The Entrepreneurs’ Programme - Providing Critical Support to NSW METS
Austmine’s highly-skilled team of Business Advisers (BA’s) have worked with hundreds of SME’s around the country in the past twelve months, providing critical business management advice and support under the federal government’s Entrepreneurs’ Programme (EP). Ross Carter is the BA for Sydney, the Illawarra and Western NSW and is the newest member of the Austmine team.
We recently sat down with Ross to gain an understanding of the knowledge he has built up throughout his career in the METS sector, whilst also delving into the key challenges and opportunities arising for SME METS in NSW.
If you’d like to know more about how the EP can help your business, contact Ross via firstname.lastname@example.org. He will also be on site at AIMEX 2017 from August 29 – 31 at the Sydney Showgrounds, so drop by booth #4822 during the conference.
1. Prior to joining Austmine as a Business Advisor, what experience have you built up in the mining and METS sectors?
Graduating as a Mining Engineer in 1985, I worked across open-cut and underground mines; before joining the ranks of mining suppliers and leading multiple business units that delivered products and services to meet the demands of the mining industry.
The focus of my career has been supporting the production processes of mines through the supply and support of products and services around drill & blast, open-cut mining equipment, trades and operator labour and the delivery of open-cut pre-strip mining contracts. With experience across operations and business management roles within METS organisations, I was privileged to have the opportunity to become involved in driving improvement in production processes and outcomes of many mines across Australia and in PNG.
2. Over this period of time, what have you perceived as the fundamental changes in the sector? How have these impacted Australian SMEs?
The fundamental change across my time in the industry has been around the acceptance of change. While the risk averse nature of our industry remains, there are now many examples of how change has become not just accepted, but embraced as the new way of doing business. For example
As these elements have shaped the industry, they have also driven change in the manner in which supplier SMEs have needed to adapt to remain successful in the METS Sector.
Safety is a must. I recall in the 90s as a mine supplier when including safety and system in the supplier’s value offering was a differentiator. Now it is just what is expected. An SME with no safety system nor culture doesn’t get invited in! Moving forward client expectations around safety are moving from pure compliance to more of a living safety culture, supported by systems, leadership, training and the right people. Mine leaders want to have higher level, intelligent discussions with their suppliers on industry risk, exposures and the developments that can bring down overall risk exposures associated with our industry.
Mining is a Business. Many service suppliers to mines started with some equipment or service, being there at the right place at the right time and an excellent relationship. As the mines have embraced a business focus at all levels, successful METS SMEs have been able to improve their offering with exceptional capability and cost management. The relationship hasn’t been replaced (but with corporate structures it’s a lot harder to nurture), but it generates business leverage when applied in conjunction with exceptional capability and cost competitive offerings. The challenge for SMEs is to manage all 3 (capable, on the money and a relationship), not just think that one strength will outweigh weaknesses.
Scale of the Mining Business. This one is the toughest for SMEs to deal with. As the mining companies grow, they expect their suppliers to grow with them. The real challenge is for the SMEs to retain their value offering (the reason the mining customers use them) when making step changes in the scale of their own business. So, while there is a lot of opportunity that comes with “Growing with your customers,” there are also a lot of risks to manage; such as more people, more technology, geographical coverage, more investment; and the need to embrace systems and new structures to still attain the expected standards from a larger business.
While there have been big improvements, challenges remain. When introducing new initiatives/technology into working mines, there is still a strong degree of risk avoidance. Unfortunately, there are still stories about great technologies, equipment and solutions that fail to get any traction into operating mines. However, each year there are more success stories. Rather than dwell on the negative, my personal suggestion when seeking to introduce new solutions into the mines is to not just focus on your product and its specification, but put yourself in the buyer’s shoes and think about what are all the impacts of this solution on your client’s business.
3. You’ve now had the opportunity to work with and advise a number of METS businesses across NSW. What are the common challenges they are facing and what assistance can they access?
I have really enjoyed the opportunity to meet and understand the SMEs that I have had the privilege to spend some time with over the last 3 months. There are some great companies delivering terrific solutions to their customers. A key challenge I see revolves around dealing with risk. In particular, how the SME maintains high quality service delivery regardless of the changing demands of clients and the cyclical nature of our industry, where large clients will demand investment and commitment in the highs of the cycle and then cut demand in the downswing.
There are many companies who have delivered terrific projects and solutions for their clients; but don’t communicate this value to the world. Unfortunately, potential customers don’t know how good they are!! For example, SMEs earn much of their work from word of mouth and repeat business. However, when seeking to diversify across other segments, marketing support will better define the value that their clients receive and so support the needed business growth.
Successful SMEs have become very good at coping with what the market throws at them. However, this ability to respond can affect their ability to make acceptable margins, develop solid systems and reinvest into the business to support growth. Introducing systems and structures to these businesses, and even Lean methodologies allows such companies to better respond to business needs in a more sustainable and repeatable manner.
What I see as key with the Entrepreneurs Program is the flexibility to offer support to SMEs that is purely tailored to that business. We don’t offer a “one size fits all” solution, but we work closely with the SME clients to appreciate the business’ strengths and capabilities, and understand the real reason they are engaged by their clients. We then consider solutions and system improvements that will enhance and build upon these strengths while addressing the challenges and barriers that the SMEs are dealing with, or those barriers that are preventing the achievement of growth targets.
4. What do you believe are the major opportunities for Australian SME METS to improve business operations and win more work in the current market?
As a participant in the industry for 32 years and a believer of the industry fundamentals moving forward, there are immense opportunities for SMEs supporting and supplying the Australian Mining Industry. The size and scale of the mining companies allows them to compete sustainably across the commodity cycle. However, this size and scale limits their ability to develop and deliver new and creative solutions to many of their problems. Mining companies need to engage with successful, capable SMEs who understand their business but who also have the smarts and operational capability to create a solution and then implement that “at the coal face”.
There is much technology available and the ability to produce data is immense. Every other day we are hearing about Big Data, new sensors and new technology developments. However, the opportunity for SMEs in the METS sector is to use sensors, Big Data and technology as tools to deliver a real solution to a mine. Technology on its own doesn’t do anything, a mine won’t suffer the pain of implementing new technology unless there is a real benefit to them.
Use history to guide your execution! While the developments of 20 years ago aren’t great technology, success was all about change management. Look at the areas where change has been accepted by the industry and say how was this change implemented. Look back at implementations that worked and what didn’t.
So the message to SMEs is
- Focus on the problem that is being solved, and be sure that that problem is the mine’s real problem, not just what you think
- The solution needs to be robust and repeatable
- When taking a service or product to a mine, think how your product will impact your customer’s business. What’s the Value? What’s the risk?
- Specifications are necessary but will not drive the decision to commit.
- Once the value is defined by the client, then resource it to make sure it works. A success story will be embraced by a client site. If it doesn’t work, the industry will know about it very quickly!