s01e07 – Developing World Class Manufacturing

SUMMARY KEYWORDS

business, manufacturing, australian, manufacturers, opportunity, people, market, success, product, innovation, industry, company, customer, developing, plan, element, podcast, technology, important, services

SPEAKERS

Peter Davies, Graeme Fitzgerald

Graeme Fitzgerald 

Welcome to manufacturing mastery with Graham Fitzgerald, the podcast. My name is Graham Fitzgerald. And for over 30 years I’ve led some of Australia’s largest manufacturing organizations, right in the highs and lows, the occasional failure, and the plentiful successes that inevitably come with being in business. This podcast is aimed helping you progressive Australian manufacturer with practical, real world advice on navigating your pathway to sustainable success in manufacturing. Myself and my special guests will cover everything from how to embed a planning framework into your business, new approaches to innovation, the importance of culture and how to lead change, and navigating the new normal as an Australian manufacturer. So manufacturers let’s master. In today’s podcast, I’m joined by a person who I’ve worked with has been a customer, and now works in various levels of government to facilitate and support their programs to assist Australian manufacturing. I’d like to welcome Peter Davies to manufacturing mastery. Peter and I first met in business during our time in the Australian steel industry, specifically the gas pipelines and piping systems markets. Since that time, we’ve crossed paths in different leadership roles in engineering organizations. And now we have a common interest in the development of Australian manufacturing to be world class. So today’s podcast theme I’ve titled developing world world class manufacturing, which I know is something that Peter’s pretty passionate about. So welcome Peter to manufacturing mastery. I know you’re passionate about Australian manufacturers growing and developing their business, and to achieve great outcomes, if you can share some of your journey during our time today, and also perhaps where you see the opportunities into the future. So well describe

Peter Davies 

it’s quite out. Thank you quite a pleasure and privilege to be with you. Well, I started out my time as training engineer in shoe makers pipe fan division, worked on power stations and sugar mills and bhp plants around mainly heavy industry around Australia installing pipework systems after 27 years, left one still half that time is in middle management international operations roles. But it was time for a change had a stint with an international mining processing company time as a GM role with a national field and design company and another Australian role in Fletcher building in concrete products. With us four and a half years have been delivered in the auto industry entrepreneurs program to advanced manufacturing clients in New South Wales. So it’s been a long history of operations and manufacturing, general management, engineering and project management in the mix.

Graeme Fitzgerald 

So I assume that you’ve learned a lot through that journey. That’s a wide range of experiences. So what is that attracted you to work with us industry and the entrepreneurs program

Peter Davies 

is attracted to us industry to be able to use my experiences and supplying to other businesses to provide a personalized support to match their needs. And it’s so good to meet and work with a huge range and diversity of manufacturing companies across the regions. So it was really a great fit. I’ve learned so much I’ve learnt what successes and achievement, what failure is and how important people and leadership are to a business. And I’ve learned that Australian manufacturing is strong, it is a very innovative is resilient, and it is dynamic.

Graeme Fitzgerald 

So I guess in that respects, you’re probably seeing things that are common across different businesses that may be a critical aspects required for manufacturers to be successful. Do you think they might be?

Peter Davies 

Yeah, that’s a very good question grime. foundational to success is a sound capable leadership. Being a business owner or be a team in a large organization, a strong balanced leaders are the key to success. a close second is a customer centric focused by manufacturers and manufacturers who seek to solve customer issues. And that’s that’s very central to growing a sustainable business No matter if it’s a mature market or a new market. Again, the value curve as we call it is also very key. Gone are the days of a manufacturer making good profits and growth just for making widgets. Design and conducting r&d, pre manufacture, and having distribution after sales service and installation, spare parts post manufacture, they bringing in higher GDP, it locks the customers in on the service provision. And that’s become so important. I think another element of success and profitability and growth for business is around adopting new technology, from simple to complex technology to solve a client’s issue to improve internal processes of their own company. There’s an abundance of technology which can deliver multi fold improvement to business.

Graeme Fitzgerald 

It’s interesting, the first one you talked about is the leadership piece. You know, in an earlier podcast, we spent a bit of time just dealing with the leadership stuff. So I’d be interested in your take as to why that’s so important.

Peter Davies 

Well, leadership is fundamental to a business. The business actually will prosper solely on the back of good leadership, a leader who’s inclusive, engage their people, who is not afraid to have new skills and new capable people join the team to add to the skills that they already have. But to but to have a plan and have a vision for the company is so important. I found that passion of leaders is also a common element of successful businesses. But to actually have leaders who are prepared to continue to look ahead, foster their people build capability in their people, it’s so important. And those companies that do have leaders that do that, they do very well. That’s

Graeme Fitzgerald 

very similar view to some other people I’ve spoken to. I also, I really want to your comment about the future development, the r&d, the improvement that that type of thing. Is that something you see manufacturers embracing well as general or is it maybe more a select few that might be doing that?

