The Mint building refurbishment project commenced in October 2006 and is nearing completion. The final stages of the project, the staff amenities room and external civil and landscaping works, will be delivered in the 2009-10 financial year.
The need for the Mint to remain operational during construction and the staged delivery of the refurbishment project has proved to be very challenging, both from an operational and construction programming perspective.
The stages completed and handed over to the Mint during 2008-09 included the tool room and the collector coin production areas, the administration offices, and the museum and public gallery areas. Perhaps the most complex in terms of design and construction management were the collector coin production areas.
The delivery of the latter stages of the project was particularly demanding operationally. Various production process areas were taken off-line, relocated, re-established and commissioned. Good planning by Mint staff and the implementation of alternate arrangements ensured that the Mint met the majority of its production commitments. Staff continued to display patience and flexibility in working in this challenging and changing environment.
The Mint's administrative, business and retail operations were successfully relocated into the Process Building in March 2009. The former Administration Building was vacated and handed over to the Department of Finance and Deregulation to be refurbished and eventually occupied by another Commonwealth tenant.
Whether the refurbishment project has fulfilled its objectives will be measured by a post occupancy review. This will include a building compliance audit and certification, an assessment of space utilisation efficiencies and an energy efficiency audit, as required by the Department of the Environment, Water, Heritage and the Arts. Indications to date, are that the refurbishment project has met some of its key objectives by delivering a safe and comfortable working environment for staff, improved production facilities, and an enhanced visitor experience.
During the 2008-09 financial year the IT Services Branch has been restructured to reflect better the need for technology and management of information to be a driving force and catalyst for change within the Mint. Under the control of the Mint's Chief Information Officer (CIO) the Branch is now seen as the knowledge management centre with additional value-added functions coming together in the one branch. These functions include records management, telephony, visitor bookings and web management.
A range of initiatives were completed during the 2008-09 financial year, including:
- replacement of the telephone system and the data communications infrastructure
- development of a robust IT security framework, consisting of detailed policies and procedures, access control systems, audit and review processes and a targeted awareness program for all users
- connection to FedLink to enable secure electronic mail at the in-confidence level with other Government agencies
- introduction of a corporate intranet based on SharePoint, providing improved content management, electronic forms, collaboration and workflow functionality
- review of IT change management processes
- completion of an IT disaster recovery plan and business continuity plans for all critical systems, and
- completion of an information audit to form the basis of an ongoing knowledge management strategy and the introduction of an electronic records management system.
Business Information System
The cornerstone information project is the implementation of a new Integrated Business Information System (IBIS) to replace a range of different systems. Implementation of this project, commenced in September 2008, has continued to be the primary focus for this year and remains on target for completion by January 2010. IBIS will consist of numerous software products that will be linked and operate as a single integrated system. It includes the core ERP application, Control 2007, which is combined with the chris21 human resource management system, Synchrony customer relationship management system and the Logility demand planning and forecasting tool.
IBIS will also interface with a number of existing systems including the TRIM document and records management system and the MHWS to provide one source of truth for Mint business information. This level of integration, not previously available, will provide improved visibility, reporting and governance to ensure the Mint meets its financial management and security obligations. The system will provide an automated process for the collection, analysis and reporting of input and output data in the production process as well as an accurate and timely reconciliation of all coins during the production process. This will allow the Mint to quickly identify any inconsistencies in coin production and storage.
IBIS will cover all aspects of the Mint's operations, including financial management, accounts, logistics, payroll, human resources, time and attendance, production, production planning, quality assurance, asset management and sales. It will provide employee self-service functionality across the organisation, as well as minimise the use of paper forms and double handling.
The rollout of IBIS has provided a good opportunity to review, refine and improve business practices, providing key staff with a clear end-to-end view of coin production. The project has also assisted in the breaking down of "silos" to support the change management strategy: "One Mint".
Planned Activities for 2009-10
A range of other projects linked to our strategic and business needs or to support the new business system are planned for the 2009-10 financial year. They include:
- implementation of new storage infrastructure solution to provide information management and tiered storage, in line with information retention policies
- enhanced business continuity and disaster recovery capability with the introduction of technologies to minimise business impact and information loss
- improvements to the Mint's internet presence with the inclusion of enhanced educational resources on the website and integrated e-commerce functionality
- expansion of knowledge management strategies to encompass new information sources and the training and rollout of the electronic records management system across the organisation, and
- integration of the graphic design and communications sections of the Mint into the ICT Branch.
The implementation of the MHWS, to improve safety and production inventory management of circulating coin, entered its final phase in 2008-09. Commissioning of the system commenced on 20 May 2009 and included implementing a reconciliation process from receipt of blanks, through the manufacturing process, quality control and warehousing, to the dispatch of finished circulating coin.
Installation of the new infrastructure equipment and IT systems has continued in accordance with the project program. This has been carefully managed in cooperation with the contractor to allow the Mint to maintain production between stages of the project where new equipment and systems were installed.
Since the handover for commissioning, a reduction in the use of cardboard packaging has been achieved by the use of recycled drums now being used to deliver blank coins. The MHWS has also contributed to an improved visitor experience, providing a dynamic illustration of modern production activities and robotics. The newly installed automated blank coin conveyor system, the various robots and the automated guided vehicles used to transport pallets of finished goods from production into storage, have been of particular interest to school groups.
The challenge for the year ahead is to deliver the expected performance outcomes through a rigorous shakedown of the system. Production personnel will continue to improve their skills and familiarity with the new automated processes to establish a thorough operational knowledge of the new system. Careful attention to reliable and quality processes, procedures and work instructions will ensure operational efficiency into the future.
Last year the Mint won the honour to host the XXVI Mint Directors Conference, to be held in Canberra in September 2010. The planning work for this conference has begun under the stewardship of a Steering Committee, chaired by the Chief Executive Officer. Approximately 400 international visitors, including heads of Mints from around the world are expected to attend this conference. Not only will the conference represent an opportunity to showcase the refurbished Royal Australian Mint, but also showcase Canberra and Australia as tourist destinations. The Acting CEO and Chief Operating Officer have been working closely with the international minting community and tourism representatives to host this conference. The Mint has, to date, received a high level of support from all parties in hosting this event.
