Manufacturers' Monthly - Nov 2017

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NOVEMBER 2017

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24 Issues & Insights

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Behind the cover As global industry becomes increasingly integrated with robotics and automation transforming the factory floor, the use of digital technology is becoming more accepted, and expected, across the realm of manufacturing – whether that is in the design, production or distribution of Australian-made goods.

This issue of Manufacturers’ Monthly takes a broader look at how digitalising the workforce can benefit the future of the industry, and why it is shifting the focus away from traditional manufacturing to the dawn of intelligent innovation, with machine learning driving productivity and human intervention guiding its development.

The image featured on our front cover was contributed by

Siemens, whose Head of Marine/ Defence, Andrew Seal, spoke with Manufacturers’ Monthly at last month’s Pacific 2017 International Maritime Exposition in Sydney about the role digital shipyards will play in the revolution of Australia’s defence industry.

With this in mind, the question that has been on everybody’s lips is this: when can we expect this industrial transformation? The answer is simple: it is happening now, and Australia has been warned that it will bypass those areas of the manufacturing workforce who don’t look to digitalise their processes.

Merging the industry so more of it runs at the same pace is therefore an important step to opening Australia for business across a truly digital supply chain.

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Comment

SYED SHAH – Managing Editor, Manufacturers’ Monthly

Prepping for the big time

A

NALYTICS and Big Data essentially evolved from two major developments in the last century. In the 1940s, we saw the creation of the first computer, which gradually provided tools for people to collect data then somewhere along the way, Big Data became a term that was popularised to represent the collection, processing, and analysis of large quantities of data.

Fast forward seven decades, those quantities have grown exponentially.

An IDC report at the turn of the 21st century estimated that the world would generate 1.8 zettabytes of data by 2011. By 2020, this figure will grow 50 times or more. Let’s come to terms with reality – Big Data has been around for quite some time, but are manufacturers doing enough to harness its potential for the wellbeing of their businesses?

The term Big Data captures the data collection and analysis that have evolved from database management in the 1960s to data warehousing in the 1970s, knowledge discovery in databases (KDD) in the 1980s, enterprise resource planning (ERP) and data mining in the 1990s, and customer relationship management and business analytics in the 2000s. Big Data represents the unification of these concepts and the value we derive out of it.

Next, we put together the Big Data concept into our machines and voila, we get smart machines. These past five years saw machine learning continue to be at the forefront of technological innovation, with a few big highlights like Amazon’s Alexa, that will have long-lasting effects of artificial intelligence (AI) in everyday life. Amazon chief Jeff Bezos described this as a “renaissance and a golden age” at a gala dinner in Washington recently.

“We are now solving problems with machine learning and artificial intelligence that were in the realm of science fiction for the last several decades. And natural language understanding, machine vision problems, it really is an amazing renaissance,” he said.

8 NOVEMBER 2017 Manufacturers’ Monthly

There is no doubt that Big Data and advanced machine learning will surely empower and improve businesses and as Bezos accurately described – that “basically there’s no institution in the world that cannot be improved with machine learning.” Honestly, I find it very hard to disagree with him, as will the folks here in Australia pushing for the increased adoption of advanced manufacturing.

But before we start getting ahead of ourselves, let’s take stock of where we are now in the world of analytics and smart manufacturing. While I would dare to venture and say that more than half of the manufacturers in Australia are already using big data analytics with smart machines in some of their processes, most of them could still be struggling to reap its optimal benefits. There are many reasons this, which include the lack of the required infrastructure to support their Big Data ambitions.

So, over the course of the year, I spoke to many businesses like Bosch, Schneider, ABB, Epicor, Microsoft and many others who are experts in

this field and I’ve collated a list of some quick tips to manage your Big Data expectations.

Firstly, the implementation of a solution that involves analytics for the factory floor is not a silver bullet that will magically solve your business problems in at one go. Sure, it will provide immediate data about cost and revenue but it will only be beneficial if a business knows how to put this data into action by implementing it into its business strategy and decision-making discourse.

I have observed talking to trade show visitors (i.e. the buyers), which is the danger of getting lost in the excitement after the implementation – they expect to see instant results and a turnaround of their business.

This is of course impractical.

Analytics is a science that takes time to process and analyse before the organisation can get the benefits.

Next, develop an optimisation strategy for information gathering in your systems. Big Data gathers and stores information flowing within the mechanism of communication

and interaction going on within your organisation. This is the interactions of assets in a business value chain – how customers, partners, and prospects choose to interact with the business and vice versa.

Because of this, the technology to enable these interactions is essential – particularly the devices and computer systems that facilitate communication and information sharing. This will ensure that all information in the form of data is captured in the business information systems.

Lastly, after spending a fortune (hopefully not) on your new software suite for your operations, the last thing you need are redundancies and rehiring. So, train your workforce to manage the new methods of communication and information sharing. If there is a certain level of AI involved in some of the machine processes, even those need to be looked at, understood and managed.

This ensures security measures are intact by ensuring the protection of the confidential data that has been collected.

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News@MM $5m clean energy funding boosts electric vehicle manufacturer Victoria-based manufacturer SEA Electric will ramp up its conversion of medium-duty trucks and commercial vans to electric vehicles, using $5 million though the Clean Energy Innovation Fund.

The company has developed three electric drive systems models that can be fitted to commercial vehicles to allow them to be converted to a 100 per cent electric operation.

Its technology can be applied to businesses performing express freight, general delivery, and waste collection duties around Australia.

Clean Energy Finance Corporation (CEFC) transaction lead Melanie Madders said it would invest $5 million in SEA Electric through the Clean Energy Innovation Fund, to help purchase components and scale up its manufacturing business to meet growing customer demand.

“Electric vehicles are a very exciting part of our clean energy transition, and offer significant potential to reduce our overall carbon emissions,” Madders said.

“Emissions from light vehicles already make up as much as 10 per cent of Australia’s total emissions, with overall transport activity expected to continue to grow in the future.

“The development of costeffective ways to transition commercial vehicles to lower emissions technologies is paramount for cutting national carbon emissions.”

SEA Electric integrates and assembles electric vehicle drive systems into a basic chassis and framework, including the cab, battery pack and electric motor.

SEA Electric also fits the electronic infrastructure of the vehicle.

SEA executive chairman Tony

Fairweather welcomed the support of the Clean Energy Innovation Fund in allowing the company to accelerate the deployment of its innovative technology.

“Australia has the potential to become a global leader in the rapidly emerging electric vehicle industry, and this finance will help SEA Electric be part of that revolution,” Fairweather said.

“Vans and medium-duty trucks are suited to electric vehicle technology because businesses using them typically have relatively fixed and known route distances and vehicles return to base overnight, which allows for recharging.

“With ongoing decreases in the cost of lithium batteries, our electric drive systems are becoming increasingly cost competitive with equivalent petrol or diesel engines, which means that businesses using these vans and trucks can consider

Australia has the potential to become a global leader in the rapidly emerging electric vehicle industry.

10 NOVEMBER 2017 Manufacturers’ Monthly

100 per cent electric vehicles on a commercial basis as well as for their environmental benefits.”

The Clean Energy Innovation Fund draws on the combined skills and experience of the CEFC and the Australian Renewable Energy Agency (ARENA).

“The CEFC and ARENA’s support through the Clean Energy Innovation Fund is critical for us to achieve the next step in our business growth and will help us purchase inventory needed to fulfil orders for our electric vehicles,” Fairweather added.

The CEFC has identified transport-related emissions as a critical focus area, particularly investments in projects that achieve industry -eading levels of energy efficiency, and contribute to the productivity of Australia’s cities and regions as part of its Sustainable Cities Investment Program.

According to the Australian Bureau of Statistics, there were more than three million light commercial vehicles registered in Australia in 2016. Of those, more than 96 per cent used either petrol or diesel.

In addition to the SEA Electric investment, the Clean Energy Innovation Fund has previously invested in Geelong’s Carbon Revolution, which produces the world’s only mass-produced, onepiece, carbon-fibre car wheel.

The wheels are as much as 45 per cent lighter than aluminium wheels, reducing vehicle weight and therefore cutting fuel consumption and carbon emissions.

The Victorian Government announced last year that SEA Electric would receive $516,720 through the New Energy Jobs Fund to support the first stage of its commercial electric vehicle manufacturing facility with the long-term aim of developing an innovative range of electric powered commercial vehicles. manmonthly.com.au

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News@MM GS1, IBM, Microsoft collaborate to leverage GS1 standards for blockchain applications GS1 has announced a collaboration with IBM and Microsoft to leverage GS1 standards in their enterprise blockchain applications for supply chain clients.

The organisation’s global standards for identification and structured data enable blockchain network users to scale enterprise adoption and maintain a single, shared version of the truth about supply chain and logistics events—increasing data integrity and trust between parties, and reducing data duplication and reconciliation.

GS1 Australia’s executive director and CEO, Maria Palazzolo said, “Blockchain, like any other technology designed to exchange data across organisations, must be established on strong foundations. At its core, any supply chain implementation needs to be based on all involved parties agreeing on a common way to uniquely identify any item, location, shipment, consignment, asset or any other ‘thing’ that blockchain transactions relate to.”

“Trading partners must also adhere to common data definitions to ensure all parties in the chain can correctly interpret, and integrate, the ‘meaning’ of data in the blockchain. This is what GS1 has been doing for over 40 years across the globe.”

Data stored or referenced by blockchain networks can be structured for shared communications and interoperability through the use of standards. For example, the GS1 and ISO open standards of Electronic Product Code Information Services (EPCIS) and Core Business Vocabulary (CBV) enable standardised exchange of data and item-level tracking.

Peter Carter from Data61 (CSIRO) said, “A blockchain is a generic technology platform. The data we store in the blockchain still needs to follow supply chain data standards, and integrate with existing systems that use those standards. We have already started research into the use of GS1 EPCIS standards on blockchain, and we are exploring how we can integrate 12 NOVEMBER 2017 Manufacturers’ Monthly

Building blockchain traceability solutions on a common set of standards can help us scale across our complex, global supply chain and build networks based on transparency and trust. smart sensors and packaging into the supply chain on blockchain.”

“What attracts many organisations to blockchain technology is the possibility of sharing data across corporate boundaries while maintaining a high degree of rigour and accuracy,” said Robert Beideman, vice president – Retail, GS1. “We hope to make this possibility a reality for businesses by working with dedicated technology and industry partners— and together promoting a common business language.”

GS1 standards offer global businesses like Walmart the ability to expand blockchain networks to suppliers, distributors and other ecosystem partners, unlocking the business value of data sharing, transparency, visibility and trust. IBM and Walmart have successfully used blockchain technology in a pilot test to enhance the traceability of two food commodities in two different countries: mangoes in the US and pork in China.

“Our pilot projects in the US and China demonstrated that blockchain can strengthen existing food system safeguards by improving traceability.

Using blockchain, we were able to

track a product from retail shelf back through every stage of the supply chain, right to the farm gate, in seconds instead of days or weeks,” said Frank Yiannas, vice president of Food Safety, Walmart. “Building blockchain traceability solutions on a common set of standards can help us scale across our complex, global supply chain and build networks based on transparency and trust.”

“One of the key benefits to blockchain in the enterprise is the trust it delivers, which enables more efficient and complete sharing of the critical data that drives enterprise transactions. By removing the barriers that can be caused from disparate entry systems, that trust is solidified even further,” said Brigid McDermott, vice president, blockchain business development, IBM. “That’s why we are working with clients like Walmart and collaborating with other industry leaders to implement GS1 open standards into the work that we do.”

“The challenge with trade finance and supply chain today is that participants are forced to use disparate digital systems bridged by paper-based processes, with little or no common standards. These digital

‘islands’ work well when everyone is on the same network, but as soon as there is a lack of connectivity with certain participants using different solutions, things quickly revert to paper and manual processing,” said David E. Rutter, CEO of R3.

“We see distributed ledgers as the means to provide that connectivity between participants across business networks.”

