Manufacturers have been constantly playing catch-up in 2011, but there are various game-changers already set for 2012. Is your company ready to compete?
Manufacturers are facing increasingly dynamic market ecosystems and value networks. Global competition, climate change, energy prices, the Australian dollar, skills shortages and the mining boom are just some of the hurdles they jump every day.
But Australian firms are becoming increasingly effective at jumping through hoops with new, innovative ways to tackle these challenges.
The hurdles in 2012 won’t be any different. But what will change – what has to change – is the attitude manufacturers have towards their country, their industry, and themselves.
This year was rough. But through hard work comes rewards. And 2012 is shaping up to be rewarding for local manufacturers on many fronts.
Here is Manmonthly.com.au’s list of the top hurdles manufacturers will clear in 2012 – and beyond.
1. Carbon Tax
Australia’s top polluters will pay $23 per tonne of carbon emitted from July. The government will provide offsets for research and development, SMEs, and more.
It’s now up to manufacturers to make the technology needed to survive the tax.
"A lot of creativity will be required to help companies deal with this without adding a significant cost to their business," ifm efector managing director, Dave Delany, told MM.
"Therefore, there is the opportunity for companies to come up with solutions focussed on the energy industry,."
Companies will need energy and water management gear, including automation and control systems, metering, instrumentation and sensors. They’ll also need ongoing support and maintenance.
2. Trade Barriers
For a nation so reliant on export, there were some serious barriers to success during 2011.
But Australia and the US have pledged their support for an historic new trade deal that will see nine countries phase-out import and export tariffs. Called the Trans-Pacific Partnership (TPP), the deal would ensure our manufacturers gain more access to global economies.
"We are a great trading nation and anything we can do to increase our capacity to trade is good for Australian jobs," said Prime Minister Julia Gillard, announcing the deal at the Asia-Pacific Economic Cooperation (APEC) summit in Hawaii.
"In ambition the TPP has as a goal eliminating barriers to trade in our region. That is, eliminating tariffs, a very important expression of the level of ambition of this new partnership."
The TPP is the latest in a stream of measures tackling export difficulties and the high Australian dollar. Anti-dumping laws are also under the spotlight to ensure a level playing field for our suppliers in 2012.
"Australian industries and businesses don’t want government hand-outs or protectionist quick fixes – they just want the Australian Government to understand and respond to the challenges facing Australian manufacturing," said opposition leader, Tony Abbott.
3. Mining and Resources
It’s no secret that the mining industry in Australia is booming. However it may come as a surprise to some that there are manufacturing opportunities galore in the resources sector – if you know where to look.
A not-for-profit organisation called ICN (Industry Capability Network) has the potential to get local manufacturers involved in some of the biggest projects in Australia and overseas.
One company that recently took advantage was Garden City Geotech, who up to recently was manufacturing plastic horticultural containers and plant pots for the nursery industry.
"When we became aware of ICN, they put us in touch with the Northern Victorian Irrigation project who was very receptive to a local manufacturer of geomembranes, which is basically a very wide plastic sheet used for channel lining," company BDM, Graham Brown, told MM.
The company has invested over $6m in equipment and facilities over the past two years, and is now close to full production.
The government is also on-board with manufacturing opportunities in the resources sector, offering $1.2 million of grants to help companies form ties with mining projects.
Another success story is Perth company Hoffman Engineering, which designs and makes components for mining machinery.
"Other sections of manufacturing would do well to look at the track record of this place – how it has stayed at the forefront of research and development, how it has met its customers’ needs and how it has been investing in skills and training every step of the way," Gillard said during a visit to the company’s facility. .
Manufacturers can also get into the industry by taking advantage of the sector’s more obvious needs.
"Mining is a dangerous business. So it is essential to keep workers safe while still manufacturing at the desired capacity. An opportunity exists for manufacturers to provide equipment that can automate these processes," said ifm efector’s Delany.
"I have noticed customers doing clever things with robots, enabling tasks to be carried out safely in harsh and dangerous environments."
4. Skilled Labour
Manufacturers have been concerned about the lack of skilled labour in Australia for years. In late 2011, the government held the Future Jobs Forum, to find ways industry sectors can work together to save jobs.
Speaking at the event was Dow Chemical chief executive, Andrew Liveris, who said that Australia needs to overhaul its immigration laws to ensure workers who receive skills training here don’t return home.
"Australia has a small worker base, and to build an economy run by the best and brightest we not only need an education system that can produce this workforce, but an immigration system that can attract them," he said.
The government has already started fast-tracking 457 visas to ensure more skilled workers enter the country.
Alternative forms of training are also being rolled-out to combat the shortage, such as apprenticeships for skilled older workers.
5. Productivity & Innovation
Say hello to the industry’s new buzzwords for 2012. Last month, a seminar devoted to these themes alone was staged in Melbourne. US Information Technology and Innovation Foundation president, Dr Robert Atkinson, provided the keynote, claiming collaboration between like-minded companies is the way forward.
ARC Advisory Group VP collaborative manufacturing, Greg Gorbach, agrees.
"Three trends — a shift in global economic power, increased accessibility and capability of IT, and increased influence of Millennials [tech-savvy consumers] — act together to create a world in which the rules of buying, selling, marketing, and competition will change markedly," Gorbach told MM.
"To survive and compete, manufacturers will need to increase the breadth, scope, and character of their external collaborations. In some situations, they will need to take the lead, dynamically orchestrate distributed network agreements, execution, and transactions to ensure orders are fulfilled as promised. In other situations, they will need to let others take the lead, while participating profitably and strategically."