Arena Engineering create opportunities through diversification

A Townsville-based engineering firm says it has secured the biggest fabrication contract in its 20-year history, plus ongoing employment for its staff in tough economic times, thanks to the guidance and support of QMI Solutions and its Industry Capability Network (ICN) division.

Michael Arena, Managing Director of Arena Engineering Pty Ltd, said work by QMI Solutions and ICN Queensland had enabled the firm to bid for and win a major contract with the organisers of the inaugural Townsville 400 V8 Supercar race on July 10-12, 2009.

His company has won a tender to supply the steel debris fence that sits on top of concrete crash barriers lining each side of a circuit running more than 3km through Townsville streets. "The fence is in modular form and constructed in segments that are each 3m-4m long and of various heights," Mr Arena said.

"They need to be made in prefabricated modular form for ease of installation and storage." He said Arena Engineering was also making storage units that could house up to 20 fence modules. Mr Arena said his firm undertook work for the mining industry, earthmoving companies, refineries and the aerospace industry. "We are accredited to undertake aerospace work, manufacturing and certifying aircraft parts and equipment," he said.

Arena Engineering was originally established in Mount Isa, where Mr Arena moved to work as an instructor of apprentices with the then Mount Isa Mines Ltd. While helping out in a friend's engineering workshop he realised he could run his own business. "I saw the potential there and decided to set up my own business. Back then we were more of a one-man band. There was me on the tools and I had one or two other tradies helping."

In 2000, after running a business and living in Mount Isa for 17 years with his wife and family, the children were at stages in their schooling that made a shift possible, so they decided to move to Townsville to seek bigger markets. "The timing was good and we wanted to step the business up," Mr Arena said.

"We literally unbolted all the equipment we had at the time, put it on trucks, built the shed [in Townsville] and moved in." The firm's staffing level varies, but is usually around 14, including three apprentices, two of whom were engaged on the strength of the Supercars contract. Employees include people with fabrication and boilermaking skills and the ability to use high-tech computerised design and manufacturing equipment, plus administrative staff that includes his wife and fellow director Deborah.

Mr Arena said his firm's selection as the supplier of debris fences had its origins in a visit to Arena Engineering in early 2007 by Mario Martini, manufacturing specialist for the QMI North Queensland Service (QNQS). Mr Martini said QNQS was a specific initiative of the Department of Tourism, Regional Development & Industry (DTRDI)/QMI Solutions partnership that serviced manufacturers in a region stretching from Mackay north to Cairns and west to Mount Isa. His role was to meet with businesses and identify potential for assistance through DTRDI's Best Practice Support Program to implement world's best practice in managing manufacturing operations.

Mr Martini said working in facilities and operations management and in the field of chemical and pharmaceutical manufacturing before joining QMI gave him a level of insight into a business's maturity and an ability to gauge general levels of efficiency and capabilities. "At a business principal's invitation I conduct a walkaround. My background in manufacturing allows me to gain the level of insight to ask more specific questions about the business and aim to discern the status of an organisation," he said.

His visit to Arena Engineering with a DTRDI Regional Development Officer enabled them to assess the firm and discuss with Mr Arena the available assistance schemes and the role QMI could play. "It became very obvious to me very quickly that Arena Engineering was a facility in good order and one that had a high level of technical capability. But it appeared they were not fully utilised," Mr Martini said.

The next step was for DTRDI to conduct a more formal examination of the business through a benchmarking exercise known as a Manufacturing Microscope. Mr Martini said the Manufacturing Microscope was based on a detailed, targeted questionnaire enabling a firm to benchmark itself against world's best practice, other players in its sector and manufacturers overall.

Arena Engineering's workshop after 5S

Mr Arena said the exercise was very beneficial. "They came in, sat around the table with our staff and analysed our business, our strengths and weaknesses, and how we fit into the global market," he said. "It was very good and I would recommend it. It looked at where the potential new business was and showed us where improvements could happen in our business. We took that on board and went forward from there."

Mr Arena said that, following the Manufacturing Microscope, the firm undertook one of QMI's ProEdge workshop courses designed to streamline and improve manufacturing processes within a business.

He said one very positive outcome of the workshop was implementing the 5S system that improves overall efficiencies in the location and use of manufacturing materials and tools. The 5S system helped the firm make better use of available space. "It was very helpful because in our workshop area we have limited room for what we are doing," Mr Arena said. "The 5S system helped us reset the workshop and eliminate clutter, giving us a pleasant e nvironment which actually created more space for us."

Mr Arena said the 5S system also helped his business tackle a common problem — "getting rid of stuff you don't need. Most people do tend to get attached to things like an old desk or other old equipment. With 5S that's the sort of stuff you get someone with a fresh pair of eyes to look at and ask if you are ever going to need that old equipment and, if not, let's get rid of it." 

Mr Arena said the end result was to eliminate obsolete equipment to make room for necessary new technologies, including upgraded computer systems and new computer-aided design (CAD) and computer-aided manufacturing (CAM) equipment, and computer-numerical-controlled (CNC) machining tools. The next step in Arena Engineering's development was involving ICN, a division of QMI Solutions that specifically identified and evaluated Queensland firms capable of fulfilling supply or manufacturing contracts associated with major projects or as import replacements.

Mr Arena said Townsville-based Brett Guldbransen, ICN Regional Manager North Queensland, visited to see for himself the firm's capabilities. Mr Guldbransen said his job was to examine a business and determine "its current capabilities and what they are looking to do in the future.

Michael Arena said he would like to develop the fabrication arm of his business," he said. "Then the Supercar project came up and I found out the project managers were looking for fabricators to make the debris fences. They had targeted two companies in Brisbane. But I spoke to the Project Manager and said we had enough capability and capacity to do the job in Townsville, and I mentioned Arena Engineering and three other firms," he said.

Mr Arena said ICN put his firm on a shortlist provided to the Supercar precinct's project managers. "I am very thankful for that introduction, that's why I would recommend ICN," he said. "They ask if you can handle the job and, if you say yes, they then get the client to contact you. You have to win the contract on your own, but the initial introduction is a valuable part of the process."

Arena Engineering's workshop after 5S

Mr Arena would not disclose the exact value of the contract for the debris fence, but said it was more than $1 million and represented "the biggest project we have handled." In the current economic climate "it's been a blessing" by helping to keep staff employed.

"Also, because of the work we have and the way the business is going, I felt comfortable putting on two apprentices and training people for the future," Mr Arena said. The job had also been good for others in the Townsville business community. "We have bought a lot of raw materials locally, including the steel, so we have been able to support other local businesses."

Mr Guldbransen said Arena Engineering had won the job after competing against "two very, very reputable" Brisbane-based companies. "It's a real credit to Michael Arena that he has been able to secure the contract," he said. Mr Guldbransen said because of Queensland Government funding for the race precinct project, contractors and project managers had to abide by the government's local industry participation policies. "But the [policy] wording only says they must offer reasonable opportunities to locals. It doesn't say they must give business to the local companies," he said. "So that's the best part — Arena Engineering has proved to be very competitive."

For more information or advice, please contact:
Consultant: Mario Martinin
Phone: 07 33640700
Email: info@qmisolutions.com.au