John Russell sometimes sounds as if he cannot believe that in 25 years his Toowoomba-based firm has grown from a one-person operation to a company employing 175 people and holding the lion's share of the global mining technology market.
But he has no doubt the growth of Russell Mineral Equipment Pty Ltd (RME) is due in part to assistance received from QMI Solutions. RME specialises in designing, manufacturing and servicing systems for relining mineral grinding mills, used by mining companies to process mineral ores into concentrates.
From its Toowoomba headquarters, RME operates in key mining markets globally, across all continents. Russell, a mechanical engineer and RME's Managing Director, said the company held about 80% of the world market for mill-lining technology and had a $A45 million annual turnover.
RME had successfully identified an opportunity in a specialised market requiring a range of new technologies that cut costs incurred by mining companies when shutting grinding mills for liner exchange maintenance. "The life of the liners inside the mill dictates when a shutdown is going to occur. The relining function defines the critical path – the length of the shutdown," he said. "By being able to control those variables (timing and length) RME customers can liberate extra mill operating time each year, meaning increased production of saleable product. Shutdowns at especially rich mine sites can cost up to $500,000 an hour in lost production. Once a mill stops, so does the mine's cash flow," Russell said.
RME's competitive advantage was its suite of custom made mill relining technologies. "From a mill relining machine capable of precisely placing liners weighing more than seven tonnes, to RME's Thunderbolt range of recoilless hammers delivering up to 1,500 joules of energy, to hand tools for guiding hammers and picking up worn liner remnants, the RME mill relining system is an integrated system," Russell said.
"We have mechanised every process with huge benefits for mine site profitability and crew safety." Russell launched RME after feeling the need to control his own career path. "I graduated as a mechanical engineer from the then Queensland Institute of Technology in 1979 and went to work in Mt Isa for Mt Isa Mines Ltd (MIM) from 1980 to 1985," he said. Although he enjoyed working at MIM, Russell observed that, in a large organisation, more and clearer career paths were open to management personnel, compared with those involved in technical pursuits.
Russell's answer was to open a small company jointly owned with his wife, Dr Felicity Rea, a Toowoomba GP, which developed technical drawings for solutions to mining engineering problems. In its early days in the mid-1980s, RME was a small outfit. "It employed me, me and me," Russell said.
By 1989, RME had employed a draftsperson and a second engineer. But RME's initial business model was not quite right. "I had developed a reputation at MIM for solving problems. However, I found customers didn't want to buy drawings, they wanted to buy the hardware to physically solve the problem. They wanted to buy the whole solution." That was when Russell decided RME had to develop, design and manufacture its own hardware.
As the company grew, it benefited enormously from QMI Solutions' expertise, advice and assistance. "Since 2000, we have had a lot of contact with QMI," Russell said.
QMI's first involvement spanned several years, when it helped RME source technology for cutting high tensile steel fabrications using high-pressure water cutters.
RME later undertook a Manufacturing Microscope exercise with QMI in 2006, something Russell describes as "a fascinating process". "The management team came together and responded to what were seemingly qualitative questions about the company. Answers were in a five-point format from 'strongly agree' to 'strongly disagree'. It's a process that gives very specific results and plots where you are in the world of manufacturing. At that time, we had some fears we would come out as 'highly inventive' but also 'at risk' because we were lacking in systems," he said.
The Manufacturing Microscope results rate a company's performance and practice out of a possible score of 100 and plot both criteria on a scale. The most desirable spot was the top right-hand corner (80/80 and above), where "worldclass" organisations resided.
As it turned out, the exercise put RME at a respectable position of 70/66. A follow-up Manufacturing Microscope allocated RME a score of 74/70 and the company is looking forward to seeing further improvement in its next Manufacturing Microscope.
In 2007, QMI suggested RME adopt an enterprise resource planning (ERP) system to draw all elements of the business's administration together, including sales & marketing, inventory, human resources and financial management. Russell said QMI helped RME select a suitable ERP software package.
"It is an enterprise-wide database. The initial 12-18 month implementation phase was difficult and expensive, and required careful management. Today, RME personnel are starting to love it for its comprehensiveness."
Russell said RME also had benefited from QMI's help in implementing a Value Stream Mapping process to assess and improve production flows. Adopting Lean Manufacturing principles allowed RME to "do more" with its internal resources and minimise waste through the production process.
"You can have a lot of dramas when you are making a special machine. Say, a special bolt can't be located or some other little thing has gone missing," he said. "But, with QMI's help, and changes to factory processes, the time and effort we were unknowingly expended by controlling all those components just disappeared."
Implementing the 5S housekeeping system, under QMI Solutions' guidance, meant tangible benefits had been achieved by encouraging the company to:
- sort – sort and remove unnecessary items
- set in order – a place for everything and everything in its place,
- shine – clean the work area
- standardise – establish rules and standards
- sustain – maintain the standards in a disciplined way
"The 5S system is a precursor to Lean Manufacturing. It basically involves a big clean-up of the work place," Russell said. "If your personnel can't handle the discipline of 5S you should reconsider embarking on the Lean Manufacturing journey."
RME's use of the Stage Gate system since 2009, with QMI's help, has also paid dividends. Stage Gate is a process to manage R&D spending. "We invest up to 4% of our turnover on R&D so it's essential to spend it well. RME has many opportunities [for new products] but not all will be commercial winners."
Stage Gate is a stepped process, allowing a firm to determine whether an R&D project is worth taking to its next stage. "Each stage gives you the opportunity to make an informed decision about if and how to continue the product development process," Russell said. "It's good for [a project] that is a 'dead duck'. Without the process, few people can say 'you're a dead duck'."
Russell said RME's involvement with QMI had resulted in a process of continuous improvement. It had also paid off in human terms. "Since we began the Lean Manufacturing journey, it's so much more relaxed inside the company itself," he said.
Processes and systems introduced by QMI to RME have enabled the company to manage growth and achieve its goals. "When you have a company growing from one person to the size we are, it cannot happen just by multiplying the way you do things when you are, say, 20-strong," Russell said.
"Now, with 175 staff, there are a lot of better ways to do things. QMI has helped us to mature as a company, setting RME on a transition path from being an entrepreneurial technology company toward becoming a small, secure, well-managed corporation."
For more information or advice, please contact:
Consultant: David Pettigrew
Phone: +64 7 3364 0700
Email: info@qmisolutions.com.au