform.

The number two reason is availability of enterprise-class solutions. That was not true a few years ago. There were just small niche providers. Now, you can have no-compromise, world-class solutions available on the cloud for manufacturing and supply chain.

However, cloud-based platforms are now enabling manufacturers to take a new approach to HR management. Instead of relying on old methods based on analogue processes, new platforms provide the ability to radically change the way HR management is undertaken.

Instead of viewing staff as a single workforce, HR managers can use digital platforms to create comprehensive talent profiles of each individual within their organisation.

Each staff profile can contain details on everything from prior experience and training to current role description and performance.

Each time a staff member undertakes new training or excels in their role, additional information is added to their profile. As a result, the profile becomes an evolving record that provides HR teams with an accurate picture of each individual and their place in the organisation.

Over time, more information is learned about each customer which allows a detailed profile to be created. This profile then allows marketing to be closely aligned with the tastes and needs of each customer.

Armed with a detailed talent profile on each staff member, an organisation’s HR department can make much more granular decisions on how individuals can be nurtured and encouraged to give their best possible performance in their role.

Should skill or experience gaps be found, steps can be taken to address them.

The benefit of this approach for individuals is more job satisfaction and the chance to have a clear career path mapped out that will guide their professional development.

Rather than having to sit through time-wasting courses or miss out on possible promotions, they can be confident that the decisions being made on their behalf are based on accurate, up-to-date information.

For the organisation, the benefits flow from improved staff productivity.

Managers can be confident they have the people with the right skills sets doing the right jobs at the right time. When staff represent one of the largest overheads for

any organisation, achieving such an outcome can make a big difference to the bottom line.

Another benefit will be a more loyal workforce, lowering staff turnover rates and reducing the need for external recruitment. If staff are satisfied in their roles, they are less likely to be tempted by opportunities at other organisations.

The digital platforms that support this approach are already being used throughout Australia. Manufacturers are fast realising that the role of HR is no longer just about managing administrative processes - it is now more about strategically managing the workforce.

By shifting away from legacy systems that don’t provide a full picture of their employees, cloud platforms are now much better placed to take advantage of future opportunities for growth.

Oracle Australia 1300 366 386 www.oracle.com/au

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, D E E N U .

O T Y E R R E ER N. V E F O T N A O H IS H W D IT RC A N I E F ES TH

RELY ON AUSTRALIA’S MANUFACTURING, MINING AND INDUSTRIAL HUB 70,000 monthly users can’t be wrong. Find what you’re looking for with over 12,000 business listings and 8,000 specific product listings. Access relevant information and resources, empowering you to make a qualified purchase decision. You can always rely on your industry hub.

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InstrumentMANUFACTURING Australian instrumentation sector lagging: industry icon Recently, Manufacturers’ Monthly spoke to Dirk Kuiper, General Manager of AMS Instrumentation & Calibration about the changes we are witnessing across the manufacturing and industrial sectors.

Manufacturers Monthly (MM): With the shrinking of our manufacturing sector, how do you feel this will impact on the instrumentation and control industries?

Dirk Kuiper: Although the manufacturing industry is shrinking it is not in all industries. The automotive industry has disappeared from Australia, which seems to be the one that everybody is talking about, but it must open up other opportunities.

There are still large other manufacturing industries that will need to be nurtured, albeit with some government assistance. For example, stricter controls on the quality of imported products, particularly

from developing countries. Financial support assists to a certain extent, but must be limited as it possibly makes companies and people reliant on it, which in the long run is detrimental.

So in my view there are still great opportunities in the manufacturing industry, with other industries sprouting up with the entrepreneurial sprits of people, such as 3D printing for example. There is also a shift towards other industries, such as pharmaceutical, food and beverage for example.

Even in the current climate I do not think it will impact process control and control industries to a great extent, but more the automation industry, such as robotics

and motion control. Processes still need to be controlled and measured.

Industry is always looking at improving productivity, so there will always be a requirement for instrumentation and control.

(MM): Do you see the expansion of the Industrial Internet of Things as the saviour of the process, control and instrumentation sectors?

Dirk Kuiper: The Industrial Internet of Things (IIoT) is described as a machine learning and big data technology, harnessing the sensor data, machine-to-machine (M2M) communication and automation technologies that have existed in industrial settings for years. The

driving philosophy behind the IIoT is that smart machines are better than humans at accurately, consistently capturing and communicating data.

This statement may be expressing what IIoT is, but will it be the savior?

- Yes and No. It will spur on new development and research and plants will become more and more automated, so there will be increased productivity and more opportunities for the process, control and instrumentation industry.

One of the concerns is the interoperability between devices and machines that use different protocols and these will take time to be sorted out.

In the past many instrumentation, control and automation companies developed their own protocols, which now need to be developed in common architectures. Security and non-investment in new technologies like IIoT are also a major concern Companies will need to make large investments in upgrading the infrastructure and processes to enable IIoT. MM: What about new technologies - is there anything new coming that will be a game changer for your industry?

Dirk Kuiper: New technologies are being developed all the time, such as 3D printing as mentioned above, and sometimes it is difficult to see what is coming in the future.

At this stage the newer technologies are IIoT as described above and wireless. It appears that many instrumentation and control companies are developing wireless equipment. As we are all aware it is part of our normal daily life now, such as mobile phones, wireless internet, etc. and we cannot exist without it anymore and it will

18 DECEMBER 2016 Manufacturers’ Monthly

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InstrumentMANUFACTURING develop more and more in to other areas, including industrial processes.

In new installations it will save a great deal in reducing the costs of cabling, connecting devices, etc., but in existing installation the benefits may not be that great or could increase the installation costs.

The ISA100 Wireless is an international standard, IEC 62734 and an open universal wireless network protocol that makes it the only industrial network protocol compatible with the Internet of Things (IoT). ISA100 has a strict protocol for security to ensure it is safe in the industrial environment, but security experts have warned that there is a possibility that the systems are open to hacking for either political, blackmail or terrorism ideals.

Recently, this proved to be true where hundreds of thousands of IoT devices were hacked, although these were mainly household appliances, but nothing is holding this back from occurring in the industrial sphere. Encryption of data is a most important part of wireless and encryption needs to be enforced at various levels within a plant.

MM: Is there a bigger need for calibration services these days or has this part of instrumentation become less important?

Dirk Kuiper: It is a fact that all measurement devices drift over time. Modern instruments typically drift less than older models and manufacturers generally select the best available components and perform testing to for the aging of instrumentation, but still drift over time. Environmental conditions may also play a part in the aging process.

Instrumentation that is used more often or in critical processes wear also out more quickly than those that are used less frequently.

It could be that process instrumentation are more stable presently, which could reduce the regularity of calibration, but at the same time regulatory requirements have increased the requirement for regular calibration in various industries, such as pharmaceutical manmonthly.com.au

industry, food and beverage industry, power plants (emission controls and safety), chemical and petrochemical industry (emission controls and safety) and in the oil and gas industry.

Heavily regulated industries, such as pharmaceutical and food and beverage industry usually carry out the calibration and documentation with their own calibration resources, due to strict Standard Operation Procedures and government requirements, while calibration is more outsourced within other industries through contracting companies.

MM: What about locally-made products - how do they compare in terms of imported products?

Dirk Kuiper: In the instrumentation manufacturing industry Australia is lagging well behind in designing and producing high accuracy equipment and most equipment is imported either by overseas instrument companies or distributors.

That said there are still companies that manufacture instrumentation, such as Trimec Flow Products, GPI Australia and MacNaught. These however mainly supply mechanical, i.e. positive displacement flowmeters.

As the owner of Trimec Flow products I can only speak for this company, but our products in this category

compare very well with any imported products and offer advantages of quicker deliveries and price.

MM: Flowmeters are now highly accurate- have they reached the peak of accuracy or can we go further?

Dirk Kuiper: As with all markets companies are always striving to offer better products and this is certainly true in our industry as well. New technologies in various flowmeter sections, such as ultrasonics, radar, and microwave are coming more and more to the fore. For example, in ultrasonics previously there was a two-path measurement, this has now developed in multipass measurements to provide more accuracy.

In the domestic water industry there is a movement to replace the basic flowmeters with ultrasonic flowmeters. In radar level measurement where the instruments now operate at a higher frequency than before, 80GHZ instead of the widely used 26GHZ. In microwave measurements a new way to provide measurement is guided microwave measurement (GWR or guided wave radar), which provides highly accurate and reliable measurements.

So in conclusion industry will always strive to provide better

instrumentation with higher accuracies or other advancements MM: Will Australia ever be in a position to export instruments to say Asia and if so when do you think this will happen?

Dirk Kuiper: As mentioned before the manufacturing industry of instrumentation is small and is mainly positive displacement flowmeters and electronics. From what I can gather, most of these companies export to Asia and some are quite successful. I believe it is due to the high quality of the products, reasonably fast deliveries and a willingness to accommodate their needs.

In Trimec Flow Products’ case, we sell and market our products worldwide and the Asian market amounts to about 15 per cent of total sales. There are still developing markets in Asia and there is certainly an opportunity to increase sales into those areas.

Dirk Kuiper, General Manager of AMS Instrumentation & Calibration and Trimec Flow Products has been in the instrumentation industry for 45 years and has worked in various capacities in several countries for a variety of instrument companies. The Interview was conducted by Branko Miletic.

Manufacturers’ Monthly DECEMBER 2016 19

IndustryOPINION The environment is changing, says Atlas Copco GM In our ongoing series talking to the movers and shakers in Australian industry, we talk to Matt Hobden, the newly-minted General Manager of Atlas Copco Australia about where the local industry is heading for compressors and blowers, and what the future holds for one of the worlds’ iconic companies in that field.

Manufacturers Monthly (MM): How long have you been in the position?

Matt Hobden: I’ve been in the position for three months.

I’ve been with Atlas Copco for 16 years, starting as a sales engineer in different sales roles.

My most recent position was regional general manager for the rental business for the Oceanic region - in laymans terms, Australia, New Zealand, New Guinea and the Pacific Islands.

