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Australian businesses 'missing the point' of automation

18 June, 2015

A leading Australian manufacturing business CEO says claims that automation will force people out of jobs are alarmist.

While technology is shifting the way businesses operate, Dr Herbert Hermens, head of Australian-owned manufacturer Keech, says a move towards automation doesn't have to come at the cost of jobs.

"Some businesses are failing to see the opportunity that automation brings – the opportunity to educate people and reskill the workforce in a movement towards more specialty skills that we can then export to the rest of the world. This will bring significantly more value to their operations than simply cutting jobs," he says.

A recent report from CEDA claimed that 18.4 per cent of the workforce had a "medium probability" of losing their jobs in the next two decades, but Hermens believes those worrying about the future of Australian businesses are missing the point of this report.

"Automation should be used to strengthen Australia's position in the global market. It allows us to be more nimble and quick to respond to changing trends."

Over the past five years, Keech – which predominantly services the mining and resources sector - has seen about 10 per cent growth in a market that has been in steep decline.

"Keech invests seven per cent of its turnover into R&D and we've thrived for more than 80 years through constant adaptation," Hermens says.

Automation is on the agenda for Keech, which specialises in making steel castings and wear resistant products for the mining, construction, industrial, agriculture, and rail industries, and which recently expanded its capabilities through the adoption of industrial 3D printing.

"We're moving a substantial percentage of our manufacturing processes to an automated system. Put simply, we're embracing automation to improve market share, have better control, better quality products, and improve our global position," Hermens says.

"This is not just a cost cutting exercise. Our goal is not to shed staff. We're implementing a training program to re-skill and re-deploy staff within the company. We hope to continue the move towards automation in our foundries over the next 15 years, but foresee no real reduction in labour over this time. This cost will be absorbed in our growth.

Hermens is adamant about the need to upskill Australia's workforce and believes that government and private entities alike should take an active role in stimulating the manufacturing sector.

"There is an urgent need for additional emphasis on science, technology, engineering and mathematics courses and a move for young people towards earlier engagement and training so they can continue to add value."

So what should businesses be doing now to prepare for the shift?

According to Hermens, business leaders need to be working with their management teams to bring them along the journey, and employees should be working hand in hand with their employers to secure training and re-deploy their skills within operations.

"Keech is partnering with universities and other industry groups to ensure we continue to improve everyone's capability and improve our business capacity. We recognise the opportunity automation presents to make developmental improvements and are embracing the advancement as a positive and necessary change."

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Baron Stan | Tuesday, June 23, 2015, 11:51 PM
I think it staggers belief anyone could suggest automation does not cut jobs - the basic driver of automation is to reduce labour costs so as to be effective against third world countries where labour costs are minuscule by conmparison. All other benefits reproducibility and speed enhance profits by a lesser degree. If you can expand volume production and have the market to do so to have every employee to be terminated re-employed to operate a machine that does the job of 100 of them then maybe....