What was the landscape like in manufacturing when you took the helm of Hunternet in 2013?
Industry was definitely in decline when I first returned to Newcastle to commence my role with HunterNet. Commodity prices had commenced to ‘free fall’ from September 2012 and mining houses had already commenced aggressive efficiency and cost improvement programs. The region’s ship building had already begun downsizing with the impending ‘valley of death’ arising from a lack of build and sustainment opportunities. Further, infrastructure development had slowed. It was clear one week into the role, the good times of years past had come to a close.
What were the challenges for manufacturers then?
The need to build new capabilities and capacity. Traditional markets had either shrunk or disappeared. The only hope to survive and position for growth for many was to pursue ‘new’ niche market opportunities or supply chains.
And core challenges for HunterNet?
HunterNet also needed to take a long look at itself. Companies expected more than just networking opportunities. We needed to develop the capacity to directly add value to our member company’s bottom line and provide specialist business support platforms for their respective work forces.
Four years on, what have you done to support to your 200 members?
There have been many initiatives implemented. We have built on the network by facilitating open innovation programs where several companies have collaborated to enter new markets. Our Project Directors are really niche business development consultants that focus on positioning Hunter and Central Coast companies in four industry focus areas spanning 13 national and global supply chains. They work ‘in’ companies BD departments. We have internationalised and, in partnership with Austrade, executed business development and familiarisation programs in China, Indonesia, Vietnam, Malaysia, Japan, and South Korea. Providing optimal business support and professional development programs have assisted companies in developing their business and teams. Finally, despite many challenges we are further diversifying our Group Training Company and we are in the third year of delivering the Hunter’s Future Leaders Program.
What feedback are you getting from your members on current challenges?
We are receiving qualified feedback on improvements in business confidence. Whilst there are heightened levels of activity in the resources, infrastructure and defence sectors, there is also a recognition that a focus on innovation, efficiencies, and productivity is ‘business as normal’.
Advanced manufacturing is crucial to survival. How is the Hunter faring?
We are ‘batting above the average’. We have a range of companies that have invested in specialised equipment including industrial 3D printers. We have a relatively high number of ‘hidden champions’ that are building their business on the base of ‘world’s best’ technologies.
What are the growth areas and key opportunities for Hunter manufacturers?
Just based on the number of cranes on the skyline, infrastructure development and asset management has seen a huge increase in activity. Also, in the short to medium term we will see more sustainment packages released to support the JSFs (F35s) to be based at Williamtown, which will also contribute to industry attractiveness for the airport precinct. There is an increase in contracts from the resources and energy sector. Finally, we are seeing increased opportunities in some of the regions traditional manufacturing markets (for example, rail).
And the biggest threat?
Global competition. If you are producing ‘widgets’ you are unlikely to be able to compete with low labour cost countries unless you have invested in automation. The other big challenge is accessing the right target customers/companies and their decision makers to develop relationships. If the first contact you have with a prospective customer is in response to a tender/EOI, you have a very low prospect of success. This is a service provided by our Project Directors. Finally, the need to continuously value-add and differentiate product and service offerings.
How is the Group Training Company travelling?
It has had a tough four years. During the downturn, companies simply were not putting apprentices or trainees on. However, we are implementing a business diversification strategy and we have seen numbers more than double since late 2016.
Looking forward, what will challenge industry?
There are many challenges but the fundamentals still apply. Understand your current capabilities. Be realistic about what markets you can pursue. Understand what is required (capital and time) to develop new capacities. Never underestimate the importance of relationships and collaboration. Understand that product and service improvement and development is a continuous part of business. Innovate and take calculated risks – it’s ok to fail – just fail quick and cheap. Have a meaningful, measurable strategic plan so you can change course if factors out of your control change the landscape. Be nimble.
Innovate and take calculated risks – it’s ok to fail – just fail quick and cheap.Tony Cade