“Leveraging existing GS1 standards to structure event information will enable blockchain-based supply chain implementations to be more interoperable and will simplify the capture and description of events that are written against smart contracts,” said Yorke Rhodes III, global business strategist, blockchain, Microsoft.

“Collaborating with partners to implement solutions on blockchain using standards already in place for item-level tracking is the quickest path to production.”

“We look forward to close collaboration with Microsoft and IBM, and will also engage with other blockchain technology companies for the adoption of GS1 standards to enable interoperability and decrease adoption barriers,” Palazzolo said. manmonthly.com.au

News@MM Holden closes its doors in Australia The final closure of the Holden production line in Elizabeth is a sad day for the auto assembly sector and its workers, according to Australian Industry (Ai) Group CEO Innes Willox.

Manufacturing, however, is still going strong and it is promising that many of the displaced workers have found new employment in a big part thanks to the efforts of Holden itself.

Ai Group has been encouraging members to consider hiring the many skilled people Holden has trained so well and, given the growing skill shortages in Australia many opportunities have opened up in recent months. The national unemployment rate fell to a fouryear low in September and so the labour market is hotting up for skilled workers.

For auto itself there will still

be up to 20,000 jobs in the supply chain nationally. These many businesses will continue to design and make parts and assemble trucks, buses and specialised vehicles.

Another 30,000 people will continue to work in related sectors

that design, make and repair our ships, boats, trains, trams and aircraft. Australian manufacturers are already successful exporters and there are strong signs this has the potential to be built upon.

More broadly, manufacturing has been growing in Australia

Despite Holden’s closure, manufacturing is still going strong in Australia.

each month for much of the past two-years according to Ai Group’s Australian Performance of Manufacturing Index.

Manufacturing also continues to be a major employer in Australia accounting for just under 900,000 people (August 2017), or 7.3 per cent of the total workforce.

Manufacturing has been particularly strong in the food, beverages and groceries subsector and the high rise and housing boom is creating big demand for building materials, furniture and furnishings. Steel manufacturing is also recovering well and the infrastructure and defence project pipelines are both big positives for the sector.

For Holden, the brand will continue but it is sad nonetheless to see this final chapter close for Australian auto assembly.

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Manufacturers’ Monthly NOVEMBER 2017 13

Automation IN MANUFACTURING Keeping the vision alive Syed Shah caught up with Renate Pilz, CEO and managing partner of Pilz GmbH, who shared her thoughts on her 40-plus-year journey in the business, passing on the torch and keeping the Pilz vision strong.

G

ERMAN engineering company Pilz GmbH is getting set to pass the baton of leadership, with Renate Pilz, who has been the driving force behind the growth of this exemplary German Mittelstand business, announced her retirement at the end of the year. Renate visited Australia recently and said that the Australian arm of the business has the potential to be a local powerhouse of engineering.

Pilz Australia is headquartered in Melbourne with offices in Sydney, Brisbane and Auckland, providing sales and logistics, along with turnkey engineering projects to the local market. Pilz Australia forms part of

the Asia-Pacific region for Pilz where the business has doubled its revenue in five years to nearly $100 million, accounting for 20 per cent of the company’s global revenue.

Pilz is an example of the quintessential German “Mittelstand” company or medium-sized enterprise.

With its unprecedented growth through innovation and foresight in the field of automation, it is often cited as a “miracle” of the German economy. In many ways, the Australian economy is similar to that of Germany, in that it shares a dependence on the success of small to medium-sized enterprises (SMEs).

Renate describes the “Mittelstand”

philosophy as sort of a “hereditary DNA” which carries into the products and services the country produces – something which also translates into the drive behind the success of Pilz as a company. Typically, these companies are heavily focused in niche markets, producing highly superior products that make them leaders in their respective markets and taking them to the world.

The company was founded by Herman Pilz back in 1948 and its international growth and innovative trajectory is based posthumously on his son, Peter Pilz who died in a plane crash in 1975. Picking up the reins during that difficult time was his

wife, and the mother of his two small children – Renate Pilz. When she took over, she had not studied and had no technical or business knowledge, let alone a clear concept of automation technology.

However, Renate was determined to carry on her family’s legacy in the business. “Nonetheless, against the advice of my confidants, I decided not to sell the company, out of a sense of duty,” said Renate.

Initially, she limited her involvement to chairing the company’s advisory board and used her childrearing years as a period of intense learning, before taking full control of the company in 1994.

Renate Pilz, CEO and managing partner of Pilz GmbH.

14 NOVEMBER 2017 Manufacturers’ Monthly

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Automation IN MANUFACTURING Challenges and the road towards safety in automation Renate said she remembers very well the day her husband showed her a safety relay for the first time. She told him not to even start explaining it to her as automation was a complete mystery. However, since taking over the reins of the company, she has committed herself to learning everything there is to know and is passionate about automation and safety.

Renate said that learning new technical skills was not the most challenging part of her career. “Like anything, if you apply yourself diligently you will learn it,” she said.

“I have had no technical training, but I made it my mission to educate myself in this industry and surrounded myself with a supportive and instructive team.

“When I stepped into my husband’s shoes in 1975, I had two small children (Susanne and Thomas). My friends were all housewives and mothers so they were quite surprised at what I was doing. That was a different era and it was very unusual for a woman to head a company, let alone a technical engineering business in Germany’s southwest region of Swabia.

“After being in the business for over 40 years, it is wonderful to be independent – you are the author of your success.”

Renate explained that the most challenging time in her career was going through the global financial crash in 2008 because, according to her, it was not something that the company had anticipated. The first thing that came to her mind then were her employees worldwide.

“We fought hard in every direction, especially with the banks. Our priority was to secure everyone’s jobs worldwide, and at that time, that was 1,500 workers – which we did. In this light, we learnt that globalisation is a concept we have to constantly contend with. But at the end of the day, the challenges balance themselves out, an international market place is exciting and we just look forward to what the next day will bring,” said Renate.

“In this sense, I would like to say that we are definitely human driven manmonthly.com.au

before being revenue driven.”

Speaking of the Pilz philosophy on safety, Renate explained that, back when she first took over in the 70s and the 80s, it was difficult to convince people on the concept of applying safety through electrical means. She described the resistance to their business philosophy that went right up to the government level just to be approved.

“From before, the Pilz vision has always been about bringing safety to the workplace between man and machine. Once we convinced the market of the importance of safety through control systems, it went well from then on with people finally seeing reason behind our insistence on it.

“Automation was and always will be a growing part in our lives so here at Pilz, one of our core philosophies is about bringing safety to our customers through our solutions. And that philosophy is one of our key drivers to success when we first set up shop here in Australia because every time we meet our customers, we stress on the importance of safety through automation. That is something that we have insisted upon with our customers and the market for many years now,” said Renate.

Since then, the company has opened up many offices around the world with the latest ones in Bangkok and Vietnam recently and the main Southeast Asian headquarters situated in Singapore. “We felt it was the right time to expand into this region to help out with the growing need for the automation market over there,” said Renate.

Renate has visited Down Under on occasion in 1998 for the opening of the subsidiary company which coincided with the 50-year anniversary of the parent company. Her firm philosophy is that each region is autonomous run as a “Schwestergessellschaft” – a German word that describes a sistercompany that is independent and autonomous.

According to Renate, Peter’s legacy is the driving force behind the company, where 40 years later, his vision for safety automation is just as prevalent today. When the teams gather to talk of innovation,

new products or services it is guided by one single ethos: “What would Peter think?”

The Australian connection Australia was part of the company’s first foray outside Europe in 1998 when subsidiaries launched in Australia, Brazil and Japan. Australia was seen as a forerunner into the Asia Pacific market and has a safety culture that matches Europe’s, in particular Germany – which leads the world in safety products and services.

Given the relatively small size of the local market compared to Pilz’s 40 sister-companies worldwide, the company believes the Australian subsidiary is placed in a good test market to champion new products throughout the region.

With a strong safety culture and lead in industries such as mining, oil and gas, medical, research and defence, the company sees it as their business to learn how to do it on the ground here and leverage that into countries with similar markets and applications globally.

“As with all our international subsidiaries, I have firm faith that coupled with the excellent opportunities for growth in various markets and with the quality of the leadership team here, the business on this side of the world is in good hands,” said Renate.

The renowned Emergency Stop button Pilz came to worldwide acclaim as the pioneer of the Emergency Stop (that red button you see on machinery everywhere). Today, this button is integral to everyday safety – from baggage handling and packaging equipment through to the process lines in manufacturing and automotive factories. There is a lot of technology behind what looks like a very simple button as it has to reliably operate every time as every time there is an emergency.

The button relies on the smart technology pioneered by Pilz and contained largely within its safety relays and configurable safety controllers; the yellow box used to control everything related to safety on machinery from simple guard-

switches on a wood-working machine to emergency shutdown sequences on nuclear reactors, known colloquially as the Pilz relay.

Industry 4.0, the future and parting ways Pilz reinvests nearly 20 per cent of revenues a year on research and development – most industries are around three to five per cent – to capture the future, including a large focus on Industry 4.0, the new cyber-physical world of manufacturing systems and creating the digital factory of the future or the “smart factory” where machines communicate and think for themselves. This sees devices communicate in real-time, connected to big data, thinking for themselves.

Work is a “batch size of one” as the customer designs a bespoke piece of equipment.

“Industry 4.0 is the way forward but we have to make sure what we manufacture for the customer will make sense for the customers, otherwise there will not be much of a point to it, will there?” Renate pointed out.

The company’s research and development program sets it on a growth trajectory and Renate steps down knowing the future will be both successful and exciting.

“The parting advice I have for any person in business is the same as I give to my son and daughter who are taking over the reins: Put your whole heart into what you do and commit to the customer because, without customers, we do not have a business.”

On her leaving the business behind by the end of 2017, she told Manufacturers’ Monthly that she has no regrets after steering the company to success.

“I am content knowing that I have done my best for the business, the customers and all my colleagues around the world. My wish for the company would be the continued sustainable growth after I have parted ways with it.

“Personally, once I retire, I’m looking forward to some quiet time gardening and enjoying a bit more time with my family.”

Manufacturers’ Monthly NOVEMER 2017 15

IOT @MM Digitalising Australia’s workforce Though many companies believe they are up with the times, industry mentor Kumar Parakala insists the digital age has escaped them. Manufacturers’ Monthly reports from Siemens’ Digitalize 2017 summit.

Industry consultant Kumar Parakala address an audience at Siemens’ Digitalize 2017 conference.

M

ANUFACTURERS should no longer be preparing for the next technological transformation, a leading industry consultant has warned.

The fourth industrial revolution is already here and, if you let it, will pass you by in the blink of an eye.

“I used to believe that we were at the forefront of this digitial revolution and we all knew what we were talking about,” Kumar Parakala of GHD told an audience at 16 NOVEMBER 2017 Manufacturers’ Monthly

Siemens’ Digitalize 2017 conference, held in Sydney.

“But we were so wrong. I wanted to get to the bottom of what this digitalisation is all about and became an advisor to some of the leading businesses in the world.”

Wind the clock back 40 years and the technology that resides in the latest smart phone used today would have, collectively, set you back close to $1 million.

Considering this digitalisation

of the modern world, Parakala, who is known as a global digital leader, suggests industry is still pulling the wool over its eyes – creeping off to a dark corner where it imagines the world slows down and doesn’t change.

“Some of [those leading companies] are out there, trying to transpond other businesses,” he said.

“However, if someone is telling you that they have already figured it out, let me tell you that they are in a complete state of ignorance.”

Social readiness In the event’s opening address, Siemens CEO Jeff Connolly called for a change of attitude towards Australian manufacturing, and insists digitalising the workforce will help Australia tap into the global supply chain.

“What we want to do is move Australia away from cynicism towards a ‘why-not attitude’,” Connolly said. “The Industry 4.0 approach is not only about manmonthly.com.au

IOT@MM

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Australian industry attended the Siemens’ Digitalize 2017 conference in Sydney. technology but is also about social readiness [to adapt].

