Stop the rollercoaster, we feel sick.

Sam Fulton

March 10, 2019

Stop the rollercoaster, we feel sick.

What a rollercoaster ride the last few months have been with our new Labour government. We’ve seen quite a bit of upheaval and discussion. Discussion is good, but it can also be unsettling and creates nervousness in the marketplace. Businesses like to know what’s around the corner as it helps them plan for the future. If doubt sets in then plans go out the window and economic development risks being put on the backburner. We’ve seen several new policies and changes come into effect that have impacted the manufacturing industry.

 

Fero - labour relations

 

Employment Relations in NZ
Perhaps the most significant change of the past few months, even years, is to employment relations. We’ve seen unprecedented industrial actions from several unions and industries, not least teachers and nurses. There are no signs that this will ease, in fact we can predict that it will increase as unions become increasingly empowered through Multi Employer Collective Agreements.

 

The increasing NZ Minimum Wage
The hard facts are that this government will increase the minimum wage by 28% within its first term, and so what about its second term? We only have to look across the Tasman to Australia to see the devastating effects of increased costs and increased legislation on the manufacturing industry.

 

Such a high leap in the minimum wage not only causes increases through all wage levels, but brings with it an inevitable compacting of wage levels from top to bottom. That leaves the more highly skilled and experienced worker feeling that there is less value placed on their abilities versus the non-skilled worker who is earning only a little less.

 

The reality for Fero
At Fero, we are significantly affected by government changes to labour relations and minimum wages. It places undue pressure on our ability to compete in the global market. This aside the changes proposed by government have forced us to think differently and a little more ‘outside the box’.

 

Luckily we saw the writing on the wall a couple of years ago and we put a great deal of effort into finding ways to absorb and mitigate these skyrocketing costs.

 

“The next 14 months alone is going to see a 15% wage increase for us. For many businesses that could mean the beginning of the end, but we’re confident we can overcome it through innovation, a unique offering and experience”
Sam Fulton, MD Fero

 

The future for Fero
We are working very hard to improve our sourcing and supply chain to remove cost through better purchasing and more effective partnerships with suppliers and or customers. Our engineering and purchasing teams have been focusing on each of our accounts and looking at ways to optimise their production and not pass on cost increases.

 

We are very pleased with our decision to establish a production plant in Samoa. This has allowed us to maintain a lot of our prices into the market, whilst at the same time providing a future for the business and some much needed jobs in Samoa. We’re proud of our involvement in Samoa and we believe strongly that it will make a significant difference to our future.

 

We have been very impressed with the speed at which our plant has been able to deliver to market and the ongoing productivity and quality that we are able to enjoy. It is a perfect synergy with our plant in NZ and together we are proud to be able to support and deliver to our international customer base.

 

Fero Samoa Production

Sam Fulton

October 30, 2018

Fero Samoa Turns One!

It’s hard to believe that Fero Samoa turns one in November and I think it’s fair to say it has been a great year.

 

Back in 2017 when we heard about the closure of OE manufacturing a simple idea was sown. Who knew that this idea would grow into the success it has today. Not only are we able to offer clients offshore manufacturing, we are also able to offer assembly and sub-assembly expertise in this world class facility. This gives us the ability to offer Fero customers lower MOQs whilst delivering fast turnarounds due to the country’s proximity to both Australia and New Zealand.

 

Fero Samoa Production Plant

 

Fero now has a team of over 100 staff operating in Samoa who are trained in lean manufacturing techniques which ensures high levels of quality and productive delivery. The senior management team have over 50 years experience and are well placed to continue this growth, expecting the payroll to grow to over 500 staff in the next 4 years!

 

 

We have also been able to share expertise between factories in NZ and Samoa which is very beneficial to the company.

 

Turning one is a major milestone for Fero Samoa and we are delighted to celebrate and say thanks to everyone that has been involved. Fero Samoa would not be the success it is today if it wasn’t for the support of the staff, government, suppliers and the Samoan people.

 

We look forward to our continued growth in the Australasian manufacturing industry.

Sam Fulton

July 3, 2018

Survey Results 2018

Each year we send out a survey to our customer base, which gives us a snapshot of what our customers think of Fero and the service we provide. Fero has seen some big changes over the past 2 years with the opening of the new factory in Samoa and the growth in NZ. And that’s why we feel it is important that we get some honest feedback from our customers to maintain our service levels and to see where we need to improve.

