SA industry in transition

WITH globalisation affecting the manufacturing industry world-wide, it’s no surprise to see South Australia in a period of industrial flux. Alan Johnson reports.

WITH globalisation affecting the manufacturing industry world-wide, it’s no surprise to see South Australia in a period of industrial flux.

Once known as the automotive and whitegoods manufacturing state, Stephen Myatt, director of SA’s Engineering Employers Association, says today it’s difficult to categorise industry in South Australia.

“Except to say, in a general sense, it’s very much a two speed economy.

“Many companies are restructuring in the face of competition, but if you are one of the companies supplying mining, infrastructure or the rail industry then you are booming.

“We are even making locomotives at the moment, something we haven’t done for some time,” Myatt told Manufacturers Monthly.

Over the next decade, Myatt believes South Australia will witness the changing face of manufacturing, “to be a state built on the individual capabilities of companies”.

“I’m not saying manufacturing won’t exist anymore, or that any particular industry sector will or won’t exist anymore.

“What we’re finding is that companies actually compete on individual characteristics, so it depends on what you’ve got as a company in relation to your engineering expertise, your design expertise, your intellectual property, your manufacturing process, individual customers, or a market niche.

“We’re really finding that it comes down to those competitive strengths that are found at the enterprise level,” Myatt said.

“However, in the long term we have to make sure we have a manufacturing base, even though it will look different to what it is now,” he said.

With a number of major industrial land releases soon to be announced, the recent signing of the AWD (Air Warfare Destroyer) contract, and the Olympic Dam expansion, Myatt believes South Australia is in for a strong period of growth.

“While manufacturing is in a state of transition in SA, I guess you can apply that to certain degrees to every state, but I think we really do have these major project opportunities here.

“As we speak right now, the AWD is getting expressions of interest from all sorts of manufacturers to be suppliers, and as such, we’re optimistic that there will be a significant opportunity for the State’s manufacturers to be involved.

“The important thing to remember is that this is a 40-year through-life project, so any contract of that size is going to have some impact on the local economy.

“As well as the AWD, the Olympic Dam expansion will be enormous if it occurs. The spin-offs that will happen in the upper Spencer Gulf area, plus right through manufacturing in the state and the country will be enormous just out of that project alone.

“So yes, we’re in this transition process, but we’ve all got a challenge to manage it, ensuring that we have the skills, the capability, and then delivering,” Myatt said.

Automation the key

One company that is taking advantage of its competitive strength is Adelaide engineering company, Sage Automation.

Described as Australia’s largest independent systems integrator, Sage provides a wide range of automation and control systems ranging from designing and installing robotic assembly lines for car manufacturers through to developing runway lighting systems for airports.

According to Sage’s GM, Adrian Fahey, the key to the company’s successes is having strong leadership, a strong work culture and employing the right people.

“We also put the customer first and strive for continuous improvement, as well as investing heavily in knowledge gathering,” Fahey told Manufacturers Monthly.

He says this investment will see the company double its present turnover of $48m, to $100m by 2012. The company presently operates with 180 staff in Adelaide, and another 20 in Sydney, Brisbane and Victoria.

Fahey says the company’s engineering skills will drive the company’s growth.

According to Fahey, the key to a successful automation project is not the actual products used, but the way they are integrated.

“Most engineers can build an automated line, but they also need to re-start the line quickly to reduce production downtime. Our engineers have strong skills in recovering systems from fault.

“Getting the quickest sequence of recovery is very important for manufacturers when they have a power out or an E-stop,” Fahey said.

When investing in automation projects, Fahey advises manufacturers not to focus solely on ROI.

It’s obviously important, but they should also look for continuous improvement. Many companies, especially overseas, use OEE (Overall Equipment Effectiveness) as a measure, aiming for 85% to 90%.”

Fahey admits automation can take many forms. “Sometimes it might just be a matter of moving machines closer to improve productivity levels.”

Whatever the measure or project, Fahey says it’s important for manufacturers to automate their production wherever possible.

“For those that do invest in automation and MI (manufacturing intelligence) they are the ones that will survive.

“Robotics are now more flexible and cost competitive then ever, with prices as low as $50K to $60K, fully installed.”

To produce the engineers needed to drive the company to its 2012 goal, Sage is in the process of setting up a $3.5m training facility, with plans to provide external training programs.

To be officially opened next June/July, the Didactic training facility is a “mini-factory” which will offer university graduates the practical experience to accompany their theory.

According to Fahey, the facility will allow the company to speed up its graduate training, cutting the process by 50%.

“At the moment we are in the process of developing the curriculum for the program,” Fahey said.