“With the digital world, we finally have an opportunity in Australia to [discard] the tyranny of distance and connect Australia with anywhere on the planet.

“Some people say that tapping into the global supply chain isn’t real and that you cannot do it from Australia. Collaboration is not necessarily something that we do [well] in Australia but the world today is different and we have to become a part of that ‘collaboration’ culture.”

Discussing the role of Industry 4.0, Connolly said he believes the digital revolution has the ability to change the mentality of the industrial workforce as much as its processes.

“In my personal view, industry has to take a much higher load of the [nation’s] education and [implement] models seen elsewhere in the world,” he added.

Joining Connolly, managing director for the Advanced Manufacturing Growth Centre, Jens Goennemann, discussed the role manufacturing plays on the global stage.

“The challenge is for companies to put their money towards the future and innovation,” he said. “Manufacturing is a broad church – where the

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Manufacturers’ Monthly NOVEMER 2017 17 1469430421_Manufacturers Monthly advert.indd 1

16/08/2016 2:22:46 PM

IOT @MM other sectors are very distinct, manufacturing is a holistic sector.

“Limiting manufacturing only to production or assembling something is far too shortsighted. We must see, support and foster change to go away from the production mindset and to go up and down the value chain.

“All the power houses in the world depend on manufacturing. We cannot rely on commodities because we use them up, so we need to rely on manufacturing and make it ready for the future.”

Cost of adoption One of the major drawbacks of digitalisation in the minds of the

industry is the perception that technology is too complex, as well as the cost of adoption and the security risks that go hand in hand.

“Working in the energy sector, I can tell you that cyber security risks are real,” said Stefan Bungart, Siemens’ head of digitalisation for Power Generation Services.

“You may or may not be aware of the number of cyber attacks you are facing every single day in your business.

“There are people out there in our industry who are experimenting with what they can do with your power plants. They are probably sitting somewhere else, and are

governed by somebody else.

“What we are seeing are people who experiment with ways to stop a power plant working and who want to see whether they can control it.

Some are even seeing if they can make it blow up.”

Consider a generator for a moment – an enormous rotating mass – that needs to be perfectly balanced to operate safely at high speeds.

“Moving at thousands of rotations per second, the precision that is needed to stop that crashing is mind-blowing,” Bungart said.

“Now imagine a hacker is trying to influence a tiny parameter in

that system. We have seen this in a power plant in Russia where a software error led to a power station blowing up.

“Cyber security has become a powerhouse for our customers and also for those who make it. While you think that cyber security is mainly a network-based problem, it is not.

“Most cyber security attacks are socially engineered. Imagine what would happen if we just switch off our power plants unexpectedly.

What would happen? The whole system would collapse.”

By applying different technologies in an end-to-end

Siemens CEO Jeff Connolly (left) and the Advanced Manufacturing Growth Centre’s managing director Jens Goennemann discuss the industry.

18 NOVEMBER 2017 Manufacturers’ Monthly

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IOT@MM way – from design right through to everything that automation encompasses – Bungart emphasises the importance of staying abreast of modern technology.

“As a business, we work across so many different industries that have so many different requirements, it is important that we build ourselves an infrastructure that doesn’t kill us in cost and allows us to build very different, newer stations on top of it,” he added.

Digitalising transport During a seminar on intelligent transport, MRX Technologies’ chief engineer, Kevin Winchester, explained that inspection gauges used on trains 100 years ago are still relied upon today – where operators walk up and down the train to approve the condition of a locomotive’s wheels.

While maintenance has always

been viewed as a cost rather than an opportunity, he said the digital engineers at Perth-based MRX are bringing the railway industry into the 21st century.

“We have really managed to transform their maintenance activities and, because they are spending less time maintaining their trains, it means their trains spend less time in the depot for manual inspection and are out there on revenue service with the customers,” Winchester added.

Sectors right across the global manufacturing market are trialling and adopting disruptive innovation of great promise.

In the world that is 3D printing, the food industry is creating artificial corn, for example, which brings about once unimagined questions of the future of food and hospitality.

Likewise, in Russia, construction companies are building homes in 24

hours with the latest and fastest 3D printing capabilities.

“What does it do to our building industry?” Parakala said. “And, if you can build something in 24 hours, what does that mean for property prices?”

Across the transport sector, all modes of public travel are experiencing the impact of digital technology too.

The private taxi service Uber is also seeking opportunities in air travel, while rail networks are benefitting from the digitalisation of its trains, as it has seen via MRX. “They are not all here today but, in the next 10 years, these are some of the things that are coming,” Parakala continued. “Major changes are on the horizon and we are right at the beginning of them.

What we want to do is move Australia away from cynicism towards a ‘why-not attitude’.

In California, testing is being carried out for something called Hyperloop, a ground-based transport network that is said to travel at airline speeds, for a fraction of the cost.

“If you don’t take the time out to focus on things, information just passes over and that is exactly what is happening in this era of digital disruption.”

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Manufacturers’ Monthly NOVEMER 2017 19

Industry FOCUS Shaping ships and building bridges Malcolm Turnbull insists Australian manufacturing will benefit from the country’s largest peacetime upgrade in the history of its defence industry. However, more collaboration is necessary to see its true value. Steven Impey reports.

P

RIME Minister Malcolm Turnbull struck a chord with Australian industry in the opening of the tenth Pacific International Maritime Exposition in October.

The world gathering was held at the International Conference Centre Sydney, welcoming 500 exhibitors

as well as 85 naval delegates among a wealth of senior industry and military leaders.

“This is a crucially important gathering and it comes at an important time of enormous investment by my government here in Australia,” Turnbull told the conference.

“We are embarking on the largest ever peacetime upgrade to our defence capabilities – a massive shipbuilding program, which will deliver 54 new vessels to tackle the regional and global threats in the decades ahead.

“We are ensuring our national security while creating the certainty,

the jobs and the opportunities that were missing in previous years.”

The Naval Shipbuilding Plan builds on the government’s 2016 Defence whitepaper, which Turnbull stresses will guarantee long-term employment for Australians working towards a sovereign shipbuilding and sustainment capability.

Prime Minsiter Malcolm Turnbull addresses the maritime industry at the International Conventional Centre Sydney.

20 NOVEMBER 2017 Manufacturers’ Monthly

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IndustryFOCUS

This is a crucially important gathering and it comes at an important time of enormous investment by my government here in Australia.

Availability and lethality At the heart of this, Australia’s naval industry is seeking to strengthen and maintain the availability and lethality of its naval capability and to do it through the collaboration and unison of the existing industry.

It was only a handful of years ago when Australia’s workforce was considered a commodity rather than an integral part of the decision-making process, according to Captain Brad Smith, director of the Guided Missile Frigate Systems Program Office (FFGSPO),

which provides seaworthy Guided Missile Frigates to the Royal Australian Navy.

Smith explained the importance of moving away from a “high transaction” culture, towards one that owns a more “outcome focus” on the roles and relationships between industry partners.

“I often say that industry is a mirror of us, and that, if we have negative behaviour, industry has no choice but to align itself to our behaviour,” Smith said.

“One of the leadership changes for us [FFGSPO] was to change our

behaviour and to open up and sit down with industry to see what we can do [better].”

Industry 4.0 – including the advancement and sharing of data and technology – is considered a major step forward.

Sharon Wilson, head of Industry Strategy at BAE Systems Australia, discussed the importance of developing Australia’s small and medium businesses (SMEs) in light of the government’s multi-billion dollar defence budget.

“We need to develop Australian industry and to work with the industry to get away from only being component manufacturing, towards assembly, autonomy and further beyond,” she said.

“It is not impossible for Australian industry to do that but it is a big ask for a small company to get themselves up there.

“The further you go up the

pyramid, the faster you become a strategic supplier and the reason we want that is because the majority of our money is spent in sustainment and typically goes to [manufacturers] at the top.”

There are two challenges to distributing the pie more proportionately, according to Wilson.

One is to engage SMEs with the latest technology capability and, secondly, to increase any given company’s business systems capability, an area Wilson says a lot of SMEs ignore because they are busy trying to manage “low-end” products.

“As we see defence industry going forward, it is those business systems capabilities that are going to become more important when they start to get into the digital management of the supply chain,” she continued.

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Manufacturers’ Monthly NOVEMER 2017 21

Industry FOCUS Manufacturers displayed the latest technology in Australia’s maritime sector.

we have seen companies develop their business off the back of that capability and it is those client contracts that tend to pull through SME development.”

Adjoining forces Joining Smith at a FFG Sustainment seminar at Pacific 2017, a panel of naval partners from Thales Australia, BAE Systems Australia and the Royal Australian Navy – which make up the FFG Enterprise – explained why they have sought to go by respective strengths rather than grabbing what they can at the expense of a friend of industry.

“We spend a lot of time with the workforce trying to impress on them that, with everything we do, FFGSPO produces nothing – it is FFG Enterprise [and its partners] that produce everything,” Smith said.

22 NOVEMBER 2017 Manufacturers’ Monthly

“It’s an approach where, no matter who does it, everyone is sharing in that value, whether it is through awards or through projects.

“We have had a number of examples where we’ve walked into a meeting and said this is what we want to achieve as a customer and you, in a contract, go away and tell us who is going to do what and how you are going to bring it together.

“My job is to shape that around the edges but really it is all about allowing the industry to tell us what the best solution is.”

One area where this is taking greater precedence is in the creation of digital shipyards, where industry players are contributing more to the design and development of Australia’s frigates.

This is considered an opportunity to invest further into the education stream, including Industry 4.0

graduation courses such as those at Swinburne University, in Melbourne.

Much like the role of the Shipbuilding Centre of Excellence in the US – where software is heavily used in shipbuilding – companies such as Siemens have heavily invested in domestic opportunities to ready Australia’s manufacturing industry.

“We are working with [shipbuilding] companies such as Austal and their digital position,” said Andrew Seal, head of Marine/ Defence at Siemens. “It is a developing environment. However, it isn’t only about the tools we use but also the workforce that uses them.

“In the past, engineering set the manufacturing process at the design level, whereas now, when the design model is handed over to production, production now has

its own flexibility to map its own processes.”

A “digital twin” allows shipdesigners to simulate and archive all facets of a new frigate, right from the 3D-modelling stage to the layout and inventory of a manufacturing plant, capturing the big data that makes the maintenance of a modern vessel more efficient.

“For us, the interesting question is going to be – while we have already seen the development of the US workforce around this concept, how can we drive a broader industry and bring both the software and hardware sides of production closer together in Australia,” Seal added.

Digital defence In his opening address, the Prime Minister announced that Saab Australia would develop a single combat management system as part

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IndustryFOCUS of federal government investment worth more than $1 billion that aims to create hundreds of jobs across the defence industry.

The South Australia defence technology company will partner with CEA Technologies and Lockheed Martin Australia to support the missile and air warfare capabilities of the Future Frigate Program.

The move is part of Turnbull’s desire to mandate the way Australia’s Future Frigates are procured, meaning the government will move away from a “one-ship onetender” approach.

“In the complex threat environment that our navy will face in the future, we need the best capability for our Future Frigates that can deal with contemporary threats both under and over the water,” Turnbull said.

“A capability that ensures we can share information on those threats

with other assets, allies and partners – including the US Navy – and can be upgraded to meet emerging threats, supported and further developed through close ties with Australian industry.”

Dr Derek Rogers, head of Saab Australia’s Global Centre of Excellence in Autonomous Vessels, is working around the naval capability of unmanned vessels for dull, dirty and dangerous roles and spoke about the opportunities autonomous technologies are presenting the domestic supply chain.

“In terms of work for metal, plastics and rubber, I consciously use Australian suppliers and agents who have been particularly good in providing technology information,” he said. “When they have been asked to do things, there is a whole raft of areas where they have been able to help.

“Although this is not there

traditional space, particularly in Adelaide – with the reduction of the car industry – this [technology] has been a fantastic opportunity to explore different instructions.”