 

Looking back over the past few years it’s been great to see that the whole manufacturing industry has seen positive growth and this has been backed up in our survey with 67% of our customers expecting to see more growth within the next 18 months.

 

The overall survey results were once again positive with the majority of customers being very happy with their relationship with Fero and 100% of customers being satisfied using Fero as a supplier for their business.

 

We are very proud of the fact that over 60% of our customers have been doing business with Fero for over 5 years and all of our customers believe they have a good professional relationship with us. When we asked them what the major advantages were when working with us, they said that they had seen a reduction in costs, lead times and assembly times and that Fero were a reliable source for components.

 

Fero Results 2018Our customers also thought that we were extremely responsive (87.5%), friendly and that our quality was better than most of the competitors. This is all great news and something we are very proud of both here in NZ and Samoa.

 

But of course it can’t be all good stuff and to be honest what we find really important is the ‘other’ stuff. The ‘other’ stuff is not necessarily what you want to hear but it’s the stuff that will make us a better company in the long run.

 

 

 

So here’s the stuff that you thought we could improve on…

Warehouse and dispatch – this is always a problematic area and one that we aim to continuously improve. We understand that we don’t get it right every time but despite all this it was great to see that 100% of customers did receive their orders in a timely fashion and 38% are on time evertime.

General Professionalism and Consistency – although 75% of customers see Fero as being very or extremely professional we did see a 14% decrease in this figure. This is something we will strive to pull back throughout the coming year. We also noticed that although our consistency has been increasing over the past few years we still need to be mindful of in our assembly and production.

Added Value – We saw a reduction in the amount of added value Fero was seen to be giving clients dropping to 62.5%. We see this as an important benefit to our customers and we will address this with our staff.

 

How Can Fero Improve

 

And here are some fun facts to finish off with:Fero Smiles

100% of customers believed that Feros’ communication was excellent.

60% of customers when asked what Fero could improve on said ‘NOTHING’

88% of customers would likely recommend Fero to a friend or colleague

 

Thankyou to everyone that took the time to complete the survey and we look forward to continuing to improve our service to you.

Sam Fulton

June 1, 2017

What’s Looming for Fero?

Although much of our core business is in the production of wiring looms, it would be a mistake to think that this is all we do. As a business we see ourselves as providing assembly services for manufacturers. Often this involves the assembly of wiring looms to streamline the manufacturing process, but at other times we use our teams to assemble other elements as part of a sub-assembly process.

 

Sub assembly solutions

 

We use our resources, plant and systems to run sub assembly projects for various clients, combining our electrical experience with other materials. Often these types of projects start with a conversation about wiring but then develop into an understanding that we can provide more solutions and take on more sub assembly.

 

Due to our very strong relationships with Chinese suppliers we’re winning business in Australia and even Europe. We’re using our connections to source a whole variety of materials, and moving beyond simply wiring solutions.

 

As we take on more sub assembly tasks, we’re proving ourselves to be more efficient in speed of turnaround, more consistent in quality and often much more economical for smaller businesses that don’t want to tie up capital in staff costs.

Let’s Talk

If you’re interested in outsourcing more of your sub assembly to free up staff for other roles, or to reduce your capital outlay and/or inventory costs, we would love to talk to you. We have built up some excellent case studies recently that demonstrate our ability and prove the business for outsourced sub assembly.

Heading to China

In the next few weeks we’re heading back over to China and talking to our partners about a variety of materials, including aluminium extrusions for an upcoming project.

 

Call Sam on 09 274 0104, and discover more.

Sam Fulton

March 23, 2017

Focus on Copper

Did you know?

Copper is man’s oldest metal, dating back more than 10,000 years. A copper pendant discovered in what is now northern Iraq goes back to about 8700 B.C.

 

There are 1.6 billion tons of Copper reserves known in the world – it seems a lot, but when it’s gone, it’s gone.

 

Twenty mines account for about 99% of production – that makes for 20 very influential mines!

 

Pure copper’s melting point is 1,981°F (1,083°C, 1356°K). Its most important properties include superior heat transfer, electrical conductivity and corrosion resistance.

