Growth by Design: The Actronic Story Having Engineered Its Way into a Leading Global Role in Its Niche Market, Auckland-Based Actronic Is Now Busy Redesigning Its Own Mindset. Why Does the Company No Longer Just See Itself as a Kiwi Exporter and What Is Its Recipe for Growth?
Jayne, Vicki, New Zealand Management
Actronic has already made the grade as a successful Kiwi exporter. Its hydraulic weighing equipment is a market leader in major overseas markets; around 95 percent of its income is derived offshore and in the past four years its annual revenue has doubled to $20 million.
Now in its 30th year, the company is deliberately designing itself for a whole new level of expansion. Buying back the rights to distribute one of its major products, Loadrite, three years ago started its shift from primarily a manufacturing/ engineering design house to a company with global reach to end consumers.
"I guess the company had come to a crossroads," says CEO Mark Templeton. "We had new investors on board; there was a feeling the company could become truly global and notch up some pretty impressive growth."
That meant getting a better grip on where markets were heading, out-thinking competitive forces, building a better sense of connectedness with end customer needs and strengthening distribution channel partnerships.
"To grow we had to be able to expand not only geographically but extend our product range and move into new market segments."
That presented a real challenge to the company's existing distribution channel which mainly comprised smaller owner-operated companies that were strong on the technical side in terms of installing and supporting product and mainly focused in what has been Actronic's primary markets--quarrying and mining. Expanding its market network in a way that enhanced rather than weakened the company's connection with its end customers was vital.
One of the tools the company chose to help meet growth challenges was the "Better by Design" programme promoted by NZ Trade & Enterprise. Launched in 2005, it coincided with the company's need to focus on new growth drivers, says Templeton.
"It was really timely for us. Sometimes these things are a bit flavour of the month but in our case it fitted well with the stage of development Actronic was at and the changes it was looking to make in its culture. We put several of our people through the programme and built it into our strategy."
One of the aspects of the programme that really gelled was its strong focus on designing for end customer needs. It's why Actronic software engineers can often be found behind the wheels of front-end loaders--exploring how their products are used and how they can be improved.
"Our engineers are put in face-to-face contact with customers--not just those who are doing the buying but those operating the machinery--because that's really where the design process starts," says Templeton.
"We spend a lot of time looking at how an operator actually drives the machine, ergonomic issues, how our products might make the interface between operator and machine easier--even re-thinking what the product is there for and how its function could be delivered in different ways."
Or how that function could be extended in a way that meets broader customer needs. For instance, with quarry operators being squeezed by rising energy costs and industry consolidation, there's a much stronger emphasis on productivity and that provides an opportunity for Actronic to expand its market space, says Templeton.
"Instead of just supplying a customer with weighing scales, we can provide an integrated load-out management system that is pretty much all automated with a reporting capability that allows the quarry manager or someone in head office to monitor on-site productivity. What we can offer is not just a weighing tool but a productivity tool."
That's the change in thinking that emerged from looking at its product much more from the customer's viewpoint and putting effort into understanding trends taking place in the industry, says Templeton.
One of the other aspects of the Better by Design programme, he says, is its cross-disciplinary approach--in other words it encourages different functions within the company to pool their efforts rather than work in silos. …