MM: Has your experience from where you started helped in terms of how you approach your current role?

Matt Hobden: My first role here was as a sales engineer and I think that really gave me a good understanding of the sales process.

I had a couple of sales roles and then transitioned into a local product manager role so starting to support the sales reps in the field and being a little bit more involved in the management of the business. Product management gave me a good feeling for developing products, promoting products and pricing. I had another role which was engineering manager.

MM: With a technical and sales background, would you say that gives you a unique insight into how the company should function?

Matt Hobden: I think so, and you could include commercial as well too because one of the things that’s changed dramatically in the last 10-15 years locally is the commercial and legal landscape.

So 10-15 years ago, you could do a deal on a handshake and now with the changing nature of investment in the country, I think for the better of course, commercial and legal contracts have become a lot more onerous.

I think my last position as engineering manager gave me a good understanding of engineering contracts, which I think is absolutely essential now.

MM: What would be some things that you are looking at for the direction of the company and have those ideas been shaped by your experience?

Matt Hobden: We have a changing environment. We see mining and oil and gas transitioning into production so we need to make sure we align our business with that potential.

We are also seeing some pent up demand coming from manufacturing and hopefully this will be released if the Australian dollar softens a little bit more and the country becomes more competitive.

So we need to make sure we’re aligned with that potential.

MM: How do you intend to enure that Atlas Copco is firmly aligned with the potential in the market?

Matt Hobden: I guess in simple terms it’s looking at where the potential is, making sure we’re structured geographically to take that potential, but I think more importantly back to basics from one perspective and that’s having a real focus on the customer. So we also measure customer satisfaction monthly.

We send out surveys we use the net promoter score system, which we find is a fantastic tool and I think this will really allow us to develop the business in a sustainable way, by making sure we’ve got satisfied customers and we’ve got the right people and processes in place to continue to satisfy our customers. That’s probably the one key thing which I’ve brought from the rental business.

The rental business is totally a service business; very low switching costs so unless you have very

Mathew Hobden, General Manager of Atlas Copco Australia.

20 DECEMBER 2016 Manufacturers’ Monthly

manmonthly.com.au

IndustryOPINION The good news for us is if you take the mining sector, the mining business has in the order of 17 locations nationally. So in quite a lot of instances we have remote people from the compressor business in the mining locations with the mining business so we get great leverage in synergies from the other business areas.

MM: What is the one thing you would tell your potential successor about the business and what they actually do?

satisfied customers they’ll go to your competitor. They can change overnight so its something I intend to bring, that strong customer service culture from the rental business into our sales and service business.

MM: For many years, Atlas Copco was known for its rental business - is the rental side still a big part of the business?

Matt Hobden: It wasn’t our largest business but it was quite significant, because if you take the business 10 years ago, we had more of a general hire focus so we had a product range not as broad as anywhere near as say Coates Hire but similar.

We’d offer quite a diverse range of equipment like compressed air, lighting generators, lighting towers, pumps, welders, even hydraulic and air driven construction tools.

But that all changed in 2007, so we had a significant divestment where we divested everything aside from the compressed air to Coates Hire and we had a refocus on the core of compressed air. So the business now does predominantely large compressed air, large power, high volume nitrogen generators and there’s just been a recent acquisition of a nitrogen generator rental business and also steam boilers. manmonthly.com.au

MM: Are there other geographical areas where you’re seeing growth?

Matt Hobden: I think at the moment most of the growth is in the northern part of the country, purely because of the investment in energy and minerals.

MM: Is food manufacturing an area you’re looking to expand into?

Matt Hobden: Probably not in Sydney. In the Sydney region we already have quite a good deal of capacity with this location.

We probably see ourselves maybe expanding more in the regional areas with additional coverage of the market. So our hubs are quite well established with capacity for growth, but probably the regions is where we can leverage.

Matt Hobden: I would tell them to focus on our people. You need to daily keep your people engaged – that would be the first lot of advice.

Maybe if I break it down into three things: the second lot of advice I would say is focus on your customers, make sure you have promoters of your business.

The third thing would be, expect change in the environment and make sure you’re continually adjusting the organisation to that changing environment. They’re all quite broad things but that’s the advice I’d give.

Atlas Copco Australia (02) 9621 9999 www.atlascopco.com.au

Matt Hobden: If I speak broadly, the most interesting segments for us in manufacturing, its the nontrade exposed areas - the segments in the manufacturing industry that are basically producing for local consumption. That’s where we see the strength remaining and probably continuing until we see this gradual depreciation of currency.

If you listen to major economic forecasters they think we’ll see a much stronger manufacturing sector when the currency is around 0.65 Australian dollars. It’s still got a way to go but that’s when they see real competitive advantage and competitive advantage returning to the country and to our local manufacturers. At the moment the focus is on sectors that aren’t trade exposed.

MM: Are you looking to expand this site itself to other areas?

Manufacturers’ Monthly DECEMBER 2016 21

2016 TOP 100 MANUFACTURERS Industry’s winners and losers With a precious few exceptions, this year’s annual Top 100 Manufacturers report does not make easy reading, as Alan Johnson reports.

I

BIS while not being dramatic, has noted that the slow decline of Australia’s traditional manufacturing industry looks set to continue, with a disappointing number of winners in this year’s manufacturing report.

Nick Tarrant, Senior Industry analyst with IBISWorld, one of Australia’s richest sources of business information, says most of the manufacturing sectors are struggling, and declining around per cent to three per cent a year, on average.

He admits it’s not a huge decline, and says there is a lot of volatility depending on prices.

“Most of the companies that have dropped their revenue in the Top 100 list has been due to volatile factors, but the trend is downwards,” Tarrant told Manufacturers’ Monthly.

He said the only exception was the food and beverage sector, with most companies in the sector still growing.

“This is mainly due to Australia’s strong agricultural division, and strong demand for Australian food and beverages such as the wine sector which we expect to grow 7.1 per cent this year to reach $6.2bn.”

Tarrant says the reason for the wine industry’s outstanding growth is twofold - strong export demand coupled with the lower Australian dollar.

“But also Chile and Argentina have had poor harvests this year, and have struggled to meet demand; with Australia picking up the slack.

Tarrant admits the lower Australian dollar has improved

Companies out of 2016 Manufacturing list Company name

Reason for drop off

Arrium

In voluntary administration

Australian Consolidated Food Investments

The company was acquired by JBS SA. As part of restructure Baybrick became the ultimate Australian entity.

JBS Australia

The company was acquired by Baybrick

Pentair Flow Control International

The company has not released financials since 2013.

Pfizer Australia Holdings

Ranked 108. Just missed out

Roche Products

Roche fell off the list in 2016 because it no longer manufactures in Australia.

22 DECEMBER 2016 Manufacturers’ Monthly

the global competitiveness of local manufacturers, but says most overseas manufacturers operate with far lower overheads and wage costs which make it difficult for Australian manufacturers to compete.

However, the good news is that the value of our dollar is not expected to change much over the next five years. IbisWorld is forecasting little change over the next five years, predicting it will only appreciate marginally to 77c against the US greenback.

With the general trend downwards, Tarrant says we can expect to see further consolidation of companies within the top 100 manufacturers list.

“Even with the food industry included, the overall trend is of the manufacturing industry going backwards.

“So I expect to see this consolidation trend to continue, especially in the struggling sectors of the manufacturing industry. Anything that can cut costs, and streamline operations.

Winners But it’s not all gloom and doom, there are some outstanding results in this year’s list of top 100 manufacturers.

Raytheon for example, the defence construction contractor, recorded a stunning 93.96 per cent revenue growth on the back of a high increase in construction contracts coupled with changes to its contract clauses with the Australian Defence Force (ADF) Air Warfare Destroyer program.

They now have an incentive fee structure that ties their performance to what they receive on that contract. manmonthly.com.au

2016 TOP 100 MANUFACTURERS Top 100 Manufacturing Companies - As at 04/11/2016 Current Rank

Trading Name

(Previous Year)

(Balance Date)

Revenue('000)

Previous Year Revenue ('000)

NPAT('000)

Previous Year NPAT ('000)

Total Assets('000)

Previous Year Total Assets ('000)

Employees

Previous Year Employees

1 (1)

Caltex (12/15)

$20,056,415

$24,240,160

$521,507

$19,931

$5,104,741

$5,128,534

3080

3597

2 (12)

Viva Energy (12/15)

$16,673,600

$6,269,700

$159,800

$162,300

$4,063,600

$4,215,500

1114

1235

3 (3)

Fonterra Co-op Group (7/16)

$16,577,722

$18,238,337

$767,750

$441,693

$16,225,125

$17,359,690

21300

22000

4 (2)

BP Australia (12/15)

$15,920,000

$22,497,000

$166,000

$(207,000)

$13,824,000

$13,288,000

5514

6624

5 (4)

Amcor (6/16)

$12,816,624

$13,122,814

$327,668

$913,201

$11,654,417

$11,473,200

31761

27902

6 (6)

BlueScope Steel (6/16)

$9,910,800

$8,564,500

$353,800

$136,300

$9,148,600

$7,877,500

N/A

N/A

7 (10)

Perth Mint (6/16)

$9,024,726

$6,622,912

$29,540

$14,059

$4,287,151

$3,246,667

441

386

8 (7)

Toyota Motor Corp (3/16)

$8,860,960

$8,294,937

$236,368

$194,331

$2,982,060

$2,840,156

N/A

3894

9 (8)

CSL (6/16)

$8,463,919

$7,554,746

$1,667,735

$1,851,101

$10,151,790

$8,592,382

14000

14000

10 (5)

ExxonMobil Aust (12/15)

$7,433,000

$9,469,000

$(60,000)

$181,000

$31,226,000

$26,883,000

1711

1846

11 (14)

Visy (6/16)

$5,700,000

$5,600,000

N/A

N/A

N/A

N/A

10150

10100

12 (16)

Coca-Cola Amatil (12/15)

$5,186,900

$5,034,100

$393,400

$272,100

$6,667,400

$6,057,300

14000

14700

13 (9)