By teaming with industry, manufacturers in the US are better equipped to learn how to digitalise the build of a 4,000-ton frigate from the tools in a plant to its design, manufacture and maintenance.

“Once you have manufactured it, you then have to sustain it,” said Tony King, Siemens’ director of Federal Services Product Lifestyle Management, in Virginia.

“With a digital twin, you can use big data to figure out when you have to increase things like your maintenance, etcetera. It means you are always trying to improve the operations of the product in one ‘central design depository’.”

To bring SMEs up to speed on this concept, Wilson says businesses

must automate a lot of their processes before they can benefit from the digital supply chain – or, in this case, “Shipyard 4.0”.

“With a digital yard, if your equipment is electronically tagged, we should know where that equipment is,” Wilson said.

“By doing this, you can see how digitalisation can help a naval enterprise by sharing workforce information.

“It can create a digital workforce marketplace. Export opportunities come from driving out cost and, if Australia wants to work on the international market, we are going to have to drive out cost.

“We need to balance defence needs and look for where they can introduce those Australian innovations, re-testing equipment, and setting up facilities. But that also needs the will of the customer to use Australian ideas.”

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Issues &INSIGHTS The art of exporting Australian-made Though the general consensus is that Australian manufacturing is experiencing a downturn, Steven Impey looks at the country’s export statistics, which tell a different story.

B

ACK in June, senator Nick Xenophon stressed to an industry summit in Canberra that Australia’s manufacturing sector had shrunk by roughly 12 per cent in the past 10 years.

That’s a substantial portion of the workforce and widely considered to be the result of the offshoring of Australian labour.

Now consider this: in the same time, the revenue produced through the industry’s international supply chains has inevitably slowed – but by only one per cent.

That is according to an industry breakdown of statistics supplied by the Australian market data expert IBIS World, as requested by

Manufacturers’ Monthly.

To put this into context, the demise of the automotive assembly sector more than halved an export sector once worth $4 billion between 2007 and 2017.

While the industry fears it has not experienced the full brunt closures to the Holden and Toyota factories will bear in the years to come, Australia is still exporting more than $101 billion worth of manufactured goods annually. The industry, by all means, is plugging the gap with alternative innovation.

Arguably, the nation should hope to have achieved more in that time while it is still riding a commodity wave.

Nonetheless, there are sectors out there that are taking advantage of a more connected world. The revenue created from exporting processed meats alone has grown by almost $3 billion.

Meanwhile, smaller sectors such as the paper manufacturing industry broke the billion-dollar threshold in 2014.

Abetted by investment in the defence industry, Australia’s procurement for international shipbuilding has also seen the sector grow from a low of $26 million in 2007, to more than $400 million eight years later.

Though demand for different products will continue to yo-yo,

it proves Australia is still doing business on the global stage and, according to the numbers, has an appetite for more.

Opportunities for growth Greg McKenna, chief market strategist for Sydney stockbroker, Axitrader, insists that all the signs indicate that global trade is trending upwards.

“Australian manufacturing in a global sense hasn’t been this good for more than a decade,” he said.

“Just last month, the International Monetary Fund (IMF) upgraded global growth for this year and next.”

The Organisation for Economic

Paul Ives, of AstraZeneca, explains how the company capitalised on the Chinese medical market Credit: David Howe

24 NOVEMBER 2017 Manufacturers’ Monthly

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Issues&INSIGHTS Co-operation and Development (OECD) has also predicted 2018 is going to be the first year in a decade when all of its member countries will experience growth.

“And that’s the big trend,” McKenna continued. “Global growth is back and it is synchronised.

“That means quality Australian manufactured goods – priced right and with the currency exposure managed appropriately – can deliver great opportunities for profitable growth.”

The next step is to ensure Australian companies get their hands on some of that pie.

Since 2013, the Turnbull government has concluded five Free Trade Agreements in addition to its existing links with China, Japan and South Korea.

That equates to 1.6 billion more people in the preferential market.

“Australia’s existing trade agreements are creating various

opportunities in overseas markets for Australian manufacturers,” said Steven Ciobo, minister for Trade, Tourism and Investment “Australia has an active forward trade agenda that will further reduce barriers holding back our exporters and create new trade opportunities.

“We will further cut trade red tape and support businesses wanting to capitalise on the massive opportunities in our region and further afield.”

The government’s trade agenda also includes the IndonesiaAustralia Comprehensive Economic Partnership Agreement, and is negotiating trade agreements with Pacific Alliance countries (comprised of Mexico, Chile, Peru and Colombia) as well as Hong Kong.

Negotiations are also ongoing for the Regional Comprehensive Economic Partnership (RCEP)

A report from Zebra Technologies suggests connected factories will increase export opportunity.

between the ten member states of the ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam).

There is no surprise that

Asia makes up for most of Australia’s imported goods – from textiles, printing and minerals manufacturing in China, to metal and transport parts made in Japan and petroleum from Singapore.

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Manufacturers’ Monthly NOVEMER 2017 25

Issues &INSIGHTS However, in addition to trade routes between New Zealand, the US and Europe, China and Japan do represent a large chunk of Australian manufactured exports across sectors including textiles, food and beverage, as well as wood and chemical production.

This is of course fluid, meaning that political – and even cultural – changes can open the door for Australian manufacturers.

AstraZeneca Australia, the manufacturer of respiratory medicines, came close to shutting its Sydney-based factory in 2010, following a decline in its export to the US medical market.

Around the same time, China had invested US$125 billion ($A160

billion) into its own medical system to tackle problems with pollution levels, and presented an opportunity.

“There was an instant requirement in China for respiratory products for asthma,” said Paul Ives, head of formulation and services at AstraZeneca Australia, which now delivers more than $500 million worth of exports.

“The decision was to close the Australian facility at that point, even though we were performing better from a cost and productivity perspective.

“We have come from effectively being a factory that was closing down in 2010 to what is now the fastest growing site in the AstraZeneca network.”

The metals movement Japan, Papa New Guinea and China are the three top suppliers of primary metals manufacturing to Australia, according to statistics.

The sector, however, has proven to be a strong area of export for Australia, with fabricated metals in high demand in Hong Kong, the UK and China.

In May, Adelaide surface engineering company, LaserBond, shipped its first customised laser cladding system to China, where the Chinese government is supporting the re-manufacture of metal components.

Laser cladding is the process of adding a pure metal or alloy in powdered form to a re-manufactured

component – to protect it from corrosion and wear – and gave LaserBond a foot in the door.

“There’s no absolute on the future – you just position yourself as best you can until you get there,” said Wayne Hooper, LaserBond’s executive director.

“Our strategic international relationships are growing on the supplier side and customer side.

We are delivering for companies who are seeking high performance wear resistance in particularly tough situations.

“LaserBond excels when working in strategic partnerships.

As an example, we also designed a machine tailored for an international company that makes

Australian manufacturing exports ($m) – IBIS World SECTOR

2007

2012

2017

FIVE-YEAR GROWTH CAGR

MOST IMPORTS (ORIGIN)

MOST EXPORTS (DESTINATION)

Food Product

19,495.1

17,543.4

26,658.4

8.7%

New Zealand

Japan

Beverages

3,844.0

2,229.7

2,723.9

4.1%

New Zealand

China

Textile, Leather, Clothing and Footwear

1,939.8

1,949.8

2,112.9

1.6%

China

China

Wood Product

1,570.4

955.7

1,450.8

8.7%

China

China

Pulp, Paper and Converted Paper Product

1,307.0

1,130.8

1,299.5

2.8%

China

New Zealand

Printing (Including the Reproduction of Recorded Media)

265.4

190.0

85.0

-14.9%

China

New Zealand

Petroleum and Coal Product

4,152.5

3,588.3

2,052.1

-10.6%

Singapore

Ship & Aircraft

Basic Chemical and Chemical Product

8,119.9

7,198.3

6,968.3

-0.6%

US

China

Polymer Product and Rubber Product

1,291.5

1,026.2

1,204.8

3.3%

China

New Zealand

Non-Metallic Mineral Product

350.3

230.1

250.0

1.7%

China

New Zealand

Primary Metal and Metal Product

39,601.8

35,459.1

34,387.3

-0.6%

Japan

Hong Kong

Fabricated Metal Product

1,509.6

1,193.7

1,488.1

4.5%

China

New Zealand

Transport Equipment

6,312.6

4,437.4

5,201.1

3.2%

Japan

US

Machinery and Equipment

11,490.2

11,636.6

13,413.4

2.9%

China

New Zealand

Furniture and Other

1,340.0

2,195.3

2,364.0

1.5%

China

US

Total Manufacturing

102,590.1

90,964.4

101,659.6

2.2%

26 NOVEMBER 2017 Manufacturers’ Monthly

manmonthly.com.au

Issues&INSIGHTS a 10-ton crusher roller, which allows them to refurbish it.”

To guide businesses seeking to enter lucrative export markets, the government’s Free Trade Agreement Portal provides practical advice on the art of distributing a product overseas.

Seeing the potential for growth is the first step to building the country’s small and medium sectors.

The next stage is getting out there and giving Australia’s innovation room to breathe.

This was address by Michael Sharpe, director of the Advanced Manufacturing Growth Centre, who demanded a “massive workforce transformation” if Australia is to expand its manufacturing industry.

“Some of the manufacturers I am talking with are looking at the Free Trade Agreements but they also other partnerships through global linkages,” Sharpe said.

“There are world-class products flying off the shelves [in Australia] and, if we were able to get them into

manmonthly.com.au

the US market or Europe, I would have no hesitation saying that they would sell like hot cakes there too.

“Australian manufacturing is much larger and stronger than people give it credit for and is also transforming rapidly, with exceptional opportunities ahead of it.”

“However, if their setup is manual and there is no visibility across the organisation, it becomes very difficult to scale up and manage the business overseas.

“Having that visibility and full traceability, it gives your suppliers an up-to-date view of the company and that’s when the company comes

into its own.

“Having a connected business is now considered a ‘must’ if your company wants to grow outside of Australia. If your data is out of date, you will become a difficult company to work with and that will really slow down growth.”

Connecting locally first According to a recent international study by the tracking and computer technologies manufacturer Zebra Technologies, Australian manufacturers must assume increased connectivity in their factories if they want to grow globally.

“Whether it is in retail, transport or any other sector, we see a very common scenario in the manufacturing industry, and that is companies do want to grow the geography of their business,” said Tom Christodoulou, Zebra’s regional director for Australia and New Zealand.

Manufacturers’ Monthly NOVEMER 2017 27

Manufacturing STRATEGIES Growing together With bold ambitions and a clear vision, TWM Consolidated was looking for a new lender as it continued to grow its jewellery manufacturing business and branch out into the retail sector.

A

well-established jewellery manufacturer with roots in Istanbul, Turkey, TWM Consolidated has been manufacturing bespoke jewellery in Australia since the 1990s.

Roberto Ulas, COO has been creating jewellery pieces since he was eight years old. He first learnt the craft from his father, Sarkis Ulas, in Turkey and started working full-time for the business at 15. Roberto and family have been growing the business and now proudly operate one of the largest jewellery design and manufacturing businesses in Australia.

With a wealth of experience and expertise, Roberto has witnessed the industry develop and change dramatically over the last 20 years.

From humble beginnings, working with his brother Rudi Ingilli, using simple machinery in his father’s

backyard to running his current 1,000 square metre manufacturing plant in Mulgrave, Roberto knows the industry inside and out.

Having supplied Australia’s leading jewellery retailers and wholesalers - from high-end boutiques on Collins Street to high street chain stores; the Ulas and Ingilli family always wanted to connect with their customer directly and establish their own route to market. “After all, we are in the business of love and relationships,” said Maria Ulas, CEO of Artelia, a second-generation jewellery house and retail arm of TWM Consolidated. “We want to have that connection directly with our customers.”

Getting off the ground Roberto was always tied up with the core aspect of the business;

manufacturing jewellery for Australia-wide stores and Rudi with the accounts and financial aspect.