Peter Davies 

I think Australian manufacturers don’t lack the drive to innovate. And to think outside the square, they’re innovating most days across sectors and geography. But I see a bit of a gap that some manufacturers do the innovation in a bit of a cocoon, I forget that the improved product or the specific product they make, has to have an end market or provide a solution to an end customer, or it becomes wasteful. And it’s not a useful item. I think the manufacturers who are customer centric and by being customer centric, they can gain market competitive advantage and grow the volumes, they have the potential to enter new markets and become known as the solution provider through their through their innovation and research and development work. It is a bit complex, but it’s a way of developing products services and, and deliverables to a market. Also, a lot of Australian manufacturers don’t identify the intellectual property. Being in prop products or services or processes, which are key for the differentiators to their competitors. Most of them struggle to determine its value and its and how to protect it. And so it’s a bit of a gap. And companies that innovate. They normally have a simple opportunity funnel, when they apply that to the items that are trying to innovate, they can help grow their business, get to a niche product, that’s really increasing your profitability, lock in their customers. And when a company starts to innovate, or has a process of successful innovation, that is momentum to seek further innovation.

Graeme Fitzgerald 

I think one of the things you mentioned there brought back a saying that I was once told that my solution has no value until I understand the problem that it solves. And what you’re saying is often sometimes the innovation might happen we could develop a wonderful new product or service but the we forgot to understand where it’s going to be applicable.

Peter Davies 

So that’s exactly right. Yeah, yeah. So

Graeme Fitzgerald 

so you I think from what you’ve said, there is you know, the the criticism that Australian manufacturers lack innovation is probably not a fair one in in that perspective, but there’s an opportunity to grow the understanding of The application of innovation in markets, is that right?

Peter Davies 

Exactly right. Innovation is a way to make that great product even better, or that service or the process. And it is, it is a definitely an opportunity for businesses to be unique, and have a market competitive advantage. And that’s so important. Competition may import or be it local, it’s really important to have something that differentiates you from the others. And it’s also exciting to have a business that’s x prepared to improve or make changes and have by unfinished business. So they businesses, that net flow workflow along very nicely

Graeme Fitzgerald 

there the from my experience, they’ve been the best ones to work with and work for, as when stuffs happening, and there’s improvement and new ideas and the energy in those businesses is, is far greater than in those that are just busily doing what they’re currently doing. So

Peter Davies 

yeah, totally agree.

Graeme Fitzgerald 

So can you maybe share your thoughts on how you see the greatest opportunities for Australian manufacturing, you know, in 2021, and beyond?

Peter Davies 

Sure. I think there’s plenty of areas of great opportunity for advancement and factoring. I think the first one rolls the people, I think with the key opportunity they can glean from this with technology by by being inclusive with the people through innovation. I think businesses are now seen that being flexible and agile. And having a customer centric focus is vital. And this allowing companies to flourish. So really the first greatest opportunities to build upon your own people and seek the people that will grow your company. I think another great opportunity that’s evolved recently in the last year and onwards has got to be exports. And exports have been has been surprisingly very strong during the COVID, second half year of 2020. And as the COVID COVID impact diminishes on a daily basis for us now are well planned and researched. And target and export markets are becoming really achievable and attainable. And advanced manufacturing really has a particularly strong opportunity involving the large market of the USA, it’s a very strong trend. Another one that I see is opportunities around adding services. And along the value chain like installation of your product or aftermarket service or providing critical spare parts. And I also think

Graeme Fitzgerald 

Sorry, I got that better.

Peter Davies 

Yep. Sorry. Because I think that another point I’d make a there’s some sectors I think will foster more opportunity domestically. And these are the sectors like clean tech and energy, spices now becoming a focus, food and agriculture of dependency. Defense continues on that line. I think technology adoption through industry, four oh, areas is another great opportunity. So I think some particular sectors now will continue to be like advanced manufacturing and continue to be a great place to be.

Graeme Fitzgerald 

So that’s so in that respect, you’re really talking I guess, if I understand your the way you’re speaking there, Peter is that adding value to the existing products and services by application and technology in those that sort of direction is something you see as a real, a real opportunity for people over the next period of time.

Peter Davies 

Certainly, I think for the next next few years, at least, there’ll be a great appetite to add value.

Graeme Fitzgerald 

The I was going one of the things that struck a chord with me there when you were talking was the comment about the importance of identifying the people are going to help you take your business to the next level. So potentially the the old adage of finding the the cheapest people to work in my business manufacturing business may not necessarily be a way to secure success in the future. Is that what I can take from your comment?

Peter Davies 

That’s a good that’s a good observation, right because things like design. That’s a particular skill set and involves technology CAD design. Lots of different applications are now in play for creating and developing and improving design. So that’s one area. That’s, that’s new and design. Traditionally, what we’re seeing is is a younger generation can can join, met advanced manufacturing through design. So I think that’s, that’s a very sound value Ed. One example.

Graeme Fitzgerald 

No good, thank you. So one of the things that I try and include in this podcast is, you know, my goal is really to help people who are listening to be able to take away particular ideas and actually apply it in their business, hopefully, straightaway after they’ve listened. So as a facilitator responsible for achieving real business developments in with conjunction with us industry, can you share with us what you see is the, maybe the the key element or the one thing that business owners and managers should be addressing as their foundation for success?

