Industry is doing it tough

Recent feedback from industry leaders paints a picture of a really tough automation, control and instrumentation (ACI) market. Projects in the process industries, certainly mining, have been deferred or mothballed, and the contraction in manufacturing continues. Both the process and manufacturing marketplaces are demonstrating no growth.

As a consequence of the drop in global demand for coal and steel, the uncertainty surrounding the future of the carbon tax and the minerals resources rent tax (MRRT), the mining industry has postponed or cancelled many projects. Lack of direction in government spending on process infrastructure such as water treatment and sewage plant upgrades has resulted in a sharp drop in public projects. Added to this is the lack of investment locally in new chemical, food, brewing, pharmaceutical plants - much of the investment is offshore. In fact, manufacturing has been decreasing since the GFC recovery in 2010.

The result for the ACI industry is ongoing servicing for maintenance at a bare minimum level, but no growth. Is this situation necessary?

It is no secret that the automobile industry continues to struggle, requiring more and more government support. Most of the pharmaceutical and food packaging industries have offshored, as has our textile business. Even our transport industry is under scrutiny with under-investment in maintenance of tankers, and probably other vehicles as well.

There is an interesting maxim that should be nailed to every plant manager’s door: “less input; more output”. Every plant, both process and manufacturing, should be driving towards reducing inputs - energy, labour, materials, wastage - and increasing outputs in the form of products and services.

This can’t be achieved without investing in innovation. Australian industries need to innovate, modernise to become faster and cheaper, and to deliver the highest quality output. The culture of ‘if it ain’t broke, don’t fix it’, needs to change.

Management needs to accept that to survive in this market in the future will require a ‘disruptive strategy’ - a strategy, like the internet, that radically changes the way things are done. Workgroups reporting to the board need to be established to explore what new and innovative products, solutions and services are available, and have been tried and tested in other competitive markets.

In process plants it is imperative to understand what is being measured, how accurately and how reliably, and what is not being measured that should be. There are so many new measuring devices, boasting new materials to withstand harsh environments, digital communication (fieldbuses), self-validation (improved accuracy), wireless connectivity (for those hard-to-cable installations), that can provide more measurement information to help optimise the processes. This data can then be processed faster and more reliably by the next generation of software, PLCs and DCSs, using smart valves, actuators, VSDs to manage each process.

But there is no gain without pain. Implementing a culture of change requires leadership from management, capital investment approved by the board, investment in technician training, collaboration with the vendors and a strong will to innovate.

The IICA can play a significant part in this innovation by ensuring that all practitioners are certified and graded, and that the appropriate training courses are accredited. It is not beyond the realms of imagination that these ‘disruptive strategies’ around innovation create a demand for locally qualified engineers and technicians, and that our universities and TAFEs can profitably train the necessary skilled people.

If we don’t adopt new technologies soon, we will end up selling our resources and importing our skills and finished products.

*John Immelman was formerly managing director at Endress+Hauser Australia and was responsible for establishing the Australian operation in 2001, having held senior management positions at E+H in South Africa before immigrating to Australia. As part of his personal philosophy to ‘always put back into the community’, John is the current chairman of the IICA Sydney Branch, an involved member of Engineers Australia, a member of the Institute of Directors and the founder and former president of the Profibus Association Australia.