Orica (9/16)

$5,185,600

$5,745,600

$342,800

$(1,267,400)

$6,595,800

$7,321,300

N/A

12000

14 (15)

Lion Nathan Nat Foods (9/15)

$4,798,300

$5,070,300

$238,700

$188,500

$10,768,700

$10,920,200

6356

6746

15 (11)

Sims Metal Management (6/16)

$4,683,300

$6,376,900

$(216,500)

$109,900

$2,570,900

$2,881,800

4756

5429

16 (17)

Boral (6/16)

$4,364,000

$4,360,000

$256,000

$257,000

$5,800,500

$5,865,400

8334

8356

17 (19)

Alcoa of Aust (12/15)

$4,160,100

$3,891,000

$645,500

$215,700

$5,822,800

$5,384,500

N/A

N/A

18 (22)

Orora (6/16)

$3,872,000

$3,427,300

$168,600

$131,400

$3,129,900

$2,937,000

6200

5600

19 (23)

Incitec Pivot (9/15)

$3,694,500

$3,411,300

$398,600

$247,100

$9,196,300

$7,970,200

5500

5064

20 (20)

GM Holden (12/15)

$3,583,998

$3,709,532

$114,331

$(269,362)

$2,051,652

$1,956,787

3067

4434

21 (18)

ConocoPhillips Aust (12/15)

$3,184,770

$4,577,935

$(1,764,126)

$732,305

$20,273,711

$22,396,433

883

1007

22 (25)

Teys Aust (6/15)

$2,924,726

$2,403,551

$281,754

$193,935

$1,066,766

$735,130

4773

4573

23 (27)

Nufarm (7/16)

$2,846,866

$2,756,296

$27,519

$43,220

$3,461,138

$3,574,188

3200

3349

24 (24)

Devondale Murray Goulburn (6/16)

$2,798,002

$2,881,289

$40,577

$25,166

$2,177,833

$1,840,584

2611

2450

25 (26)

Ford Aust (12/15)

$2,797,292

$2,810,804

$(162,255)

$(190,704)

$748,154

$963,411

2691

2860

26 (28)

Inghams (6/15)

$2,480,161

$2,369,335

$62,405

$92,383

$893,376

$1,267,299

8213

8393

27 (36)

Treasury Wine Estates (6/16)

$2,360,900

$1,982,000

$179,400

$77,600

$5,377,200

$4,149,800

N/A

2005

28 (34)

CSR (3/16)

$2,332,800

$2,065,600

$142,300

$125,500

$2,215,800

$2,119,300

3578

3134

29 (35)

Carlton & United Breweries (3/16)

$2,321,100

$2,005,700

$410,200

$233,800

$13,724,900

$14,514,600

1597

1758

30 (31)

James Hardie (3/16)

$2,265,725

$2,208,064

$318,830

$380,013

$2,661,783

$2,667,132

3257

3178

31 (32)

Nestle (12/15)

$2,225,985

$2,137,483

$179,096

$104,521

$1,513,490

$1,477,173

N/A

N/A

32 (29)

George Weston Foods (8/15)

$2,198,804

$2,199,922

$51,346

$16,285

$2,666,816

$2,050,208

6661

6835

33 (30)

Ansell (6/16)

$2,130,041

$2,265,484

$213,568

$251,691

$3,074,787

$3,189,961

16000

14000

34 (33)

Goodman Fielder (6/15)

$2,069,700

$2,217,100

$(344,400)

$(405,100)

$1,768,000

$2,213,200

5474

N/A

35 (38)

Wilmar Sugar (12/15)

$1,880,800

$1,848,700

$73,500

$68,100

$2,662,300

$2,333,600

2383

1861

36 (39)

Hanson Australia Holdings (12/15)

$1,838,400

$1,832,700

$152,500

$139,800

$4,598,300

$4,504,100

3153

3026

37 (42)

MM Electrical Merch (12/15)

$1,805,319

$1,682,150

$111,705

$246,366

$1,920,416

$1,785,871

2200

N/A

38 (41)

Mondelez Aust (12/15)

$1,777,890

$1,748,223

$118,389

$168,114

$1,604,097

$1,616,013

2928

3056

39 (40)

Asahi Holdings (12/15)

$1,740,432

$1,968,009

$(256,686)

$(53,338)

$2,075,904

$2,420,235

2500

2500

40 (48)

ResMed Holdings (6/15)

$1,702,277

$1,528,650

$407,601

$505,694

$2,327,925

$2,024,839

2671

2592

41 (45)

Dulux Group (9/15)

$1,692,918

$1,618,300

$112,773

$104,528

$1,159,109

$1,035,098

4000

4000

42 (47)

Parmalat Aust (12/15)

$1,660,476

$1,533,655

$35,305

$34,025

$1,009,668

$1,013,733

2197

2150

43 (78)

Aristocrat Leisure (9/15)

$1,601,873

$845,658

$186,430

$(16,429)

$3,218,733

$1,112,709

2912

2274

44 (43)

Unilever Aust (12/15)

$1,567,771

$1,660,122

$47,914

$85,589

$929,184

$907,357

1060

1190

45 (50)

Baiada Poultry (6/16)

$1,520,700

$1,470,000

N/A

N/A

N/A

N/A

N/A

3799

46 (44)

Holcim Aust (12/15)

$1,516,410

$1,643,601

$81,314

$95,150

$2,124,170

$2,007,003

2831

2981

47 (52)

Mars (12/15)

$1,476,949

$1,391,956

$134,089

$155,682

$1,225,909

$1,101,516

1766

1700

48 (53)

Adelaide Brighton (12/15)

$1,464,700

$1,363,900

$207,900

$172,700

$1,838,500

$1,820,600

1386

1409

49 (46)

Johnson & Johnson (12/15)

$1,443,175

$1,417,722

$99,623

$71,597

$1,028,104

$990,118

1750

1800

50 (55)

Manildra Group (6/16)

$1,400,000

$1,300,000

N/A

N/A

N/A

N/A

1300

1100

manmonthly.com.au

Manufacturers’ Monthly DECEMBER 2016 23

2016 TOP 100 MANUFACTURERS New inclusions on 2016 top 100 manufacturing list Company name

Revenue change

Australian Agricultural Company

38.43%

Baxter Healthcare

6.27%

Blackmores

51.70%

Bombardier Transportation Australia

12.85%

Raytheon Australia

93.96%

Warranambool Cheese & Butter Factory

43.79%

They almost doubled their revenue because of that.

But it’s also because of the industry they are operating in. The Australian government has recently increased its defence expenditure to two per cent of GDP. The huge submarine contract, worth something like $50bn, that’s going to benefit a lot of ship builders as well as companies who supply parts and equipment that are used in these huge defence projects.

One of the more interesting winners in this year’s Top 100 manufacturers feature is the specialised explosives manufacturing industry, with companies like Orica and Downer taking advantage of a substantial increases in coal prices.

With the price of coal rising 200 per cent in the past three months, production is being ramped up in Australia many coal mines are being re-opened and a substantial increase demand for specialised explosives used to clear overburden in coal mines. In fact, half the demand for explosives comes from coal miners. In line with this, the explosives industry is expected to grow by 5.2 per cent in the coming year to reach $3bn.

While the mining equipment manufacturing sector has declined considerably year on year since 2013, Tarrant says the industry may have bottomed out and is now predicted to turn around over the next five years or so. The worst may well be over for this sector.

Second on this year’s top 100 list of manufacturers is Viva Energy, which recorded a substantial increase in revenue (165.94 per cent) from the sale of goods, and in August 2014, the company acquired Shell Australia and 24 DECEMBER 2016 Manufacturers’ Monthly

renamed Viva Energy Australia Group.

Readers might ask why the Perth Mint is on the list, but its position and positive results are due to Australia being the second largest gold producer after China, plus the mint’s new silver coin blanking facility began operating allowing coin and mint production to triple.

Three companies in the growing healthcare sector had outstanding results this year.

Blackmore increased it revenue by an outstanding 51.7 per cent mainly due to high demand for Blackmore

products in Asia, with sales boosted

by Chinese tourists and exporters. As well the company acquired Global Therapeutics which contributed $3m to revenue.

Cochlear also recorded a positive result, increasing its revenue by 23.09 per cent mainly due to a strong focus on customer and market growth activities and by rolling out a suite of products.

At the same time, Fisher & Paykel Healthcare increased its revenue by 21.7 per cent with both Respiratory and Acute Care (RAC) and Obstructive Sleep Apnea (OSA) humidification products performing well due to demand in hospitals and home settings.

Gaming machine manufacturer, Aristocrat Leisure, also had an outstanding year, with revenue increasing 89.42 per cent due to strong growth in the Asia Pacific due to interest in gaming operations, and strong ship share gains across all key markets as well as a more favourable product mix which included enhanced content

and the release of Helix cabinet.

Beef producers, Australian Agricultural Company (AACo) and Teys Australia (a Cargill joint venture), also had successful years.

AACo sales revenue increased 38.43 per cent mainly due to high demand from global markets for the company’s produce, with beef sales increasing in the USA and South Korea, plus a new strategy and improved operations positioning the company as a premium producer in international markets.

Teys Australia increased its revenue by 21.68 per cent with demand for beef and strong cattle supply and good weather conditions contributing to increase in production of stock.

