Chapter 1 History of DENSO Automotive Australia

1972-1982

DENSO had recognised very early as a company that safety and quality were two aspects of strategic management that needed to be among the first of operating principles; a proven philosophy which contributed to the success of the company since its founding in 1949.
DENSO’s reputation for quality parts and systems was known before it set up manufacturing in Australia. By 1972, with the start of DENSO manufacturing (DMAU) in Australia, at Altona in Melbourne, DENSO knew that a quality and safety culture had to be deeply embedded in its Australian organisation to really impact on DENSO Australia’s sustainability and future.

Over the next 20 years, it also responded to the developing regulatory framework around what became known as Occupational Health and Safety (OH&S), as well as meet the exacting management quality standards and automotive industry standards developing equally quickly among the vehicle manufacturers as technology and customer needs changed rapidly.

DENSO Australia (DNAU) knew that it had to be competitive not just against DENSO products imported from other DENSO manufacturing sites in Japan, especially as tariff barriers were gradually removed, but also to improve quality to demonstrate to the vehicle manufacturers that DENSO Australia was the supplier of choice.

1984

When the Australian Government introduced a new plan for the automotive industry in 1984, in effect reducing the import duties on vehicles and vehicle parts, DNAU knew that producing locally parts of the highest quality to compete with overseas component imports was more important than ever. In turn this would also mean lower costs.

DENSO understood that the local vehicle manufacturers, led by its major customer in Toyota, had very high standards themselves, and DENSO needed to reflect that in everything it did. To be the best supplier of automotive parts not just to Toyota – but to other manufacturers as well like GMH and Ford – DENSO’s philosophy was slowly but painstakingly applied to manufacturing facility in Altona, Melbourne as well as all other sites.

1988

In July 1988 Managing Director Tony Kusunoki started the journey of a revised DENSO Australia mission and operating principles. Quality was number two in six listed operating principles. As Tony put it, ‘The key to quality is to build quality into every process of our work by committing ourselves to the principle – ‘the next step in the process is my customer’. This meant treating suppliers as part of the family to achieve quality across the board and therefore meet customer satisfaction. In order to keep prices competitive and quality high, DNAU looked at ways to reduce costs in part so that it could invest more into quality control and higher standards. Allied to this was the safety regime, as effective injury control is one of the best cost-containment programs which management could undertake.

1989

By 1989, DENSO Australia had brought safety a long way compared to many other manufacturing sites across the country. It had OH&S representatives in each section of the office, store and factory. Over the years, safety shoes, ear plugs, eye protection and protective clothing were introduced. A full time OH&S Officer was also appointed, along with Safety representatives in each section, all of whom along with forepersons throughout the company, were given regular training.¹

¹ ND News, Vol14, No3, April 1989, p4.

OH&S Certificate courses, covering such areas as, for example, the identification and management of hazards and how to find solutions to those problems, participation in improved work method design, physical risk surveys and storage and handling, were conducted every six months.²

² ND News, Vol 14, No5, June 1989, p9.

1990

Aidan Carter, who joined the small engineering team at Altona in 1974, recalls that the quality of the DENSO products reached a high point when DNAU won the engine cooling business for a Japanese company in 1990, a world first.³

³ Interview with Aidan Carter, 14 November 2022.

DENSO Australia however, had already recognised that the company’s culture was the key to success in this area. Using DENSO’s philosophy, and specifically the DENSO Spirit principle, the company to engage all of its employees, whether on the manufacturing lines, or in distribution or office, to start to find out the causes of accidents and incidents and initiate measures to eliminate as far as possible those causes through the safety system in place.

For example, when there was a rise in the incidents of repetitive strain injuries among assembly workers at Altona, DENSO quickly investigated the causes and implemented changes such as rotating worker time on the line, to manage this particular problem.

As well, earlier in 1990, DNAU recognised that continuous improvement (or ‘kaizen’, part of the DENSO Spirit principle) by following the company operating principles would lead to preferred supplier status with UUAI (Toyota and GM-H), Mitsubishi and Ford.⁴ This was highlight for many of the long-term employees of the company, not just management. By Q3 of 1990, Toyota gave DNAU an ‘excellent’ rating for quality and delivery.⁵
In December 1990 DNAU implemented a new project focused on ‘machine lockout’. It introduced ‘Danger Life Protection’ tags to ensure that machines were not operated during maintenance work. This is seen as the norm today but then it was ground-breaking for DENSO in Australia.
By August 1990, these cultural changes within DNAU and attitudes to safety were already bearing results. The annual levy paid to the government for the government’s new WorkCare program was reduced and hence made savings for the company. The contributing factors cited in DNAU were: safety was gaining greater momentum and credibility; forepersons, managers and safety representatives were concentrating on prevention; rehabilitation was improving, preventing long term absences; and there was more awareness and cooperation between employees.⁶

⁴ ND News, Vol15 No 3, August 1990, p1.