The Human Resources Branch is working towards the implementation of a new Human Resources Management Information System and an updated time keeper system. These new systems form part of the IBIS rollout and will provide staff with a self-service option for reviewing their personal pay details and entitlements, and also enhance the level and quality of reporting to Senior Management.
The "One Mint" change process, with all staff now located in the one building, has provided staff in all areas with greater levels of interaction and improved communication.
A staff survey was conducted in late June to measure our progress as a developing organisation. This survey is part of an ongoing improvement process and will establish a baseline for determining our performance. Among other things, it will assess the extent to which our values and standards are being practised.
Performance Development Scheme
The Mint's revised Performance Development Scheme has now been in operation for almost a full cycle. Individual plans were put in place for all staff, from which individual and corporate training needs were identified.
The simpler processes identified during the revision were helpful in achieving an easy uptake across the organisation. Further refresher training is planned prior to the end of the current cycle.
Royal Australian Mint Certified Agreement and APS Values
The 2008-10 Royal Australian Mint Certified Agreement took effect on 22 August 2008. The Agreement provided staff with a four per cent salary increase. A further increase of 3.8 per cent plus a 0.2 per cent pre-conditional increase will accrue on 22 August 2009 if certain requirements are met concerning the PDS and the Mint's 5S program. 5S is one of the tools used to create a leaner, more competitive manufacturing environment. It is a visual approach to working and helps identify any problems. The major difference from previous agreements was the change in a normal working day from 7.35 hours to 7.5 hours, and a mandatory shutdown over the Christmas to New Year period.
Performance Pay
The Royal Australian Mint 2008-2010 Certified Agreement determines salary rates for all non-senior executive service staff. There are no provisions for performance pay under this agreement.
Workplace Relations
The Mint has a range of formal and informal consultative arrangements including the Mint Consultative Forum. The Consultative Forum is chaired by the CEO and comprises management, elected representatives and union representatives.
The Mint will continue to make direct communication between management and employees a priority. The Mint is committed to discussing workplace issues in the spirit of cooperation and trust; ensuring employees receive information on workplace issues affecting them, including business progress and the impacts of new programs. The Agreement provides for employees to contribute their views on these issues. This continues to be important in the Mint's ongoing change process.
Recruitment and Succession Planning
The Mint continues to focus on recruitment and retention strategies. Recruitment activity last year resulted in 14 promotions, including two external applicants, 23 appointments and nine non-ongoing staff converted to ongoing employees.
The Mint realised its investment in its apprenticeship program when one of our apprentices was engaged as a qualified tradesman. A further five apprentices will be completing their apprenticeships in early 2010 and will be considered for ongoing qualified trade positions. One electrical apprentice, Mr Anthony Palasrinne, is continuing to provide input into the Government's initiative 2008 Australian Apprenticeship Roundtable discussions. We will continue to review our workforce plan to take account of future losses in key areas, through increased generalised training and specialised skilling of our staff. Significant competition in remuneration still exists outside the Mint and will continue to have an effect on the retention of all our staff.
Training
The Mint has continued to mentor English as a Second Language (ESL), with volunteer staff conducting English conversation groups each week. The Mint provided more than 754 training places on a range of individual and corporate programs throughout the year. A Certificate III in process manufacturing was successfully completed by 25 staff in late 2008. There has also been a variety of internal process training that has been carried out and will continue on a regular basis.
Among the training programs conducted in 2008-09 were courses on OH&S, presentation skills, report writing skills, project management, code of conduct and values, basic and advanced computer training, strategic thinking, communication and negotiation, financial management, supervising skills, ethics and fraud, and policy formulation.
The cost of training courses attended by Mint employees for 2008-09, excluding salary and travel, was $433,268.
In an environment of continuing change and external competition for skilled staff, the Mint will continue to focus on further development opportunities for staff to ensure we recruit and retain talented staff for our business. Our commitment to continuous improvement and best practice will remain high on our agenda.
Occupational Health and Safety
The Mint is committed to OH&S through a 'safety first' approach to ensure the health, safety and wellbeing of all employees, contractors and visitors. This 'safety first' approach is driven by the Chief Executive Officer through all levels of the organisation. Refurbishment and associated activities continued to be a major focus for the year. The use of audit and risk management principles assisted us to deliver the refurbishment project and also better educate our staff in safe work practices and methodologies.
The 'healthy lifestyle payment' is a provision under the Certified Agreement and is an annual one-off payment towards activities such as quit smoking programs and health club memberships. Twenty nine employees participated in the program during the year. The Mint also maintained a regular health management program and provided a range of health tests for staff as well as reimbursements for spectacles for users of screen based equipment. Biological tests for exposure to hazardous substances were conducted for 35 employees and eight employees undertook hearing tests. The Mint also provided free influenza vaccinations for 95 employees.
Throughout the year a range of external OH&S initial and refresher training was provided to employees. This included training in risk management, OH&S Committee participation, First Aid, Health and Safety Representation, OH&S in Contracting, Forklift, Confined Space and Harassment Officer training. Health and Safety Representatives were designated for each work group and undertook regular workplace inspections, along with providing their workgroup members with information and assistance in safety matters.
Comprehensive and broad ranging OH&S training has been beneficial and will continue to further develop and maintain the safety knowledge and skills of all staff. OH&S awareness for all staff, particularly in risk management, will be given high priority along with the endorsement of the Mint's Health and Safety Management Arrangements and the redevelopment of the OH&S Management System: RAMSAFE. Measurement of OH&S training, inspections and return to work activities will serve as performance indicators with a target of 100 per cent achievement set in these areas. The lost time injury rate for this period has been at its lowest in the last eight years and the Mint will continue its current target to reduce incidents by 15 per cent.
Injury management at the Mint is provided in a timely manner. There were a total of 67 incidents and 29 accidents reported. Of these accidents, there were 13 accepted compensation claims. The lost time rate for this period was 7.88 weeks and the compensation premium for the Mint is currently $541,283.
There were three notifications for dangerous occurrences, two investigations resulting in two improvement notices and one prohibition notice. Corrective action was taken and the Mint continues to maintain its positive working relationships with Comcare and other external stakeholders such as unions.
