A Global Reputation of Quality and Professionalism
Micreo is a world-leading manufacturer of microwave and electro-optic technology for the defence sector. Founded in March of 2002, the company has continually experienced 20% compound annual growth since the first full year of operation. Micreo primarily operates on an international level, with 85% of their product being exported to North America and Europe.
Micreo designs and manufactures RF subsystems for radar and electronic warfare systems. Most products are mounted on defence aircraft, such as fast jets and surveillance vehicles, while some are placed on navy and army projects.
“We’re in an industry which mandates the highest quality, and that’s key to our operation,” says Managing Director Tim Shaw. Micreo has operated to ISO 9001:2008 standards since the company’s establishment, and is continually updating and improving their procedures. “More recently, we’ve been moving up the food chain in terms of the level of integration of our products, and we’re now ready for the AS9100 certification process.” Adhering to and exceeding such standards plays a major role in Micreo’s operation, and about 5 % of their staff of 75 is directly involved in quality assurance.
Taking advantage of their association with defence research in Australia, a majority of Micreo’s work within the country is carried out alongside the DSTO. “We leverage that relationship to become introduced to overseas customers, and we’ve become involved with the global supply chain initiative from the Department of Defence, we’re a very early adopter of that,” says Tim. Micreo’s greatest marketing strength is their reputation and record of delivery and quality. “Having that, it’s quite a closed sort of industry, because the cost of failure is high when you get into these aerospace programs . Having been able to do it before, and having a good reputation, is absolutely key to ongoing marketing,” Shaw explains. “We need to be the best in the world at what we do to gain entry into United States and Europe. That is our objective, and that is what I believe we’ve been able to attain.”
In 2011, Micreo, together with a DMO Team, was the recipient of the ADM award for Rapid Acquisition. The company has also been awarded a variety of accolades from numerous global aerospace companies for excellence of supply. “With the size of these companies, it’s not just a question of being a good supplier to one site or one subsidiary,” Tim says. “Once you have done a good job for one of those subsidiaries, you get onto their preferred supplier list for their whole organisation, and we’ve been successful in doing that.”
Micreo has learned from their customers how to properly manage their own supply chain. “Our customers have a supplier rating system whereby they rate us in terms of our delivery, and you’ve got to be up at 100% in order to satisfy them,” Shaw explains. “Initially, our suppliers in Australia weren’t on the same level, and we’ve been on a journey with them to get them up to that.” This type of flow down is extremely important in the defence sector, and Micreo has learned a lot from their customers in that regard. “All along they’ve made us aware of keeping our delivery and quality up. Provided you do that, you’ve got an ongoing business.”
As a primarily international supplier, the current events occurring in the United States play the greatest role in affecting Micreo’s plans for the future. “The sequestration prevalent in that market is a significant issue for us,” says Tim. Local issues, such as budget cuts, bear some importance as well, as many products that the company sells to America soon returns to Australia in the form of systems for the Australian Defence Force. “It’s important to try and be in a segment of the market which is not subject to those cutbacks,” Shaw says, “in order for the business to survive.”
Tim also points out that increased productivity is key for the success manufacturing companies in Australia. “When we started the company in 2002, our prices were effectively a lot higher. Since then, our prices have halved, thanks to the rise in the Australian dollar. At the same time, our labour costs have risen far more sharply than those of the United States. To survive and to thrive in that environment, we have to be extremely productive and efficient, and we put a lot of work into that.” As well, Shaw stresses the importance of finding a niche market. “Simply doing the same thing as others are doing in different parts of the world will doom you to failure,” he states. “The key things that we need to focus on when manufacturing in Australia; being productive, doing a hard technology, and being the best in the world at it.”
Many of Micreo’s key team members have been working together on RF technology since 1991. “Not just myself,” Tim says, “but members of our engineering and manufacturing team as well. We’ve been associated since 1991, when we were working on satellite products. In the last dozen years, we’ve been working together at Micreo. It’s been a very interesting journey, although also a very challenging one.” Micreo has recently completed a building program that has doubled their manufacturing area, in order to accommodate the company’s impressive expansion in the coming year. “We’ve been fortunate in getting contracts which have promised to more than double our existing business over the next two or three years, and we’re just in the process of introducing those new products.”