⁵ ND News, Vol15 No 8, December 1990, p10.

⁶ ND News, Vol15 No 6, August 1990, p5.

1991

In September 1991 Australian Automotive Air (AAA) was established. AAA Associate Handbooks issued to all new employees contained extensive notes regarding Safety. New associates were exhorted to remember that “Accidents don’t just happen – they are caused.” This was continued and enhanced in future years. To move safety issues and the work of the Safety Representatives Committee through the decision-making channels in DNAU, an Executive Safety Committee was established. Its role is to make policy, review it and implement it.⁷

⁷ ND News, Vol15 No 2, April 1990, p5.

In October 1991 the CEO of Occupational Health and Safety Authority in Victoria (previously Department of Labour), spoke to the managers of the company to raise awareness about OH&S legal structure, how it fits into the Federal scheme, how it relates to individual companies and to individuals within the companies.⁸ Over time, attendance at OH&S training courses was widened to include all management, staff and factory employees across the company.

⁸ The Innovator, October 1991, p9.

1992

In May 1992 DNAU introduced an Employee Assistance Program to assist employees in times of need and link them to community services.⁹ In doing so, the company recognized that employees who were under personal stress could affect OH&S in the workplace.

⁹ The Innovator, May 1992, p8.

By October 1992, DMAU in Altona presented with a Ford ‘Q1’ quality rating. The award recognizes worldwide, among Ford suppliers, the capability to build to international standards. It is earned not only in achieving a level of product quality excellence, but also in implementing systems and processes to continually improve scrap, rework, waste and, eventually, cost levels.

That same month, the Executive Safety Committee and the Safety Representative Committee met for a joint conference - ‘What have we achieved and what can we improve on’. The number of accidents, incidents and injuries that were reported from Altona in 1992 exceeded its reduction targets.

A good example of this was when in 1992 the then Warehouse & Distribution Division instituted an improvement to the diesel pump and air conditioner spare parts racking by eliminating ladder picking, which improved safety as well as efficiency and product flow.¹⁰

¹⁰ The Innovator, September 1992, p6.

1993

At the time, safety programs in Australian manufacturing sites in general was quite traditional; i.e., not integrated into the organizations and dependent on marginally effective, top-down safety committees and safety campaigns and incentives which did little to bring down safety costs or injury levels.

Even when, in the Australian regulatory environment under the so-called WorkSafe program which had developed by the early 1990s, where safety inspectors could inspect the facility, losses still occurred. One reason was, as one senior person in the OH& S (Workers’ Compensation) areas said in 1993, ‘that the employees were not made part of the safety process.’¹¹

¹¹ Chamber Gazette, Vol2, No1, December 1993, p1.

Management knew that the employer was responsible for the daily safety of the employee in the course of their employment. To this end DNAU insisted on management involvement as well as employee engagement across the board. With the drive to reduce costs through employee downtime from workplace accidents, management had extra incentive to be closely involved in the elimination of hazards, as well as continuously improve safety processes and employee health.

There was a clear recognition very early in the DNAU operation that this made sense – productivity, employee morale and lower employee turnover resulted. Alongside this the encouragement of employee involvement in safety also encouraged employee involvement in their work, generating innovative ideas to improve work processes and inevitably, quality.
So, the goal for 1993 was set at ‘zero lost time injuries. The safety committees noted that Government changes in health and safety and WorkCover meant ‘that the company has to work out its own solutions to its own problems’.¹²
Russell Jopson, a senior manager who had joined the company in 1991 said that, ‘…both safety and quality were paramount in the DENSO mindset and DENSO was very stringent in making sure that DNAU’s operations met the high DENSO standards. Jopson noted that in the spirit of constant improvement (kaizen), DNAU automated inspection processes as much as it could, for example installing camera vision systems.
He said ‘Your safety performance was published every month throughout the company and around the globe. Then the questions were: what has been done about any issues? What was the corrective action taken? How do we share that around to other DENSO group companies as a learning experience?’.¹³
In November 1993, DNAU’s air-conditioning manufacturing operation at Croydon – Australian Automotive Air under Managing Director Charlie Murodono – won the annual Victorian Prevention Award for Innovation in OH&S, with a pallet handling and package system which used a roller conveyor and scissor lift to eliminate manual lifting of packages from conveyor to pallet. The system reduced workers’ reports of back pain and soreness while increasing productivity.¹⁴ In fact from the introduction of the new system, there were no more complaints of back pain in that area of operation. It was clear to all - OH&S is inseparable from best management practices and therefore an integral part of DENSO management strategy.
The year ended on a high note when in December 1993, AAA won the Federal Chamber of Automotive Industries Quality Circle Award for 1993.
AAA from its beginning focused on three main safety education principles and priorities – to develop awareness of safety issues; establish personal responsibility for safety; and to encourage creative thinking that generates new ideas in accordance with the DENSO Spirit principle.

