Welcome to ICN’s Global Diversification in the Australian Transport Sector

seminar

2014 FORMULA 1 ROLEX AUSTRALIAN GRAND PRIX Saturday 15 March 2014, 9.30am – 11.00am

Don Matthews Executive Director

ICN Victoria

Tony Carney National Sector Manager Rail

ICN

Bruce Griffiths Supplier Advocate Rail

Commonwealth Government of Australia

Global Diversification in the Australian Transport Sector Bruce Griffiths OAM, Rail Supplier Advocate Grand Prix Melbourne 15 March 2014

Australian rail manufacturing

Annual turnover of more than $4 billion Employs 15,000 annually Non-urban passenger rail increased by 12% and urban passenger rail

increased by 5% in the last two years Approximately 330 firms with over 150 years of both rail design and

manufacturing capability Largest tram network in the world (Melbourne, Victoria) World’s 6th largest rail infrastructure network, spanning the continent

with 44,262 kilometres of track

Industry Development Strategy

Supplier Continuous Improvement Program (SCIP) Forecasting domestic demand for passenger rolling stock Rail Industry Technology Roadmap Harmonisation of rolling stock specifications Rail industry statistics project Promoting capability and business matching Increasing international business opportunities

Future Rolling Stock Needs

Benefits of Better Coordinated Rail Procurement

ARA and Department of Industry comissioned Deloitte Access Economics to identify any benefits of a more coordinated and harmonised approach to rail procurement.

The “Opportunities for Greater Passenger Rolling stock Procurement Efficiency” report was launched by Minister Truss, Deputy Prime Minister and Minister for Infrastructure and Regional Development at AusRAIL 2013.

Over the next 30 years, state governments could spend $30 billion on procuring rolling stock.

More efficient planning around purchases can save governments nearly $6 billion on their upcoming rail projects.

Could retain nearly $15.5 billion in economic activity in Australia over the next 30 years.

Benefits of Better Coordinated Rail Procurement

The industry benefits: Increased foresight and ability to plan for upcoming orders. More functional and well-coordinated supply chain. Increased innovation for the industry. Future growth and sustainability of the Australian rail industry. Support Australian jobs and regional development. Higher productivity.

On Track to 2040 – Tech Roadmap

210 participants from over 110 different organisations.

Started June 2011. Launched in June 2012. 3 Technological Priority Areas– Materials and

Manufacturing, Monitoring and Management, and Power and Propulsion.

18 Priority Opportunities. 6 Enabling Action Areas. 22 Recommendations on technologies to help

position the Australian rail industry to better meet needs of global customers.

What’s next?

Rail Manufacturing CRC Minister Macfarlane announced $31 million in

funding funding for this CRC on 21 February 2014 to increase Australia’s rail industry capability and global competitive position.

$ to $ funding leverage. 6 Year Term. Strong support from industry, government, and R&D

providers.

Rail Manufacturing CRC Status

Cash $21m Participants $16.0m Other $5m

Participants : • Confirmed • Pending

19 6

In Kind • Value • FTE

$46.3m 172

Centre (including Admin, Education, Board, Commercialisation)

$10m

Education $1.7m

Grant $31m

Total Value $98.3m

Rail Manufacturing CRC

Participants:

Trade mission – InnoTrans 2014, Berlin

Australian delegation to largest global rail trade show - 23-26 September

Access customers; initiate export business; and leverage networking events to raise company profile.

At InnoTrans 2012, 33 rail suppliers reported over $50 million in business opportunities.

Opportunities for Global Diversification

Technology Roadmap – identified future opportunity areas for Australia’s manufacturing future – important lessons learned!

Rail Manufacturing CRC – global collaboration platform with funding available to invest in areas of Australia’s competitive manufacturing strengths – important opportunity to be involved.

Trade missions – InnoTrans 2014 – increase exposure to international customers and understanding opportunities that might exist in the global market

Better coordinated rail procurement – harmonised and coordinated procurement to help for increased integration with global supply chains.

