It’s a common thought that the biggest rewards accrue to the biggest risk takers – but Hofmann Engineering Managing Director is having none of it. To Erich Hofmann, the very nature of engineering is to eliminate risk – you analyse the problem, design the solution, and manufacture it to a certified quality-controlled process.
Such principles of success were shared on 25 July with a 40 strong tour group organised by WA DEFENCE REVIEW, in partnership with District 32 (a business association providing a cooperative system giving its 250 members access to quality services and resources under one banner).
Elaborating on his no-risk approach, Hofmann said that it’s a mistake to specialise at the bottom-end of manufacturing, such as metal fabrication, as this exposes you to competition from low cost overseas operators. The further up the ‘food-chain’ you go, he said, the more competitive you become and the greater the dollar value of your product.
Hofmann’s provide a complete manufacturing service through to high-tech, high value products such as gears (up to 15m in diameter), valves, self-aligning drives, pumps, bearings, propulsion systems, propellers and processes for improving metals, such as heat treatments and carbonisation.
The Company can reverse engineer and reproduce existing product, a capability that extended the life of the Australian Army’s fleet of 800 Unimog trucks when replacement gearboxes became unavailable. Its solution-seeking culture found a way to repair a Collins class submarine in-situ without having to cut a hole in the hull, saving time and cost. The value of such flexibility and initiative in war-time is very apparent.
But what of risk from fluctuating demand? Hofmann’s have minimised the impact of this factor by diversifying both the industries and the markets they supply. On the basis that engineering involves the same processes whatever the industry, Hofmann’s draws its clientele from diverse fields such as mining, defence, civil works, military hardware, and public transportation; and it has factories in Perth, Bendigo, Melbourne, Newcastle, Canada, Chile, China, India and Peru.
What then of risks from financing and corporate takeovers? Hofmann’s is free of debt and 100% family-owned. The Company has been operating since 1969 and, despite booms and busts, proudly claims to have never had a bad year.
Americans often use the term ‘the American Dream’, but Hofmann’s story could be called ‘the Australian Dream’. In 1962, immigrant John Hofmann disembarked ship in Fremantle for a look around, found employment in his toolmaking trade, and never re-boarded the vessel. Starting from a house in the suburbs, he and his family built the Western Australian success story that is today’s Hofmann Engineering.
The visitors enjoyed a tour of Hofmann’s Bassendean facilities, marvelling at the automated machines that work 24/7 over as many hours, days or weeks it takes to complete cutting some quite prodigious components with absolute accuracy. But no engineering factory can be completely automated; Hofmann’s employ 500 multi-ethnic staff to work around the clock to meet their client’s requirements – and not all are engaged on the factory floor. There are some 30 engineers constantly involved in design, specification, and in some cases, applying for patents to add to Hofmann’s growing Intellectual Property repository.
With complimentary refreshments to follow the talk and tour, the visitors had not only learned some valuable business principles from a Company with an enviable track record; but had also taken the opportunity to network with fellow visitors to advance their own organisations’ interests.
“District32 was delighted to be associated with WA DEFENCE REVIEW for this outstanding event at Hofmann Engineering, which gave insights into their facility while also providing some additional education on the defence sector more generally. Hence, the combination of the tour and the wide-ranging networking opportunities facilitated by WA DEFENCE REVIEW were of considerable benefit to all those who attended.”
Dean Keating, Director, District32