During the year the Mint aimed to reduce repetitive tasks and achieved this through the automation of some processes and the implementation of engineering solutions. These engineering solutions were acknowledged by the Mint's selection as a finalist in the Safety Rehabilitation and Compensation Commission Safety Awards 2009 for the best solution to a workplace health and safety issue with its modification to its coin press doors.
Staffing Information
All staff are employed under the Public Service Act 1999.
Table 3 The Mint's operative and paid inoperative staff by classification and gender (as at 30 June 2009)
Table 4 The Mint's operatives paid under the Certified Agreement and AWAs (as at 30 June 2009)
Table 5 Salary Ranges for Certified Agreement and AWAs (as at 30 June 2009)
Total for all SES remuneration was $379,185, excluding superannuation allowances.
Workplace Diversity
The Mint respects and appreciates the cultural diversity of its workforce. Forty two per cent of employees are from countries where English is not the spoken language and seven per cent were born overseas in countries where English is the first language.
The Workplace Diversity Program continues to formalise the Mint's commitment to ensuring employees in identified groups have fair access to recruitment, training and promotion opportunities. The Mint has a Mature Age Workforce Policy to provide measures that continue to support our older staff who wish to remain in the workforce.
Mutually agreed leave conditions assist employees in balancing work, family and other caring responsibilities by allowing the use of their personal leave entitlements to care for immediate family members. Applications for part-time work are considered and flexible working hours are available to fit in with family commitments. An additional one week paternity leave was also a new feature of our Agreement to enable working fathers to share in caring commitments. Working from home is also offered to staff to balance work and family commitments.
Executive level employees are able to make use of flexible working hours in the same way as all other Mint employees.
Our continuing commitment to ESL training programs for staff reinforces our commitment to continue to provide more opportunities for staff in this group to advance their careers.
Table 6 Equal Employment Opportunity (EEO) Target Groups
Disability Strategy
The Mint will continue to support and encourage our disabled employees. The Mint maintains a continuing relationship with disability support groups and peak bodies. We address special needs on an individual basis and, where necessary, make adjustments to a working environment, for example, through modifications to workstations, access to special software, parking, hours of duty and specific job tasking. The refurbished Mint has met all compliance requirements in accordance with the Disability Discrimination Act 1992 for staff and visitors.
The Mint's website complies with Web Content Accessibility Guidelines (W3C), allowing all customers to provide feedback, make enquiries and order Mint products via the internet.
The Mint fulfils its obligation under the Disability Discrimination Act 1992 with regard to its tourist facility.
The Mint maintained its close working relationship with the commercial banks through the Coin Issues Working Group of the Australian Payments Clearing Association. This relationship and information sharing contributed strongly to the understanding of stakeholder needs. The cooperative approach to managing the national coin pool, reported last year, has continued. A further small gain in the reduction of stock compared to the 2007-08 outcome was achieved by the end of the year. The Mint is continuing to work with the industry to further improve coin demand forecast accuracy and increase both its service delivery and financial performance.
Banks ordered proportionately more high denomination coins than low denomination coins again this year. The average face value of issued coins rose to 43.17 cents per coin compared to 35.76 cents per coin in 2007-08. Both metal prices and the exchange rate fell compared to the previous year. The fall in metal prices had greater impact than the fall in the exchange rate, and together with the increased average face value of coins issued, created a favourable environment for Seigniorage.
Following the establishment of a scheme resulting in the successful placement of a Mint apprentice in the Royal Canadian Mint last year, the Mint hosted a reciprocal visit by a Royal Canadian Mint tradesperson this year. These exchange programs are monitored by both Mints to ensure they mutually enhance our learning capabilities and foster closer working relationships.
Preliminary results from a coin attrition study have become available this year. The study is designed to identify the "lifespan" and rate of loss of coins through statistical analysis of coins in circulation. It is expected that this study will help to quantify issues surrounding the longevity of coins in circulation and may also reveal any underlying behaviours in relation to the changed usage of coins and collecting behaviour of the community for various designs issued into circulation since the introduction of decimal currency in 1966.
Quality Assurance
Recommissioning of equipment and production lines as part of the refurbishment program provided significant challenges during the year. Several types of new technology were also introduced and needed a rapid adaptation of knowledge and skills of staff with minimal impact on the final quality of our products.
Ability to meet our high standard was tested on a few occasions resulting in unplanned delays for some products. Quality education and awareness programs were extended to suppliers by providing a factory tour of the Mint and assisting them with a quality guide and checklist covering all aspects of our packaging standards. Several training sessions were conducted by the Quality Section during the year to educate Mint staff at all levels on how to maintain quality standards.
An automated blank measurement machine was commissioned during the year. This machine enables measurements to be taken, recorded, and monitored for compliance with specifications. The new process replaced several manual processes and resulted in objective testing with increased sampling of circulating coin blanks. A similar machine has been installed as part of the MHWS to check circulating coins for visual defects after striking, and provide further assurance for the coining process.
Test equipment was acquired during the year to monitor the adhesion and depth of coatings on coinage dies. This device has enhanced the inspection of dies and has provided the necessary data to accurately calibrate the specialised coating machines.
Independent testing and chemical analysis of coins and blanks was undertaken during the year. This has helped to identify and address blank preparation, coining and surface protection issues in a proactive and objective manner. These tests are aimed at reducing wastage and improving the quality of our products.
The planned triennial audit of the Mint's quality systems resulted in the pleasing retention of ISO 9001 Quality Management Accreditation.
The focus during the next year will still be maintaining the quality standard of products and processes throughout the Mint. This will be achieved by:
- targeted quality awareness and education programs for all Mint staff
- acquisition of testing equipment to objectively measure coin lustre and appearance
- implementation of Enterprise Compliance and Quality Management System (ECQMS) software
- a comprehensive audit aimed at wastage minimisation across all aspects of production, and
- a post-refurbishment review and update of all operational procedures and work instructions.
Planning and Scheduling
Production planning during the financial year has focused on balancing the post-refurbishment workload. The Master Production Schedule for circulating coins, collector coins and corporate products has taken into account the demand forecasts, their translation into operational and procurement plans and risk minimisation associated with these activities. In addition, various activities associated with commissioning of equipment after refurbishment caused further delays and frequent adjustments to the production schedule.