 

Copper and Fero

An everyday metal

Copper is a mineral and an element essential to our everyday lives. It is a major industrial metal because of its high ductility, malleability, thermal and electrical conductivity and resistance to corrosion. It is an essential nutrient in our daily diet. And, its antimicrobial property is becoming increasingly important to the prevention of infection. It ranks third after iron and aluminum in terms of quantities consumed in the USA.

 

Copper wiring

Due to it’s unique conductivity properties copper is essential in electrical wiring. Copper wire price fluctuates heavily due to many different factors including the supply and demand of copper globally, the emergence of different types of wire and even seasonal conditions.

 

The price of Copper

Copper, until recently one of the worst performing commodities of the past two years, experienced a sustained spike of 33% at the end of 2016, posing several questions as to the direction of the market as we move into 2017.

 

The biggest single cause of the price rise has been a pick-up in Chinese imports, responsible for almost 50% of global copper demand. This is seen a good omen for the industry’s health.

 

There are some who claim it will be short-lived, but in my opinion this is short sighted.

Copper And Fero

In reality I, and many others, feel the market has the potential be driven higher this year and next, if not by outright supply tightness then by the perception the market is moving in that direction.

 

Put simply we’re seeing more demand from China and only 20 mines to extract it, added to the fact that it is a finite resource.

 

The general trend over the long term has been that copper prices have fallen since a high in 2011. These falling costs have helped offset a strengthening US Dollar against the RMB, and have resulted in a neutral outcome in the market.

Fero and the Copper story

Suffice to say the price of copper has a big effect on our business, with much of our wiring containing copper. We watch the London Metal Exchange with interest, and will continue to do so. As a business, have already seen some significant increases in raw material costs coming through. Our hope is that we will see a smoothing out of the pricing and that we will be able to absorb the extra cost without being forced to pass it on to our customers.

 

We will monitor the market and keep you updated on how copper performs over the next few months.

 

Sam Fulton

February 28, 2017

Important news from Fero

We are aware that after the announcement to the market yesterday of the liquidation of TradeTech NZ that there is some confusion as to how this relates to Fero.

Prior to 2014 Fero incorporated TradeTech and Wire Solutions.  In 2014 Fero sold TradeTech NZ to a private operator.  At this time Fero and TradeTech became completely separate entities with no common ownership or other interests.  Both companies are operating in different sectors of the market and providing different services.

 

As separate entities Fero is in no way effected by the liquidation of TradeTech. 

 

We do have some common customers, and some of those customers are unclear on how the businesses are structured and owned.  This has caused some confusion in the market, of which we would like to clear up.  Fero is a business that has seen significant growth since 2014 and is very secure in its operations.  We have a strong future supporting New Zealand Manufacturers and helping to ensure that the local manufacturing sector remains strong.  2017 looks to be a very exciting year for Fero with a number of new initiatives that we will be introducing to support our customers and to continue to support manufacturing in New Zealand.

 

If there are any questions or uncertainties I am always happy to discuss.  Please don’t hesitate to contact me at sam.fulton@fero.co.nz

 

Sam Fulton

February 19, 2017

Why manufacturing is so important to NZ

Typically New Zealanders do not think of themselves as living in a manufacturing economy. But New Zealand’s manufacturing industries make an important contribution to the national economy. In the year ended September 2015, the manufacturing sector output accounted for around 10% of real GDP and 11% of the labour force.

Manufacturing NZ

But this misperception can have a detrimental effect on the growth of NZ manufacturing and we as kiwi’s should be aware and proud of how important manufacturing is to our country.

Skills

 

If we do not have the skills, talent and training coming into the industry then this could undermine the potential for growth. It is not surprising that some high- growth manufacturing firms emphasise skill shortages and other constraints on talent- driven growth as being much more important than any effects of costs or exchange rates.

It’s interesting when you look at surveys that highlight the traits of NZ manufacturing firms. Typically these firms are:

 

  • Largely export oriented

 

  • Predominantly locally owned

 

  • Mostly privately held

 

  • Vertically integrated in the domestic market and in offshore markets where they have a large presence.

 

  • Still manufacturing in New Zealand where it makes sense for the entire or part of the production process to do so, and engaging in research, design and the provision of services.