It was when Maria came in as the retail visionary that the retail arm of the business became a reality.

TWM Consolidated needed an understanding lender who could advise them through this period of growth and development.

“We’ve always toyed with the idea of having our own standalone shops. So, we decided to clean up our whole process, refinance and have a look at what products would be available as we made the move into retail,” said Roberto. “’At this stage Rudi approached Bank of Melbourne through a mutual friend and they ticked all of the boxes.”

For TWM Consolidated, the point of difference with Bank of Melbourne was that they personalised the whole experience.

The jewellery design and manufacturing business landscape has changed a lot in the past 20 years.

28 NOVEMBER 2017 Manufacturers’ Monthly

“They have a genuine interest in who we are, what we do and how they can help us. We’ve never experienced that with a bank before,” said Roberto.

TWM found that with previous lenders they didn’t want to rock the boat. “Other banks didn’t want to be part of a growing business. But with Bank of Melbourne they understand our vision and want to help us grow.”

More than a slogan TWM Consolidated recognised there was a gap in the market for a jeweller who could really personalise the experience for the customer and made this a core aspect of Artelia. As this was such a core principle for them, they were aware that they weren’t getting the same treatment from their bank.

“It’s an important factor in any business relationship that you feel

For Roberto, the experience with the Bank of Melbourne was a personalised one.

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ManufacturingSTRATEGIES

Roberto and Rudi run a 1000 sqm manufacturing plant today in Mulgrave.

TWM recognised the opportunity to personalise the experience for their customers and they needed a good financial partner to realise this. valued,” said Roberto. “Its 100 per cent the relationship aspect that gives Bank of Melbourne the edge. They are not just looking at the numbers, they understand our whole vision.”

Bank of Melbourne doesn’t just ask: “How much do you want?” They get involved in the decisions and can offer expert advice on where to invest, who and what to invest in.

TWM Consolidated has been manufacturing jewellery since 1966 and has always been a family business. It was a priority for Roberto and family that they worked with a bank who understood the unique demands and challenges of a family run business.

“You hear those slogans and pledges from the banks all the time, but with Bank of Melbourne they really meant it,” said Roberto. “That was fundamental for us.”

Investing in the future Roberto has a clear vision of where he wants to take the business; this includes a plan to open up manmonthly.com.au

two more retail stores in the next 12 months, while still growing the core manufacturing aspect of the business.

TWM Consolidated has found that by working with Bank of Melbourne, it is always one step ahead. “It’s funny because usually with the banks they are one step behind, but with Bank of Melbourne they are very much ready when we are. That is really refreshing for us,” said Roberto.

For Roberto and family, working with Bank of Melbourne has been a breath of fresh air during a crucial period of growth. “I’ve been dealing with banks in one form or another since I was a teenager, and even though our business is now at its largest and most complex, I can honestly say this is the best bank relationship we’ve ever had.”

TWM: twmco.com.au Bank of Melbourne: www.bankofmelbourne.com.au Manufacturers’ Monthly NOVEMER 2017 29

Endeavour Awards Winner’s Profile Getting ahead of the pack Manufacturers’ Monthly caught up with Nicky Guenther and Holger Salow, directors and senior engineers from Yumarr Automation to find out their thoughts on the growing demand for better and safer solutions with automation.

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ITH more than 15 years’ experience in the application of laser scanners, radars and 3D cameras at the manufacturers level, Yumarr is a technology front-runner in the development of automation systems for the mining industry. The range of solutions that they provide include advanced object detection under harshest environmental conditions, situational awareness, collision avoidance, operator assistance, machine guidance and safeguarding, tunnel and terrain mapping as well as volumetric measurement solutions.

Currently, Yumarr operates from facilities in Australia and Germany.

Among the many solutions that they provide, one of their key specialties are taking on customer projects associated with surface and underground vehicle automation and large material handling equipment.

The company places a particular focus on taking on the ongoing challenges within the mining industry. Their systems enable automation in areas where traditionally administrative controls are the only means to separate the person from the hazard, which far too often - due to human factors – does not prevent accidents from happening. Demanding applications in very harsh environment require only the most reliable, robust sensing and computing equipment and in this vein, Yumarr is specialised in perception sensor based automation solutions.

Nicky Guenther mentioned that the company is aware of the growing optimism in the adoption of automation technologies in the industry. He explained that technology is finally catching up with the demanding requirements that enable automation of mobile equipment.

“One example are the advances in perception sensor technology which,

30 NOVEMBER 2017 Manufacturers’ Monthly

together with Yumarr’s outstanding know how and intelligent algorithms, now allows situational awareness and measurement of performance data under harshest conditions like heavy dust and water spray.

“Another example is the interconnectivity of devices such as sensors, controllers and actuators which allows to monitor the operation in real-time and closed loop control,” said Guenther.

Guenther said that Yumarr possesses the vision to develop and provide systems that significantly reduce the risks faced by people working in mine sites.

“Automation can allow the complete separation of the machine operator from the hostile situation and to monitor and control the machine from a safe remote location,” said≈Guenther.

In one of their first products, Yumarr has used automation to perceive, interpret and safeguard the complex interactions of humans, the machine and the environment, but not to remove the person from

the machine. “JumboGuard”, their automatic boom isolation system for underground drill rigs delivers significant safety benefits for mining companies around Australia.

“Underground drill operators and machine offsiders have one of the toughest and most demanding jobs in the industry. The team of Yumarr is very proud, as JumboGuard plays an important role in allowing operating crews to return safely and healthy from the drill face,” said Guenther.

Meeting industry demands and winning at Endeavour 2017 Holger Salow told Manufacturers’ Monthly that since starting up, they have already got quite a fair bit of business and interest in their solutions.

“For a start-up, Yumarr has experienced a great demand for our smart solutions for automation and machine control which allows us to work with the big players of the industry,” said Salow.

He said that they provide systems for OEMs and customised solutions for end users who have installed

and are operating in various surface and underground mine sites across Australia.

“As such we have become technology partner with Rio Tinto in the development of the ‘Drill of the Future’ and developed the situational awareness system for their autonomous drills,” said Salow.

In addition to this, leading equipment manufacturer Atlas Copco uses the object detection and ground profiling system “Pit Viper Guard” which was designed and developed by Yumarr, to fully automate their blast hole drills.

As for taking the Outstanding Start-Up Award at the Endeavour Awards this year, Salow described it as a great honour for the company.

“It is a great honour for us, especially as a start-up and an enormous acknowledgement from the industry. With so many other outstanding companies and remarkable solutions nominated for this award, it is very encouraging for us and good to see the industry in such a good shape,” said Salow.

Yumarr places great focus on taking on the ongoing challenges in the industries it serves.

manmonthly.com.au

Safety &MM Finding the key to labour visibility Scott Linke, senior consultant, Mitrefinch, shares his thoughts on workforce management challenges and how the use of software could save a lot of time and money.

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HEN certain factorybased businesses expand their workforce, scheduling and rostering can be an issue, especially with workers that do overtime or flexi-time.

Mitrefinch’s Staff Scheduling & Rostering software enables the automation of this scheduling and rostering – ensuring the right staff are on hand, while keeping costs as low and possible. Time-management software creates staff schedules that meet the needs of an organisation, team, department or client in a fraction of the time it would take manually with paperwork or timesheets.

Originally from England, the company started in 1979 and was one of the first time-management suppliers in the world. Here in Australia, they set up as a subsidiary of Mitrefinch Global in 2003.

Today, 14 years later, they are closing in on the 500-client mark with the bulk of those being in manufacturing and distribution across all states that have a workforce size of between 50500 people.

“We consider ourselves to be part of the human capital management (HCM) supply chain providing workforce management software.

What that really is, is managing the pay of blue collar workers,” said Scott Linke, senior consultant and business development, Mitrefinch.

“When you think of the manufacturing pay conditions in Australia, they can be quite complex. And from that point of view, being a product that was originally developed in England, the pay structure was similar to that of Australia and, because of that, the product also works very well in Australia,” Linke explained.

Easing the time The prime proposition of Mitrefinch is automating the pay process. In manmonthly.com.au

With time management software, process time is cut down to just a matter of a few minutes.

many organisations, where old paper methods like the punch card system are still being used, employees clock in and out at the start and end of the day. Then, the punch cards go to a payroll office where the payroll officers have to work out the elements of each worker’s pay. In this case, they might be entitled to overtime or whatever the pay agreement says they are entitled to get.

“So, what Mitrefinch does is automate that punch card process that pretty much cuts the process down to a very short time,” said Linke.

Linke explained that, for a small business process, the old systems could still be manageable. But by the time that business reaches the size of a 50 to 75 workforce mark, the business becomes more difficult to manage.

“This usually ends up as the trigger point for that company to go and say this is where they need a better process to manage their growing workforce,” said Linke.

“However, as with any time and management process, accuracy is key because one of the biggest concerns for manufacturers today is overpaying or underpaying the workers. Larger manufacturers may have a more sophisticated system to manage this, but most medium enterprises do not. With the face of manufacturing processes rapidly changing, it would be best for them to consider a system like ours,” said Linke.

The software and the value add Linke cited an example of a client that uses their software in the distribution business where there was an operations manager, who

was spending about two thirds of a day every week, going about looking through paperwork.

“In a business, it is not financially sound for the company if the operations manager spends that amount of time on that kind of paperwork,” said Linke.

“With our software, it essentially cuts the process time down to a matter of a few minutes per day and the operations manager could then focus on proper operational tasks that he was hired to spend his time focusing more on.”

One of the key value adds that the software provides for the business is the visibility of labour.

In the manufacturing space, labour takes up a large chunk of the costs involved in the business. In this vein, manufacturers are trying to move towards a more dynamic workforce – labour on a needs basis for certain periods.

“Part of our software is to do with scheduling that caters to this dynamic workforce. One of our clients does production planning 24 hours in advance and they use our software to go out and find casual workers to get those workers in within the time frame,” said Linke.

In this case the client is managing the whole allocation process of staff according to the dynamic nature of production.

The software also enables an operations manager to get visibility into his day-to-day cost of labour.

Where a manufacturer has variable labour like large numbers of workers who have overtime, expenditures, they will be likely to have a lengthy process of sorting the pay hours out with the accounts department.

“But if you have a system like ours, the manager can now view the hours put in by each worker daily and easily. This gives the operations manager a much easier time managing the overall labour costs,” said Linke.

Manufacturers’ Monthly NOVEMER 2017 31

Sensors Smart sensors are the future Manufacturers are turning to precision smart sensors to improve their productivity and profitability. As the manufacturing industry shifts gear, Thermo Fisher’s Michael Barth explains why engineers are adapting too.

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Y being open-minded to changing technology, Australian manufacturers are laying the foundations for a brighter future for the industry, according to a senior consultant of sensor technology.

Michael Barth, test and measurement portfolio manager from Thermo Fisher Scientific, insists this transition is already happening and that the growth of sensor innovation is providing the next step for automation.

This isn’t a coincidence in his eyes. As a smaller workforce takes on higher-spec projects across manufacturing, defence and aerospace, connecting industrial customers to supplier partners with tailored smart sensor technologies.

“We have a wide range of sensor solutions from world leading supply partners who we represent,” Barth told Manufacturers’ Monthly.

“We bring years of expertise to work with clients on demanding industrial applications. That is really the ultimate driver: to provide the most suitable solutions for our customers.

“We have a range of technologies that offer our customers precision knowledge of their processes and allow people – and also machines – to make better decisions on the factory floor.”

One of the major problems for manufacturers over recent years has been the industry’s exodus to Asia, where lower-cost manufacturing plants are thriving on cheap labour and quick turnaround.

By moving into the digital age so to speak, Barth explains why it is the role of digital entrepreneurs to attempt to move that tyranny of distance back into Australia’s favour.

“When you look at Germany, for example, the idea that we can’t compete in Australia doesn’t hold water,” Barth continued.

32 NOVEMBER 2017 Manufacturers’ Monthly

“Germany is a powerhouse of manufacturing and yet you wouldn’t think their living standards and the cost to produce there are that different from Australia. If they can do it, then surely Australia can too.