The escalating price of precious metals and demand from corporate customers has increased the demand for precious metal products. A precious metal requirement plan was developed to manage cash flow and supply issues. The high costs of conversion of blanks and longer lead times from suppliers created by supply shortages made for a challenging environment to translate customer demands into timely fulfilment of orders.
Planning worked on minimising the inventory holding and optimising the production volumes. This was partially achieved by splitting the coining and final packing processes. This strategy will need further review and fine tuning as business conditions return to normal.
The focus for next year will include:
- implementation of new ERP software
- support for the interfacing of the MHWS into ERP
- coordination of precious metal blank procurement process
- integrated planning for Production and Production Services including design, master tooling and Toolroom activities, and
- minimisation of inventory and optimisation of production volumes consistent with business plans and customer demand.
Circulating Coin Production
The demand for circulating coins was 388 million pieces during the financial year. This was fully met by using our stock holdings built ahead of the disruptions of refurbishment. The 287 million circulating coins produced during the financial year represent an increase of 47 per cent over the previous year's production. This increase was made possible after the re-opening of the refurbished coining hall in February 2008 to cater for the need for buffer stock to enable further construction activity to install the MHWS.
The primary role of Production Services is to prepare coin designs and tooling for coin manufacture, and seek improvement in technical processes for enhancing product manufacture. Production Services is committed to applying technology to improve the position of the Mint in circulating and collector coin manufacture.
The Mint refurbishment project had a major impact on our ability to deliver services during the reporting period. Regular operations were affected over extended periods of heavy resource demands when machinery was recommissioned, accommodation was re-occupied and when construction contractors were working alongside Mint staff. This led to reduced services being delivered during the 12 month relocation period. A particular challenge was achieving the high environmental climate control conditions required for proper operation of the two specialised computer numerical controlled engraving machines.
In mid-2008 the Toolroom was consolidated back into its refurbished location and installation and recommissioning of high precision metal working machinery, heat treatment furnaces and computer controlled machining centres was completed. Staged re-occupation allowed the optimisation of the die manufacturing line to improve material transport between machine centres and reduce manufacturing times.
The pre-stocking of dies and press tooling parts in early 2008 provided sufficient supplies for the recommissioned circulating coin facility during the Toolroom relocation and allowed for the freeing up of resources for recommissioning. Production Services delivered 1630 circulating coin dies, 575 proof coin dies, 40 token dies, 344 uncirculated coin dies and 107 coining collars during the year.
Processes were updated in design and engraving for the recording of activity, leading to more accurate data to be used for costing and scheduling of coin designs and master tool manufacture. Coin designs and plasters were produced to support the manufacture of 89 master tools during the year.
Prototype tooling design was completed for the collector coin presses and is now in testing. The objectives of the new design are to replace worn tooling, reduce replacement manufacturing cost, facilitate faster die changes, reduce tooling wear rates, reduce coin reject rates and simplify tooling inventory for reduced costs.
The Toolroom continued to support and guide the education of fitting and machining apprentices.
Significant contributions were made in several technological areas during the year. A physical vapour deposition coating system for hard coating the coining dies was installed. Once fully trialled and integrated into production it will eliminate environmental toxic waste production and disposal problems from the hard chromium electroplating process used in the Mint for over 40 years. Additional benefits are expected through better coating performance, a reduction in die demand and lower manufacturing costs. The integration is expected to take up to two years for trials, process changes and staff training.
Installation of a new vacuum heat treatment furnace will allow the resumption of the "redesign for manufacture" project in coining die manufacture. The furnace will use nitrogen gas quenched die steels leading to improved safety, reduced die steel inventory, reductions in heat treatment and die polishing times, and reduced overall costs.
The manufacturing processes for two complex collector coins were developed. These were a silver coin featuring a holographic image, showing three different images on the surface of a coin and a silver coin containing pieces of crushed meteorite within a central capsule.
Technical specifications for circulating coin blanks were reviewed and technical management processes for the new circulating coin blank supply contract were developed.
In the coming year Production Services will have fully settled into the new facilities. Key activities will be to:
- changeover to and consolidate the new systems offered by the IBIS project
- acquire and apply better technologies to collector coin tarnish protection
- introduce and train a larger number of staff in newly acquired technologies
- identify potential upgrades to existing machinery, and
- continue research into improvements in product quality and manufacture.
Circulating Coin Production
The circulating coin production area was shut down again this year between December 2008 and May 2009 to install the new MHWS. A buffer stock of coins was produced to meet expected demand prior to these works commencing.
Machinery and accompanying control systems were installed during the shutdown period as part of the materials handling and warehousing project (MHWP). The project included the installation of several new automated robots such as the strongest multi-axis robot in Australia and automatic guided vehicles (AGVs) which transfer both coining blanks and coins in the circulating coin production area. Post-installation commissioning and integration with existing systems continue.
Safety in the circulating coin production area was improved by the replacement of traditional fork lift trucks with the AGV system. The AGVs are fitted with collision detectors that reduce the risk of personal injury. AGVs automatically move both blanks and coins between coining presses and designated storage locations both on the ground and basement levels. The recent implementation of an AGV night program further improves safety by ensuring that the previous daily coin transportation requirements are carried out after general working hours.
A new system for the storage and transportation of blanks and coins in sealed drums has reduced the need for cardboard box packaging of finished coins. This resulted in a substantial cost saving by reusing the drums from the blank import process. The need for customers to handle waste cardboard and polymer bags has all but disappeared.
The visual workplace program was implemented simultaneously with the MHWP. As part of this, the 5S methodology helped to manage the transition to a highly organised workplace with visual controls; including large noticeboards and plasma screens that display a variety of work and safety related messages. The 5S program is now well established, has been implemented successfully across the entire Mint, and forms part of the productivity and efficiency measures in the Mint's Certified Agreement.
Task teams were established in the circulating coin production area to focus on specific production or workplace issues. These teams successfully reduced noise levels in the area with low cost innovations, identified an OH&S hazard associated with press operation and designed a system to eliminate the risk involved.