 

So what makes us competitive?

 

Well, sometimes being a small country does have its advantages and the architecture of NZ firms can be seen as an advantage. By being local, privately owned companies we can be more specialised and therefore more focused on innovation rather than cost-minimisation.

 

A country of our size creates nimble companies that need to adapt to changes offshore, both political and economic. Take Donald Trump in the USA. Should we fear what’s happening in that market and how it will affect NZ manufacturing? I believe not. NZ companies are nimble enough to adapt – we’ve had to for years. We’ll either find a way to provide the USA with the solutions it wants or we’ll look to other markets like China, Europe, even the Commonwealth.

 

At Fero we feel we are small enough to care but big enough to deliver and we really stand by this. We are growing as a company but we do have very strong values and beliefs. We are always looking for ways to improve our processes and we are constantly building stronger ties with China. This relationship allows us to manage the processes and get some cost down but most importantly monitor quality and consistency.  

 

Sam Fulton

February 8, 2017

2016 was a positive year – how will 2017 fair?

2016 was a positive year for NZ manufacturing and saw consistent expansion throughout the year. Catherine Beard, Business NZ’s executive director for manufacturing, said that the results were encouraging.

 

The activity in the manufacturing sector over 2016 averaged out at 56.0. This showed an increase from 54.2 in 2015, but interestingly the same result as both 2014 and 2013. Overall, this shows how consistent and how positive the activity has been for the sector over the last few years.

 

There is also a very positive feeling around the manufacturing sector and positive comments stood at 70% for December, with seasonal factors (particularly Xmas) having a strong influence.

 

BNZ Senior Economist, Craig Ebert, said “the December result caps off a positive year for the manufacturing sector.  Indeed, since the survey started in 2002, last year’s average has only been surpassed by 2004’s 57.5”.

 

So what can we expect for the new year?

The general consensus is that the NZ Manufacturing sector is in good shape and that 2017 will continue to expand at a steady rate. However, Economist Doug Steel does feel that there could be a few warning signs that should not be ignored.

NZ Manufacturing Index

 

In December PMI new orders fell to 52.6 in December, which still indicates growth but it is the lowest level of new orders for nearly two years. Therefore this is worth watching over the next quarter as an indicator of sale growth ahead. The industry’s new orders also slowed a bit in the QSBO (qrtly survey of business opinion).

 

Having said that it appears that manufacturers in the QSBO are more confident this year than last. A net 23% expect better economic conditions over the coming six months. This compares to a net 4% expecting improvement in the previous survey. It’s a decent lift and sets confidence well above long-term norms, of -6.

 

So, let’s continue doing what we are doing NZ and make our country proud of what we add to the economy and the manufacturing sector around the world.

Sam Fulton

December 5, 2016

Fero gets the thumbs up from customers.

No matter what industry you are in, no matter what products you make, the key to good business is to understand your customers.

 

Without these customers Fero would not have a business and that’s why we feel it is important once a year to get some honest feedback. Of course it’s always nice to hear the good stuff but what we find really important is the ‘other’ stuff. The ‘other’ stuff is not necessarily what you want to hear but it’s the stuff that will make us a better company in the long run.

 

This year our account managers contacted a range of customers and invited them to complete an online survey. (Thanks to all those that completed this!) We had a great response and are happy that the results received give a fair indication of how Fero is seen and what we need to improve on.

 

Last year we set ourselves some internal goals. These were:

 

  • To maintain customer satisfaction
  • To improve our delivery and despatch
  • To inform customers of all Fero’s offering

 

How did we do??
Overall, I think that we can give ourselves a pat on the back and say well done as there were lots of positive comments coming from customers that were very satisfied with Fero’s service. Infact 90% of customers said that they would happily recommend Fero to a friend. This figure is great but it has dropped by 5% on last year so we will definitely be looking into why this has happened.

How are fero?

From what you said in the surveys, Fero is seen as a very professional company that is responsive, has good communication skills and adds value to a customer’s business. We are seen as friendly and helpful and good at what we do. Our quality of product is seen as better than most competitors and our price is seen as ‘about the same’.

