Seeley International

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The never ending journey of continuous improvement

 

Seeley International was established in Adelaide in 1972 when its Founder and Executive Chairman, Mr Frank Seeley AM FAICD, began manufacturing air conditioning units in his garage. At the time of writing (2014), Seeley International employs more than 370 staff around the world. The Lonsdale factory (South Australia) manufactures a range of direct and indirect evaporative coolers, whereas the Albury factory (New South Wales) mainly produces gas heaters and large industrial coolers. To this day, Seeley International is a South Australian family run business that prides itself on its commitment to innovation and quality products. It exports to more than 120 countries and has won numerous prestigious awards for innovation and design, excellence in manufacturing and export markets, environmental solutions and sustainability. Seeley International is a high value added manufacturer that operates High Performance Work Systems (HPWS) and can be described as a Smart Workplace. Mr Seeley outlined his key operating philosophy as follows:

“We have to automate, and we have to automate like there's no tomorrow. And we have to innovate like nobody else is innovating. Yes, people will tend to copy what we do, but we are out in front of them, and right now we are developing products that are four generations out into the future.”

Mr Frank Seeley AM FAICD – Founder and Executive Chairman, Seeley International

Click on the titles below to read about the strategies and practices that Seeley International has implemented and that define's the company as a Smart Workplace

Seeley International made the strategic decision to be as ‘vertically integrated’ as it could. This means that, as far as is possible, Seeley International manufactures the majority of the components for its finished products internally, as opposed to outsourcing them from other local or international companies. For example, Seeley International manufactures many components using its own plastic injection moulding machines, as well as parts and assembly of motors, pumps and filters, giving the company control over the supply chain and generating a range of advantages.

Firstly, Seeley International can ensure the consistency and quality of the components that it uses, something that is very difficult to do when outsourcing from geographically dispersed suppliers. Ensuring product quality is a key concern for businesses that compete in high value added markets as opposed to price competition in economy markets.

 “We make almost everything here in South Australia because we are focussed on producing high quality, energy-efficient and durable Australian made products. We currently make the most efficient evaporative coolers and ducted gas heaters in the world and we want it to stay that way”.

 Mr Frank Seeley AM FAICD – Founder and Executive Chairman, Seeley International

Secondly, by internalising component manufacture, Seeley International can maintain consistency in price paid for components, insulating itself from global price fluctuations and the changing value of the Australian dollar. Moreover, given the huge purchasing power of its multinational competitors, vertical integration enables Seeley International to produce its own components at a competitive price whilst maintaining the highest quality.

The third advantage of vertical integration for Seeley International is that the company is more responsive to fluctuations in product demand as it can immediately produce more or less components as required, rather than negotiating with suppliers and transporting components to its manufacturing facilities; the logistics of which can be both costly and time consuming. This allows Seeley International to operate in a ‘just-in-time’ manner reducing in-process inventory and associated costs.

Seeley International invests greatly in research and development and product innovation. Mr Paul Proctor, Managing Director, Seeley International, stated that for SMEs (Small and Medium sized Enterprises) like Seeley International there is little point in trying to compete on cheaper products produced by multinational corporations due to their huge purchasing power. Rather, Seeley International’s business strategy is to compete on a range of high quality, innovative and efficient products. As such, Mr Proctor emphasised the importance of innovation for the company, describing it as a continual process, as once Seeley International brings a new product to the market, someone will eventually replicate it, so the company always needs to be at least one step ahead. In fact, Seeley International is considerably more than one step ahead. Mr Frank Seeley AM FAICD, Founder and Executive Chairman, Seeley International, described innovation as “the lifeblood of the company” and as such, Seeley International employs a team of 25 to 30 engineers dedicated to product research and development. Furthermore, Mr Seeley formed a separate group called ‘Imagineering’ utilising the very best engineers and innovators to focus on developing products and ideas four generations into the future.

 “We’ve got more ideas and more projects than we have engineers, and so we have never got to a stage where the engineers are sitting around doing nothing”.

Mr Paul Proctor – Managing Director, Seeley International

Since 1981, Seeley International has embarked upon a process of increased automation of its production processes to improve productivity and remain globally competitive. Mr Frank Seeley AM FAICD, Founder and Executive Chairman, Seeley International, explained that automation is essential as “machines can do things so much cheaper, quicker and better than people can”. In the past, each machine required one operator, whereas one operator can now look after three machines. One key investment was the purchase of a number of robot arms, some following the closure of the Mitsubishi plant in Tonsley Park in 2008, which allows components to be moved from one machine to the next quickly and efficiently. Contrary to some opinion, automation actually doesn't result in job losses, because making manufacturing more efficient enables the company to be more competitive in the marketplace, and as the company continues to grow and production expands, employees can be up-skilled and trained in other areas.

There is a clear distinction between hard and soft automation. Hard automation repeatedly undertakes the same task, each time producing identical components to the same specification. Soft automation, on the other hand, can be re-programmed quickly and efficiently to undertake different tasks and produce components to different specifications. Whilst there will always be a requirement for both hard and soft automation, Mr Seeley explained that the company has invested greatly in soft automation allowing it to adapt and change short production runs to cater for fluctuations in demand for the range of products produced. Mr Seeley stated that:

 “You can’t just invest in hard automation, you need to be able to go with the flow, change from one product to another and therefore soft automation is absolutely essential to the future of our business and the jobs of our people”.

Advanced production technologies require fewer workers to operate them, as such the number of components produced per operator increases and productivity improves. Productivity can be described as the ratio of output to inputs in production. Seeley International has seen huge increase in productivity with the introduction of new production technologies with Mr Paul Proctor, Managing Director, Seeley International, reporting an increase in (financial) turnover of 50 per cent over the preceding six years.

