Overcoming what could seem to be an impossible task may involve one key Industry 4.0 skill. Connor Pearce speaks with one company that made the leap.
In July 2017, the team at Successful Endeavours received an order for 65 trial units
from a company, IND Technology, that had recently been spun out of research conducted at RMIT. As a manufacturer of specialist electronic devices, based in Narre Warren, south-east Melbourne, this was not an altogether unusual event for Successful Endeavours, except when you take into account the fact that the order was for a product not yet designed, with features still to be confirmed. Schedule for final delivery? November 2017, less than 16 weeks away.
In the end, the product, a solar- powered device that detects faults in rural power lines to prevent bushfires was delivered on time, to specifications. According to Ray Keefe, managing director of Successful Endeavours, what made all of this possible was one thing that is missing from many manufacturers in Australia; collaboration.
In this case, to deliver each element of the Internet of Things (IoT) ecosystem that enabled the device to work, a consortium of local, Australian businesses came together. In the end, everything from the enclosure and mounting, to software, hardware, and electronics manufacturing occurred in Australia. Each of the businesses that Successful Endeavours collaborated with on this project brought their own expertise, as Keefe noted in the case of Maries Production Services, which designed the sheet metal parts for assemblies, as well as logistics.
“One of the things that made them a good fit for this project is that they’re a smaller, leaner operation. They’re fairly agile in being able to turn around work and they have established supplier relationships in Australia,” said Keefe. “They look at the job and decide where it’s best to be done. They already had all of the required relationships within the Melbourne supply network.”
Like Maries, another collaborator, Precision Electronics Technology, which carried out the contract electronics manufacturing, had particular qualities that ensured that the project could be pulled off.
“Precision Electronics Technology were selected because we know they can do relatively fast turnarounds and, although you pay a small premium for it, it’s an affordable premium. We also know that they’ve got very good quality standards and if something doesn’t go right they’ll fix it,” said Keefe.
While Precision and Maries had an established relationship with Keefe and Successful Endeavours, another business, Connect Electronics, which delivered the looms and cable assemblies, was unknown to the team until the project began.
“Connect Electronics were coming into it cold,” said Keefe. “Steve Nicholas, manager at Connect Electronics, dropped in to us for a cold call while we were wondering who will we get to do connectors. We sat down around a table, we had a bit of a talk to him about their business ethos, how they operated, and he was prepared to be quite open and transparent with us.”
A shared understanding
With the team coming together under Successful Endeavours as the systems integrator, among other roles, each of the members had to be prepared to take a risk on the project. The nature of the project required a level of trust between each business.
“Nobody started with formal signed contracts in place, because the work couldn’t be categorised that clearly,” described Keefe. “One of the things that was required for this was a good deal of belief and trust in each other, to actually take the journey and to be reasonable about pricing.”
While the project had to have a commercial basis to it, in working together under these parameters, there needed to be a greater level of understanding than in other business relationships.
“Collaboration has to be non- transactional,” stated Keefe. “It can’t just be, ‘Yeah we’ll make you a bracket, the brackets will be this much. When we get an order from you and the upfront deposit we’ll start and once we’ve got that underway we’ll look at the next one.’ It has to be quite a bit more, ‘We’re on the same team pulling together, we’re all doing our own bits’.”
In the delivery of the devices for IND Technology, the nature of the contract meant that the commercial partners had to wear the risk and financial cost of the partnership.
“IND Technology had staged payments, so they didn’t get any cash in until they’d met certain criteria because there was government funding associated with the project. The government funding is always trailing funding, which means that the commercial partners have to fund everything up to that point,” said Keefe.
“We’re all looking after each other from a cashflow perspective IND are paying what they can, Successful Endeavours are covering some of it, and suppliers are being generous on payment terms to make the opportunity possible.”
Of course, not every business is willing or able to work under these conditions, and Keefe highlights how finding the right partners was as much about finding businesses with matching values, as being able to deliver the technological requirements. Keefe listed the values required as contribution, ownership of the outcome, generosity, transparency, trust, and finally a desire for excellence.
“So, it is not just meeting your contractual obligations, but doing something really amazing that will knock your socks off.’”
As these requirements go beyond simply the financial side of business, projects that have this level of collaboration need have a goal that goes beyond making money, even if that is a step along the way.
“You’ve got to paint the picture of what the opportunity is and why it’s worth doing because businesses don’t just exist to make money – businesses need to make money
or they go away – but business are primarily about partnering together to do something of substance.”
In this case, stopping bushfires, including those similar to the Black Saturday bushfires in Victoria, where 180 people died, was that greater purpose. However, in other projects completed by Successful Endeavours, which also required a similar level of investment on behalf of the business, there was also a greater purpose.
“A number of years ago someone came to us needing a product that would stop plumbers being electrocuted,” recalled Keefe. “They couldn’t buy a suitable product on the market and they’d been asked to find this product by a water utility who had three plumbers die in the same week.
“We put together a rough prototype to show them that what they wanted to do was possible. Then, they got that assessed by Sydney Water and everyone decided that was good. We put together a budget for doing the R&D, the production set up and unit costs. They came back to us and said, ‘No one’s paying for any R&D or set up, you’ll have to wear that yourself.’”
Coming up with a solution here required a different approach from Successful Endeavours, one that was in part possible because of a belief in the project and the business case.
“We sat down with them and asked them, ‘How many units do you believe you’ll be able to sell?’ They estimated 300, so we then went through the process of working out a business case for that, so we would have a break even on 300 units and went ahead,” said Keefe.
“We’re at nearly serial number 4000 on that product now.”
Keefe highlighted that, in his experience, successfully completing projects such as this has to be part of a business’s DNA.
“One of the things that I’ve deliberately done with Successful Endeavours as a business is that we’ve built an inherently collaborative environment. We look for people who understand that. It’s quite difficult to shift, culturally, in the middle of a delivery schedule. We’ve been practicing collaboration for a long time and building up those trusting relationships.”
In a report conducted by PwC on behalf of Swinburne University, titled, Transforming Australian Manufacturing: Preparing businesses and workplaces for Industry 4.0, the first finding was the need for businesses to become skilled collaborators in the Industry 4.0 environment. With the scale and transformative potential of the technology and systems of Industry 4.0 on the horizon, Australia’s manufacturing SMEs must collaborate, found the report – a finding Keefe echoes.
“What we’re seeing with Industry 4.0 is there are lots of opportunities where if you’re agile and you can pivot, you can pick up pieces of business that other people can’t go after. That means that this week you can doing 100 IND Technology units and then next week 200 plumber guarding units, the week after that you can be doing something else, and your production line can pivot around all those opportunities relatively quickly,” said Keefe.