Collector Coin Production
During the first half of the financial year the collector coin production facility was largely shut down pending the finalisation of the refurbishment project. Although major building refurbishment works were completed by December 2008 delays were experienced in reaching full capacity because of a range of commissioning issues. Collector coin demand for the year was comparatively low with supply generally maintained from existing stocks and disruptions were minimised.
Several major new pieces of equipment were installed following the building refurbishment. Testing and commissioning procedures for this equipment have been ongoing. The presses for collector coins were refurbished and their operational life extended by five to ten years. The result of the refurbishment project is a facility which makes better use of the available space and has better facilities for employees. As the 2009-10 year arrives the section can look forward to using a modern building facility fitted out with equipment that is either new or refurbished to substantially extend its operational life. The improvement to equipment and facilities, and the greater use of task teams are expected to reduce wastage rates.
The Royal Australian Mint Marketing and Sales Branch was responsible for collector coin product development, corporate and custom minting, direct, wholesale and retail sales, advertising and market research, tourism and national attraction management and museum and gallery services.
Collector Coin Program
The Royal Australian Mint designs, manufactures and markets Australian collector coins. The Royal Australian Mint collector coin program recognises a range of popular anniversaries, people and events on coins that are sold successfully in Australia and throughout the world. The program includes a mix of base metal and precious metal collector coins.
Product Development
The Mint's collector coin product development is dedicated to commemorating only the most worthy of Australian events, people, places and culture on Australia's coinage. This is done with integrity and commitment to historical and factual accuracy in coin design, marketing collateral and media representation. The approach is one of considered and restrained issuance of coin variations and mintages. The Mint's coins, whether mirror-like proof coins on high purity precious metals or uncirculated coins in base metals, are subjected to the same award winning and innovative design, engineering, packaging and presentation.
The product development team are continually researching the collector coin market, themes and innovation that we can present to our collectors. The Mint is proud of the coins that have been on offer over the past year and look forward to further enhancing its products.
Sales and Service
The global financial crisis has impacted negatively on collector coin sales revenue for the 2008-09 financial year. The decline in demand called for proactive management of the inventory through the revision of forecasts which impacted on manufacturing activity as noted in the Operations report. Income was supplemented by engaging in cross promotions with other coin suppliers.
Direct and Retail Sales
The Direct Sales Section experienced only a minimal decrease in revenue, compared with the previous financial year. Although spending on collector coins was down on expectations the Mint was able to supplement its income with additional collector accessories to achieve this result.
Cost savings also contributed to good outcomes in Sales. There has been an increase in the proportion of orders taken through the internet, resulting in improved productivity, and staff from other sections in Marketing supported the call centre team during the peak selling periods to ensure our service standard was upheld while saving on staffing costs. Further development of the website is expected to result in more growth in internet sales.
The Mint Coin Shop reopened in March 2009. The Museum and Gallery were planned to reopen at the same time, but delays caused by refurbishment pushed handover and opening back past the end of June. The visitation of the Mint Shop is now being boosted by an after hours event to coincide with each Mint Issue release. These events are well attended by collectors who come to enjoy the interaction with other collectors and Mint staff.
Wholesale
A major revision of the Mint's wholesale terms of trade was finalised this year and will be launched in July 2009. The majority of current dealers have re-signed to the new terms. These terms of trade will undergo annual review and be updated to keep pace with current business practices.
The Mint's presence at the Australian Numismatic Dealer Association coin shows and visits to existing dealers has continued to build the dealer network with a 42 per cent increase through 2008-09. The Mint's attendance at international coin shows has also helped to boost our representation in overseas markets.
Corporate and Custom Minting
There has been strong growth in corporate orders over the past year with a growing interest from overseas clients. Australian coins that are legal tender are popular in Europe and Asia, with a strong demand for gold coins coming from China.
Partnerships are being formed with distributors in Europe and these are providing links to customers for the Mint's precious metal coins. Medallions have also shown growth on the domestic market with a challenge to maintain the quality, which the Mint is renowned for, at a competitive price.
Market Research
Marketing is always a challenge in tough economic times. The Mint again engaged in qualitative and quantitative research to access and update customer profiling and segmentation. Through this data, the Mint was able to identify better the optimal target market with which to communicate and promote the Mint brand and products.
The Mint is using market research to develop an informed integrated marketing strategy with media buying and placement. This resulted in several products achieving higher than expected sales in 2008-09 through promotion outside of normal coin collecting publications. This strategy added to the success of the $1 Inspirational Australian, Mary MacKillop coin, the 50 cent Anniversary of Australia winning the America's Cup coin, the $1 Centenary of the Australian Quarantine Inspection Service coin, the Polar Series, and the global fascination in celebrating the International Year of Astronomy through our year sets.
Through these marketing strategies, the Mint has been able to show a better return on investment (ROI) on its advertising spend compared to the previous year's marketing activities. Additionally, the ROI improvement, efficiently targeted advertising, website re-skin, mailing campaigns and promotions have allowed the Mint to expand its reach and enabled it to maintain its customer base throughout the year.
Table 7 Advertising and Market Research
2008-09 expenditure for advertising and market research
The Museum and Gallery Section worked closely with the Refurbishment team to provide material for the new displays in the refurbished gallery. As part of this work, the contents of over 45 cabinets were progressively removed from the old galleries and reorganised to present a new experience to the Mint's visitors. The majority of the new displays has now been installed. The review of the visitor experience included replacement of the theatrette presentation, starting with a new script and filming of a new video. Visitors now see a contemporary video featuring the development of coins and information about the coin manufacturing processes.
Visitor numbers have been estimated at approximately 142,000 for the year, an increase of around 15 per cent over the previous year. The number of visitors is expected to increase significantly with the completion of refurbishment works and reopening of the viewing galleries.
A pleasing development during the year was that the Mint received funding of $1.5 million from the Government, indexed annually, for gallery and visitor services. This funding will, in part, be used to develop and implement a curriculum-related educational program for school groups and progressively improve the National Coin Collection and associated displays.
The National Coin Collection has been re-valued by the Australian Valuation Office. The value has increased from $12.6 million to $16.1 million reflecting the current strong performance of collector coins in general and gold coins in particular on secondary markets.
