Manufacturing News

Manufacturers in the 1990s joined the world stage

WHEN globalisation lead the way for grunge and retro-inspired fashion, the republican debate was threatening ties with Britain, and Sydney was gearing-up for the 2000 Olympics, members of the global manufacturing industry started to get to know each other. 

Using a great new thing called ‘the internet’, manufacturers could start to see – for the first time – what competing businesses were doing in the facilities across the other side of the world. This transparency started to fuel stiffer competition, as well as collaboration and, finally, productivity. Manufacturing imports and exports grew exponentially during this time, and businesses flourished in the new global marketplace.

Hot off the back of a recession, Australian manufacturers bounced-back with gusto at the start of the 1990s and began taking advantage of tariff reductions. Australian products became known for their high quality – especially compared to some of their neighbours – and local businesses looked outside their own backyards for extra coin. 

According to a Productivity Commission research paper called Trends in Australian Manufacturing (2003), exports increased from just over 15% of manufacturing output in 1989-90, to around 24% in 1999-2000, with import shares also rising.

The paper points out that while both simply- and elaborately-transformed manufactures (STMs and ETMs) showed substantial growth, export growth of ETMs was particularly strong, growing by over 130%. 

"Over the longer term, the increasing openness of manufacturing meant that, whereas manufacturing exports were only about 14% of total Australian exports in 1963-64, they stood at just under a third of exports in 1997-98," the researchers state.

Productivity Commission research shows that the 1990s was a stable era for manufacturing, with growth rates less variable than past decades.

"For example, for manufacturing as a whole, volatility was less than half that prevailing in the previous two decades. This probably reflects the fact that, other than in 1990-91, there were no general economic downturns in this period," the writers say.

Australian manufacturing was becoming increasingly open. In 1999-2000, over one-third of domestically-sold manufactured goods was produced overseas and about one-quarter of domestically-produced goods was sold overseas. This is up from, respectively, less than one-quarter and one-sixth a decade earlier.

Manufacturing was also becoming more specialised, and numerical controllers were opening the way for greater industrial automation. There was a shift to lighter and stronger materials in many manufactured goods, and a growing focus on reducing energy requirements as part of broader productivity initiatives.

The Productivity Commission research paper Microeconomic Reforms and Australian Productivity: Exploring the Links (1999) reports that there was a marked improvement in Australia’s rate of productivity growth in the 1990s, and that ABS estimates put Australia’s productivity growth in this decade at a record peak.

Push for best practice

The May 1991 issue of Manufacturers’ Monthly reported that some $25 million would be spent on an Australian best practice demonstration program over two years as part of the government’s March industry statement.

"The best practice demonstration program is aiming to accelerate the spread of best practice reforms and improved workplace culture throughout industry. A committee of industry, union and government will be set-up to implement the program," the article said.

"This will involve international benchmarking, so that Australian firms can compare themselves with similar overseas companies."

That same issue of Manufacturers’ Monthly also carried an article by John Button, then Minister for Industry, Technology and Commerce, in which he explained the rationale behind tariff cuts. He said a key objective of the Government’s March industry statement was to intensify pressure to focus on competitive investments in Australia as a central part of the tariff reforms. 

"Other aims were to accelerate the linkages between Australian industry and international markets, and to harness the skills and technology base of Australia," Senator Button said.

"In sum, we set out to accelerate the two parallel themes which have been in industry policy since 1983 – on the one hand rolling-back protection to focus effort on international efficiency and external competition and, on the other, fostering a business climate which will meet the challenges posed by exposure to the international economy. Manufacturing will grow into high value added activities."

Executive director of the Metal Trades Industry Association (MTIA) in the 1990s, Bob Herbert, says the Howard government, which took office in March 1996, continued to deregulate the economy and the push to enterprise bargaining which had started under the Industrial Relations Minister Laurie Brereton in the early 1990s.

"This was a period of industry consolidation, and the industrial relations reforms were initially supported by the MTIA. However, this later became a divisive issue as reforms were pursued to the extreme," he told Manufacturers’ Monthly.

In 1998, the Australian Industry Group was formed out of a merger between the MTIA and the Australian Chamber of Manufactures, with Bob Herbert as the inaugural chief executive. He says the pace of globalisation continued to grow and Australia became recognised as one of the most open economies in the world. 

"Companies increasingly looked to engage with China and India. R&D and automation became increasingly important elements in engaging with international supply chains, and the competency of the workforce became a feature of the work of the National Training Board," Herbert said.