Peter Davies 

Sure, well, that’s a great question, I just comes back to one thing as a key takeaway, and that’s have a plane, update the plane and get external help, if that’s needed to develop one, we get a clear and dynamic I think, one three and a five year strategic business plan that covers all the elements of your business, and then share that plan with all the others not involved in the planning inside your business. Because the key part of this is communication of the plane, it’s no good developing if you don’t communicate it. But make it real, make it simple and make it visual. And then once you’ve got done that, develop the plan for your business, work on the plan, and then review the plan at regular intervals that suits your business needs. And also change check performance against what you’ve targeted, and then adjust the activity as you need. But appliance really a pathway, it’s really allows all people in the business, to know to be on the pathway, but know where the plan is know where you’re headed. So I really would sum that up by saying, Get a plan in place. It’s foundational for success. That’s

Graeme Fitzgerald 

pretty amazing. That you came up with that. One of the things that I think I’ve taken out of the last 12 months in supporting and working with manufacturers and other businesses, is the power even in a very difficult year of how having a plan allowed all of my businesses that I’ve been supporting to actually finish that very difficult year in a much better place than otherwise. And yeah, that’s I couldn’t agree with you more better. I think that’s, that’s the foundation piece for me. So

Peter Davies 

yeah, yeah.

Graeme Fitzgerald 

So you’ve had an opportunity to build a wide range of experiences during your career. From that, what’s been your greatest lesson in that time? And how is it influencing you in what you’re doing today with AWS industry in the end the entrepreneurs program, and share that

Peter Davies 

with us? Yeah, sure. I’ve had a lot of great lessons, but one sticks out above them all. And that’s all about people. Now, how to lead people who leads people who’s accountable and responsibility, who’s involved, I think, I no longer think it’s just the senior management or owners who determine a company’s success. But I think the most successful growth companies I’ve seen and been involved with, and those with all the people engaged, I think building the capability is also vital with the people, building teams around leaders. So there’s diversity and those skills brought in and also in building the capability technology, technology is also drawing and domaining that capability be built in, in businesses. But a simple principle involving people is holding self and others accountable in leadership. I think that builds on engagement that builds on commitment and builds on the capability so I still put personally use these leadership elements and plus a few others to drive my own performance and how I guide other business leaders know how we’ve helped shape companies towards you know, their best and most vital asset is how to utilize their people. Well.

Graeme Fitzgerald 

Yeah. I it’s amazing that the subject of people and customers continues to come up in the in in many of the conversations I’m having with manufacturers and they truly is an area that I think develops the future success of businesses. So yeah, I think that’s a great thing. So is there any other comments or things that stand out for you, Peter? You know, and I could talk for hours about manufacturing? As you know, yeah. Yeah. So yeah, anything else that opportunities or threats or challenges come to mind?

Peter Davies 

A quick one on some threats, I think COVID is highlighted to all companies, but in in manufacturing particular, the need to be diligent around your supply chain, there is logistics and extra cost in it. So supply chain element has, has caused some real issue, I think, the onshoring element where people were, were buying products from overseas now that there some have already started, there’s a good momentum to bring offshore produce products back, or elements of their manufacturing back into the country, which is, is a good thing. And also, I think that that’s some other threats. But also, I think that it’s it’s a, it’s a great opportunity to look for new things and new markets, the way that the digital platform has been used to communicate, that gives a great opportunity to get your products and services out to the bigger Australian market, not just in your region, not only in the state that potential to get your product and services out to a bigger audience. And I think the other thing is not to be afraid to take up digital platforms that will help you sell online or give advice online or get customers get some technical data, but you’re getting the interaction with them. I think the the use and development of technology and technology was adopted a lot in 2020. With with the COVID issue. And if we can build on that for manufacturing, it will just lift performance and improve outcomes. And it’ll accelerate those things that have been traditionally that take a lot longer to achieve.

Graeme Fitzgerald 

I look but I can’t thank you enough, Peter, for giving me your time today. I know a lot of the things you’re saying resume resonates so strongly, and sharing, you know, thanks for sharing some of your journey over the last few years and the challenges and opportunities to see it. My perspective, I guess I know that if manufacturers believe that it’s possible, and they’re willing to confront those challenges and do what it takes. There’s no reason not to expect a bright future for Australian manufacturing. So, so thanks for your time and insights. My

Peter Davies 

pleasure. Thanks. Great. Thanks very much.

Graeme Fitzgerald 

Thank you for being part of this week’s episode was great to have you. I’m always keen to hear your thoughts, questions, ideas and suggestions for future topics for the podcast. So please get in touch to my Facebook page. Graham Fitzgerald, manufacturing growth specialists. My LinkedIn page or via my website, Graham fitzgerald.com. That that’s gra me Fitzgerald comm that a if you’re enjoying what I’m putting out here, please rate review or subscribe to the podcast. So more manufacturers can find out about it. And we can build our community masterminds, manufacturing this great nation. Talk to you soon.