In March 2009 two new coin-operated visitor presses were brought into operation to replace the old Taylor and Challen presses that had first come into service producing circulating coins in 1976. These new presses were developed from the bare frames of two CM 1 presses that had originally been purchased in 1983 to produce Australia's first $1 coins. The feed mechanism was modified to be driven by an independent electric motor to slowly transport a single blank to the dies and then take the freshly struck coin to the ejection chute. All the old electromechanical controls were replaced by modern electronics. These modifications allow the presses to operate more slowly so visitors obtain a clear view of how a coin is produced. The project was run by the Museum and Gallery Section with invaluable assistance from many Mint staff.
Following the reorganisation of the Communications Branch in 2007-08, the roles and responsibilities of the Branch have continued to evolve. The task of ensuring that communications is owned by everyone, and the facilitating role of the Branch in that task, has been emphasised. This evolution has permitted a change in direction and a more measured approach to the performance of the Branch.
External Communications
Reassignment of duties to use team members in roles with their strongest capabilities has brought improvement to various aspects of external communications.
The Mint's website was relaunched in March 2009 to renew its appearance, update the content, improve usability and access compliance. The website has become a major focus for the provision of information to clients, and in particular it has been the main tool for updates on progress with the refurbishment project and impacts on visitor services. Improvements in content have expanded the usefulness of the website and this is expected to continue both for general enquiries and as a branding, commercial and educational resource.
Figure 4 The daily frequency of contact timing through the info@ contact point
Measurement of the response times to enquiries made through the info@ mailbox shows that on average all enquiries were answered in approximately two calendar days, and within one working day, if received on a working day. Arrival times for info@ contacts over the past two years show that more than 50 per cent of contacts occur outside of office hours, see Figure 4. As response times are now within a one day cycle for business days, any further shortening of service cycles will depend on achieving quicker responses to those contacts which occur outside business hours. This opportunity suggests that a higher degree of self-service might increase customer satisfaction and reduce workload from person-to-person responses to routine or factual enquiries. The evolution of the website interface to permit more self-service through simpler navigation, improved content and an intelligent enquiry entry screen is under investigation.
Media releases made in 2008-09 increased by 14 per cent over the previous year resulting in a similar increase in media coverage. These results reflect the strong desire of the Mint to engage with the news media to distribute our messages of public interest, educational and commercial stories. The intention is to create an increased awareness in the community of the Mint, of coinage and the operation of a Government business whose role is to serve their needs.
The Communications Branch coordinated seven product launches during the year, and assisted with a number of shop events. The gala event of the year was the November 2008 launch of the 2009 products with the International Year of Astronomy theme. This outdoor event, which was meant to draw attention to the heavens, was dampened by showers and a clouded sky. But this did not prevent the enjoyment of astronomical images lighting up the façade of the Administration Building in its final role as host of a major event before the move to new offices in the refurbished Process Building.
Graphic Design
The challenge of maintaining a continuous flow of packaging designs during the refurbishment and relocation in March 2009 required coordination of the production of packaging to meet the needs of other areas of the Mint.
The move into the new facilities has provided a better, purpose built, working environment and the closer proximity of the graphic designers to the coin sculptors is leading to a more integrated working relationship. Professional development conferences and exhibitions have been used by the graphic designers to research new processes and materials. Site visits arranged to suppliers and printers during the year helped to develop a better understanding of their production processes and build stronger, more informed working relationships.
The Mint's graphic designers have been involved in facets of design which deviated from their normal role of designing packaging and marketing materials for the Mint's collector range. Unique design opportunities allowed the designers to make their own creative contributions to the refurbishment of the Mint. This included designing a glass feature wall for the new foyer, developing new corporate signage, and providing design advice for the new Mint Coin Shop, visitors gallery and gallery presses. The graphic designers have also contributed to the interior decoration of the refurbished Mint with creative artwork on the glass walls of conference and meeting rooms.
The Mint's 2007-08 annual report was entered into the Institute of Public Administration Australia (IPAA) Annual Report Awards. Feedback from this process has contributed to the design of this report, with improved navigation and better representation of information being emphasised.
The designers worked closely with the IT Services Branch to enhance the website and intranet. This included coordinating photography to build a library of coins from the National Coin Collection. Many of these images have been added to the website both as a valuable resource for the community and to improve self-service to enquiries.
Internal Communications
A theme that effective communications results from ownership by everyone has been pursued throughout the year. A major tool for internal communications is the Mint's intranet. This was relaunched in September 2008 with improved capabilities and more appropriate content. This tool is now the repository for business forms, procedures and work instructions raised under the Integrated Management Manual, and the primary tool for distribution of formal staff notices, informal bulletins and a staff social page. Branch content managers are in place to act as focal points and communications facilitators.
Early experiments using collaborative workspaces on the intranet have shown that the Mint community still favours broadcast emails over this technology. A meeting survey conducted via the intranet also showed a strong dependence on face-to-face meetings for information sharing. The costs of these large meetings, and the printing of agendas and minutes, might be addressed through changed attitudes and skills using collaborative workgroups.
Trials are being carried out using on-line forms and workflow to increase the efficiency of business processes. This theme is being carried through the IBIS project and is expected to result in shorter cycle times for many aspects of review and approval in all areas of the Mint.
Change Management
Throughout the year the need for a change management
strategy continued, largely because of the refurbishment project and subsequent operational and physical changes occurring throughout the Mint. One element of this strategy was to "leverage off" the coming together of previously separated work areas of the Mint as a result of the refurbishment project. It was evident that there was a strong need to build a more cohesive relationship between functional areas of the Mint. "One Mint" came out of this as a strategy to focus plans, actions and communications. The One Mint came together in March 2009 when the administrative, business and retail functions of the Mint were finally brought together by relocation from the original Administration Building to the Process Building.
Effective from 2008-09, the Mint's outcome and output statement was updated to better reflect the diversity of functions it now undertakes. The Mint's new outcome statement was expanded and focuses on producing circulating coins to meet the economic needs of Australia, and provides a mandate for the Mint to produce and sell coins to foreign countries. In addition, the previous single output was expanded into four distinct sub-outputs to assist in assessing and monitoring the Mint's performance in achieving Government objectives.