It can be argued that when such technologies are introduced, fewer employees are required resulting in an increase in unemployment in the local area. However Mr Frank Seeley, Founder and Executive Chairman, Seeley International, claimed that this has not been the case as productivity improvements allowed for expansion and so, employees have been re-trained and moved into new areas of production. Moreover Mr Paul Proctor, Managing Director, Seeley International, described how the composition of the workforce has changed and become more highly skilled to be able to operate and re-program the new technologies. Mr Proctor said that:

 “Instead of having 280 employees out of 380 pressing buttons or driving forklift trucks, we now have a smaller number of highly skilled operators but a considerably higher number of engineers, we used to have 30 and now we have over 50, as well as research and development and back-office people like sales and marketing ... it’s become a more skilled and flexible workplace”.

Creating an open and inclusive company culture is a priority for Seeley International and permeates every level of the business. The purpose is to make employees feel ‘part of the Seeley family’, building commitment and loyalty to the company. This generates an environment where employees want to contribute to the success of the company and are more likely to make suggestions to management about how improvements can be made on the shopfloor. These feed into Seeley International’s formal Continuous Improvement program (see next title for detailed description). Two things that really stand out at Seeley International that help create its inclusive company culture are first, visible and approachable management and second, effective management communication.

Seeley International operates a relatively flat management structure from the Managing Director, to the Production Manager, to the shopfloor, making management less threatening and more approachable to employees. All managers and team leaders are trained to lead by example, get to know their employees and encourage them to communicate their ideas.

To ensure that employees do not feel isolated and can visualise how their work impacts upon the wider organisation, management at Seeley International communicate an array of information to the shopfloor, from high level company decisions and performance data to output targets, training programs, employee suggestions and improvements to production processes. The Production Manager highlighted some of the ways Seeley International communicates information to the workforce:

 “The production manager and quality manager meet with team leaders every morning. Team leaders then have a 10 minute meeting with their team members. There are also a number of forums and biannual factory meetings … we make use of a few prominent notice boards that show output and performance and continuous improvement suggestions made by workers”.

Seeley International operate a well-established Continuous Improvement program on the shopfloor that focuses on generating efficiency improvements in the production process, how work is undertaken, health and safety, productivity, quality and reducing waste. A formal ‘problem solving methodology’ is in place that encourages employees to identify how things can be improved. Employees then work with their team leader and management to come up with ideas, put a fix in place, measure the results, and then confirm these results.

In the last six years, Seeley International has implemented over 1300 improvement projects suggested by shopfloor employees, with savings estimated at over $650,000. All improvement projects, completed and ongoing, are presented on the notice boards on the shopfloor and ownership is given to the employee who made the suggestion. Mr Paul Proctor, Managing Director, Seeley International, noted that as workers’ confidence increases the projects they suggest, and the savings that can be made, get bigger and bigger. Twice a year each team presents a review of the projects they have enacted over the preceding six months to the whole workforce, shareholders, directors and the management team. Mr Frank Seeley AM FAICD, Founder and Executive Chairman, Seeley International, described this as:

 “Incredibly valuable for employees in feeling valued for their ideas as well as sharing them with other teams across the shopfloor”.

Production workers at Seeley International operate in teams. At the Lonsdale site, for example, there are ten main production teams incorporating up to six employees. Mr Frank Seeley AM FAICD, Founder and Executive Chairman, Seeley International, explained that team-working is used first to create a sense of ownership over a specific part of the production process and, second, to provide a voice for employees through team meetings.

Team working is an effective way of getting employees to work together and to build loyalty and commitment. Furthermore, it gives the team ownership of a part of the production process or the production of a specific component. Teams are therefore more likely to take responsibility for meeting output and quality targets and making suggestions for how improvements can be made. Team meetings give the team members the opportunity to make such suggestions and share experiences.

 “Team working takes 10 times the effort and the skill, but if done correctly you get ten times the reward … the problem is that hardly any companies do it right and that’s why communication and good management are so important”.

 Mr Frank Seeley AM FAICD – Founder and Executive Chairman, Seeley International

Seeley International has invested considerably in new production technologies and so has systematically up-skilled its workforce. The company is also committed to training employees to undertake tasks in different areas around the shopfloor (multi-skilling). Seeley International sees multi-skilling as a key performance indicator that contributes to the wider business strategy and so, employees must work their way through a skills matrix which is directly linked to their pay, meaning the more skills they acquire the higher their pay.

Multi-skilling is particularly important for Seeley International as it is very vertically integrated. This means that, as much as is possible, the company produces all the components for its finished products internally rather than outsourcing from component suppliers (for example plastic injection mouldings, motors, pumps, filters). As such, jobs around the shopfloor can vary considerably and fluctuations in demand for different components means that employees are often moved into different roles. The flexibility that multi-skilling brings makes this possible at Seeley International.

Seeley International operates a workforce model, often referred to as the ‘flexible firm’, which uses a ‘core’ of well-trained multi-skilled permanent employees and a ‘periphery’ of less skilled casual workers who perform more repetitive tasks to meet fluctuations in product demand. Mr Paul Proctor, Managing Director, Seeley International, claimed that casual contracts were also indirectly used as an effective way of screening casual workers for permanent jobs in the core workforce. He stated that:

 “We rarely have to recruit externally for permanent shopfloor positions as team leaders identify enthusiastic casual workers who fit in well with the company culture and we make them permanent … it's less risk for us, we’ve seen them working and we know they are good”.

Flinders University, Australian Industrial Transformation Institute (AITI)