To bolster its competitive edge as a global contract manufacturer, award-winning Nautech Electronics continues to re-engineer its business and rely on Abel® ERP to drive greater efficiency, automation and agility to meet changing market demands.
Managing Director Andrew Turner and his wife, Alison, started Nautech Electronics from their Auckland home in 1989, installing marine electronics and cellular phones. Today, they run a multi-million dollar business with 85 staff that designs and manufactures specialized electronic components and turnkey solutions: from airline products to the electronics that run sirens and lights on emergency vehicles, and safety signals and video screens on racetracks across New Zealand, Australia and the United States.
Andrew credits Nautech’s growth to its strong focus on engineering, design and quality – expertise that’s won both Manukau Business Excellence Awards and Ernst & Young New Zealand Entrepreneur of the Year finalist honors. The company’s long-term success may come down to one critical asset: “Innovation”.
For nearly 20 years the biggest part of Nautech’s business was fitting out the electronics on every New Zealand Police car, up to 70 a month. But the risk of relying on one large specialist-fleet contract led Andrew to reinvent the company as a contract manufacturer offering highly integrated, prototype-to-packaging services to a wider market.
“Our new strategy required a lot of changes,” Andrew says. “Our design and engineering skills were valuable points of difference, but first we had to invest in more advanced technology to ensure we had the flexibility and efficiency to compete with low-cost manufacturing in China.”
Today, inside their purpose-built, 30,000-square-foot facility in East Tamaki, blue-uniformed staff oversee clean-room production lines where high-precision automated machines mount and inspect up to several hundred electronic components on circuit boards. Pick-and-place machines and robotics play a critical role on the assembly lines, choosing the correct components from up to 300 feeder reels attached to the machines like rolls of film.
Installing advanced Surface-Mount Technology (SMT) was only part of the new strategy. The other requirement, Andrew says, was finding a business management system to better manage the tens of thousands of electronic components used every hour on the production lines. Although Nautech has been a loyal Abel® ERP customer for 15 years, Andrew decided as part of the new strategy to also review and test other systems before finally adopting Abel’s Manufacturing Requirements Planning (MRP) along with production scheduling, unique ID codes, barcode scanning, and routing functionality.
“Many other software companies promise the earth with their ERP systems but leave a lot to be desired,” he says. “A high profile competitor to Abel even required that we have a full-time senior accountant to do manual journaling every day. Abel’s functionality has delivered the end-to-end automation, integration and traceability we needed to stay competitive now, and into the future, and our staff found Abel a lot easier to use than any other system we tested.”
About 35 staff now use the system in Auckland and 15 more in Australia, where Nautech operates as a joint venture.
Abel’s most significant improvement, Andrew says, was the automation of Nautech’s materials inventory and handling. With up to 10,000 tiny, sensitive and often expensive SMT components on every production reel, it was critical to manage inventory as efficiently as possible. Abel’s integrated system enables Nautech to:
- Forecast and purchase materials
- Receive stock
- Barcode and load materials into automated storage machines
- Schedule jobs
- Identify required components by job and pick materials
- Transfer stock from raw material store to production lines
- Eliminate production-line paperwork
- Trace every part, component and batch
- Reduce stock write-off and loss
“Abel has made this process faster,” Andrew says. “Some jobs used to take one person two hours to find all the components and now they’re picked and ready to go in 10 minutes. This has contributed so much more to our overall efficiency. Abel knows where every component is and how to accurately schedule jobs that keep our production lines running smoothly.”
All of which helps Nautech better manage the company’s biggest challenge – long lead times for stock.
“We can build anything in two to three weeks but the lead time for materials is typically three to four months and sometimes a year,” Andrew says. “Abel gives us a forecasting advantage. It knows our future production and material requirements and by including our current materials position, it can predict our stock requirements and stock shortages, ensuring we can respond more quickly to customer orders.”
Nautech’s new strategy has proved prescient and profitable. A year after its Police contract ended, contract manufacturing now accounts for 90 per cent of the company’s business and has boosted annual turnover to around $20 million. Nautech is also well positioned, Andrew says, for growing customer demand for prototype to complete boxed and packaged assemblies, like the many products Nautech assembles, inspects, packages and sends directly to their customers.
“As an Abel ERP customer for 15 years, we knew the financials, inventory management and distribution were very sound, the service was good, and that the system was good value and easy to use,” Andrew says. “By deciding to use Abel’s Manufacturing Requirements Planning (MRP), Abel has not only helped us strengthen our competitive edge in New Zealand and overseas, but also given us the flexibility and confidence we need to continue to grow our business.”
As a veteran Central Muscle Car and Bathurst motorsport driver, Andrew knows success hangs on many skills – good planning, strong design, engineering efficiency and quality control. And that the winning formula is not only about outperforming the competition but also driving with an agile eye on the road ahead.