Bruce Davies founded Modtec in the late '70s as industrial design and manufacturing company, although doing more of the latter than the former. Davies' own background is in industrial engineering, working at Bendons as an engineer before starting his own business.
Until 2002 Modtec was primarliy a subcontractor for larger engineering firms such as Gallagher, but seeing a need to diversify and take control of his company's destiny – Davies shifted gears and now runs a 70-strong company developing and producing 90 percent of its own intellectual property. Through its Integ sub-brand, Modtec sells workplace ergonomic equipment such as monitor brackets and laptop trays. It's also expanding into medical and health equipment, including medical beds.
I talk to Davies about the industrial design process, working and selling into markets like China and India, and what opportunities there are from manufacturing in New Zealand.
(Bruce Davies, chief executive and founder of Modtec.)
Why did you shift Modtec away from subcontracting to manufacturing its own IP?
It was for our own security. We wanted to get closer to our customers and be in control of our own destiny.
Can you give me an idea of the revenue the company is achieving manufacturing its own products versus what it was as a subcontractor?
I'd rather not, as you might appreciate that could give our competitors more advantage than we'd like. We're doing well ... It was absolutely the right decision and it's paying off for us.
(Metal monitor arms drying on a rack.)
What is the company doing now that it didn't have the capacity or capability to do in 2002? What new skills have you had to bring on board?
The biggest decision was investing in and hiring a marketing and sales team. We'd never needed one before and it's not my strength, I'm an operations guy. But selling our own wares meant we needed to get out there and sell ourselves.
I knew from the get-go we'd be exporting overseas so we had to engage a professional sales and marketing person with a strong offshore record. Ian Cooper [now Modtec head of global sales and marketing] was involved in Fisher & Paykel's dish drawer unit in the US. We were lucky to find him.
(Modtec's four-strong industrial design team use the same equipment they help create.)
How about designing, building and testing your own products – what changed when you started selling your own ideas?
We went through a transition where we brought in grads who were working with our trade guys. They learned from each other and it became a situation where the total was greater than the sum of the parts.
Do you still have relationships with local schools and unis?
We jointly sponsor some AUT Design School honours students. Right now we have someone there researching sit/stand technology and behaviour for us. It allows us to support a student and at the same time get some great research to help the business grow.
(Modtec workers assembling the final products. It's the end of the shift otherwise there'd be more people on the line.)
You have both internal and external design teams. What does that achieve?
The internal design team is familiar with the way we work and our processes, which is important but can become a limitation if they become rigid in their thinking. The outside design team challenges us to think in different ways and how we use new materials. Working in this industry you have to keep on top of the best cost processes and the use of new materials and polymers [Modtec uses a two-man team at Blender Design as its external design unit].
Everything they do we pay for and it remains our IP ... We get fresh thinking and they get more credibility and recognition in the industry.
(A die cast mould, molten metal is poured in to create parts needed for Modtec products.)
You're selling into India and China, with teams in those countries too. What have you learned from working with overseas units?
You've got to be very patient when working in India and China. Getting an import / export license in India took the better part of three years.
Secondly you need to be bilingual in every market you're in. What's paid off for us is getting involved in and supporting the [New Zealand] government's points system for immigration. What we've been doing is bringing in skilled workers to work here in New Zealand, training them, then taking them back to their own countries to help us grow there. We couldn't have done this with just Europeans.
You're bringing in workers from overseas. Is there a shortage of skills here that you're not getting from the tertiary institutes?
It's not so much an issue here as it is in India. There are plenty of grads but most aren't achieving the levels we need.
It's a lot about attitude. Kiwis by nature are very creative and innovative, we don't ask why something can't be done. This isn't always the case overseas, workers are often micromanaged to the point they become afraid to make mistakes and set themselves into a routine. The Indian guys we have here aren't like that, they know they can make mistakes and provide us with great ideas.
What advice do you have for budding industrial designers and garage businesses wanting to grow their businesses?
Get aligned with external design people because they bring fresh thinking to the table. Do it as a partnership and get outside of your own ways of thinking.
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