Crafting a stable business

By Rod Oram

Monday 1st April 2002

An Invercargill company is making money out of rough seas

Back in 1986 some fishermen from Bluff had an idea for a better work boat. How about a pair of rigid aluminium pontoons, with a pointed bow like an inflatable and a big work platform between them, powered by an outboard? It would be more stable in rough seas and highly dependable, impervious to sharp-edged oyster and paua shells.

Paul Adams, a young Invercargill man who had worked as a coach builder, told his friends he thought he could make such a boat. So he did. In fact, in his first full year he made 75 Stabi-Crafts.

But, as it turned out, the big challenge was not building boats but building the business. From about 1993 to 1995 "we were working hard but not smart", says Adams. "I had good process and manufacturing skills, but the biggest hurdle was management skills. We had a jobbing-shop mentality, not a production mentality."

He set about learning on the job how to run a company. The best move he made, he says, was to get a pair of non-executive directors: John Walley, chief executive of the Canterbury Manufacturers Association, and Ian Morrison, an Auckland businessman. Mentors and disciplinarians to him, they kept him focused on the changes he needed to make.

The company enjoyed big growth again in 1999, including brisk exports, but plateaued in 2000 and 2001 until it embarked on another round of upskilling. This one saw, for example, the adoption of the Japanese kanban system for controlling work-in-progress, a systemised store for components and an increased focus on efficiency.

"We have plans that could let us produce 1000 boats a year," says Adams, and that's with only one eight-hour shift a day. "We could increase that quite dramatically with our efficiency gains." It is now investigating leading-edge technologies. "We're taking ourselves from a cottage industry to a systemised manufacturing company."

Rod Oram
oram@clear.net.nz

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