Losers Australia’s steel industry is one of the hardest hit industries this year, with Arrium going into voluntary administration, who held around 20 per cent of the market, with the remaining players struggling against Chinese imports,

manmonthly.com.au

2016 TOP 100 MANUFACTURERS Top 100 Manufacturing Companies - As at 04/11/2016 Current Rank

Trading Name

(Previous Year)

(Balance Date)

Revenue('000)

Previous Year Revenue ('000)

NPAT('000)

Previous Year NPAT ('000)

Total Assets('000)

Previous Year Total Assets ('000)

Employees

Previous Year Employees

51 (57)

Pact Group Holdings (6/16)

$1,390,509

$1,253,310

$85,051

$67,632

$1,373,038

$1,177,103

N/A

1980

52 (51)

Austal (6/16)

$1,356,462

$1,446,763

$(84,281)

$53,225

$1,013,126

$1,068,954

N/A

N/A

53 (60)

Nuplex Industries (6/16)

$1,332,397

$1,310,079

$80,844

$67,817

$982,008

$1,132,298

N/A

1733

54 (59)

Simplot Aust (8/15)

$1,315,778

$1,242,522

$87,678

$31,768

$919,956

$827,692

2052

2774

55 (58)

SunRice (4/16)

$1,270,178

$1,247,117

$49,077

$43,425

$970,579

$950,184

2178

2286

56 (54)

BAE Systems Aust (12/15)

$1,267,098

$1,349,509

$(64,686)

$47,106

$966,355

$1,106,845

4098

4675

57 (65)

Boeing Aust (12/15)

$1,221,488

$1,104,203

$86,742

$85,431

$1,360,693

$1,239,772

3246

3050

58 (64)

Bega Cheese (6/16)

$1,203,414

$1,120,491

$28,779

$12,408

$586,674

$552,419

1650

1700

59 (62)

BOC (12/15)

$1,183,642

$1,189,305

$169,061

$170,096

$2,603,640

$2,650,355

2403

2465

60 (68)

Thales Aust (12/15)

$1,158,047

$1,037,460

$78,070

$70,949

$1,235,016

$1,186,325

3302

3284

61 (74)

Cochlear (6/16)

$1,145,176

$930,358

$188,921

$145,840

$957,363

$875,402

2934

2632

62 (63)

PepsiCo Aust & NZ (12/15)

$1,136,601

$1,127,203

$46,840

$49,495

$974,500

$935,210

1615

1768

63 (69)

NH Foods Aust (3/16)

$1,110,197

$1,034,721

$33,046

$120,709

$379,184

$382,233

1671

1839

64 (66)

AstraZeneca (12/15)

$1,093,637

$1,080,159

$60,144

$57,958

$564,165

$519,186

720

908

65 (67)

Arnotts (8/15)

$1,090,096

$1,041,175

$57,968

$(32,676)

$1,652,555

$1,562,870

5200

5200

66 (70)

Kimberly-Clark Pacific (12/15)

$1,049,550

$1,032,270

$(57,592)

$(117,175)

$1,853,927

$1,831,195

1026

1106

67 (56)

ABB Group (12/15)

$1,032,663

$1,211,882

$(33,013)

$(32,629)

$907,759

$1,086,194

1897

2244

68 (73)

GlaxoSmithKline (12/15)

$947,871

$941,863

$16,158

$(126,670)

$1,331,396

$1,521,484

829

1476

69 (76)

Ridley (6/16)

$924,865

$911,696

$27,606

$21,171

$484,850

$476,553

676

685

70 (37)

Siemens (9/15)

$915,000

$1,556,657

$43,287

$46,171

$731,203

$907,456

N/A

N/A

71 (71)

Bradken (6/16)

$838,387

$998,108

$(195,941)

$(241,295)

$1,053,411

$1,523,813

N/A

3560

72 (77)

Aspen Asia Pacific (6/15)

$835,887

$865,189

$116,406

$105,764

$1,519,700

$1,481,984

706

N/A

73 (80)

Owens-Illinois (12/15)

$822,900

$800,900

$33,400

$(13,400)

$933,400

$886,100

1004

1590

74 (81)

Australian Paper (12/15)

$813,816

$786,719

$(60,950)

$(37,494)

$920,005

$925,348

1191

1308

75 (75)

ASC (6/16)

$800,852

$1,029,231

$26,628

$21,891

$702,581

$683,359

2500

2600

76 (82)

Heinz (1/16)

$784,505

$776,776

$39,037

$12,093

$793,064

$939,948

780

735

77 (-)

AACo (3/16)

$781,399

$564,486

$67,807

$9,623

$1,383,119

$1,214,091

592

584

78 (87)

Bindaree Beef (6/16)

$778,810

$705,000

N/A

N/A

N/A

N/A

N/A

782

79 (79)

PACCAR (12/15)

$764,497

$855,295

$71,738

$96,040

$1,084,152

$1,199,533

675

695

80 (84)

Brickworks (7/16)

$753,113

$727,094

$78,190

$78,090

$2,515,861

$2,518,517

1490

1468

81 (86)

Airbus Aust (12/15)

$749,453

$706,833

$31,784

$32,934

$515,910

$505,544

N/A

N/A

82 (-)

Raytheon (12/15)

$745,276

$384,249

$65,626

$(7,613)

$361,568

$167,897

1168

1187

83 (92)

Fisher & Paykel Healthcare (3/16)

$743,417

$611,538

$129,463

$102,156

$692,155

$604,609

3587

3151

84 (89)

Sun Metals (12/15)

$733,063

$781,493

$40,343

$41,564

$704,683

$703,577

N/A

N/A

85 (-)

Blackmores (6/16)

$718,718

$473,773

$100,008

$46,556

$434,023

$293,407

1000

900

86 (91)

Bayer Aust (12/15)

$718,314

$623,314

$13,465

$(6,847)

$520,473

$463,676

591

596

87 (85)

Qenos Holdings (12/15)

$705,810

$724,089

$3,921

$3,249

$911,668

$907,936

680

688

88 (88)

Bridgestone (12/15)

$705,263

$703,681

$26,296

$16,983

$447,869

$438,562

795

802

89 (90)

Joy Global (10/15)

$696,105

$679,615

$(8,328)

$(565)

$597,758

$716,865

1130

1209

90 (98)

Honeywell (12/15)

$675,170

$591,972

$90,182

$70,822

$323,356

$704,082

1500

1500

91 (83)

Merck Sharp & Dohme Aust (12/15)

$658,948

$767,784

$20,460

$46,956

$605,702

$642,478

450

512

92 (-)

Warrnambool Cheese & Butter (3/16)

$653,050

$454,173

$4,218

$34,305

$552,329

$357,658

N/A

507

93 (95)

Asaleo Care (12/15)

$623,469

$637,181

$75,626

$2,986

$775,297

$773,438

1000

1030

94 (94)

Weir Group (1/16)

$618,762

$636,794

$26,999

$43,512

$912,614

$942,742

2290

1500

95 (97)

Kilcoy Pastoral (6/15)

$600,996

$506,179

$24,649

$28,519

$126,505

$99,125

N/A

735

96 (96)

GUD Holdings (6/16)

$597,038

$498,045

$(43,039)

$33,245

$618,166

$515,343

N/A

N/A

97 (-)

Baxter Healthcare (12/15)

$586,859

$552,240

$27,903

$20,832

$402,816

$360,673

909

953

98 (99)

BASF (12/15)

$565,435

$585,162

$(16,634)

$(1,211)

$330,681

$369,823

421

462

99 (100)

Norske Skog Industries Aust (12/15)

$565,251

$564,398

$(153,754)

$(20,036)

$681,246

$867,983

N/A

N/A

100 (-)

Bombardier Transportation (12/15)

$562,580

$498,524

$18,898

$(5,328)

$511,337

$471,400

697

995

manmonthly.com.au

Manufacturers’ Monthly DECEMBER 2016 25

2016 TOP 100 MANUFACTURERS Another problems for the industry is the decline of automotive manufacturing in Australia, which is a key downstream market.

However, Tarrant does not necessarily believe the steel making industry demise is set in stone, as Australian manufacturers are still keen to source steel products from Australia, especially it’s almost custom made for them, and they can rely on the quality of the steel, unlike a lot of the imported steel.

“With Arrium in voluntary administration, the industry has declined by 7.9 per cent this year, but at $9.1bn it is still a substantial industry.”

Tarrant believes there is always going to be a place for the steel making industry in Australia, especially now the government has indicated they want to use Australian steel in the upcoming submarine contract.

“There is always going to be local demand, it’s just that it’s not always consistent as the industry bottoms out and starts up again.

“Also, the steel industry is not as concentrated as some of the other industries. There are still a large number of small players that supply to construction firms,” Tarrant explained.

26 DECEMBER 2016 Manufacturers’ Monthly

Another industry suffering from concerted import competition is our aluminium industry, which is set to decline by 5.9 per cent this year to $1.2bn, down from a peak of $2.3bn a decade ago.

Despite the lower Australian dollar, imports now account for 60 per cent of domestic demand.

Over the past couple of years there has been allegations of dumping aluminium products to the Anti-Dumping Commission, which has been upheld and a lot of Chinese companies have been hit with extra tariffs on aluminium products.

“While this provides some relief from the Chinese importers, it is not

Big losers Company Name

Change in Total Revenue - Swing Factor Down

ASC

-22.19%

BP Australia

-29.4%

ConocoPhillips Australia

-30.43%

ExxonMobil Australia

-21.50%

Siemens

-41.22%

Sims Metal Management

-26.56%

“China produces around half of the world’s aluminium, but smelting and the main inputs into aluminium production are heavily subsidised by the Chinese government, which is providing Chinese competitors with the cheap supply of raw materials such as aluminium billet.

Plus, in December last year, the China/Australia FTA eliminated a few of the tariffs on aluminium products.

as severe as what other major buyers of aluminium, such as the US and Canadian governments who have much higher anti-dumping rates on Chinese made products.

The interesting thing with this industry is that labour/wages is not a major component, it’s is mostly energy the main input.

Unlike other manufacturing industries where labour costs are the biggest input where China and other low cost labour countries have a natural advantage there, but in Australia’s aluminium industry wages make up around 12 per cent of the total cost, with energy costs which include gas and electricity is around 60 per cent.

Australia’s aluminium industry is finding it difficult to compete with these heavily subsidised products, and is why the Australian Government, via the Anti-Dumping Commission, has stepped in.

The Government will also be looking closely at the revenue figures of it fully owned Australian Submarine Corporation (ASC).

The figures look very ordinary, with annual revenue down 22.9 per cent, mainly due to the end of a couple of projects, and Air Warfare Destroyer contract being pushed back.

Tarrant says this is always a problem with the ship building industry and any of those industries

that rely on government contracts.