The Mint reported an after tax operating loss of $16 million in 2008-09. This loss was largely a result of a gap in timing for the reporting of revenue and associated expenses. Last year, the Mint reported an unusually high net surplus — also attributable to this timing issue. The timing issue is negated when the Mint's performance is viewed over a two financial year timeframe. The Minister for Finance and Deregulation has granted the Mint approval in the 2009-10 Budget to reclassify the circulating coin finished goods inventory as an administered asset to ensure that the timing issue does not reoccur in the forward years. This approval will ensure that expenses will be matched against revenue at the time of reporting.
The Mint remitted $114 million in Seigniorage to the Commonwealth's Official Public Account for the financial year 2008-09.
The Mint's net assets have decreased by $2.7 million over the previous year due to increase in net assets of $20.8 million and increase in net liability of $23.5 million.
The movement in net assets was due to the increase in "assets under construction" relating to building refurbishment, MHWS and the IT system upgrade. As the Mint continues with the completion of its major projects, at 30 June 2009, it reported $38.1 million of fixed asset work-in-progress. This was mainly attributable to:
- $27.7 million for leasehold improvements associated with building refurbishment, and
- $10.4 million for plant and equipment brought about by the MHWP and the upgrade of the Mint's information management system
These projects are expected to be completed and commissioned in 2009-10.
The Mint is the custodian of Australia's National Coin Collection. The collection was independently re-valued in the financial year at $16.1 million, an increase of 28 per cent over the previous year. The increase reflects the rising value of gold and growing interest in Australian pre-decimal proof coins by collectors.
The Mint accepted the Australian National Audit Office's (ANAO)'s recommendation to report the National Coin Collection as "heritage and cultural assets". As defined under the Finance Minister's Orders, heritage and cultural assets are "assets held for the community's benefit, and represent, in part, Australia's cultural and historic background". In addition, these items "will generally be held for public exhibition, education or research; and/or protected, cared for and preserved".
The increase in Mint total liabilities is due mainly to outstanding Seigniorage payable of $19.9 million which was remitted to Commonwealth in August 2009, per Treasury-Royal Australian Mint Memorandum of Understanding.
The Mint received audit clearance for its 2008-09 financial statements from the ANAO. The ANAO has again issued an unqualified audit report, shown in Financial Statements, p. 55-56.
Indications are that the difficult market conditions that emerged during the last financial year will continue to pose challenges for the Mint into 2009-10. The Mint's immediate focus is to further consolidate its business operations, and as the economy strengthens, take advantage of any qualified opportunities to grow the business.
Procurement
The Mint procurement policies and practices reflect the principles set out in the Commonwealth Procurement Guidelines and the Mint's Chief Executive's Instructions (CEIs). These policies and practices focus on:
- value for money
- accountability and transparency
- encouraging competition, and
- compliance with all other government policy.
The Mint's purchasing activities are coordinated through the Contracts and Procurement Unit which advises on government procurement requirements. The services provided include contract management advice, better practice on all aspects of the procurement cycle, tender document preparation including evaluations, procurement and evaluation plans and the annual procurement plan.
The Mint is currently investigating the opportunities available from local and overseas manufacturers for the sourcing of packaging products. This activity is in line with the Mint's Procurement Policy in obtaining value for money.
During this past year procurement has completed contracts for:
- supply of coin blanks
- provision of an ERP software system
- integrated telephone system
- loose furniture, and
- provision of a new Mint uniform.
In the coming year it is expected that tenders will be issued for:
- precious metal blanks
- provision of cleaning services, and
- associated workshop machinery.
The Contracts Management register will be integrated with the new ERP system when it is implemented.
Exempt Contracts
The Mint currently has no contracts that are exempt from AusTender.
Australian National Audit Office Access
All Mint contracts are free of provisions limiting access by the Auditor-General.
Grant Programs
The Mint did not administer any discretionary or non-discretionary grant programs for the financial year 2008-09.
Consultancies
Consistent with the CPGs Instructions the Mint engages consultants on the basis of:
- value for money
- open and effective competition
- ethics and fair dealing
- accountability and reporting
- national competitiveness and industry development, and
- support for other Australian Government policies.
Typically, consultants are engaged to investigate or diagnose a defined issue or problem; carry out defined research, reviews or evaluations; provide independent advice and information or creative solutions to assist the Mint in managing their decision making. The most common reasons for the engagement of consultancy services are:
- unavailability of specialist in-house resources in the short timeframe allowed
- the need for an independent study or review, and
- specialist skills and knowledge not available in-house.
The selection methods used for consultancies are categorised in Table 8.
During 2008-09, nine new consultancy contracts valued at $10,000 and over were entered into resulting in total expenditure of $420,527. In addition, one ongoing consultancy contract valued at $10,000 and over was active during the year involving total actual expenditure of $27,844. Information on expenditure on contracts and consultancies is also available on the AusTender website www.tenders.gov.au
Table 8 Consultancies valued at and over $10,000 in 2008-09
(1) Open Tender: A procurement procedure in which a request for tender is published inviting all businesses that satisfy the conditions for participation to submit tenders. Public tenders are sought from the marketplace using the Australian Government AusTender internet site.
Select Tender: A procurement procedure in which the procuring agency selects which potential suppliers are invited to submit tenders. Tenders are invited from a short list of competent suppliers.
Direct Sourcing: A form of restricted tendering, available only under certain defined circumstances, with a single potential supplier or suppliers being invited to bid because of their unique expertise and/or their special ability to supply the goods and/or services sought.
(2) Justification for decision to use consultancy:
a - Skills currently unavailable within agency
b - Need for specialised or professional skills
c - Need for independent research or assessment
Assets Management
The Mint manages and reports both current and non-current assets in accordance with guidelines set out in the Chief Executive Instructions and Australian Accounting Standards.
In 2008-09, the Capital Management Planning Group (CMPG) continued to manage the Mint's capital funding allocation to ensure that the Mint's capital requirements are met. The CMPG is responsible for the management of the Capital Management Plan (CMP) which was designed to ensure compliance to Australian accounting standards and best practice including depreciation, funding, asset management. It provides assurance that the Mint is meeting its obligations under the financial management framework and the Commonwealth Procurement Guidelines. Both the CMP and CMPG provide an improved framework for capital purchases, replacement, retirement, and disposal of assets that meet the Mint's business objective of ensuring that the Mint's fixed assets fully support the business objectives.
