Industry Q&A: Advanced Manufacturing Productivity Improvements - Where do the Opportunities Lie?
With manufacturing being a large part of both the mining and the METS worlds, we caught up with Jason Furness, Founder and CEO of Manufacturship to get some tips into where the opportunities can be found for improvement on processing in mining and advanced manufacturing in METS.
Austmine’s latest Mining Equipment, Technology and Services (METS) sector survey showed that Advanced Manufacturing is one of the top ten services currently offered by Australian METS. From your work with companies in this space, what have you seen as being the most common mistakes made when it comes to having an efficient and productive operation?
The basic scenario for METS in this country has changed significantly over the last couple of years, in line with the changing commodity prices. Clients now want faster service, greater levels of innovation and cheaper prices - and ideally they wanted it yesterday! The pressure is on for everyone to reinvent their operations.
Most METS that we see are bending over backwards to meet their clients’ needs. Where they cause themselves problems is that whilst they are bending over to meet Client A’s needs, they hurt Client B. If they manage to keep all their clients happy somehow, they can then become ineffective in what they do, in regards to return for themselves, i.e. they are putting clients above their own commercial returns.
This is creating what’s seen as a conflict for many companies, between servicing all their clients at the desired level and making a strong commercial return for themselves. We often have to sit down with these companies and explain that if they’re not making a strong commercial return for themselves, then they’re hurting clients in the long term, because they won’t survive.
The bottom line is: you can provide excellent service to clients, at a good commercial return to you, the service provider. Yes, the gold rush boom time has passed and there are adjustments to cost structures required, but you can still run your business well and support clients better than you used to, whilst making a profit.
Do you see common opportunities to increase profitability across the service providers who manufacture equipment, and the mining and mineral companies who are processing their ore? After 2 years of pushing for improved productivity and efficiency, are there any “easy wins” left for any organisations?
There are definitely wins left, although some will be easier than others. The principles of better manufacturing date back to Henry Ford in the 1920s, with everyone consistently looking to reduce cost. Nearly 100 years later, opportunities still remain for cost reduction and there will be still another 100 years from now, be that with ore processing, or the services that support them.
The first key area for focus is increased collaboration between the miners and the service providers, compared to how they have worked in the past. The end goal in this collaboration is getting the process to run more smoothly and effectively between all players. We’ve moved from the average plant shutdown taking 72 hours to now having to do the same amount of work 48 hours or less, but now we need to concentrate as a collective effort on maximising what is achieved during this time. What is needed between the contractors and the miners is a better integration with safety and maintenance groups at the mine themselves, from shift structures through to culture and KPIs.
The second key area, specifically for METS, is that many of them are not supplying to everyone in Australia or the Asia Pacific region who could possibly buy from them. The opportunity lies in considering who else in the local mines, or in APAC, could be buying from them, and embarking upon an awareness campaign. We still run into plenty of companies who really fit the definition of the world’s best kept secret! They have a fantastic product or service, but you can walk into any number of mining companies and they’ve never been heard of.
So in summary, better collaboration, a greater reach for METS companies and ensuring you are not the world’s best kept secret are key to growth in this sector.
How important is it for the drive for change to come from the very top of an organisation, in order to see significant improvement?
Textbooks are very keen on drive for change needing to come from the top. Having change come from the top is great, I’m not going to decry that; it’s fantastic if the head of the company is on board. However, this shouldn’t be used as an excuse, as it often is, that until the CEO or another senior executive, puts the spotlight on a department that no change will be initiated within it.
Having senior level support can certainly make effecting change easier, in terms of resource, support or direction. There are local changes though, that will make your customers’ lives easier and help to build some momentum for greater change from within. Don’t use your boss having different priorities as an excuse to not make change! Everyone is responsible for influencing change that can provide a better value service for the client.
Do you see people or technology as the solution to the challenges being faced by the manufacturing industry here in Australia?
I would see the intelligent use of technology in a commercially sensible framework as the answer. I’ve seen companies and clients go to a trade show and simply purchase the latest machine on offer there, with no commercial background done on it prior, after which it sits in the background of the mining or manufacturing operation, costing the company money.
It is fundamentally essential to have the right people in place, the A-graders, who are really driving the creativity of the business and can then leverage technology where it’s commercially sensible to do so.
To order Manufacturing Money, by Jason Furness and Michael McLean, visit this link.