If you’re a user of HERA’s New Zealand Welding Centre (NZWC) you’ll have a good idea of what this service is worth to you. But can you put it into dollars?
It’s ok if the answer is ‘no,’ because we couldn’t either. Especially when more broadly investigating value created through improved products, services, quality, productivity and reduced rework.
That’s why we decided to try put a figure on it – and you’ll be surprised what we found! In a nutshell your industry levy from welding consumables gave you a conservative return of investment of more than 24 times what you put in!
As part of HERA, NZWC provides a wide range of services to industry and members across New Zealand.
Providing technical advice, R&D, standards development, training and education, certification via HERA Certifications Ltd and support for general industry promotion and advocacy.
We’re also New Zealand’s representative as one of 56 other countries of the International Institute of Welding (IIW) and are actively involved in numerous initiatives to improve our industry’s competitiveness.
Our strategic planning has streamlined our activities to four areas:
- research and development;
- education and training;
- certification and verification; and
- technology transfer.
And, to deliver valuable outcomes and continuous improvement in these spaces, it’s essential a feedback loop is established to quantify value in financial terms.
Establishing the baseline
The methodology used to establish NZWC’s dollar value is based on the estimated direct benefits to our members and the wider industry using assessment models leveraged by international and reciprocal member organisations such as UK based TWI, Australian WTIA and IIW.
In our evaluation we limited our review to services delivered between 1 July 2017 to 30 April 2018. Actively excluding several outcomes such as R&D projects and also accepting we’re yet to complete the current year.
The outcome was a conservative estimated ratio of 24:1. In other word for every industry levy dollar, $24 in value is created. These findings allow us to say with great confidence investing in our activities directly and through the research levy pays industry back handsomely.
We know at first glance this ratio sounds overly optimistic especially if compared to return of investments for new machinery for example. But when you scratch under the surface, it”s clear you’ve been able to access a lot! We’ve delivered:
- More than 1200 technical enquiries, company assistance or consulting.
- Five technology forum seminars and workshops with 275 expert attendees.
- Welding supervisor and inspector courses to 85 students
- AS 2214 Welding Supervisor certification to 41 students
- Welding Inspector qualifications to 14 students
- 28 SFC audits via HERA Certifications Ltd
- Nine research papers and guidance notes
- Four technical standard reviews
- 1000 training modules to training providers, and
- We also have ongoing works for four major R&D projects on our books.
What does this all mean for you?
This work to measure our value not only assists us to better understand what activities give the greatest return but allows us to prioritise funding and be accountable to our members, Government and key stakeholders.
This is important to explore following the recommendation from our industry member based Welding Centre Panel and HERA Executive approval to increase the levy on welding consumables from 5, to 10 cents per kilogram. This comes after 16 years of the levy staying static despite inflation and increasing service pressures.
Currently in the consultation phase for this increase, we believe the change will be supported given it’ll create additional annual funds of $200k – translating to $4.8 million in benefits to our industry.
Let’s be clear – cost and value creation are key tools to measure performance for any organisation. Having just gone through the process ourselves, the outcome confirms that investing industry money via a levy on welding consumables makes economic sense. The returns sound better than putting money in the bank or in an investment property at a 1:24 ratio!
Delve into our findings deeper
If you’re interested in our approach used to assess our value, be sure to contact our General Manager Welding Centre Dr Michail Karpenko.
A big part of this research was a result of a membership survey sent out to a cross-section of our Welding Centre users ranging from welders, to supervisors, inspectors, engineering consultants and more.
This feedback was invaluable to understanding how you interact with us and confirmed the value we provide as a result of the levy we’re supported by. Special congratulations must go out to Unitec’s Rhys Davey and Culham Engineering’s Grant Withers who won the two camera’s that were up for grabs.
And of course if you’re a levy payer we’d welcome your support to increase the levy when we call for your vote. Stay tuned, as this voting paper will be sent shortly.