In our latest News Update on our home page www.kingscroft.com.au we have posted an article from the Sydney Morning Herald which outlines why for some companies, “Made in Australia” is a better option from a financial and business sense. Reading this good news article, we thought it appropriate to repost a blog from December 2015, that also looks at manufacturing success stories in Australia.
It is not unusual for us to hear from the media or our own networks that Manufacturing in Australia is “under the pump”…increasing energy costs, jobs moving overseas, economies of scale not being available in Australia, expensive labour.
Despite the negativity there are major success stories e.g. Resmed, CSL, ZIP. In all manufacturing companies there is the opportunity to make money with little outlay. I recently met a Senior Operations Manager who turned his hand to working as an Interim Executive. He rattled off the benefits that he has delivered in a series of short term (8 to 40 days) engagements in Australia and the UK.
Case Study 1 Australian Bakery Ingredients Company
Review Effluent Treatment methods and introduce new treatment system annual savings of $400,000pa on $2M annual spend from 5 days consulting.
Case study 2 UK Tea Company
Reorganise workflow – efficiency up from 70 to 80% – reduced giveaway by 8% through a new weighing system.
Saved $150,000 pa in labour and $50,000 pa in raw material costs for 35 days consulting and capital investment of $18,000.
Case study 3 UK Conservatory Blind manufacturer
Introduce 5S principles to engage workforce, simplify workflow and largely eliminate rework. The factory was then so smart it was shown as an example of the company’s efficiency to prospective customers.
Labour saving $90,000, rework savings $30,000pa from 8 days consulting, $6000 capital.
Case Study 4 UK Contract Manufacturing Company
Re-design the layout for their new factory and warehouse. Review product range using Pareto principles.
Capital cost on new factory reduced from $9 to $8 million. Product Range simplification saving $50,000pa.
from 12 days consulting, no capital.
Case Study5 New Zealand Coffee Company
Implement new shift patterns (3 shift running) to increase capacity, reduce downtime “warm-ups” and reduce energy costs. Reduce overweight by 3%.
$30,000pa labour saving, $15,000 energy and waste saving, $15,000pa overweight reduction saving from 5 days consulting and $3000 capital.
We all get absorbed in our businesses and this for me was a salient reminder that a fresh pair of eyes combined with the right know how can help improve any business where significant gains can be realised swiftly.
The advantage of well directed Interim Executives is big ROI.
Blog First Posted in December 2015
Garry King, Director – September 2016