Common sense management and a strong focus on training are just two of the key reasons for a South Australian welding company’s remarkable success. Alan Johnson reports.
The company has nurtured a culture of continuous improvement through identifying “progressive” as one of the organisation’s core values.
WHILE many perceive Australia’s welding/fabrication industry as being on a slow downward spiral, Smart Fabrication, headquartered in Port Adelaide, is dispelling that myth with an average growth rate of over 50% a year, and no debt.
The fast-growing, dynamic engineering and specialist steel fabrication company, which started trading in 1999, has more than quadrupled its revenues from $1.6m per year in 2007, and is currently on track for another record year, having recently posted its best quarter in the history of the company. The company employs over 65 people across a variety of trades.
The company’s founder and MD, Simon Kennedy, puts this remarkable success down to a number of reasons.
“It’s not down to just one thing, it’s like any good recipe it takes many ingredients to make a good cake.”
“But one of the most important areas for me is looking after all the people involved with the business, and that includes our clients, suppliers and employees and treating them very fairly and with respect, making it fun to do business with us at the same time.”
“We also offer our workers a lot of reward and recognition. If our workers go home happy, they will come to work the next day happy and do a good job,” he said.
While admitting that the quality of a weld is not necessarily down to the technology, Kennedy has invested in good quality machines.
“We have a full range of welding machines, with the latest pipemate dual welders here. I also have in-house welding inspection and supervision capabilities here.
“I have also employed one of the gurus in the welding industry, Kerry Humphreys our Quality Manager, who is probably the most talented welder in the state, and a great teacher. He works closely with our apprentices to improve their welding skills.”
Kennedy says the company also invests heavily in R&D, looking at new technologies and automation.
“We put a lot of time and energy into R&D and we are always looking to improve our productivity levels.
“We also develop a lot of our own machinery to be more efficient in our processes. There’s a lot of technology out there that anyone can purchase, but you need to put a little bit of your own input into it to really make it work,” Kennedy told Manufacturers’ Monthly.
The company, which took out this year’s Endeavour Award for Business Transformation, has also developed a Lean Continuous Improvement Plan and Schedule to prepare the organisation for the implementation of a systematic lean program with the assistance of an experienced consultant.
High weld pass rates
Kennedy, who was a boilermaker and a first class welder for over 20 years, working at the Australian Submarine Corporation (now ASC) and as a first class pipe welder, takes pride in the company’s high weld pass rates, saying it’s down to both the quality welding equipment used and the skill of the actual welder.
While working on the Moomba Compression Station project for example, Smart Fabrication welders completed 3364 welds on the project with only 26 welds failing (0.77%) to comply with the nominated standard AS4037 Class 1. (The TWI states a 1.7% to 3% failure rate is the average for welding piping systems).
Kennedy’s advice to other manufacturing companies is to never cut back on training, saying it’s training that puts you on the top shelf.
“People often ask me about the cost of training, and what happens when that person leaves? But I ask them what happens if you don’t train them, and they stay, what’s the cost in that?
The company puts the entire staff, from Kennedy down to the first year apprentices, on all the relevant training courses.
“We also give our apprentices an opportunity in the first couple of years of their apprenticeship to start learning.”
Kennedy admits it can be costly to train guys up in the beginning. “But I find the young guys respond well when given an opportunity to have a go like the experienced tradespeople in the industry.”
He explained that most welding apprentices would have to wait until they finished their apprenticeships before looking at first class welding pipes, saying most years his apprentices win awards at trade schools for being outstanding.
“There are a couple of reasons for that: we only employ top class welders, so the benchmark around here is very high, and we give them a lot of opportunities.”
Kennedy explained that the company has nurtured a culture of continuous improvement through identifying “progressive” as one of the organisation’s core values, measuring each employee’s behaviour against that expected of them and linking it to remuneration reviews as well as the organisation’s reward and recognition program.
“And importantly we don’t make mistakes here, we make opportunities to learn. We have an open attitude, if you have done something wrong, this is an opportunity for learning. We all make mistakes, it’s all about encouragement and a pat on the back when they do a good job.”
One of Kennedy’s catchphrases is ‘we don’t do average’.
“My father told me you don’t need to be overly fantastic to be outstanding, you only need to be one or two percent better than average. Everyone is average and no one notices average. To be really good all you need to do is try that little bit harder.”
“Everything we do here, we aim to be five percent better, that includes how we package a job, how we deliver it, all the little things we do.”
“Often it’s the little things we do that make a big difference. There’s no one big thing that is going to make a company great,” he said.
Kennedy explains that most welding processes take about the same amount of time no matter which company is doing it, so he now tends to focus on the company’s service side.
“Everything we do needs to be 100%. With quality you can’t improve on 100%, and basically the industry dictates our pricing structure,” Kennedy said.
The company, which works in a variety of industries including water, defence and mining, recently expanded into the demanding oil & gas industry.
“Working in the oil & gas industry has its own challenges; everything needs to be 100% to start with, plus you need to deliver on time, every time. In addition to that you need to have a quality system and quality personnel who are on their game 100% of the time, because the quality documentation is almost as demanding as the welding and fabrication itself.”
Today, Smart Fabrication’s capabilities include pipe spool fabrication (carbon/stainless/duplex), pipe skid fabrication, pressure vessel fabrication, structural works, aluminium work, blast and paint and site work/installation.
The company now boasts a 33,500sqm footprint across two sites; 9,5000sqm of undercover workshops, multiple sub-arc welding machines, in-house NDT and hydro-testing bays and a 170m water frontage at its Port Adelaide headquarters.
Alan Johnson is Manufacturers’ Monthly‘s former editor. He has researched and written about all aspects of the Australian manufacturing sector for over 25 years.
08 8240 1876