¹² The Innovator, December 1992, p9.

¹³ Interview with Russell Jopson, 9 November 2022.

¹⁴ Croydon Post, 3 November 1993, p7.

1999

In mid-1999, through continuous improvement and attention to elimination of accident causes, AAA was given Safety MAP accreditation. Safety MAP was a Victorian Government initiative which stood for: Safety Management Achievement Program. This program was a means by which businesses such as DNAU could assess and audit their progress in in developing successful programs to reduce the cost and frequency of workplace, accidents, injuries and disease.
The then Victorian Minister for industry noted that Safety MAP accreditation was a demonstration of how a company has reduced not just the costs of poor health and safety but also how they have used this approach to build a quality system essential to maintaining a quality edge.¹⁵ The program was designed to be compatible with existing quality standards and applied many of the principles used in Quality Management. The establishment of DENSO International Australia (DIAU) in part to facilitate the first exports was a testament to the quality achievements of manufacturing and DNAU as a whole.

¹⁵ Chamber Gazette, Vol2, No1, December 1993, p5.

2001-2006

In 2001, DMAU in Altona closed.

In 2002, DNAU achieved AS/NZS 4801 accreditation (now 45001) which demonstrated that DENSO Australia complied with OH&S laws and had created a safe workplace for their employees and stakeholders. Simultaneously it also achieved accreditation for QS 9000, a quality standard developed by a joint effort of the "Big Three" American automakers, General Motors, Chrysler and Ford.

That same year DENSO Australia was recognized with a GM Quality Supplier of the Year Award. Later, with the demise of the QS9000 standard, DNAU moved to ISO 9001, the international standard specifying quality system requirements, aimed primarily at achieving customer satisfaction.

Change continued at DNAU. AAA moved to Croydon after plant expansions in 2003 and 2006, with the goal of achieving a single manufacturing plant at that location.

2007-2008

As testament to DNAU’s commitment to continuous improvement as an automotive supplier, including to both safety and quality, in 2007 and 2008 DNAU won the Federal Chamber of Automotive Industry Supplier of the Year Award.

2009-2017

In 2009, DNAU also achieved IATF 16949 accreditation, the global quality standard that applies specifically to the automotive industry. IATF 16949 is applicable for sites that produce service parts or parts for car assembly (not the aftermarket parts) and focusing on customer-specific requirements. Late that year and into 2010 came a major restructuring of DENSO Australia (DNAU) – to create the ‘new DNAU or ‘One DENSO’, which consolidated DIAU and AAA at Croydon.

In 2011 a new distribution center was added at Croydon. These expansions of the Croydon site saw the same ongoing commitment to quality and safety that had been a hallmark of DNAU for several decades.

However, in the background to these achievements was the major challenges to a small and highly competitive vehicle manufacturing market in Australia. One by one, the automotive manufacturers announced plans to close down in Australia - the last to do so was Toyota - and the automotive industry collapsed, along with the gamut of supporting industries which supported it. DNAU was no exception, and DENSO was forced to rationalize its manufacturing footprint in Australia and so, wound up its manufacturing operations.

2018-2022

From 2017 the company focus shifted towards the growth of local aftermarket product sales and expanding its Australian-based global R & D engineering: ‘after 45 years of operation in Australia, the decision to close local manufacturing in 2017 was one of our biggest and most difficult’, one senior manager said.

The company was reformed as a sales and R&D division, while Croydon retains the distribution center needed to provide service to customers of DENSO’s original equipment technologies. President and CEO of DNAU, Gavan Keenan, who joined the company in 1991, reflected on the quality and safety aspects of DENSO:

¹⁶ Interview with Gavan Keenan, 3 November 2022.

DENSO Australia Group today remains committed to the highest standards of quality, safety and innovation, in accordance with the DENSO Spirit.