Welcome to another edition of Fast Five – our fortnightly series where we ask Victoria’s most influential and exceptional business leaders five questions to get a behind-the-scenes glimpse of Australia’s vital and challenging operations.

Highlighting the scale of ANCA’s operations, the company exports 99 per cent of its products to customers in more than 45 countries and has offices in the UK, Germany, China, Thailand, India, Japan, Brazil and the USA, as well as a comprehensive network of representatives and agents worldwide.

In this edition we spoke to Dr. Christopher Hegarty, ANCA Group CEO, about the company’s meteoric rise from humble origins, its recent product innovations and future outlook.

#1: ANCA is a local manufacturing success story, having started in Melbourne nearly 50 years ago and has grown its base here and overseas in the decades since. What has underpinned the company’s growth in that time?

ANCA is an advanced manufacturing success story, employing more than 1,100 people globally – including more than 500 at its Bayswater, Melbourne headquarters – and exporting 99 per cent of what it makes to over 50 countries. It has a turnover of over A$200 million and is gearing up for its busiest year ever, having experienced a very buoyant market. I am proud to say we are number one in our field, with our closest competitors being Swiss and German in origin.

To give a sense of our global impact, most things you use in everyday life have been manufactured in part with a cutting tool: from the cars you drive, a metal knee replacement, a turbine engine on a Boeing 787, a wooden table and chair, to an iPhone. We like to think that ANCA in some way contributes to everyday life.

The importance of software, a global outlook, and supplying a highly specialised niche product have all been recommended as part of an “advanced manufacturing” prescription in the last few years but have been key to ANCA’s success for a very long time. ANCA made the strategic decision to design and build CNC tool and cutter grinders, a geometrically complex machine, which suited ANCA’s expertise in software. Plus, the competition at the time was either very difficult to use or didn’t offer a high level of features. ANCA’s machines used advanced software that made them very easy to operate and gave enormous flexibility in the ease with which complex shapes could be ground.

Our team’s technical brilliance has seen us solve many thorny issues that our customers couldn’t. Research and development have always been a vital part of our business, generally focused on a current (or anticipated) customer need. Often the problems solved led to a commercially appealing product for a broader audience. Examples abound. Could ANCA make a machine that could grind hexagonal shapes for a power steering manufacturer? Could they make a machine that could grind extremely robust polycrystalline tools that aerospace customers wanted for machining difficult combinations of materials? Could they create a dual-robot cell, able to complete multiple operations on turbine blades and other workpieces, for a multibillion-dollar space industry customer?

The answer to all those questions was yes. The customers, including names like Rolls Royce, Sandvik, Boeing, General Electric, Airbus and many others were very happy and ordered more. Typical of a leader able to do what nobody else in its field can do, ANCA has achieved a long list of world firsts. One first was offering support and diagnostics for machines way back in 1999, well before the term “industrial internet” gained currency. Another standout is an electronic probe to measure our product while still in a machine, first introduced in 1987 and now ubiquitous on CNC machines. There are lots of innovations that ANCA didn’t copyright or protect; the touch probe in particular. We’ve always been confident we’re able to out-innovate our competitors.

#2: As ANCA approaches its half century, what is the company’s current focus and what ambitions does it harbor for the future?

Innovation at ANCA is key. We constantly innovate to bring first-to market technologies and offer capabilities that our competitors cannot.

We are focused on commercialising our non-machine product range to leverage our excellent suite of technology and expertise developed over our almost 50 years in business. This will be possible due to our vertical integration, which means we have been a major developer of technology that we sell around the world – not just our machines but also the automation and CNC controls, sheet metal and precision-component manufacturing. For example, we design and manufacture flexible control systems, specialising in high-precision solutions for CNC machines. It has customisable hardware and software solutions for all markets, excelling in high-speed and precision automation solutions.

