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Australian manufacturing: are we ready for the information age?

08 October, 2014

Australia needs to play to its strengths and transition from traditional manufacturing into new areas of competitive advantage, a white paper from the CSIRO has suggested.

The CSIRO proposes the direction for such a move in Equipping Australian Manufacturing for the Information Age: iManufacturing – Is Australia Ready?.

The paper aims to generate discussion among Australian industry to prepare them for the move away from 20th century modes of production and allow them to compete on the world market.

The CSIRO said opportunities exist both domestically and internationally in the market for high valued, niche manufactured goods and associated services produced here if Australian industry were to adopt and utilise modern information technology and develop the associated skills to make best use of it.

Recognising the worldwide trend towards smaller batches of production, customised products, rapid prototyping, agile manufacturing processes and an emphasis on increased 'servitisation', the report's authors warn that Australian manufacturers must develop appropriate business models and prepare themselves for increasingly innovative and competitive offerings in terms of price and flexibility in their domestic and international market niches.

The paper talks about businesses growing and evolving from the use of traditional IT-based technologies and into eManufacturing (dependent on cloud-based services) or progress further into iManufacturing (or informatics-linked manufacturing).

Transitioning to iManufacturing

To compete globally, the report says, enterprises need to have the right skills and tools to do business, adapt to the future, including:

  • Develop workers which combine not only eSkills (general computer/internet abilities) but also iSkills (understanding data, connectedness, the Internet of Things, servitisation) and manufacturing expertise
  • Encourage and develop materialisation technologies that more rapidly turn digital, customised data into physical outputs
  • Develop collaborations and networks at local and global scales that are not only engaged at the human communications level but are sharers of data, resources, and processes
  • Improve supply chain interoperability and material flow efficiencies
  • Move manufacturing industries increasingly into the service spaces – the servitisation of manufacturing
  • Develop appropriate business models that maximise the potential that these new technologies provide.
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Phil Hopwood | Wednesday, October 8, 2014, 11:43 AM
Nice vision but the CSIRO is going to have to develop these ideas a lot further before they will be of any practical use. The problems for manufacturing are more economic and political than they are scientific.
Hedley | Friday, October 10, 2014, 3:01 PM
If I read it right, Phil is highlighting that manufacturing is "on the nose" for all politicians. I agree. So here we go again with more business bashing from the bureaucrats. But to be constructive, I answer their six points as below starting with point 3: My industry sector is involved in networking by having set up a Pty Ltd Company through which we, as shareholders, more safely exchange our business ideas. We are developing a web site data base. It is starting to benefit us. Point 4: Our supply chain has more tiers than it needs. Too many middle men. We are working on it. Point 5: The service industry is a larger part of manufacturing than many think. I suspect that bureaucrats know little of this. My manufacturing sector also services our product when it reaches the point of "wear" when REMANUFACTURING steps in. That is, the product is recycled by replacing the worn components at a saving of 45% to the client. This is done in our factory where manufacturing takes place. Road and rail transport is a big part of this and hardly small time stuff. Point 6: Business models: Our networking group, private Company, is working on this to good effect. But we still face issues as below. Point 1: Develop workers: I dislike the term "workers" as it implies semi-skilled and poorly educated staff. That aside, industry has been addressing the education of our staff as a matter of course because no one else is. Hello education departments. The primary and secondary schools are seen as below standard and contributing substantially to the young people arriving at an interview with few employable skills and knowledge. Think reading, writing, and basic math. Point 2: Develop new digital-based technologies. Bureaucrats have little understanding of cash flow. Even more, they appear to be distant from the fact that the main manufacturers in Australia are small family owned businesses. To change our country's terms of trade in the manner that places pressure on small business to change or fail is like beating a tired horse once too often. I say to the bureaucrats, look into your own ranks and see the huge growth of your numbers. We folk in business call that our overhead. And when it comes time to toughen up a business, having sorted the business model and productive staff, guess who goes next? Talkers and non-productive people that no longer fit in the way forward. But to close on the positive, all contributions are welcome from the CSIRO and I acknowledge that they identify what we are doing. But take the message back to Canberra and to the States that our education system has failed us. This matter of "employable skills" impacts greatly on the small business model where staff come primarily from secondary schools and through a trade the more intelligent become managers or owners of our businesses. Tertiary-trained staff are generally not part of a small business model yet that is where Government has directed the dollars since the HECS fee idea was introduced. In business if we produce an excess of product we go broke. But no so for the bureaucrats apparently.