There are still plenty of well-run and dynamic businesses in this country. Manufacturers facing an uncertain future have a lot learn from the experienced outfits. Innes Willox writes.
It is difficult to overstate the extent of the challenges that Australian manufacturing has faced over the past decade. In many ways they are bigger even than the shock of two to three decades ago when manufacturing was jolted by the wind-down of tariffs and the recession of the early 1990s.
While the pressures have not ended, in a very real sense the impacts to date can be seen as having demonstrated the strengths and resilience of domestic manufacturing more than its weaknesses.
It is a future that will be made in large part by businesses themselves acting on their own initiatives; in partnership with other businesses – both here and abroad; in collaboration with academic and private-sector R&D providers; often despite the interventions of governments and government agencies; and also, hopefully, with some cooperative facilitation from the public sector as well.
And, while this future will build on the existing base of our manufacturing and engineering capabilities, it is a future that will be different in a number of key respects from Australia's manufacturing traditions.
Fortunately there are opportunities as well as challenges.
And there can be little doubt that Australia has strong manufacturing and engineering capabilities and very well-run and dynamic businesses.
There are plenty of examples of them. This includes Banlaw who have transformed from being a manufacturer of fuel pumping equipment to an information technology and service company providing global fuel monitoring for large mining companies and national transport operators; Nupress with its niche stainless steel products and services in glass architecture for buildings both in Australia and in North America; and Hedweld who have gone from constructing steel industrial buildings in the Upper Hunter regional to a manufacturer and exporter of mining and earthmoving equipment. It also operates a facility on North America.
There is a lot to learn from these businesses with their emphasis on quality; the strong partnerships they build; the attention they give to the development of their businesses; the investments they make in their workforces and in their capital equipment; and the ongoing quest for new opportunities.
While we have some solid reasons for measured optimism about the potential for Australian manufacturing – both from the supply and demand sides – success is far from assured.
For one thing we have already seen quite a loss of capability – you can't lose 9 per cent of your workforce and not lose capability. And we know that there is considerable pressure building on other parts of the sector.
What we have to do in the face of this is to build and rebuild capability.
One area of management capability development that Ai Group has been working on over the past year or so under a contract with the Department of Communications is in developing material for what is called a Digital Business Kit (DBK).
The DBK is a collection of information, tips, case studies and advice on how digital technologies can create real benefits for the small to medium enterprises within the manufacturing industry.
Designed as an introduction to the possibilities that digital technologies offer businesses, the kit contains useful information and tips from companies who have found real success in integrating new digital technology within the operations and management of their businesses.
An example is FPM – Bendix Brakes, an automotive supplier based in Ballarat. They developed an app that uses face recognition technology that enables a customer to take an image of the brake pad, the app recognises the part, automatically searches an online catalogue and identifies the right replacement. The company attributes this and their social media marketing strategy as key in their survival in the automotive aftermarket.
Digital technology and the internet are creating disruptive changes that bring major opportunities and challenges in product and production innovation. With the correct approach and responding positively to the inherent challenges and opportunities, Australian manufacturing firms who are not only technologically sophisticated, but are also agile, adaptive and efficient will be most likely to excel.