“Their revenue figures are extremely volatile year to year, because once the contract finishes, and they don’t have another contract to start straight away, they have to cut back on staff and other areas.”

However, as Tarrant points out ASC’s NPAT has increased and the company has delivered positive results, plus it exceeded the agreed submarine Material Ready Day (MRD) targets with the Royal Australian Navy and completed HMAS Farncomb’s two-year Full Cycle Docking (FCD) contract.

While the food industry in general is travelling very well, there are some outstanding exceptions in this year’s top 100 list.

The milk powder manufacturing industry is one example. Back in the 2014 financial year, the revenue of the milk powder industry was around $1.7bn, but this financial year it fell to $757m and is expected to fall even further in 2016/17; down 12.2 per≈cent.

Most of the milk powder, used for baby food for example, we produce (90 per cent) is exported, mainly to Asia; China, Indonesia, Malaysia, Singapore.

China is the biggest market, making up around 20 per cent of revenue. The industry is extremely reliant of that section of the market.

NT says, export volumes have been very volatile for the past couple of years due to weather conditions and pricing.

However, in the past couple of years the powder prices have plummeted, probably since mid-2013.

The reason for such dramatic falls is due to powder prices tied to the price of milk, which has been steadily falling, and stiff competition from overseas.

The two major players are Fonterra and Murray Goulburn.

While Fonterra is heavily exposed to international trade, both are struggling this year.

The other major player is Warrnambool Cheese & Butter, and together they make up 90 per cent of the industry.

While the figures for Warrnambool Cheese & Butter show a substantial increase in revenue (43.79 per cent), manmonthly.com.au

2016 TOP 100 MANUFACTURERS this growth was partly due to the acquisition of Lion-Dairy and Drinks.

The everyday cheese business contributed $160m, and includes COON, Cracker Barrel, MilLel and Fred Walker brands.

The other reason for the revenue increase was Warrnambool Cheese & Butter’s Japan joint venture which has also expanded the business and has helped offset low commodity prices Another industry normally associated with positive balance sheets is the oil and gas industry. However this year appears to be an exception with BP Australia, ExxonMobil Australia and ConocoPhillips Australia going backwards.

BP Australia suffered a substantial

decrease in sales and other operating revenues (down 29.24 per cent) mainly due to the disposal of i s bitumen operations in Australia in August 2015, plus the company closed its Bulwer Island Refinery, which will be converted into a jet terminal.

The refining operations stopped in May 2015 and resulted in staff redundancies and the discharging of some assets.

“However, the company also plans to enter non-operating joint venture in fuel distribution operations in Australia.”

ExxonMobil Australia also suffered a decrease in revenue (down 21.5 per cent) which was mainly due to lower average prices for saleable products

Big winners Company Name

rather than a decrease in sales.

In fact, the company’s sales have been constant as it continues supplying 40 per cent of Eastern Australia’s natural gas and 50 per cent of Victoria’s automotive and aviation fuel.

ConocoPhillips Australia, which is involved in the natural gas processing and production of Liquefied Natural Gas (LNG), faced worsening economic conditions coupled with a weakened price outlook which resulted in significant impairments on the books (revenue down 30.43 per cent).

Also, between 2010-2015, the company had to pay tax assessment and penalties to Timor-Leste which cost $240m.

Other companies recording drops in revenue include Sims Metal

nick.tarrant@ibisworld.com

Change in Total Revenue - Swing Factor Up

Aristocrat Leisure

89.42%

Australian Agricultural Company

38.43%

Blackmores

51.70%

Cochlear

23.09%

Fisher & Paykel Healthcare

21.57%

Perth Mint

36.27%

Raytheon

93.96%

Teys Australia - A Cargill Joint Venture

21.68%

Viva Energy

165.94%

Warrnambool Cheese & Butter

43.79%

THE MAIN EVENT FOR PROCESSING AND PACKAGING manmonthly.com.au

Management and Siemens Australia.

For Sims Metal Management, the decrease of sales revenue (down 26.56 per cent) is due to lower sales volume and lower average scrap metal prices.

Also, average selling prices for ferrous and non-ferrous metals decreased due to the external operating environment, which includes China’s excess production of steel being exported into the international export market at high levels.

For Siemens, the transition of the mining sector from investment to production and the postponed infrastructure projects in rail and power generation explains the decrease in revenue by 41.22 per cent.

REGISTER NOW Manufacturers’ Monthly DECEMBER 2016 27

Water/ WASTEWATER Making fuel out of sewage

I

T may sound like science fiction, but wastewater treatment plants across the United States may one day turn ordinary sewage into biocrude oil, thanks to new research at the Department of Energy’s Pacific Northwest National Laboratory.

The technology, hydrothermal liquefaction, mimics the geological conditions the Earth uses to create crude oil, using high pressure and

of wet organic feedstock, such as agricultural waste.

Using hydrothermal liquefaction, organic matter such as human waste can be broken down to simpler chemical compounds. The material is pressurized to 3000 pounds per square inch — nearly one hundred times that of a car tire.

Pressurised sludge then goes into a reactor system operating at about

Sewage sludge has long been viewed as a poor ingredient for producing biofuel because it’s too wet. The approach being studied by PNNL eliminates the need for drying required in a majority of current thermal technologies which historically has made wastewater to fuel conversion too energy intensive and expensive. temperature to achieve in minutes something that takes Mother Nature millions of years. The resulting material is similar to petroleum pumped out of the ground, with a small amount of water and oxygen mixed in. This biocrude can then be refined using conventional petroleum refining operations.

Wastewater treatment plants across the U.S. treat approximately 34 billion gallons of sewage every day. That amount could produce the equivalent of up to approximately 30 million barrels of oil per year. PNNL estimates that a single person could generate two to three gallons of biocrude per year.

Sewage, or more specifically sewage sludge, has long been viewed as a poor ingredient for producing biofuel because it’s too wet. The approach being studied

by PNNL eliminates the need for drying required in a majority of current thermal technologies which historically has made wastewater to fuel conversion too energy intensive and expensive. HTL may also be used to make fuel from other types 28 DECEMBER 2016 Manufacturers’ Monthly

350 degrees Celsius. The heat and pressure cause the cells of the waste material to break down into different fractions — biocrude and an aqueous liquid phase.

“There is plenty of carbon in municipal waste water sludge and interestingly, there are also fats,” said Corinne Drennan, who is responsible for bioenergy technologies research at PNNL. “The fats or lipids appear to facilitate the conversion of other materials in the wastewater such as toilet paper, keep the sludge moving through the reactor, and produce a very high quality biocrude that, when refined, yields fuels such as gasoline, diesel and jet fuels.”

In addition to producing useful fuel, HTL could give local governments significant cost savings by virtually eliminating the need for sewage residuals processing, transport and disposal.

pressurised tube. We’ve really accelerated hydrothermal conversion technology over the last six years to create a continuous, and scalable process which allows the use of wet wastes like sewage sludge.”

An independent assessment for the Water Environment & Reuse Foundation calls HTL a highly disruptive technology that has potential for treating wastewater solids. WE&RF investigators noted the process has high carbon conversion efficiency with nearly 60 per cent of available carbon in primary sludge becoming bio-crude. The report calls for further demonstration, which may soon be in the works.

between $9 to $10 million with Metro Vancouver providing nearly one-half of the cost directly and the remaining balance subject to external funding.”

Once funding is in place, Metro Vancouver plans to move to the design phase in 2017, followed by equipment fabrication, with start-up occurring in 2018.

“If this emerging technology is a success, a future production facility could lead the way for Metro Vancouver’s wastewater operation to meet its sustainability objectives of zero net energy, zero odours and zero residuals,” added Mussatto.

Demonstration Facility in the Works

Nothing left behind

PNNL has licensed its HTL technology to Utah-based Genifuel Corporation, which is now working with Metro Vancouver, a partnership of 23 local authorities in British Columbia, Canada, to build a demonstration plant.

“Metro Vancouver hopes to be the first wastewater treatment utility in North America to host hydrothermal liquefaction at one of its treatment plants,” said Darrell Mussatto, chair of Metro Vancouver’s Utilities Committee.

“The pilot project will cost

In addition to the biocrude, the liquid phase can be treated with a catalyst to create other fuels and chemical products. A small amount of solid material is also generated, which contains important nutrients.

For example, early efforts have demonstrated the ability to recover phosphorus, which can replace phosphorus ore used in fertiliser production.

This article was published with permission from the US Department of Energy’s Pacific Northwest National Laboratory.

Sludge from Metro Vancouver’s wastewater treatment plant has been dewatered prior to conversion to biocrude oil at Pacific Northwest National Laboratory.

Simple and efficient “The best thing about this process is how simple it is,” said Drennan.

“The reactor is literally a hot, manmonthly.com.au

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FacilitiesMANAGEMENT Corrosion – a problem eating away at Australian industry According to research by Curtin University, corrosion may be costing the Australian economy more than $30 billion each year.

W

ITHIN industrial environments, exposure to things like water, acid or salt causes corrosion of geared motors. This, in turn, reduces the strength of the corroded parts and inevitably means they have to be replaced.

In corrosive environments the need for replacement is more than just occasional. Gear boxes need to be replaced as often as every six months. Apart from costs and downtime, such a maintenance regime presents businesses with all too frequent gearbox mounting challenges.

For obvious reasons, businesses in the food and beverage sector are required to maintain high hygiene standards. To do this, they need to follow strict wash-down procedures which have the unfortunate side- effect of increasing the rate of corrosion.

Similarly, corrosion is a problem for operations dealing with chemicals, those located offshore or near the coast, and others (such as car washes) which just can’t avoid water.

Historically, businesses looking to deal with this problem have had two

30 DECEMBER 2016 Manufacturers’ Monthly

options: to use stainless products or products with a protective coating.

The attractions of stainless steel for this purpose is obvious.

It eliminates the need for harsh cleaning chemicals and decreases the instances of leaks, rust and corrosion.

To date, stainless steel has rightly been regarded as a better anti-corrosion solution than the alternatives, namely paints and surface treatments.

