One of the key companies serving the manufacturing sector, SICK Australia , is currently marking 25 years in Australia, and General Manager Peter Horman believes that the company is charting the right course for the future.
SICK Australia, a subsidiary of multinational SICK AG Germany, is Australia’s largest provider of sensors for factory automation, industrial safety systems, automatic identification and laser measurement systems, and analysers and process instrumentation.
The Australian subsidiary also serves the New Zealand market. “I think we can say that every factory of a significant size in this country has some SICK equipment,” says Horman.
“We have 17,000 companies in our database, of which 8,000 are active at any given time. Given the intense competitiveness of the field, we are pleased with our position: about 30 per cent of the Factory Automation Sensor market, with about $30 million in total product sales."
“Our nearest Sensor competitor has a turnover of perhaps $5 million. However, there is an army of small players. In a way, that’s good: it means that you can’t afford to get complacent.”
Horman, who will soon step down from his position, notes that SICK Australia began in 1982 with himself and one employee, but it was a case of having the right products at the right time.
“The Australian manufacturing sector, under pressure from stiff international competition, was shifting from labour-based production methods to techniques based on automation,” he notes.
“That meant there was a strong need for high-quality sensors, and SICK in Germany was a leader in the technology. It developed the technology for moving from white-light sensors to infra-red sensors, as well as the first bar-code readers for the pharmaceutical industry, for example. It was infra-red sensors that really put us on the map in Australia, when we were first getting established."
“Sensor technology is something of an invisible player in the manufacturing sector. But then you look at, say, all the products in a supermarket, and you realise that every one – even, in fact, every label on every product – is there because a sensor did its job in production, storage, and transport.
There is a very wide range of sensor products, from vision sensors to proximity switches to light grids. The biggest use of sensors is in packaging machines, conveyance systems, and the like – anything where there is high-speed movement of products.”
Aside from sensors, SICK Australia is market leader in logistics-related technology. “In the freight industry in Australia, there is a system change under way that allows shippers to choose to pay on the basis of either volume or weight,” Horman says.
“We provide equipment which allows for very quick comparison to find the most cost-effective choice. We have sold over 30 volume-measuring systems since last July, and we were the first company to win standards approval in the area. This is a very big issue for everyone from airlines to major retailers.”
He notes that SICK provides a range of RFID reader systems and related equipment, but he sees limitations on the technology, mainly due to cost.
He acknowledges the value of RFIDs in their capacity to contain a great deal of information, especially relating to manufacturing processes and complex transport issues. But he does not believe that RFIDs will supersede bar-code technology any time soon, although SICK is keeping a close eye on developments in the field.
SICK is also continuing to develop laser measurement systems for bulk scanning and people counting, as well as specialist tools for airport luggage control systems.
“Overall, it is the food industry which is the biggest user of our products, looking from the manufacturing side through to the packaging and the delivery end,” Horman notes.
“But all companies are increasingly concerned with logistics and supply chains, even down to how many parcels can fit on a particular truck or go into a certain storage area. This needs precise measurements of volume and weight, and our identification and measurement systems have an important role to play in getting the best from logistics management."
“Another part of the new emphasis on logistics is that no-one wants to hold a lot of stock. Everyone in paying more attention to issues of transport control. Logistics is the area that I see as having the most significant growth potential for us.”
SICK Australia has also ridden the demand for automated safety equipment. One of the first patents won by the company founder, engineer Erwin Sick, was for safety light curtains, in 1950.
The main uses for safety light curtains have been with presses and guillotines, so that the machine automatically shuts down if a photo-electric barrier is broken.
SICK also provides safety interlocks, safety sensors, and laser area scanners. “Safety in Australia used to be a pretty haphazard affair,” Horman says, “and the national record was pretty bad. In the 1980s, several state governments, led by Victoria, started to draw up rules and standards, and that meant companies had to look for solutions. We worked with the regulatory authorities on what the technology could offer, and came up with some answers. Using equipment like this means accidents can be prevented, rather than putting something in place only after a person had been injured or killed. In fact, we were the first company in Australia to provide safety light curtains in this way, and one of the first in the world."
“Safety used to be seen as a cost, but gradually things have turned around so many companies are seeing it as an investment. You put in safety equipment to protect your people, and also to protect the company from liability claims – and that also feeds through to premium levels. Our preventative safety equipment is a big part of that.”
Horman also sees environmental analysis as an area of growth for SICK Australia. “SICK had the first monitor for measuring smoke and dust in chimney stacks – that was one of the very early products that Erwin Sick developed,” he says.
“As the environment becomes a more significant public concern, demand for gas analysers, dust monitors, and emission control systems is likely to increase – it is already a very big issue in Europe, and SICK in Germany is a leader in that field. So we can draw on that experience and technology.”
SICK Australia recently acquired Gas Analysis Systems Australia, formerly Maihak Australia, as a means of increasing its involvement in this area. This will be the first manufactured products in Australia for SICK with custom made extractive gas analyser systems.
Reasons for success
Although SICK Australia is a subsidiary, Horman notes that the parent company has never sought to interfere in local management matters.
“They have always respected our position as market leader in Australia,” he says. “In fact, there are times when they have used SICK Australia as a sort of testing ground. When SICK Australia was starting up, the head office encouraged us to represent some other companies that produced particular products. When we showed that we could do that, SICK eventually moved directly into those product areas, either by acquiring the companies or by taking up the technology, not just in Australia but around the world.”
Horman identifies a move from third-party distributors to directly-employed sales representatives as a key reason for the success of SICK Australia. This allowed for the creation and cultivation of personal relationships with customers, and sales representatives make a point of providing demonstrations of new products to clients on a regular basis. Participation in trade shows and industry exhibitions are also important in maintaining the company’s profile.
“SICK Australia is now showing subsidiaries in other countries how to build effective sales networks,” says Horman, who sits on the board of SICK companies in China, Taiwan and Singapore. “This is especially important when you are a late entrant into a market. The global nature of the SICK group is an added advantage. Aside from the good reputation, it means that there is a network to trade information about standards, equipment, and solutions. That’s very important in a linked-up world where technological quality is paramount.”
“An advantage that SICK Australia has over its competitors is the range of products. In Australia, we have over 30,000 items in stock, from low-cost sensors to very intelligent, vision-based technology – and we can always go the SICK head office if a customer needs something that we don’t carry in Australia. That means we can provide a product for every purpose, across the range of a customer’s activities. We call it a ‘full basket’ solution, and it is in contrast to competitors who have a more limited range and have to try to fit what they have to the customer’s processes. That’s when mis-applications and problems happen.”
According to Horman, the next generation of products in the sensor line is vision control, using camera-based monitoring systems. The problem at the moment is that they are too slow, due to the huge amount of computer power required for frame-by-frame analysis. But SICK is undertaking a great deal of R&D to deal with these problems. Another path forward is loading more computer technology directly into sensors themselves, allowing sensors to become more sensitive and discriminating.
“This is where things are going, I think,” says Horman. “And it’s where this company has always had it’s strength. It’s about applying technology to processes and systems. It’s about coming up with a smarter way to do things, and then going forward with it.”