After demonstrating the ability to adapt to ever-changing industry conditions throughout more than two decades in business, Victorian manufacturing company JBO Engineering is now setting its sights on sustained growth.
Jeffrey Owen founded JBO Engineering in 1994. Jeff had previously been a toolmaker, and his business initially specialised in that area. The company was making a lot of rubber moulds in the early years and ended up buying a CNC mill to help with production. However, it soon became clear that there was a lot more work in production machining than in toolmaking.
“We decided it was time to perhaps change our outlook a bit, and we shifted from a toolmaking environment to a production environment,” says Jeff, today JBO’s Managing Director. “That was about 18 years ago now. We still make press tools, rubber moulds and plastic injection dies – we just don’t make many of them any more. Nowadays we focus on production machining and manufacturing other peoples’ products.”
That ability to shift focus has also encompassed the markets in which JBO operates. Like many Victorian manufacturing businesses, it initially found a lot of work for the car industry, making production press tools and rubber moulds for three or four companies servicing the automotive sector. Even back in the 1990s, however, it was clear that the cyclical nature of the automotive industry meant it couldn’t be relied upon as a permanent mainstay of the business.
“We decided back then, that wasn’t for us,” recalls Jeff. “Being worked to death for a couple of years and then left alone for three or four did not suit us. And some of my original customers, while they were tied up to the auto industry, also had other sectors: domestic products, white goods manufacture and so on. We realised there was a much bigger toolmaking world out there, other than the automotive industry, and we decided back then we had to move away from that.”
Instead JBO began seeking work in sectors such as pharmaceuticals and telecommunications. While it was still making rubber moulds and production tooling for domestic products manufacturers, the arrival of that first CNC mill opened up more and more opportunities.
“People would come and ask could we make 10 of these, 15 of these, 100 of this,” adds Jeff. “And we realised there was quite a vast market of work there that was more consistent than the toolmaking work. Within 18 months we bought a second machine and we were progressing along quite well.”
Today JBO employs five full-time staff at its Kilsyth plant in Melbourne’s eastern suburbs, with a bank of casuals that come and go as required. The company specialises in CNC milling and turning, producing components for clients from across the entire gamut of Australian manufacturing. It hasn’t actively pursued export markets as yet – aside from one customer in The Philippines – though its diverse customer base means a significant percentage of its product does finally end up overseas. It still machines a lot of components for the domestic products, telecommunications and pharmaceutical sectors. It also makes parts for motorsport and the audio sector.
“We do a lot of mining components for one customer; he’s like a middleman to the mines. I don’t deal with the mining companies directly, I deal with him and he services them. We do a bit of defence work through the same gentleman. We’re not tied to one specific sector.”
Delivering for the customer
Jeff believes that the key to success in Australian manufacturing these days is the ability to turn jobs around quickly. “There’s not a lot of lead time in any job anymore. You’ve got to be able to respond quickly. To respond quickly you’ve got to have good people, and reliable equipment. If you haven’t got reliable equipment and people, you can’t do anything.”
Having a diversified set of customers is another factor, ensuring that the company is not left vulnerable to market variations in specific sectors.
“We try and maintain a good balance of customers in different environments,” Jeff says. “And good relationships with the people you work with, both customers and suppliers. We have very good relationships with our suppliers so we can get material quickly. They’re vital.”
JBO takes an active approach to building new business relationships and pursuing new opportunities for exposure. This year the company participated in the Austech 2017 exhibition in Melbourne, where it had a stand within the Manufacturers’ Pavilion section. According to Jeff, it was an interesting, very rewarding experience.
“As a small company, obviously it’s a big commitment of time to be there for the four days,” he explains. “But I thought it was a very good experience. We’ve had a couple of positive leads from the show. In fact we’ve already delivered one job from the show, and we’ve got the next job for them lined up ready to go. So it’s been a good outcome – really good.
“It was good to see so many other small companies, there. I got to meet a lot of similar-sized businesses, some bigger, some smaller ones, and having discussions with them, we all seem to face similar sorts of problems. The ability to network and meet other people was great.”
That emphasis on forging new relationships is not just about winning new customers, but also about seeking out opportunities for collaboration. Finding ways to co-operate and pool resources to achieved shared benefits is crucial according to Jeff, both for his business and the industry as a whole.
“It’s become vital in Australia,” he says. “You have to rely on other people who have a certain expertise. You do what you do well and they do what they do well. Work together rather than try and cover everything in one shop. Collaboration between companies is the way forward for Australia.
“We have a network of people we work with already. We have done for years. There’s certain types of work that does not suit us any more, that we outsource to trusted colleagues. You can’t cover every base any more. It’s hard to get the right skilled people, so we use the expertise of others that we work closly with.”
Prospects on the horizon
Jeff acknowledges that Australian manufacturing has been through a run of hard years, but he believes the conditions for the industry are looking more optimistic than they have in some time. Moreover, those companies that have survived the downturn, such as JBO, are well placed to grow now.
“Our whole manufacturing sector has shrunk. There’s no two ways about that, but I think those that are left have learnt to be adaptive and to try different methods and techniques to remain competitive. The companies that have survived have survived for good reason. And that’s because they’re always trying to improve their process. For companies that are prepared to invest in better technologies and better processes and think outside the box, there’s always a market.
“With the Australian dollar being down, like it is now, it has opened up the world to us again. Back when it got up to near-parity, that’s not maintainable for Australian manufacturing. With the dollar down, I see good opportunities, not just in Australia but outside Australia.”
With regard to where the industry will be in five or 10 years’ time, Jeff is cautiously optimistic: “Hopefully it’s booming! But I think it will have shrunk. There’s no hiding from that. There’s still a lot of uncertainty based on what’s going to happen with the automotive closures. But a lot of businesses have already moved out of those markets anyway. I think the industry will be smaller than it is now, but it will be stronger. There’s a lot of opportunity for export, and with the growing population there has to be further infrastructure projects and flow-on effects for manufacturing.”
Meanwhile, JBO’s current plans are focused on building on those strategies that have been working successfully. While the company has never shied away from taking on new markets, Jeff isn’t focused on further diversification unless there is sound a case for it.
“I don’t think we can afford to be too diversified, because I don’t think you can service any one area properly,” he explains. “We’re certainly looking to expand the customer base, but in areas where we do well. Our focus in the next 12 months will be getting ISO accreditation to help open up other markets which at the present are not available. And we’re looking at the implementation of another machine. We have the space so we’re discussing what that will be – another turning centre or another milling centre – maybe both!
“We’d like to expand further this year. We’ve grown 15% over the last financial year and we’d like to see at least that again this year.”