The problem with such coatings is that when used on original painted aluminium surface, they simply lie on top of the aluminium substrate and may even bridge across pores in the metal. In other words, they do not form a permanent bond to the substrate. They can easily be removed if bumped or scratched, and therefore offer only limited corrosion resistance.

For its part, NORD, recently released the NSD tupH Sealed Surface Conversion System in Australia that is designed to provide protection at a molecular level and that has been hailed as a breakthrough in corrosion protection.

Unlike surface coatings, NSD tupH includes a base layer that is permanently bonded to the

aluminium substrate and provides a powerful foundation for adhesion of the surface sealant. This foundation provides excellent roughness, is 6-7 times harder than the aluminium substrate and up to 1000 times harder than paint.

In other words, the product is superior to surface coatings and is a genuine alternative to stainless steel.

Indeed, according to the company, it offers two advantages when compared to stainless steel. Firstly, it is significantly cheaper. NSD tupH delivers similar levels of corrosion protection at a fraction of the cost.

Secondly, products coated with the system are much lighter than stainless steel products. This makes mounting and maintenance easier.

The surface treatment creates an easy to clean surface which is resistant to acids and alkalis of wide pH range. Free from chromates, it prevents the spreading of corrosion, even in cases where machinery is physically scratched or damaged.

NSD tupH drives can be used in demanding atmospheres much beyond the usual service life of paintcoated systems. Since no coating is applied and only the surface is hardened, contamination of products

or process media is avoided, which is not possible with chipping paint.

The system conforms to FDA Title 21 CFR 175.300 and has successfully undergone ASTM D714 and proven its resistance to blister formation. Similarly, it has proven its effectiveness against corrosion through ASTM D610-08, and scribe per ASTM D1654-08 according to DIN EN ISO 2409.

Further tests performed on the system included ASTM B11709 Salt spray test, ASTM D3170 Gravelometer test, DINEN ISO 9227 Salt spray mist test, and DIN EN ISO2409 Cross-cut test.

It is approved for food applications according to FDA Title 21 CFR 175.300 with treated systems resisting cleaning agents in the pH2 to pH12 range.

The company said it uses NSD tupH on a range of products, including its Helical gear units, Bevel gear units, UNIVERSAL worm gear units, Smooth motors, and Electronic SK 1xxE. All gearboxess are supplied with stainless steel hollow shaft and fasteners.

NORD Drivesystems 03 9394 0500 www4.nord.com

manmonthly.com.au

CELEBRATING 70 YEARS OF SENSOR INTELLIGENCE.

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Industry4.0 Are you ready for the Fourth Industrial Revolution?

First there was steam power. Then electricity. Then electronics and IT. Now the fourth industrial revolution has arrived: a mix of cloud computing, generative design and additive manufacturing. Are you ready to ride the wave for what’s arguably mankind’s greatest step forward? Jim Ward writes.

T

HE above question was posed to more than 150 engineers and technicians at a workshop held in Perth in September by Autodesk, a global leader in the creation of software for architecture, engineering, construction, manufacturing, mining and the entertainment industry.

Richard Elving, Autodesk’s Manufacturing Sales Manager in Australia, said dominant technology trends - cloud computing, mobile technology, social connection, and collaboration - were driving businesses and consumers alike to explore profoundly different ways to design, make and use things.

Manufacturers have always been seeking ways to make things

ABOUT THE SPEAKERS Richard Elving (Autodesk) is an award winning sales manager with a 14-year sales career reflecting experience and outstanding performance in product design and manufacturing. He has an extensive network through the manufacturing community across Australia, Asia and Northern Europe, and a strong passion to enable innovation in manufacturing.

32 DECEMBER 2016 Manufacturers’ Monthly

quicker, easier, cheaper, but now the new and growing expectation for products customised to the needs of individuals is posing a fundamental challenge to the current approach to product design and manufacture.

Dubbed “The future of making things”, the path ahead for the manufacturing sector world-wide is rich in opportunities but also littered with traps for the unwary.

It’s a future that will involve three transformations – how things are designed and made, what customers care about and want and the nature of the products we make.

For the first time, large-scale manufacturers face a serious challenge from smaller – even start-up – companies that are quick on their feet, take the massive computing power offered by cloudbased technologies as a given, and focus on imagination and innovation, creating new products and distribution methods for the future instead of simply looking for ways to tweak the present.

Key to the development of products in the future is the “Internet of Things” – the cloudbased linking of products worldwide to make a reality of concepts like the smart city and the driverless car.

“We moved on from the age of documentation to the era of optimisation. Now we have to prepare ourselves for the era of connection,” said Richard Elving.

“It’s estimated that by 2020, 50 billion products will be interconnected.”

He cited the example of Tesla cars, which use interconnectivity to send updates to car owners, for example to increase power from the existing unit, or to solve problems that may arise.

Interconnectivity will facilitate

the exchange of information between all the disciplines involved in the flow from concept, through design and engineering, to manufacture and distribution. This, said Autodesk, will replace the need to use multiple software programs that don’t talk to each other with a single product innovation platform that will extend from concept right through to customer feedback, to facilitate ongoing product improvement.

Autodesk is working towards the fulfilment of this need with Project Dreamcatcher, which it describes as the next generation of CAD. Dreamcatcher is a generative design system that enables designers to craft a definition of their design problem through goals and constraints. This information is used to synthesise alternative design solutions that meet the specified objectives.

Designers can then explore tradeoffs between many alternative approaches and select design solutions for manufacture.

This marks a massive step forward in the evolution of CAD. Although the acronym stands for “Computer Aided Design” it is essentially a passive system that would more accurately be termed “Computer Aided Documentation”.

The emerging generation of design tools enables designers to go beyond simply telling the computer what to do. By feeding in objectives and restraints they can tell it what they want to achieve. This makes the computer not simply a tool for execution, but an active player in the process of creativity – a process that will produce literally hundreds of solutions, many of which would lie outside the scope of human imagination.

When generative design is

combined with new forms of manufacturing like 3D printing, which lends itself to smaller manufacturing spaces, total flexibility in product output and commercially feasible short production runs, it sets the scene for a complete restructure of the manufacturing sector.

This raises the other key question in the future of making things, which is the translation of generative design to the manufacturing process – “taking it from art to part”, in the lingo of the industry.

The most frequently touted solution is additive manufacturing (AM), or 3D printing.

Despite having many impressive runs on the board, AM is yet to win universal acceptance. Is it, as many still claim, just a fad?

No, say Autodesk. While Australia may be lagging behind industrial giants like the USA, China, Germany and Japan in the adoption of AM, its small and scattered population, coupled with the logistical problems associated with a preponderance of remotely located industries like mining and agriculture, makes it ideally suited to take up this flexible technology on a grand scale.

AM has clearly demonstrated its ability to go further than the economical manufacture of prototypes and short run products.

Despite common perceptions, it is also well suited to long run mass production. In Germany, a company servicing the medical industry last year produced ten million items using AM. And, importantly, variations to the original item did not involve expensive retooling – simply an amendment to the computer program.

Matthew McKnight, Senior manmonthly.com.au

Industry4.0 Technical Specialist, Manufacturing, for Autodesk in Australia, illustrated to the potency of the marriage between generative design and additive manufacturing by outlining a case study of a joint project between Autodesk, Airbus and New York design consultancy, The Living, to produce the world’s largest metal 3D printed aircraft component.

He explained that the specifications for the existing partition, currently in use in every Airbus in the world, were fed into the computer together with a number of weight and strength constraints.

From the myriad of solutions produced by the generative design program, one was selected that met – and exceeded – the criteria. The organic design, although complex in detail, was totally capable of being produced by a 3D metal printer.

The finished product met all the prescribed aviation strength and safety criteria, and weighed in at 45 per cent less than the production item currently in use in the Airbus fleet.

Airbus estimates the new partition, which will be in operational service by 2018, will create a saving of up to 465,000 metric tons of C02 emissions per year, the equivalent of taking about 96,000 passenger cars

ABOUT THE SPEAKERS Matthew McKnight (Autodesk) is a mechanical design/ project engineer with over 15 years’ experience. His particular strengths lie in project management, with a proven ability to research, design, prototype, develop and implement innovative solutions.

manmonthly.com.au

off the road for one year. And, of course, the application of generative design and additive manufacturing won’t stop there for the aircraft manufacturer.

Autodesk describe this as a perfect example of technology making the quantum leap from passive to generative.

McKnight said it had involved taking new approaches at every stage of the manufacturing process, from the software used to conceive and design the new partition, through the manufacturing hardware to the materials used in the end product.

“This is the way manufacturing is heading, and it’s what we should all be doing,” said McKnight.

“It’s not a question of if, but when these new technologies will be widely available.

“It’s a question of ‘be proactive, or be overtaken’,” he said.

One Western Australian company that has already emphatically opted for the proactive route is Perth-based Aurora Laboratories.

Established just two years ago, Aurora’s primary goal was to enable the mass adoption of 3D metal printing via new technologies that would significantly reduce the purchase price and make production faster and cheaper.

“Our first goal, which we recently achieved, was to build an industrial quality small format printer that could be marketed for around $50,000,” said Aurora’s managing director, David Budge.

Additive manufacturing costs are predicated on the weight, rather than the shape, of the item being produced – “the complexity comes free”, as Budge puts it. In practical terms, this means that producing a complex shape like a turbine would cost roughly the same as producing a simple square block of the same weight in the same material.

“Our next goal is to produce a high-speed, large format printer capable of producing a highresolution one-tonne component in one day – which would take from three to six months using current technology,” said Budge.

“We’re currently building our first large format prototype, and

we expect it to be commercially available within two years.

“It will have a massive impact on production costs and will seriously challenge the viability of traditional manufacturing methods, as well as the existing supply chain mentality,” he said.

Aurora’s vision for the large machine is that it will be able to produce a heavy and complex component, such as a 300kg pump or valve, for as little as $4,500, compared to a probable cost in the region of $AU 80,000 using conventional manufacturing methods.