“I suspect that has a lot to do with our willingness to automate processes and improve our efficiencies. We certainly have all the resources in Australia to do a lot of manufacturing, so perhaps we can start exporting value-add rather than so much of our raw materials.”

At Thermo Fisher, they have kept up to date with standards in the industry with the various control and communication technologies out there.

“We are keeping up with the times and making sure to supply customers the products meeting industry automation requirements,” Barth said.

“Some manufacturers stick with the ‘tried and tested’ sensors. Alternatively they could get the other end of the scale with companies like MTS sensors, which is offering real time data communication protocols that enable the digital manufacturing revolution.

“It is important that sensor manufacturers are keeping up with current industry technology trends to keep themselves relevant and to ensure their business has access to the equipment and sensors to meet their application needs.”

By matching customers’ application needs to the right solution, Thermo Fisher is not only in the business of technology production but also has a hand in shaping the future of the manufacturing landscape.

“Anyone can sell out of a catalogue whereas these days most customers are looking to us to solve a problem,” Barth continued.

“They can’t be an expert in everything, so what we can offer is

our knowledge of the sensor and matching that with the application needs to ensure that the customer has a solution that is going to perform and is a benefit to them.”

In the magnetostrictive space, MTS has been a frontrunner for many years. Known for introducing its magnetostrictive sensors to position measurement, it has since patented a number of key advancements in the technology.

An example of its diversity is apparent today. For example, something like a ‘signal-noise ratio’ – where sensors can be affected by shock – does not necessarily aid the average user, but can make all the difference in an industry where shock and vibration are common factors.

Around the issue of application redundancy, where critical control applications – whether they are

nuclear, safety or other critical process – are imperative – MTS’ new T-series sensors also offer redundant output and sensing in one package.

These are only a few examples of how the industry is adapting to common, and even future trends, which, Barth explains, is the reason for the changing roles of sensor engineers.

“I have been involved in MTS products for more than 17 years and have seen them move from very basic technology – particularly the conditioning electronics – to a point now where you can offer configurability and interface to a computer and program,” Barth said.

“At Thermo Fisher, we tend to touch on a very broad customer base and, whatever the applications are, being able to utilise experience from one industry can often translate into knowledge that benefits other sectors.”

Thermofisher has a range of technologies that offer customers precision knowledge of their processes.

manmonthly.com.au

Research&DEVELOPMENT Closing the manufacturing divide At a time when technology has a huge bearing over the industry’s future, Australia’s manufacturers are running at different paces. Mark Dingley, Matthews Australasia’s newly appointed CEO, discusses the implications for an industry stuck in two minds.

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NDUSTRY thrives on diversity; those interactions between companies and sectors that run up and down the supply chain.

As it stands, Australia has a strong start-up sector making strides during transitional times for a manufacturing industry that, in recent years, has been in decline.

Whereas some are taking strategic risks and pushing for more technological integration on the factory floor, others are playing the cautious card or are, simply, not yet financially capable of such industrial change.

Considering this “bimodal” picture of Australia’s industry – where its entrepreneurs and workhorses are running different courses – Mark Dingley, CEO for Matthews Australasia, spoke with Manufacturers’ Monthly about the opportunities and challenges of a diversified economy.

“The digital and innovation world makes sense in Australia yet, in a way, there are a lot of smaller manufacturers who are still coming to grips with how they can adopt new technology to improve their supply chain,” Dingley said.

“One of the challenges for a lot of companies is that they aren’t building greenfield sites where they can roll out state-ofthe-art equipment. For some of the companies I talk to, it is very difficult to outlay any significant capital that is required to upgrade every part of their infrastructure.

“But it certainly doesn’t mean you shouldn’t do anything because standing still means you will whittle on the vine. So, in around a lot of our conversations around Industry 4.0, we talk about the need to look at future innovation and how that can improve the current processes and environment of a business.”

The “digital hype” around manufacturing and the supply chain manmonthly.com.au

has put companies in two minds, Dingley continued.

“A lot of companies are trying to get their heads around the future and how they can harness new technologies,” he said.

The result, Dingley says, is a “two-paced” supply chain.

On one side, there are those who are concentrating carefully on maintaining the status quo, including the overall cost structure of their business and its continuous improvement.

But where this is risky, Dingley explains, is that these types of manufacturers often stick with the same technology that is currently residing within their four walls.

“Yet, there are those other companies that are also looking at new ideas, innovation and opportunities to test new technologies and see what impact it can have to their business and along the supply chain,” Dingley said.

“There are obviously a lot of pressures on businesses today and a lot of businesses are focused on cost-down reduction. But there are certainly a growing number of manufacturers who invest in automation and seeking out new ideas.

“Certainly companies need to look at how they can utilise that within their own four walls but the common denominator here is staying relevant in a fast-paced, changing industry.”

This, according to Dingley, starts with the simple step of gaining a true representation of the company’s own production line and, in particular, the processes that are currently in place.

All the way from the raw produce and well beyond the finished product, Matthews’ role is to demonstrate to businesses how they can harness and implement technology in strategic steps that

don’t sink the ship before it is built.

Developing a database that demonstrates where a company can increase productivity to experience efficiency gains is the first step.

“From a Matthews standpoint, our solutions depend greatly on this kind of feedback data and allow us to make real-time decisions for an individual business,” Dingley said.

“Traceability is becoming more about the ability and in particularly exports into Asia – for product authentication to promote anticounterfeiting and brand protection.

“Export is certainly growing and technology will certainly play an important part in that market and supply chain. For those who want to take the opportunity, it will assist manufacturers to sell, promote and get their products into positions of growth.”

In July, Dingley took charge as CEO of Matthews Australasia in place of former managing director

Lester Nichol, who served the company for 36 years.

“Australian manufacturing has always had agility and flexibility when the opportunity is right,” Dingley continued.

“There have been many challenges with the decline of manufacturing over recent years in Australia but those who are succeeding are those who are innovating and looking for new market opportunities and a different supply-chain route.

“Over the next five to 10 years, the industry of identification and inspection is going to see significant changes both in its technology and changing consumer trends.

“Business is only going to get faster because we truly live in a global economy and, at Matthews, we are very well placed to be a part of that future – to help guide the manufacturing industry that we aim to serve.”

Mark Dingley, CEO, Matthews Australia.

Manufacturers’ Monthly NOVEMER 2017 33

HVAC @MM Keeping it green: The rise of CO2 heat pumps Mitsubishi Heavy Industries Air-conditioning Australia (MHIAA) shares how commercial heat pumps are gaining popularity in the food and beverage sector being which are more energy friendly and allow operators to make the most of energy resources.

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OR the food and beverage manufacturing industries that require the use of heated water in their processes, there are the traditional methods of using furnaces that burn fossil fuel directly for heating and then there is the use of more modern heat pumps. The uses of heat pumps in the food and beverage manufacturing sector include process water, washing, pasteurisation and drying.

There are several kinds of heat pumps available on the market but CO2 heat pump systems are by far the most economically and environmentally viable to operate.

Mitsubishi Heavy Industries (MHI) offers a 30kW CO2 refrigerant heat pump, the Q-ton, for commercial and small industrial applications. They are attractive replacements for LPG hot water

services, as the running cost is up to 46 per cent lower than a normal boiler and up to 76 per cent lower than an electric heater.

In addition to having a coefficient of performance (COP) of 4.3 (the industry’s highest), a single remote controller can control up to 16 x 30kW units in modular configuration (a total of 480kW) to suit varying applications.

Trent Miller, air to water manager for MHIAA, said, “Compared to conventional refrigerant, CO2 heat pumps can generate high temperatures.

Conventional refrigerants make up for it by using electric element heating, which uses a lot more energy and hence, they are not so cost efficient.” The pressure difference between discharge and suction pressure of CO2 refrigerant is several times larger than that

MHI’s Q-ton uses enviromentally friendly refrigerant, CO2.

34 NOVEMBER 2017 Manufacturers’ Monthly

of conventional HFC refrigerants.

This leads to an increase of gas leakage and mechanical losses.

However, by introducing two-stage compression, which decreases the pressure difference in each stage, higher efficiency and reliability can be obtained.

“In a distillery in Tasmania, a Q-ton was installed instead of its originally planned electric line heater because of the projected energy savings and proven COP that the Q-ton delivers. The 4.3 COP is actually a conservative estimate and is based on the specific application (site) incoming water, outdoor ambient condition and delivery set point temperature.

Preserving the environment As part of its Low Carbon initiative, Mitsubishi Heavy Industries Thermal Systems has been pursuing the expansion of heat pump business by developing more energy-efficient heating solutions. Going forward, the company is continuing to expand and develop the “Q-ton” as a core product in its Heat Pump portfolio.

Adopting the world’s first CO2 refrigerant two-stage type compressor, the heart of the ESA30, the heat pump is capable of operating in extremely cold regions with outdoor temperatures as low as -25°C, another world’s first.

Going forward, MHIAA will market the ESA30 as a strategic product which will lead the way to expand the use of heat pump water heaters in cold weather regions. CO2 scroll-rotary two stage compressor for commercial use - ESA30, the Q-ton, this new system can maintain rated heating output in outdoor temperatures down to -7°C. This new model can also operate in outdoor conditions down to -25°C, while maintaining an intermediate season

COP (coefficient of performance) of 4.3, the industry’s highest efficiency rating in the 30 kilowatt (kW) class.

“Because we are not using conventional refrigerants, we are eliminating the emission of hydrocarbons which can damage the atmosphere. This is the main reason why we should be using natural refrigerants,” Miller said.

Towards a safer and more efficient plant The Q-ton absorbs heat contained in the air and then the world’s first patented rotary scroll (two stage) compressor, compresses the CO2 refrigerant then transfers this heat to the water and supplies hot water from 5°C to 90°C instantaneously.

The user is able to set the hot water delivery temperature from 60°C to 90°C via its associated backlit touch screen controller.

The remote monitoring combined with the inbuilt sensors within the unit and storage tanks can gather a lot of operational data from the plant where the heat pump has been installed.

This includes the amount of water and energy consumed on a daily basis and with this information, customers can then have more visibility on how efficiently they are running their manufacturing processes in let’s say, an abattoir or a dairy plant,” said Miller. In this case, food and beverage manufacturers can utilise this recorded data for predictive maintenance and necessary on-site setting adjustments to increase performance and ultimately save costs.

“With the rising energy costs in the country, CO2 and natural refrigerants will be the future of this market where hot water is needed whereby Q-ton is well placed to meet these demands,” said Miller. manmonthly.com.au

Energy MANAGEMENT Going with the flow AEMO and ARENA recently announced 10 pilot projects that have been awarded funding under the demand response initiative. Manufacturers’ Monthly caught up with one of the recipients, Flow Power to find out what it means to customers.

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ARLY in October, electricity retailer Flow Power announced that it will be part of Australian Energy Market Operator (AEMO) “virtual power plant” which according to the Australian Renewable Energy Agency (ARENA) is a $35.7 million initiative. This will deliver 200 megawatts (MW) of demand response capacity by 2020, with 143 MW to be available for the coming summer. Flow Power is among the 10 companies that were awarded funding under the demand response initiative to manage electricity supply during extreme peaks.

This program, started in May and run as a competitive round, is the flagship initiative of ARENA and AEMO’s collaboration, to test proofof-concept projects to support grid security and stability.

“The AEMO RERT program is providing additional capacity in the market through demand response,” said David Evans, director of engineering and projects, Flow Power.

Evans explained in the event of demand exceeding network or generation capacity, AEMO can call on participating businesses for demand response capacity through this program to provide some relief to the market.

“By doing this, AEMO is saying the program is necessary to manage the coming summer and beyond. Presently, the market is forecasting very high levels of demand because there’s been a change in the way we generate power in Australia. This initiative allows the market to manage that,” said Evans.