With our precision component manufacturing, we have moulding, painting, and high precision assembly capabilities within our machine tools business. There’s a lot of potential for our technology in the broader market. As a vertically integrated global organisation that delivers diverse capabilities, we have made significant progress in establishing collaborative manufacturing agreements with renewables storage providers. This journey has paved the way for reducing dependence on international supply chains in times of disruption through sovereign manufacturing of components and systems.

#3: How did the COVID-19 pandemic change how the business operates, particularly in terms of supply chain impacts and management of your workforce?

Like most businesses globally, there have been reductions in demand and impacts from COVID-19. This is within the context of ANCA machine tools as a cyclical business generally. Talking numbers, we saw a drop in sales revenue for ANCA Machine Tools from FY20 to FY21 of almost 5 per cent. This was even more dramatic in Europe, where we saw a 25 per cent decline over the same period.

Since then the market has rebounded and we are seeing record demand across the world. We are now having to work extremely hard to meet our order books and maintain our high levels of customer service. The supply chain has been a real issue with key components delayed or extremely difficult to find. This is tough given such a buoyant market where we are doing everything we can to source the products we need to keep up with customer demand.

With our headquarters located in Melbourne, we had strict lockdown restrictions for the best part of the pandemic, with many staff working from home. I’ve personally been an advocate of occasional working from home since the 1980s, but I was amazed at how well we were able to keep such a complex organisation working so effectively with most employees working remotely. Like many other businesses, there will be a change in our work from home policy as a result of this shift, and with the end of lockdowns we are working through finding the right balance.

#4: With advancements in robotics and automation accelerating in recent years, what are ANCA’s latest innovations and offerings to the market?

Customers are after more productivity, higher accuracy, and more process stability. There is a lot of interest in automation, industry 4.0, and technologies used to digitally lash all aspects of production together. As I said earlier, we’ve been playing that game for quite some time now. What’s new at ANCA is what we call AIMS, or the ANCA Integrated Manufacturing System. It’s the overarching platform under which we’ll be releasing software and hardware through the coming years. Managing everything is a state-of-the-art cloud-based supervisory system, and underneath is all of the hardware to grind, measure, and process cutting tools without the need for human intervention.

More than 70 per cent of the company’s customers require machines with robots. The AIMS system connects all of the processes used in cutting tool manufacturing: the automation, measurement equipment and post-production processes such as laser marking, as well as the grinding equipment itself. The interconnected grinding technology solution eliminates wasteful manual handling, reduces machine downtime between batches and takes away the need to have operators constantly monitoring and adjusting production machines. The whole idea is to increase productivity – the value of goods produced per hour of labour. This reduces the overall cost of manufacturing but also increases the competitiveness (and hence the viability) of re-shoring some manufacturing back from lower-cost countries to Australia.

AIMS is designed for modular functionality that can be adapted to each factory’s needs, from smaller-scale, data-based options to a full setup across a series of machines. The AIMS Server manages data flows between the elements of the system and established IT platforms, such as a factory control or enterprise resource planning (ERP) system. Users can choose from a suite of solutions to reduce production costs and integrate systems appropriate to improving their specific processes and product quality. ANCA’s solutions embrace not only the grinding process itself but other pieces of the production puzzle.

#5: Are there any noteworthy sectors or industry trends growing in prominence that are driving ANCA’s product developments?

There is a transition occurring globally with a decline in combustion engines. The shift to the electric vehicle is having both positive and negative impacts for ANCA. For example, one positive is that the demand for gears is increasing with electric vehicle and e-bikes requiring gears, driving up demand. However, with the move away from combustion engines the industry needs to diversify, so cutting tool manufacturers are looking for opportunities in sectors like woodworking, aerospace and medical devices.

There is also a push towards customisation of cutting tools rather than only offering a standard range – a big move into specialised tools for particular applications. With our products’ flexibility, ANCA leads the way here also.

We are also bringing our historic pragmatism to the somewhat nebulous/theoretical domain of industry 4.0. AIMS is a great example of how we can move ahead by investing in new technology and applying it in a pragmatic way.