25 March 2013
2013 sees Compac celebrate 30 years in operation. With a passion for building beautifully engineered products and a great team making it all happen, it’s easy to see why Compac is still going strong.
As a way to mark the occassion we decided to ask Compac’s Owner, Richard Bates, about Compac: past, present and future.
I was running a subsidiary of the Auckland Gas Company called Auto Fuel Systems installing CNG filling stations. Not feeling particularly supported, I received inspiration driving around the waterfront one day to set up my own company and Compac Industries was born.
I am an engineer and at that time my previous experience was in the refrigeration industry. I had some friends manufacturing refrigeration equipment. They were great engineers but not so good at sales and marketing so I sold some of their products on commission. I also got some design and writing specification contracts. My big break came when customers from Auto Fuel Systems started ringing me up at home because they were unhappy with the customer service provided. I was able to help them and business flourished.
The trick to manufacturing in New Zealand is to have unique advantages to your products in functionality, design and cost of manufacture. You cannot make the same product as a large offshore company and hope to compete with a high or low exchange rate. The key to having those advantages is to have really clever staff and use their combined talents. No one person is clever enough to do it alone. Compac has a lot of collective wisdom and knowledge and our development processes successfully harness that.
The challenging part is the rate of rise of the exchange rate. The actual rate itself is only reflected in labour costs. A rising exchange rate causes locally supplied material to be more expensive than offshore competitors as the local supplier will have paid for the raw material at a less favorable exchange rate.
We do get some parts manufactured offshore. Initially this was very challenging as the drawings and specifications have to be perfect. Plus you have to find a quality assured company that can deliver.
It is important to have the final assembly and quality control in New Zealand as that is where we live. You have to control the quality. If assembly is done by someone else you loose control and never know when a problem will arise.
It is more fun. We have a really good team. We have really good designs and products. We have really good manufacturing systems. We have a good bottom line. The black ink award.
Try and have such good products that they sell themselves. If your products are really good your existing customers keep buying and hopefully they tell other potential customers.
There are two things that really come to mind.
Our products are beautifully engineered. I can look at any Compac fuel dispenser in our factory or on site and see cleverly designed meters and components laid out as simply as possible with neat wiring. Each product is a masterpiece.
We also have really good systems at Compac. We know the costings of our products are accurate. We get very good reports that highlight any issues well in advance.
One learns over the years from adversities. The trick is not to make the same mistake twice or more. If you are not getting the result you want you won't get a better result from keeping on doing the same thing. You have to come up with a better way. It is important to have staff that are clever and empowered to continually think of better ways.
It is easy to be clever in hindsight and wish for different decisions and outcomes but the mistakes over the years have honed our systems into "The Compac Way". So in short: no regrets.
Firstly you have to make products that customers actually need - not what they say they need. You have to be able to produce those products for a lower cost, with unique features and better engineering than your competitors. If you can't do that with a product then you have to get rid of it.
Secondly, the system Compac uses for choosing development projects is collaborative and driven by the bottom line. No one person, including myself, calls the shots. Each major decision is collaborative and 100% agreed upon by the top management staff without any bullying or dominant personalities.