The Mint's CMP was updated in 2008-09 to reflect the internal audit recommendations relating to the asset management policies and procedures. The asset management guidance within the CMP was revised to reflect best practice relating to assets under construction, impairment, recognition and treatment of research and development costs, and asset groupings.
The Mint's non-current assets are subject to an annual stocktake to ensure accuracy of records. The Mint's asset revaluation strategy, applied with sufficient frequency, ensures correctness of the carrying fair value amount at reporting date.
The four types of fixed asset classes being managed by the Mint include plant and equipment, leasehold improvements, intangibles and the National Coin Collection. All assets were assessed for impairment at the reporting date.
The Mint continues to support, promote and comply with the requirements of the Commonwealth Fraud Control Guidelines 2002 as regulated by the Financial Management and Accountability Regulations 1997.
In October 2008, the Mint engaged WalterTurnbull to undertake a Fraud Risk Assessment and update the Mint Fraud Control Plan (FCP), taking into account the risks identified in the assessment.
The updated FCP was submitted for review to the Audit Committee and Senior Managers prior to Chief Executive Officer's approval, and implementation in January 2009. The Audit Committee and the Fraud Control Officer will continue to monitor implementation of the plan and update the plan as new fraud risks are identified.
The Mint has promoted fraud awareness among its staff through seminars, bulletins, campaigns and staff induction that actively promote the requirements of the Commonwealth Fraud Control Guidelines 2002 along with the specific requirements of the Mint in relation to fraud.
The Mint is satisfied that appropriate fraud prevention, detection, investigation and reporting procedures are in place and that annual fraud data has been collected and reported in accordance with guidelines.
This year continued to be demanding on the time and resources of the Security Section as the building refurbishment project progressed towards completion. The physical security requirements of the project and the ongoing requirements of the Mint required additional resources to manage the wide scope of activities.
In March 2009, the relocation of staff from the Administration Building into the newly refurbished Process Building required a review and update of existing protective security policy and procedures to ensure a smooth transition. A protective security risk assessment will be undertaken early in the new year to assess the post-refurbishment security of the Mint. Similarly, the Mint Security Plan will be updated to include any risks identified through the assessment.
The implementation of the MHWS, and the upgrade of production inventory management of circulating coin, to address internal security and safety issues, required significant input by the Security Section. This input involved protective security advice in relation to the design and implementation stages; to meet the needs of the project and Commonwealth security standards. Once fully implemented the MHWS will enhance the security of assets during the minting process.
The Security Section continued to maintain an appropriate protective security environment through the implementation of:
- security education and awareness through seminars, bulletins, campaigns and staff induction
- continued vetting of all staff to an appropriate level of clearance
- physical screening of all staff, contractors and visitors when exiting the secure areas of the Mint, and
- enhancement of security facilities in areas such as the guard station, visitor reception areas and boundary security by use of anti-tailgate access barriers.
These measures, along with continued monitoring of the security environment, will enable the Mint to meet its protective security requirements for both the Australian Government and the public.
Improved environmental management practices have been introduced as the building refurbishment project nears completion. These include operational procedures and processes which focus on providing specific strategies for energy supply, energy use and the delivery of goods and services to achieve potential savings, enhance conservation strategies and minimise waste.
Environmental Management
Following on from last year, the Mint refined its Environmental Management System to ensure the requirements of ISO 14001:1996 standards were achieved. This included a review of the strategies of the Integrated Management Manual, to reduce the wasteful use of resources, and potential hazards to human health and the environment from emissions and wastes. The hand over of the newly refurbished areas has enabled the use of the newly installed energy monitoring system, through the upgraded Building Management System.
The Mint has further improved its waste recycling program to include revised disposal procedures for classified, non-classified documents and packing materials, and the reintroduction of recycling waste bins in public areas.
The Mint continues to encourage the shared subscription of publications and promotes the substitution of electronic communications for paper and print media.
The water conservation measures reported last year have been improved on and upgraded with the installation of waterless urinals and sensor taps through the refurbishment project.
Water consumption for the period was 9758 kilolitres, a decrease of 40 per cent over the previous period. However, it should be noted that this was largely the result of the shutdown of some operational areas during refurbishment.
Energy Management
The Mint is establishing a predictive, preventative and programmed maintenance regime to reduce the consumption of energy, to ensure the monitoring of all systems and the early identification of repair and maintenance issues. A new maintenance program will be developed in the coming year to ensure the safe and efficient operation of all building services.
Natural gas consumption was 4.1 million megajoules for the period and electricity consumption was 2.7 megawatts. This is an increase of approximately 15 per cent and 11 per cent respectively. The electricity consumed includes the additional requirements from building refurbishment construction activity. Gas consumption returned to normal levels as heating was provided for areas not previously heated during the refurbishment project.
As advised through the building refurbishment project, energy consumption for 2009-10 is expected to improve following the final handover and completion of the project. It is anticipated that further benefits and cost savings will be achieved with the ultimate aim for the building to achieve a National Australian Built Environment Rating System rating of 4.5 stars.
Social Club
Despite the two Mint buildings being under refurbishment, the Social Club still found the time and place to organise a few social gatherings like the car park for an Australia Day sausage sizzle and a community club for the annual Christmas party!
The highlight of the year without a doubt was the One Mint Family Open Day. Mint staff invited family members to come along to the Mint for a special behind-the-scenes tour of the refurbishment. It was a great way to introduce the new Mint to our family members. The day was a huge success especially amongst the children with face painting and colouring-in competitions. Many Mint staff were involved in making the day run smoothly and took pride in showing off their new work environment
These social gatherings are a great time to get to know colleagues socially and to build staff morale and corporate pride.
The Social Club and Mint staff are also generous in their support of charities with a number of fundraising events held throughout the year. A special Christmas fundraiser was the Gift Giving Tree. Mint staff donated gifts which were given to the Smith Family to distribute to families in need.