Growth of automation

As Australian industries pushed for more automated processes there was an increasing focus on robotic applications in manufacturing and materials handling to lift productivity and quality.

The now retired former managing director of Sick Industrial Sensor Company, Peter Horman, says advances in light emitting diodes revolutionised the design and capabilities of sensors, allowing them to be used in more numerous and various locations throughout industry in the 1990s.

"The need to network the sensors was recognised and with the advance in PLC and electronic controller designs, sensor design and outputs were modified to meet the automation requirements," he said.

"Robotics in automation areas increased the need for smaller and more intelligent sensors. Visible infra-red diodes enlarged the application of sensors for proximity detection and control, solving background interference in proximity detection applications. In particular, ambient light interference was no longer a problem in sensor application areas.

"Sensors became more intelligent as critical measurements and failsafe detection requirements by industry increased. Safety light curtains became solid state with an array of beams replacing the need for moving parts."

Horman points-out that the environment for sensors in many applications involved protection from chemicals and moisture in their operation. Also, colour sensors were established allowing many applications in the packaging and printing areas to be solved.

"Scanning laser beam devices also became more intelligent allowing large safety areas to be protected, and volume measurements and intelligent barcode scanning applications to be realised. Laser diodes enabled the enhancement and design ability of sensors to fulfil more detection applications in previously difficult areas in industry," Horman said.

"In addition, distance measurement devices using time-of-flight laser diodes enabled long measurements with high accuracy as required by motor controls in many automated processes.

"On the environmental front, regulations requiring monitoring of emissions and control of air quality were becoming more stringent, so monitors for emission control capable of detecting various gasses using diode array spectrometers were developed." 

Car industry changes

Richard Phillips, director of vehicle assembly operations at GM Holden, recalls the late 1980s and early 1990s was when welding operations in the body shop moved from a complete manual shop to the heavy use of robotics.

"This continued to the point where the shop that makes the Commodore range is now about 98% automated. Also, through the 1990s and early 2000s, a lot more automation, including robotics, was installed in the press shop," Phillips told Manufacturers’ Monthly.

"In the paint shop, the biggest change was going from hand spraying to automated spraying in the late 1980s and early 1990s, and then to robotic spraying. We have now moved to electrostatic and e-coating of bodies, but that has been a gradual development of technology.

"In 1997 we moved to a more modular approach to the vehicle. Things like completely developing a cockpit module as an off-line sub-assembly, rather than assembling it in the vehicle, and other modules included the rear suspension." 

In the 1999 Productivity Commission study it was pointed out that the automotive industry, which is sensitive to scale, rationalised from five manufacturers producing 13 models of passenger vehicles at eight plants in 1985 to four manufacturers producing five models at four plants by 1999. But over the same period, industry production increased.

"In the textiles clothing and footwear industries, production of a number of low-value, standardised products ceased and many firms had adopted niche market strategies, shifting into more customised, higher value products with strong brand-name identification," the study reported.

Workplace arrangements

The 1999 Productivity Commission study also found that flexibility in work arrangements had improved. 

"As one indicator, enterprise bargaining agreements have grown to cover about half of workplaces (with more than 20 employees) in 1998, from what was a very heavy reliance on the centralised system in the 1980s. Productivity improvements have been an explicit focus of many agreements," the researchers stated.

The report went on to advise that multi-skilling had increased flexibility. Less hierarchical work arrangements in many workplaces meant that those with the best knowledge on the shop floor had greater ability (as well as financial incentive) to suggest and implement productivity enhancing measures, rather than resist them, as often occurred in the past.

According to the Australian Manufacturing Workers Union industry and economic advisor, Nixon Apple, the first half of the 1990s saw a strong push to develop smart export-oriented industries. 

"The government introduced the 150% R&D tax concession in the mid 1980s, and in the decade to the mid 1990s real investment in R&D by manufacturers grew by 10.1% per annum. This surge of investment in turn assisted double digit growth in exports of elaborately-transformed manufacturers," Apple told Manufacturers’ Monthly.

"There was also a shared recognition of the need to increase productivity through investment in innovation and training. Big picture decisions were being made by companies to refocus businesses and address factors such as plant location, rationalisation of product lines, and the need to increase automation."

Do you have any memories from the 1990s Australian manufacturing landscape you’d like to share? We’d love to hear your stories! Comment below by clicking on the ‘comment’ tab.

 

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