 

We supply most of our customers with assembly/wire harnesses (90%) but component supply has also increased over the past year with us supplying this to 38% of customers. Awareness of our other services like pressure injection moulding and offshore manufacturing are still quite low so we will be speaking to you about these next year if it’s appropriate.

 

When asked what improvements customers would like to see Fero make, there were a few clear winners. There was a few comments on the need for more visibility when it comes to pricing and there is a need to review how we confirm orders etc. so we will be looking into our processes here with the admin team.

 

Another ongoing issue that we are aware of and it was indeed one of our goals for this year, was to improve the warehouse and dispatch area. The good news is that more of you are getting your orders on time every time (23%) and 67% of customers are ‘mostly’ getting them on time but the bad news is that you are still not that happy with the process. Therefore we will be reviewing this part of the business in the new year to see how we can make this more streamlined and get your orders to you in a more timely fashion, every time!

Orders Fero

We also feel that the engineering team has a lot to offer your business whether it’s coming up with more cost effective solutions or even designing a new prototype. Therefore we will be reviewing how our engineers engage with your business and will be putting some target response times around when and how they come back to you.

 

So in summary.. We are happy with the results of the survey – from your feedback we can see that some of our service levels dropped slightly so we will work hard to maintain these better in 2017.

Fero thumbs upIn 2016 we implemented a completely new production system – it was something we had to do, but it wasn’t easy to implement and there were a few frustrations. These appear to now be ironed out and the way is clear to focus on improvement, backed up with a more efficient system.

 

Thanks
We would like to say thank you to our customers for taking the time to complete our survey. We certainly always learn from your comments and we will strive to keep your frustrations at bay and keep that smile on your face in 2017!

 

Sam Fulton

September 12, 2016

PRO-FORM : From Prototype to Production.

At Fero, we are not just about manufacturing.

 

It is important to us that we understand and help our partners grow within their business. A prime example of this is when PRO-FORM came to us with a request to add more functionality into their product.

 

PRO-FORM is a NZ family-run plastics moulding company that make bed liners, canopies and sports lids for a range of utes throughout the world. With the design of the new SLT sport lid came a request to modernise these products with an auto opening system which lifts the lid and activates a light. This was something our R&D team could certainly help with.

 

Prototype with Fero

At Fero we are lucky enough to have an in-house design and development team who understand vehicle looms and who can create a prototype quickly. Having an open source environment has enabled the partnership between Fero and PRO-FORM to develop quickly and it’s this understanding that has enabled the whole design process to evolve. This evolution has given us the knowledge to develop ideas and come up with solutions that make the functionality of the product second to none.

 

The PRO-FORM team understand their product very well and because more and more farmers and tradesmen are using utes they recognised a need for this modernisation. There were 3 main requirements that we needed to build into the design:

 

  1. A lid that automatically opens
  2. An automatic light which comes on when the lid is opened
  3. A central locking system that included the lid of the ute

By working together, our R&D team came up with a solution that met all requirements and has even given the PRO-FORM team the option of opening the lid by remote control or by touch button. The prototype was a big success and we started producing the looms and lights locally at our factory in Auckland.

Pro-form tray and lid with Fero

Due to this success we have begun to look into options for taking some of the production to China. For many NZ companies this would not be a feasible option but because we have such strong relationships with our chinese partners we are able to benefit from the cost downs and pass these on. Currently we are getting samples approved so manufacturing and production can begin.

 

The product has really taken the market by storm and PRO-FORM are now selling this system all over the world, they are even exhibiting at the world’s leading auto trade fair ‘Automechanika’ in Frankfurt this month.  

At Fero we like to think of ourselves as a company that can make things happen and we get excited about helping companies design and build a better product. It’s especially exciting when it’s a New Zealand owned, family run business like ourselves. We are proud that we can help put NZ on centre stage. We know that relationships are key and without such an open and honest environment with PRO-FORM we could never had developed something so quickly.

 

This is what Nick Smith from PRO-FORM had this to say about Fero:

 

Fero and Pro-form

“The whole team at Fero worked hard to develop this solution. They were great at simply listening, and then coming back with a sensible response, on budget, on spec and on time. That’s the beauty of working with a local NZ owned business that share the same goals as ourselves.”

 

So if you have an idea and would like some help bringing it to market then we would love to hear from you.