The other important aspect of this program is managing the introduction of more renewable generation into the market. The source of this generation is intermittent and demand management is going to play a key role in being able to integrate that type of manmonthly.com.au

generation into the market.

“As an example, when the wind is not blowing, demand response can play a key role in supporting the market until the renewable generation comes back on. Demand response will be one of the key tools allowing the market to integrate renewables successfully,” explained Evans.

The Energy Under Control Project Flow Power is one of the few electricity retailers that has received funding from ARENA and the NSW Government to participate in the Advancing Renewables program – Demand Response, which will help manage peak demand on the grid, bring costs down, and minimise the need for infrastructure development.

With funding from ARENA, Flow Power will launch their Energy Under Control project, which will see the roll out of proprietary technology and hardware, the kWatch intelligent controller, to commercial and industrial businesses. The controller allows businesses to be involved in demand response programs and helps them leverage their energy demand as a source of revenue.

“In this project, we offer the opportunity to participate in the demand response program. Firstly, it provides a cash incentive to customers (existing and future) for participating and offering capacity to the market.

Secondly, an additional revenue stream will be provided if they are called upon to provide some load curtailment,” said Evans.

Participants in the three-year program will receive activation payments based on the amount of curtailment they can offer during peaks times, as well as further payments when called on by AEMO. In practical terms, this could mean tens, if not hundreds of thousands of dollars

in additional revenue for businesses.

“This program will create an additional revenue stream for the business. For example, with some planning, it could be as simple as turning off a compressor, or a pump, without a significant impact on operations,” said Evans.

The Flow Power element Evans said to participate in the program, businesses will need to install the kWatch intelligent controller.

“This technology has a remote connection through the 4Gx network back to our operations hub which has two key purposes. It connects directly to the revenue meter so we can see what kind of load our customers are consuming in real time,” said Evans.

He also mentioned that Flow Power does not rely on incremental data from the previous day but instead looks to

real-time incoming data, so they are aware of what customers are doing in real time. The same information is also made available to the customers themselves using a mobile app or a portal – all done through the kWatch intelligent controller.

“The other function of the kWatch intelligent controller is to provide outputs that signal an event/s or a requirement to curtail load depending on what kind of load customers enrol in the program. In short, we provide the signal, data and information to the customer to integrate into their own operational controls,” said Evans.

“Being part of the ARENA AEMO initiative is a great opportunity to make additional revenue while keeping power costs down for everyone. This can all be done while having minimal impact on the business in terms of operational complexities.

Flow Power is one of the few electricity retailers that has received funding from ARENA and the NSW Government to participate in the Advancing Renewables program - Demand Response.

Manufacturers’ Monthly NOVEMER 2017 35

Promotional Features Energy Management

Going beyond a collaboration Manufacturers’ Monthly caught up with Manage My Power’s Paul Kurpiewski and Anthony Igmen to find out more about the role they are playing in helping to alleviate Australia’s energy issues in the industrial space.

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NERGY efficiency actions and improvements are still not typically or widely viewed as a strategic investment, despite many studies conducted by research firms and specialty energy management companies to demonstrate that energy efficiency contributes to the competitiveness of companies and the raising of their productivity.

With proper energy management strategies, in addition to long term cost savings, there are other tangible benefits that include improved productivity, optimised processes and new business opportunities.

However, there needs to be careful advance planning that ensures that all important elements can be incorporated from the start. These elements include avoiding delays, duplication of efforts and confusion.

Transparent planning, which involves consulting stakeholders from the beginning, will ensure critical aspects of the operations have been considered and help predict future implementation challenges.

In this vein, Manage My Power is a business that assists and educates business owners on best practices and solutions around demand and efficiency management of energy.

The company is five years old and is responsible for the management and monitoring of millions of dollars of energy reduction contracts around Australia. It provides consulting and turnkey energy efficiency solutions to commercial and industrial businesses all over Australia.

“It really is just about connecting with the right people and helping as many businesses as we can,” said Paul Kurpiewski, managing director of Manage My Power.

The core specialty of Manage My Power is providing energy management, renewable energy and improving power quality. The recent increases in electricity prices, have affected not only the residential market but also businesses, both big and small. In some cases, these 36 NOVEMBER 2017 Manufacturers’ Monthly

included increases of 50 to 100 per cent.

“During this critical period, companies should be looking at what solutions they should invest in to take control of their expensive running costs,” said Kurpiewski.

“We look to address the issues around lack of data and transparency within a business. This will include questions like: What solutions are available, what will my savings be?

How are they estimated? Are the savings being met? Is the solution working according to spec and delivering the desired results?”

Kurpiewski continued. He explained that there are many companies with different products pushing to service the one customer.

“In this case, you may have company A that is pushing for solar power and Company B for voltage optimisation or power factor correction. Hence, there is a large gap between the providers and targets don’t end up being met due to the tech clashing,” Kurpiewski said.

He explained that the technology around energy efficiency is not improving at the same rate as other sectors, especially with increasing energy costs and the decommissioning of power plants which is putting a huge strain on the network and industrial consumers.

The customer and IoT connection Building a long-lasting relationship with the customer is important for Manage My Power because the company prefers to engage in longterm relationships with clients to ensure they are provided with the right service and solutions at the right time.

“We provide consulting, auditing and project management for all of our solutions,” said Anthony Igmen, head of strategic partnerships and sales, Manage My Power. In a recent project with a client within the produce farming industry, Manage My Power conducted an energy audit to asses

With proper energy management strategies, there could be improved productivity and even new business opportunities. where potential improvements could be made.

“After conducting the audit, which consisted of CT data logging of switchboards and an interval data assessment, we found that the voltage coming into the site was much higher than usual and the power factor was low. This indicated that they had poor power quality and excess electricity was being wasted through either heat or vibration that ultimately resulted in high electricity bills,” said Igmen.

Manage My Power worked with their client to identify these issues and then they validated the savings that could be achieved through the implementation of Manage My Power’s Voltage optimisation and power factor correction units.

“With just these two solutions we were able to save our client $45,000 per year with a ROI of just over 2 years. Typically, our clients receive energy savings of 8-12 per cent annually and a 25-50 per cent ROI,” said Igmen. Besides saving money for the clients, but by reducing the voltage to the optimal range, the operating lifespans on the equipment was increased resulting in reduced maintenance and repair costs.

“We are currently working with them on the next stage of the project which will consist of 300kw solar Pv system.”

Manage My Power also leverages on the power of IoT for their energy management technologies to monitor energy usage.

“Currently, the industry does an

assessment on the customer’s site to work out the ROI the hardware is supposed to deliver and install it.

However, in most cases, once installed, they leave it and don’t react when something goes wrong (when energy costs start rising),” said Kurpiewski.

“What we do in the IoT space, we connect all of these devices together so the customer and us can get a holistic view of what is happening with all the installed solutions which includes energy monitoring,” said Kurpiewski. With these technologies, Manage My Power provides the “missing link” between the customer and their investment by providing the tools required to manage their assets.

Growing with the customers According to Igmen, the technology and expertise is available but finding the right partners is the key to success business wise. “Partnering with us will ensure that you have the best solutions and information available to you all the time. From power quality to renewable energy, we have it covered,” he said.

Implementation is not just a one stop solution that ends just there with clients. A partnership to Manage My Power extends beyond just the initial implementation. “We gather that data continuously even after they expand, we help them validate that data with their increased energy usage (with the expansion of their facilities and energy requirements) and help them save more money as they go along,” said Kurpiewski. manmonthly.com.au

WE PLAN, SO YOU CAN SAVE. Our innovative technology monitors and interprets your energy consumption, producing highly targeted, accurate data.

We use this information to design a customised energy reduction strategy that will save your business power and money in the future.

For a free assessment to ďŹ nd out how much you can save on energy costs, call 1800 667 674 or go to managemypower.com.au

P: 1800 667 674 W: managemypower.com.au E: info@mmpenergy.com

Promotional Features Energy Management

Finding the right spark Nick Halaris from PowerMaintenance tells Manufacturers’ Monthly how a business’s electricity bills can go through the roof without a proper management program.

C

URRENTLY, the wholesale energy market is highly competitive and volatile with customers constantly finding themselves facing increased price hikes to respond effectively, they need to understand how the energy marketoperates.

Enter PowerMaintenance, a company that comprises experienced electricity and gas brokers that monitor the electricity and gas markets with a portfolio of customers worth more than $400 million. The company was founded in 2011 by Nick Halaris, national sales and operations manager, PowerMaintenance who had retired from a leading energy retailer.

In 2015, PowerMaintenance acquired Electricity Brokers with the intention of expanding into the residential and small business sectors.

With their in-depth understanding of the causes and characteristics that influence the energy industry, they make sensible decisions about when and how to fight the price war.

The brokers track the current and futures markets to tender customers’ energy contracts at the right time for maximum savings.

Well-known in the electricity and gas industry, Halaris recognised that large commercial industrial customers needed an energy broker who not only managed their electricity and gas contracts, but also supplied market 38 NOVEMBER 2017 Manufacturers’ Monthly

and risk analysis and cost reduction strategies. His extensive knowledge of the local and Asia-Pacific energy markets is sought after by high profile customers, governments, and consortiums. Halaris noticed that the existing pool of electricity and gas brokers has limited knowledge of the electricity gas supply and demand problem(s) in Australia and are unable to provide these value-added services.

The company was also the first in Australia to bulk tender customers across the same load profiles to get the cheapest electricity prices available in Australia.

Sometimes an analysis of the market reveals it is not the best time to tender a customer’s energy contract, so PowerMaintenance makes sure that their customers understand the rationale behind their tendering process and will alert customers to potential risks and emphasise negative consequences to accepting a contract too early.

What the industry needs Halaris told Manufacturers’ Monthly that this would be an opportunity to help industrial clients find a suitable energy retailer for their energy and power management.

“A common problem in the manufacturing industry is poor power factor from outdated switchboards and equipment. Poor power factor is one

of the biggest contributors to wasted energy costs for manufacturers,” said Halaris.

Manufacturing customers with outdated equipment pay more for their electricity and network charges, which results in increased operational expenditure. Halaris explained that one of the critical factors for successfully reducing operational expenditure is having a well-developed plan.

“When we approach our customers, we will begin by sourcing the cheapest electricity and or gas contracts, and apply for financial grants from state and or federal governments to fund energy audits and site improvements,” said Halaris.

Helping the customer sort out their usage patterns PowerMaintenance was contracted by a large commercial industrial manufacturing plant that dealt with rubber and plastics. The company employs more than 5000 staff across seven sites in Australia.

When PowerMaintenance was first called in, the first thing it looked at was the manufacturer’s electricity bills.

“The very first thing that PowerMaintenance did was to negotiate a new electricity contract upon contract renewal.

Following this, we then monitored their electricity usage for several

months to understand and track the electricity consumption patterns and hours of operation. The reports were done via a custom meter technology and a customer profile was built based on these reports,” Halaris explained.

Next, Halaris used his expertise in network tariffs to explain to the customer how network charges contributed to their soaring electricity costs. After that, Halaris convinced the head office to invest in an energy audit to guide site improvements and following this, he applied and successfully received a government grant to subside part of the improvements.

The reporting system developed

by PowerMaintenance highlighted critical issues and potential losses that were contributing to the customer’s inflated monthly energy bill.

To begin the necessary upgrades, Halaris then negotiated with head office that the manufacturing plant need only pay half of the government-subsided energy audit – up to the point where the energy audit provided sufficient evidence that the site was utilising more electricity and gas than was necessary. The energy audit then provided a list of infrastructure upgrades, and these were completed within three years.

“Within the year, the head office manmonthly.com.au

noticed operational expenditure was down trending and approved additional spending on energy efficient products,” said Halaris.

