manuFACT has responded to the demands of Australian mining companies by navigating cultural difficulties and achieving timely outcomes needed for an offshore manufacturing project.
Newcastle-born mechanical engineer Jonathan Lee has looked to Hong Kong to develop a business opportunity he was convinced would benefit the Australian mining industry.
Lee has become a Hong Kong resident after being inspired by the stark difference in manufacturing compliance standards from Chinese manufacturers when supplying heavy engineered products to Australian mines.
A former Caterpillar senior design engineer and project manager, Lee has developed expertise with equipment and parts that are designed, assembled and manufactured in China.
With Lee’s know-how, he has helped prevent Australian mining companies from suffering from the cost of equipment failure by ensuring operational efficiency and safety from the point of procurement.
Lee’s expertise has led him to co-found a procurement and quality manufacturing company called manuFACT after being based in Hong Kong since 2013.
The Hong Kong-headquartered company comprises a team of seven mainland China engineers who serve Australian companies in their procurement dealings with Chinese manufacturers.
Every manuFACT engineer has bilingual Mandarin-English capability to act as a strategic intermediary that can execute the manufacturing requirements of Australian companies.
Their role is to identify, correct and prevent quality issues during manufacture, as well as overcome any cultural differences that may arise during a procurement project.
This expertise comes on the back of in-depth manufacturing, maintenance and operations knowledge in the mining, rail and infrastructure industries.
“Our project team understands both sides of the table,” Lee, the now managing director of manuFACT, says. “They understand the Australian client and Chinese manufacturer.”
Indeed, manuFACT is backed by a management team that has a combined experience of more than 20 years.
Their past projects range from crushing or milling equipment, underground and surface mining vehicles, longwall systems, rollingstock, processing equipment to conveyor belt systems.
manuFACT services clients including Australian Government departments, Australian and global mining companies, rail operators and engineering contractors.
“One of the big problems in a multi-country dealing is that an (Australian) client will go to China expecting its procurement process is going to be similar with any other country, so they don’t put as much planning in place,” Lee says.
“Sometimes this lack of planning requires senior company leaders to be involved in meetings to iron out the issues, or even cause companies’ fall out from a project.”
These issues span from product quality or compliance, delay in delivery, project status transparency to differences in expectations that can result in added delays, mediation, unplanned concessions and lengthy disputes.
Not only do they affect the equipment with rework prior to commissioning, but they can also hit the lifecycle and total cost of ownership, resulting in unplanned maintenance, operational downtime and reduced extraction rates.
In providing assistance to a global copper-gold mining company that ran into China procurement difficulties, manuFACT carried out a contract and process audit to find that the SAG mill design, material, specifications and standards had not been specified in the contract.
In addition, infrastructure material or welding standards had also not been specified.
As manufacturing of the SAG mill has already commenced, the mining operator was left to rely on the manufacturer’s experience and “best practice” in this situation.
“Our team stated that the manufacturer must meet known standards and the welding be carried out to AS1554.1,” Lee says.
“This was unacceptable to the manufacturer as they were not familiar with ISO or AS.”
Lee says the key to a successful procurement project involves early stage planning and on-the-ground inspection, including data analysis.
“We highly encourage due diligence auditing of the supplier or manufacturer before signing a contract,” Lee explains.
“Almost all Chinese manufacturers will welcome this if the chance of winning the contract is real, and it can be completed in as little as two days.”
“When a contract has been signed and problems start to arise during manufacturing, the implementation of remediation strategies and process improvements can be difficult and time consuming.”
Due diligence auditing and early planning will help reduce any potential cost that comes with variation or modifications that are contrary to the manufacturer’s expectations, he adds.
But it is an impossible task, according to Lee, to get these activities across the line after a contract is signed.
The involvement of manuFACT engineers from early on can help its client identify and iron out such problems on the Chinese manufacturing floor before they arise.
“From a client’s perspective, they are able to achieve levels of transparency and visibility on events occurring on the factory floor in China in real-time, without physically having to be there,” Lee says.
manuFACT’s engineers will be in the factory during equipment manufacture, capturing all non-conformances and quality issues.
This involvement gives manuFACT an enormous amount of data points from which it can identify areas to target and carry out preventative actions to ensure there are no significant delays.
“We have a system that photographs and records every non-conformance as well as project progress digitally and they’re all communicated daily to our client companies,” Lee says.
“You don’t have to fly senior leaders or engineers from Australia to wade their way through the complexities of cultural and language barriers to fix a problem.”
Instead, Australian mining operators can rely on a company like manuFACT, with its team of project managers and in-house inspectors, to mitigate the risk of overseas manufacturing.
This article also appears in the March issue of Australian Mining.