This, said Budge, will impact on the way people approach issues like spares inventory, for example on mines in remote areas, where currently the high cost of maintaining a large spares inventory has to be weighed against the loss of production caused by a long wait for parts.

Aurora is confident that as soon as AM costs match conventional methodologies like milling and casting, there will be a strong and sustained swing to the new technology.

With this will come major industrial changes, by no means limited to increased productivity and reduced costs.

Factories dedicated to a single product line – a car plant, for example – will give way to multipurpose production areas where AM machines can switch seamlessly from one product to another with a simple software change, and where modifications to individual products are just a matter of keystrokes.

The capacity to profitably produce in small quantities, and to tailor products to a client’s or consumer’s specific needs, will facilitate the localisation of businesses. This, in turn, will aid local development, at the same time greatly reducing the manufacturing sector’s transport footprint.

Elving summarised Autodesk’s view on future directions for industry by reiterating that when generative design is combined with new forms of manufacturing like 3D printing and applied to small-scale production facilities, it sets the scene for the

ABOUT THE SPEAKERS David Budge, managing director of Aurora Laboratories, has a Bachelor of Science (Chemistry) degree from the University of Western Australia.

He has extensive industry experience in robotics, robotic welding, surfacing engineering, product development and manufacturing processes. He is recognised for his experience in solving difficult fabrication and surface engineering problems.

He is the primary inventor of the large majority of Aurora’s inventions. development of a very different manufacturing landscape.

“The future of making things heralds an entirely new way of approaching the manufacturing process, from concept to production, and even the ongoing development and maintenance of the finished item. The potential benefits are, quite literally, staggering,” he said.

Elving said Autodesk was facilitating accessibility to its total software range by moving the provision of its products to a subscription system.

“Although this has only been in place for a matter of months, this has already led to an increase in uptake from both large and small companies.

It replaces the upfront cost and maintenance fees with a regular subscription that includes updates. If the software is acquired for a specific project, the subscription can be cancelled when the job is complete,” said Elving.

Autodesk Australia (02) 9844 8000 www.autodesk.com.au Manufacturers’ Monthly DECEMBER 2016 33

Industry4.0 The dawn of the new industrial era with the smart factory Over the past few decades, the manufacturing industry has undergone numerous major upheavals. Right now, we are witnessing the dawning of the next era with Industry 4.0, boosted in Asia by China’s recently announced China 2020 vision, in which they outlined plans to adopt new technologies and industries, marking a shift away from traditional manufacturing, writes Brian S. Brickhouse, President, Electrical Sector – Asia-Pacific Region, Eaton.

A

CCORDING to Eaton research on the machinery OEM segment, the global market for industrial automation is expected to grow at 5.5 per cent CAGR to reach US$210 billion by 2017.

This phenomenon is fast gaining traction, and it would be foolish not to carefully observe its development and reassess existing strategies to fully capitalise on this new phase of manufacturing.

The importance of Industry 4.0 The way we do business has transformed. Disruptive business models and technology now have the power to make or break a company.

In a way, constant change is now forcing businesses to “disrupt or be disrupted”. Like what the smartphone did to Nokia, and what Uber is doing to the taxi industry, Industry 4.0 can similarly render obsolete the company that doesn’t innovate and keep pace.

Industry 4.0 looks set to completely revolutionise the manufacturing industry through digitisation and automation.

Global consulting firm McKinsey & Company identified four drivers of this revolution: a rise in data volumes and connectivity, the emergence of analytics and business-intelligence capabilities, new forms of humanmachine interaction such as touch interfaces, and improvements in transferring digital information to the physical world through technology like 3D printing and information modelling.

Big data and analytics can significantly increase productivity 34 DECEMBER 2016 Manufacturers’ Monthly

and quality in manufacturing, while the digitisation of the physical world can drive collaboration and interoperability. Automation not only increases efficiency, but also serves to reduce the risk of human error and eliminate mundane tasks, ultimately driving the up-skilling of the manufacturing workforce.

In the past, elements in the industrial value chain such as design, planning and engineering were each implemented separately.

In the age of Industry 4.0, new technology is bringing these elements together to work more seamlessly than ever.

Big Data in manufacturing The hype behind the Internet of Things (IoT) is massive, and for good reason. IoT gives a digital voice to machines, enabling them to communicate with each other about their position, condition, temperature, etc. By leveraging these systems and optimising data flow between elements, companies can increase productivity, make operations transparent and minimise risk by making dynamic environments more predictable.

Digitising manufacturing processes through IoT technology gives us access to information and

data about our operations that we never had before. From this data, we can mine meaningful insights about our processes, identify issues such degradation or component wear, and gain greater transparency.

By bridging the gaps between our physical world and the digital one, we can engage and interact with our manufacturing operations more seamlessly and intuitively. The data can be translated to optimise factory processes and eliminate any areas of wastage or inefficiency, ultimately resulting in tangible businesses benefits.

manmonthly.com.au

Industry4.0

Energy efficiency

Challenges and solutions

Smart deviecs on the rise

For instance, energy efficiency is one of machine owners’ greatest challenges today, given rising energy bills and increasingly stringent regulatory requirements.

Solutions that enable our customers to save energy, both in their machines as well as in their manufacturing facilities, will take centre stage.

Energy efficiency can be achieved through energy measurement in manufacturing, which can help in identifying areas where energy could be saved.

Technology such as Eaton’s Lean Power solution can deliver data in real time from the controller to the actuator/sensor, making all data related to electricity and energy consumption available to the entire machine and individual actuators. This information can be used on plants and machinery to optimise energy consumption, carry out preventative diagnostics and optimise processes.

In the smart factory of today, many processes in manufacturing have been automated to reduce the level of human participation, and thereby error.

Future machines will be smarter, so we need to have more intelligent devices within these machines, making decisions on their own.

One of Eaton’s top three solutions in the manufacturing segment, the SmartWire devices, enables businesses to adapt to the Smart Factory.

Smart devices are the key to powering a Smart Factory. This is especially relevant in Asian markets, which focus on high-end machinery OEM customers with complex machinery. To fully reap the benefits of automation in manufacturing, the industry must use smart technology and equipment strategically to reduce the complications arising from the implementation of such complex machinery, and the issues associated with these new systems.

New energy companies such as solar and wind power providers, which are gaining traction fast in energy-hungry China, rely on such high-end machinery.

A device like Eaton’s solar inverter solution can reduce the maintenance cost associated with such equipment. By improving the overall reliability and efficiency of these machines, smart devices have positioned themselves as an integral part of the manufacturing industry’s evolution.

manmonthly.com.au

The factory of today and tomorrow With the cost of labour rising in China today, manufacturers are seeking more efficient ways to improve their productivity and efficiency. Revolutionary products like Eaton’s SmartWire-DT can cut wiring efforts by 70 per cent to achieve greater transparency and minimise downtime and manpower.

This solution was adopted by China Zoomlion, a large manufacturer of construction solutions.

Harnessing the potential of Industry 4.0 So what are the next steps for manufacturers to take? First and foremost, it is important to advocate a digital mindset shift in the organisation. Industry 4.0 is not a particular technology, or system, but rather an approach to doing business.

The next is to fully integrate automation into business strategies in order to realise its maximum potential. Automation cannot merely be an afterthought, but must be recognised as a legitimate business model that will help your organisation stay relevant with the advent of Industry 4.0.

Lastly, acknowledge the importance of acquiring talent in this field, who can be the ambassadors of Industry 4.0 and lead the charge within the organisation.

In taking a proactive stance to the evolution of the manufacturing industry, manufacturers can lead rather than follow the Industry 4.0 phenomenon.

Manufacturers’ Monthly DECEMBER 2016 35

The LastWORD Australia’s carbon capital Geelong has emerged as an area of great expertise for advanced materials, particularly in carbon fibre, in recent years. Brent Balinski spoke to Quickstep’s Carl De Koning about the company’s New Technology division, headquartered at Waurn Ponds.

I

T was hard to miss the “end of the road” for Ford Australia, when it shut its Geelong engine plant followed by its Broadmeadows assembly site last month.

Automotive manufacturing will continue to be a focus for many Australian businesses, however, even in Geelong.

Two high-profile local examples have ambitious visions for expansion, in fact, and their location - far from being a negative - is essential to their success.

One of these is Carbon Revolution, which announced plans to ramp up to 100,000 - 200,000 units annually of its high-end, one-piece carbon fibre wheels, and to list on the ASX by 2019.

The other also has a home at Deakin University’s Waurn Ponds campus, as well as deep links to the university, dating back to the early 2000s.

“Deakin was involved in testing and development of our Qure [out-of-autoclave curing] process.

We’ve been working with them for a number of years, and in fact over 11 PhD students have worked on Qure projects through that period,” explained Carl De Koning, Executive General Manager, Business Development (Automotive) & External Relations at Quickstep Holdings.

“A number of those are working either with us or Carbon Revolution today. So that’s been a good start to the collaborative process.”

The companies’ links to the university and the local “carbon cluster” continued with the October launch of the Future Fibre hub, assisted by a $4.7 million Australian Research Council grant.

“We’re trying to continue building the expertise that we have in Deakin and in Geelong, and that’s one of the other advantages of working with local partners, and to make this 36 DECEMBER 2016 Manufacturers’ Monthly

an Australian-known hub for fibre technology and materials research,” manager Dr Emma Prime told Manufacturers’ Monthly.

Though the hub covers more than just carbon fibres (other development areas include nanofibres and high-performance novel fibres), Quickstep and Carbon Revolution belong to advanced carbon fibre research program.

Quickstep is well-known for aerospace applications of its composite processing technology and as a part of the Joint Strike Fighter program - making its first shipment in February 2013 - but has been busily pursuing automotive markets in the last few years.

It has achieved recent successes, including in providing parts for Thales’s Hawkei, an intake for Ford’s Sprint, and a deal to develop composite seat backs with Futuris.

Last year it brought its global automotive R&D from Germany to Waurn Ponds.

The location has proven a great strength, according to De Koning. The neighbourhood has seen significant public and private investment in materials capability, including in the $34 million open-access Carbon Nexus centre, launched in 2014.

