New directions
The implementation of the new regime was not without controversy, however. Traditionalists in the Grand Banks fanbase were ruffled by the decision to combine Palm Beach hulls with Grand Banks superstructure, for example. Further, some felt that the marque’s heritage of fine carpentry, cabinetry and joinery was at risk when Grand Banks yachts began to feature same carbon fibre composite interiors with wood veneer skins used on Palm Beach builds. Richards explains that there’s no going back from the switch to composite structural craftmanship, because it makes for a stiffer core, while cutting down at least 10 percent on weight to achieve better fuel efficiency. The ride is fast, quiet and efficient, with a low centre of gravity, yet it still looks like a Grand Banks.
The company’s current show-off is the GB60 long-range cruiser, which was released in May 2017 after two years of development. With its stiff, light hull, it has a range of 1,000 miles at 20 knots, using half the fuel of its competitors. “The boat goes through the water like a torpedo,” says Dekkinga, one of their US Yacht Consultants.
Another difficult shift was the move away from the dealer sales model in favour of direct sales. “It was a big deal,” admits Richards. “The company had a network of long, 35–40-year dealer relationships around the world. They were going for 20–23 percent margins, which is totally unachievable for a manufacturing facility like Grand Banks. So we came in and basically cut everything free and went factory direct.”
The direct distribution approach made an immediate nine percent impact on margins. Richards explains, “My reasoning was, for this amount of volume we’ve got do it ourselves to try to get everything to the bottom line for our shareholders. It’s starting to pay off now because we’re heading in the right direction financially.”
Solid foundations
Subject to satisfactory due diligence, the Grand Banks group has recently acquired a service yard in Stuart, Florida, for US$3.2 million, which it intends to build into a warranty and service headquarters for both Grand Banks and Palm Beach’s strong American market.
With seven berths, a 50-ton travel lift and over 1,000 square metres of waterfront office space, the marina will also act as a private dock and exhibition venue for the group’s boats in the US.
But here in Malaysia, Richards is particularly proud of the Johor Bahru facility, maintaining that it would be unsustainable to create this streamlined production anywhere else in the world:
“We’re flying under the radar here, and starting to achieve great things, so we have to utilise that big site well.”
Within two years, he’s hopeful about designing and building a new semi-automated facility next door to the current one, where the use of high-end robotics will allow entry into the small boat sector without massive overheads.
As CEO, Richards spends a lot of time on the factory floor, and is careful to cultivate a relatively flat organisation where he has an easy rapport with the workers. This has allowed him to determine how to modernise the production process, where to invest, and how to maximise storage and stocktake: “Every boat’s different. It’s about being able to supply that product efficiently to make money.”
Change has required a huge investment, and as Richards shows off the factory, it seems like every single element has been rethought, reorganised, completely rebuilt or purchased new.
“The factory’s so different, so structured, so organised now, that it’s just starting to hum. And that’s where I get my satisfaction from,” he shares. There are new windows for natural light, roofs protecting all workers from rain and sun, and fans for better air circulation, all of which have had a measurable effect on productivity in Johor’s humid climate.
Another investment earlier this year was a brand new, state-of-the-art testing and commissioning pool. Accommodating yachts up to 24 metres, it provides a clean, controlled environment to test all mechanical and electrical systems before sea trial.
“We are doing a lot of cool stuff in the high-end automation area and building techniques to stay competitive and ahead of the curve,” Richards says. They’ve recently started using an eight-axis CNC milling robot to produce tooling in a very efficient manner – with careful programming, what used to take two months now takes two days, and 100 percent of tooling is done in-house. There is also a dedicated infusion shed, and more specialised CNC machines for structural bulkheads, costing AU$250,000 apiece.
Compton adds, “We’re continuously adding more automation and robotics to our production process, with the aim of efficiency and accuracy; not to replace any of our workforce.”
To date the inclusion of robots has actually created new jobs and roles at the facility, while increasing output to the production line. The production cycle has been shortened – the current waiting period for an order is seven to 12 months.
Richards has brought on 490 new staff members, up from 230 before the acquisition. Some of these are learning new trades; others are highly skilled, including Richards’ contacts from the Australian boatbuilding industry.