What’s Next? Rail Manufacturing CRC Progressing Rail Procurement initiative with government and industry Trade mission - InnoTrans 2014 Domestic rail supplier briefings

Email: RailAdvocate@industry.gov.au DEPARTMENT OF INDUSTRY Industry House 10 Binara Street Canberra City, ACT 2601, Australia Telephone +61 2 6213 6000

Tony Carney National Sector Manager Rail

ICN

Zoran Angelkovski Chief Executive Officer META Commonwealth

Government of Australia

META

Zoran Angelkovski Formula 1 Grand Prix

15 March 2014

Who is META?

META is a unique membership organisation of Australian manufacturers and public sector

researchers that work together to make Australian companies agile, vibrant and

innovative in a globally recognised manufacturing economy that benefits both the

industry and Australia

Biggest challenges facing Australian Manufacturers today?

• We are part of a global economy, we need to be globally competitive

• We are one of the most expensive countries in the world

• Biggest distances within our country

Overcome these challenges – “fight imports “– look into high value added products – 10% value add is too low!

Natural Disadvantages of AUSTRALIA

1. DIVERSE Culture resulting in high fragmentation of customer needs + expectation

2. Low population DENSITY limits growth opportunities

3. Long DISTANCES from many markets

What is META?

META = Manufacturing Industry + Universities (Applied Research)

• Industry led – What does industry need? Let the industry implement it (involved)

• Collaborative framework – Open for manufacturing companies of all

industry segments + universities across the country

Universities and CSIRO

Manufacturing companies will have a much closer relationship with Universities + CSIRO to shape them more from an applied industry

standpoint. Adopting to industry needs!

• Universities / CSIRO to become global centres of excellence:

Education Research Applied Research for Industry

What are we looking for?

• Focus on companies that have the Leadership mindset:

‘Can do’ attitude- look into the mirror before you look out the window

Local decision power to innovate their businesses

Who consider collaboration at a local and global level as a

competitive edge

Consider the world as their market

Employee engagement

Next 3 years identify these companies, the META 500!

The META 500- Key Attributes

Key Attributes 1. Extremely ambitious targets Want to be a market leader

2. Focus and depth > 50% vertical integration

3. Globalisation Direct customer relationship

4. Innovation R & D spending twice the industry average

5. Closeness to customers > 25% of employees contact customers

6. Loyalty and highly qualified staff > 50% less turnover rate than average

7. Strong leadership Complete identification with the company, >10 years at the top, apply common sense to business

Source: Simon, Kucher & Partners 2013.

META 500

The META 500 will demonstrate:

• What is possible through collaboration + cross industry fertilisation

• Become the future international showcase for the vibrant and agile manufacturing industry in Australia

META Projects

• Described outcome

• Target setting

• Led by industry + implement

• Up to 2 years to commercialise an idea

• Universities/ CSIRO adapts to the needs of the business (not future research)

How will META engage its industry members?

Through scalable collaboration projects, META members will:

• Implement innovation in a practical way

• Provide honest feedback to Governments on:

Global changes; Local red tape and regulatory burden; and Real opportunities

Supporting Business Excellence Across The Value Chain

Advanced Manufacturing mindset of having that full supply chain where you’re getting your suppliers and your main customers included, and the entire value chain in between.

Suppliers Research Development Manufacturing Sales, Marketing & Support Customers

Business excellence 1. Lean Manufacturing (Process thinking) 2. Lean Design (Systems thinking) 3. Lean Business (Human thinking)… across the entire value chain

Manufacturing Value Chain:

Strategy, Leadership, Culture & Management

Quality Assurance & Regulatory Affairs

Finance, Accounting, Legal & Administrative

Human Resources Supp

ortin

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How can META help?

“What can META do for me?”

• META is your organisation

• META wants to bring together people with interests in certain areas who want to meet other people, maybe from other industries, to learn from each other

META:

“Launch pad for innovation and growth by bringing the industry together

to share knowledge.”

Industry helps industry

Tony Carney National Sector Manager Rail

ICN

Those wishing to continue networking, and for a light lunch, we

have buses waiting to take you to the Innovation precinct.