“We are able to take [visiting clients] up to Carbon Nexus and show them the research centre there and the work that’s being done,” he said.

“They can see Carbon Revolution onsite there. What it does is create a much stronger impression for customers of the capability; not just your own, but what you’re able to tap into on that site.”

Though it could not share specifics about projects at the hub, these are underway and, said De Koning, include in lower-cost carbon fibre, systems for fastercuring resins, demonstrator parts for potential clients, and in process simulation.

“Deakin’s got some very capable people in automation and simulation,” he added.

“And we’re working on simulating the manufacturing process and then putting that into real-life application in the demonstrator facility that we’ve set up there.”

He described the company’s two areas at the university as themed around R&D and demonstration manufacturing, with the latter put to recent use in creating parts for DCNS, with which it signed an MoU for the Future Submarines project in June.

Projects at the Waurn Ponds site have become so varied the automotive division recently changed its name to “New Technology”.

For the next year, the division will aim to reduce cycle times for automotive part processing, allowing higher volume output with a Class A finish, and deliver several demonstrator projects aimed at winning new contracts.

It is also working towards to fast-growing Korean market for composites technology, via research on their curing machines set up at Korea Institute of Science and Technology.

“One of our key things for 2017 is deliver that Kist project with a 30-minute cycle time, which is what they’ve nominated, and being able to provide class A surface performance,” he said.

Korea is investing heavily in building its composites capacity, said De Koning.

The opportunities for the Geelong region to also take advantage of the predicted booming demand for carbon fibre-based products have been much-discussed in the lead-up to Ford’s departure.

According to one piece of market research, global demand would increase at a compound annual growth rate of 13 per cent from

2014 onwards, reaching 86,000 tons in 2020.

Some of the action might hopefully find its way to Geelong.

Work done at the Future Fibres centre, which has partnerships with organisations such as MIT and Oxford University, would add to the area’s expertise and profile, said Prime.

“By having them involved and trying to grow Geelong as the centre of fibre technology in Australia, that will [hopefully] lead to the attraction of other businesses to look at us and say ‘Geelong? That has such great knowledge in technology and materials science and fibre science and maybe we should think about working down there,’” she said.

For carbon composites to break into the mainstream in automotive, costs and cycle times will need to come down. This is also part of what Quickstep and its research partner are driving towards.

“We have a process now that can cure the part in a lower-cost environment, but to really push carbon fibre into the next level of vehicle application, it needs to be lower-cost,” said De Koning.

“It needs to come down to a point where it’s comparable to other materials, and therefore that material science work with Deakin and CSIRO through the Future Fibre Hub is a really critical part of the next generation of parts and being able to be cost-competitive against traditional automotive materials.”

manmonthly.com.au

EXPA ND I NG TO INCLUDE AN ALL-NEW CONFERENCE IN 2017

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Packaging& LABELLING What bulk packaging system should you choose?

When it comes to choosing a bulk packaging system, every business has its own unique needs. There are different types of bulk packaging systems available on the market, and each machine comes with its own uses and advantages.

It depends on the type of items you’ll be packaging and the type of packaging you’ll be using, as well as your budget.”

S

OME focus more on outer packaging functions such as forming, cleaning, and sealing. Others focus more on the interior of the package through filling, wrapping, and creative packaging solutions. What you’ll need depends on the type of items you’ll be packaging and the type of packaging you’ll be using, as well as your budget.

Form, fill and seal machines (FFS) These machines are commonly used for food packaging, although they can also be used for other items including liquids and solids. The FFS machine creates a bag from a flat roll of film, while simultaneously filling the bag with the product and sealing the bag once it’s full. The advantages of FFS machines are that they can operate at a high speed and they’re ideal for running the same product continuously.

The cost of the film is cheaper than purchasing pre-made bags, so you will save on operating costs.

However, changing the film is timeconsuming, and if the bag is dropped it will often break.

They can be used for small individual packages (like sachets) or for larger bags, and they can package a wide variety of materials like seeds, powders and liquids. VFFS machines are suitable for bagging oats, hay, mulch, fertilisers and more.

Bale packaging machines Bale packaging machines use hydraulic cylinders to compress products to a quarter of their original size. This allows you to store more products, maximise your available space, and save on packing and

transportation costs. This type of bulk packaging system is normally used for cereals, rags, sawdust, humus, straw, hay and fodder.

Valve bag fillers These machines are consistent, accurate, and simple to install and adjust. Valve bag fillers use a twostage filling system. The majority of product is filled at maximum rate, and then just before the bag reaches its target, the machine reduces the fill rate to a dribble feed.

This way, the machine can stop filling more accurately when the bag reaches its target weight.

Valve bag fillers are relatively small machines, so they don’t take up a lot of floor space. They’re suitable for packaging dry materials, powders and granular products such as soil, mulch, minerals, grains or concrete mix.

Pre-made bags or open mouth baggers These systems are extremely flexible.

They are compatible with paper bags or woven bags, heat sealers, inner liners, stitched outer bags, fold overs and taped seals.

They offer various feeding methods including gravity feeding, auger feeding, and vibratory feeding, providing you with the ability to package unusual products.

You can add dust extraction systems or bag compression functions depending on your business needs.

Poly woven bags are, on average, more robust than FFS bags, but your cost per bag will be higher. Open mouth baggers also tend to be slower than FFS systems.

Accupak 1300 793 476 www.accupak.com.au

Vertical form, fill and seal machines (VFFS) VFFS machines fill each bag before heat sealing it, labelling it with a time stamp, and auto cutting the bag.

Most VFFS machines can operate at about one finished bag per second, so they are ideal for businesses with high output requirements.

38 DECEMBER 2016 Manufacturers’ Monthly

manmonthly.com.au

What’sNew

Brought to you by

Thermal flow switch for enhanced refinery safety ENGINEERS AT NATURAL GAS LIQUIDS (NGL) fractionation processing facilities will find the FLT93L Series FlexSwitch from Fluid Components International (FCI) to be an effective and reliable solution for process relief valve leak monitoring.

NGL fractionation processing facilities separate ethane, propane, butane and other heavier hydrocarbons from the natural gas stream.

Multiple trains and columns are used in this fractional distillation process, and the relief valves are critical safety protection devices.

The switch accurately monitors the pressure relief valves for escaping flow with a thermal dispersion

technology flow sensing switch/ alarm. In this application, an inline configuration FLT93L is placed on 0.5- and 1-inch (DN15 and DN 25) diameter pipes.

The switch detects leaking or seeping gas in the lines to alert the engineer to over pressurisation and issues an alarm during such events.

For the system to work properly, the switch must detect low flows and yet avoid issuing false alarms that could seriously impact plant operations.

Beyond accurate monitoring, the switch offers a number of other advantages in this application. It is easy to install and set-up: FCI’s voltage output allows user to see into

Rugged tablets for field applications BACKPLANE SYSTEMS Technology has designed rugged tablet PCs for use in harsh field environments and situations. The range has been specifically designed for environments where dust, extreme temperatures, moisture, vibration and sunlight readability are crucial factors, without compromising user comfort.

The range of Rugged Tablet PCs from Backplane Systems Technology includes the PA-301, PA-501, PM-311, PM-511, PM-521, PM-522 and VM521 models.

The PCs are suited to Australia’s harsh climate and have applications in an array of industries where workers are in the field.

The features include: • Lightweight design weighing 0.85-1.2kg • MIL-STD-810G, MIL-STD-461F and up to six feet drop resistant • Sealed to IP65 standards to prevent dust and moisture ingress • Hot swappable

manmonthly.com.au

• • • • •

batteries with 8+ hour life RFID, 1D/2D barcode reader, magnetic strip reader & GPS Dual cameras built-in (front and rear bezel) Supports Wi-Fi, Bluetooth, USB, COM and Ethernet Desktop and vehicle docking stations Ergonomic hand and shoulder straps Backplane Systems Technology 02 9457 6400 www.backplane.com.au

the process and accurately set the desired trip point.

Flexible dual relays are settable by the plant technician for any combination of flow and/or temperature alarms.

The switch’s flow accuracy is ±2% of the setpoint velocity over a ±28°C temperature range.

Repeatability is ±0.5% reading.

A wide selection of standard and custom process connections can be provided.

The electronic control circuit can be integrally-mounted with the sensing element, or it can be located in a remote location. The standard enclosure is a coated aluminum alloy and is rated for NEMA Type 4X

(IP67) environments. Global agency approvals for Ex installations are provided. It is SIL 2 rated for reliability.

AMS 03 9017 8225 www.ams-ic.com.au

New multisensor CMMs HEXAGON MANUFACTURING Intelligence (HMI) has launched two new multi-sensor coordinate measuring machines (CMMs), the Optiv Performance 663 and 664 Dual-Z. Both machines can be configured for both tactile and contactless measuring in a single system. To save measuring time, different workpiece features can be measured without re-clamping.

Both machines feature low-vibration granite construction, mechanical linear guides on all axes, backlash-free precision drives and integrated temperature compensation.

The 663 model has a measurement range of 610 x 610 x 305mm, while the 664 takes the Z-direction up to 405mm.

Another feature of both machines is that they can be fitted with two independent vertical axes for optical and tactile sensors.

This prevents the inactive sensor from impeding machine movement, so that features within the workpiece remain accessible for programming and the risk of collisions is reduced.

Dual-Z technology also allows the use of a motorised indexable probe head to carry the tactile sensor.

For those workpieces that have rotational symmetry, the workpiece can be clamped in using the CNC rotary axis, which can also be made to swivel on an additional axis.

Both models can use the CMM monitoring system MMS PUL, which monitors temperature, vibrations, humidity and machine status to give operators a complete picture of the machine environment.

Hexagon Manufacturing Intelligence www.hexagonmi.com

Manufacturers’ Monthly DECEMBER 2016 39

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Thank you to all our customers and suppliers Have a nice summer break and best wishes for 2017 Atlas Copco Compressors - 1800 023 469 www.atlascopco.com.au/compressorsaustralia