After a careful analysis of the customer’s load profile, PowerMaintenance recommended that they take part in demand response programs, which would be subsidised by their retailer and infrastructure networks. The utilisation of a demand response management program created cashflow. This cashflow was then allocated to replacing power factor correction equipment and replacing high-voltage lights to energy-efficient LED lights, which was the quickest option and return on investment.

manmonthly.com.au

“The head office of the customer soon increased the budget after seeing the benefits. They eventually ended up spending approximately $1.4 million dollars on energy efficiency technologies within a year and nine months. Prior to this, their electricity bill before the improvements was on average $171,477 per month and was decreased to $99,204 per month, following the new implementations – a high ROI for the customer who now had savings of between $1.19 million and $2.06 million per year,” said Halaris.

Reductions in electricity costs the core business Halaris explained that Electricity

Brokers is for SMBs and residential customers while the parent company Powermaintenance targets large industrial customers. Both companies provide a full-service electricity and gas account management that offers: • Bill validation and dispute resolution with electricity and gas retailers and meter providers; continuous monitoring of meter and power factor data and realtime alerting of substitute data and/ or irregular or abnormal electricity and or gas usage; risk analysis regarding state and national electricity and gas markets

• Advice and recommendations concerning infrastructure upgrades where necessary • Round-the-clock-on-call service for power failures, disruptions, emergencies and account management queries • Cost reduction strategies • Organisation of financial assistance from government grants; payback schemes for equipment and infrastructure upgrades; and information and education concerning the current state of the Australian energy market.

Electricity Brokers 0415 250 576 (Nick Halaris) / 1300 700 500 www.electricitybrokers.com.au

Manufacturers’ Monthly NOVEMER 2017 39

What’sNew

CRC launches new multipurpose high strength lubricant

High-performance in a compact package

LEUZE electronic introduces a new member of the Global Beam family with the compact sensors of the 15 series in an IP67 housing. The new series is suitable for the reliable detection of objects in industrial environments - particularly when it is a case of dealing with standard automation tasks in the areas of conveyor systems, material flow or secondary packaging in which large operating ranges are required.

The 15 series sensor is designed in a compact cubic housing. An extremely bright light spot and an easily accessible potentiometer makes installation quick and simple. The 15 series is available in retro-reflective, diffuse and through-beam and can therefore be used in all standard applications - it is even suitable for special requirements such as detecting glossy objects and reflective surfaces.

The high function reserve makes reliable detection possible even in extreme situations, therefore reducing the risk of a system standstill. As far as the users are concerned, the new series represents an economical solution with a good price and performance ratio.

Leuze electronic Pty Ltd 1300 538 933 www.leuze.com.au

The Powerful, Fanless Computer For Demanding Military and Industrial Applications

LEADING aerosol and bulk lubricants supplier CRC Industries has expanded its range of professional-grade lubricants with the launch of new multi-purpose spray CRX. CRC Industries Australia managing director Shona Fitzgerald said CRC CRX Multi-Purpose High Strength Lubricant was an exciting addition to the company’s multi-purpose range, offering high performance at a low price.

CRX Multi-Purpose High Strength Lubricant will not dry out or wash off with water, making it ideal for industrial applications as well as recreational home use.

It has been specially formulated to stay in place for long periods of time without drying or becoming sticky.

The product does not contain silicone, acid, kerosene or dieseline and won’t harm plastics, metals, paints, enamels, fibreglass or neoprene seals.

Applications include marine and recreation, sporting and camping equipment, heaving industry use, mining and transport, food preparation areas, electronic and electrical components, farming and aviation machinery, locks and hinges.

CRC Industries Australia 1800 224 227, www.crcind.com.au

Classic 3M Speedglas Welding Helmet Launches Two Decades Later

CRYSTAL Group, a manufacturer of rugged computer hardware, recently introduced the R1112 Rugged Embedded Computer – designed for applications where high performance and reliability are needed in demanding environmental conditions.

This Rugged Embedded Computer’s efficient heat-dissipating, solid-state design makes it an optimal solution for harsh environment automation applications such as those typically found in oil & gas production, municipal utilities, mining operations and military systems. It provides a reliable and stable automation platform with minimum maintenance.

The RE1112 Rugged Embedded Computer is designed for fanless operation over an extended temperature range from -40°C to +60°C, and its special aluminium housing with cooling fins serves as a heat sink for conductive cooling of the internal electronics. The chassis is built to withstand the harsh environments for storage operations from -45°C to +85°C. The unit mounts to multiple DIN rail options and operates from a wide voltage range of 18-36 VDC power input.

The RE1112 Rugged Embedded Computer is powered by Intel Corei7 and is equipped with up to 16GB of RAM, and features one PCIe X16 low profile expansion card and offers on-board SATA2 and SATA3. The computer has two non-removable 2.5” SSD hard drives and supports Linux, VMWare and Windows software.

The RE1112 Rugged Embedded Computer is designed for highly reliable performance in both military and industrial applications through a wide temperature range.

THE new 3M Speedglas Welding Helmet 9002NC features new Speedglas True-View optics that allow welders to view the weld pool and their general surroundings with a view that appears lighter, brighter and more realistic.

By recognizing a wider spectrum of colour, it enables welders to read surfaces, contours and edges better and benefit from greater control over their welds.

The Speedglas 9002NC features exhaust vents, which assist in removing exhaled air keeping the welder more comfortable and the welding lens fog-free. The exhaust vents also allow the narrow profile helmet to comfortably sit closer to the welder’s face making it perfect for tight spaces.

At just 485 grams and featuring an upgraded head harness with multiple adjustments for a customised fit, the Speedglas 9002NC is super comfortable for all-day-wear.

With a superior optical rating (1/1/1) and Speedglas True-View this large (55x107mm) auto-darkening welding lens features shades 3/8-12 with arc detection down to an industry leading 1 amp. The new Speedglas 9002NC is compliant with the relevant Australian & New Zealand standards and is suitable for MMAW, MIG/MAG, TIG and low amperage TIG

Metromatics Pty 07 3868 4255 www.metromatics.com.au

Speedglas 02 9439 0111 www.awsi.com.au

40 NOVEMBER 2017 Manufacturers’ Monthly

manmonthly.com.au

CYBERSECURITY December 2017 Issue The IoT will make services like predictive maintenance a standard offering, as well as enable efficiencies and flexibility across the entire manufacturing process, right down to the supply chain that feeds it. Attackers seeking to disrupt industrial processes don’t need to exploit an underlying software vulnerability which could result in financial losses and disruptions to productivity.

In this December‘s edition of MM, we speak with companies that write the code, supply the software, and provide consultancy services to help manufacturers manage their cybersecurity.

manmonthly.com.au

MANAGEMENT >> TECHNOLOGY >> SOLUTIONS

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The Last WORD More supply, lower prices

Ai Group chief executive, Innes Willox shares his thoughts on Australia’s energy issues, the state governments’ progress on sorting them out and what to expect down the road.

A

I Group hears every day from businesses of all sizes who are finding their next electricity or gas contract will cost them twice to three times as much as the old one – if they can get an offer at all. For some businesses that is unwelcome weight in the saddlebags. For others, it is a brightly lit sign saying “Exit”.

Our regular surveys show that manufacturing activity has been in growth mode for much of the last few years, and in continuous expansion since October 2016. We will put that growth and much more in peril if we do not get energy right.

What does getting it right look like?

We need to distinguish time frames.

Emergency responses and government intervention have their place, but we need credible plans for how we will keep meeting our energy needs over the medium term and beyond without a rolling emergency. What is going to motivate private investment in energy on the scale we need?

We need to be conscious of the interconnectedness of energy issues.

The single biggest factor shaping electricity prices right now is gas prices. Uncertainty over future climate policy has been undermining all energy investment, undermining reliability and affordability as well as emissions reduction. Failure is hard to contain – like a bushfire, it spreads.

We need cooperation and market wide solutions, not fragmentation.

Distributed energy systems create their best value when they are supporting each other and the shared energy system as a whole. The same is true of state gas resources.

So beyond broad principles, where have recent events brought us?

On gas, I am hopeful that the Federal Government’s deal with the exporters has bought two years of breathing space, though we are going to have to watch very closely.

Gas prices offered to industry have subsided since earlier this year, but only from the apocalyptic ($20/GJ plus) to the merely dire ($10-16/GJ).

42 NOVEMBER 2017 Manufacturers’ Monthly

Views on the level of “export parity” differ, but contract offers are clearly still well above it.

Ai Group has said all year that only the diversion of gas from export could get us through the looming crunch. The voluntary diversion now agreed should help, particularly the exporters’ pledge to offer gas volumes domestically before any uncontracted spot sales overseas. We hope to see contract prices fall further as a result.

As I said, though, this is just breathing space. Conventional supplies from the Bass Strait and the Cooper are depleting, some of it faster than expected. Existing unconventional resources in Queensland need regular reinvestment to keep delivering.

We’re going to need continuous effort on both the supply and demand sides, and on pro-competitive market policy.

On supply, we have a lot of options and a lot of question marks: • The Narrabri project in NSW, at around 50 petajoules per year, would be big enough to be significant in the 2,100PJ eastern market. The State Government’s case-by-case consideration is not bad in concept – as long as it delivers a timely decision the community actually supports. If not, it’s just a fudge.

• The Northern Territory fracking moratorium is up for reconsideration and a positive decision would likely see major resource development and pipeline construction to take large volumes to the East, with substantial benefits in the Territory.

• Victoria’s unconventional gas moratorium is bipartisan, but both parties have to some degree held open the door to conventional onshore gas – the State Government will consider it in 2020, the Opposition would allow development today. But we don’t know how much there is or how commercial it will be.

• And more could be done in

Queensland coal seam gas or SA conventional and unconventional gas – though we’ve also seen stirrings of political opposition to some of this, despite the responsible approach of current and recent State Governments.

Gas imports are making more and more sense. An import jetty – or maybe more than one – would not just contribute supply, but change the competitive environment for producers, pipeliners and retailers across Eastern Australia. Competitive tension is well worth having.

Pro-competitive reform will also help, and the current wave of reforms to monitoring, pipeline capacity trading and more needs to keep going.

Finally, the gas demand side is critical. Whatever sensible steps we take, gas seems unlikely to go below an export parity range of $8-12/GJ in future. If there were a recovery in global oil prices, local gas prices could go higher. Energy efficiency and fuel switching can help the market balance and leave energy users more viable in a higher-price market.

Progress on gas supply and price will help electricity too. Beyond that we will go nowhere without new investment in the electricity system, and lots of it.

We need more supply and sources of supply to push prices down. We need new and upgraded supply to provide higher system-wide reliability and security. And we also need new and cleaner supply to help meet our national emissions goals – whether that is the current Federal 2030 target, or the deeper 2050 goals that all the Eastern States have now adopted.

The Government’s new National Energy Guarantee proposal, announced by the Prime Minister in October, has offered a plausible new direction for energy policy, with a welcome focus on security, but further work will be needed by all concerned to help significantly drive down energy prices for hard-pressed domestic and industrial energy users.

If agreed and finalised, the plan

would clarify the future treatment of electricity sector emissions and give investors greater confidence to build the new and upgraded generation we need. But only bipartisanship on energy policy will create the conditions for long-term investment in energy generation and by big energy users.

The policy gives electricity retailers full flexibility to use existing markets and contracting processes to meet their reliability and emissions obligations. Requiring lower emissions in the electricity sector would contribute to meeting Australia’s Paris climate commitments. We should strive to achieve these reductions at least cost and the technology-neutral nature of the proposed obligation is positive.

The plan also gives the electricity sector a great deal of flexibility and it gives welcome recognition of the imperative of maintaining trade competitiveness for emissionsintensive industries.

The Government will need to consult deeply with industry, the community, the States and the Opposition to make this approach a success. But we are hopeful that cooperation is possible to achieve lower prices, maintain reliability and meet Australia’s emissions commitments.

The politics of brand differentiation and playing to narrow sections of a political base is clearly powerful on both the left and the right. But the last decade of Australian energy policy is comprehensive proof that this approach is simply incompatible with a well-functioning energy system. We’ve got to get beyond it – because the alternative is to continue the current pathway of rising emissions, lost competitiveness and declining reliability.

Innes Willox, Chief Executive Australian Industry Group manmonthly.com.au

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