Graeme King, Channels and Business Development Manager, Cincom Australia visited Ausbiotech's inaugural Advanced Manufacturing Summit. He reflects on key ideas presented at the summit and what this could mean for Manufacturing in Australia.
After attending the recent Advanced Manufacturing Summit it was abundantly clear that, contrary to media reports and, perhaps general public opinion, manufacturing in Australia is alive and well. We have many examples of successful manufacturers who are profitable through manufacturing and selling their products within Australia and through successful penetration of export markets.
Provided our policymakers focus on the area; advanced manufacturing has the potential to continue to be a significant contributor to the Australian economy. However Australia's mindset about manufacturing needs to change. Our future is not in traditional assembly line production. Australia cannot compete with low-cost, high-volume production. It is in advanced manufacturing and opportunities in the global supply (value) chain.
What is advanced manufacturing?
Advanced manufacturing is often associated with niche products such as biopharmaceuticals or defence technology but that is only one part of the picture. Economies that have had the most success in advanced manufacturing are those that recognise it is not just about products – advanced manufacturing includes the full suite of activities from the concept, research and development and design stages all the way through to post sales services. It is about adding value to the production line, and it is very much about securing a place in the global supply chain.
Knowledge-intensive manufacturing services such as research and development, after-sales maintenance for high tech products and the development of customised solutions for specific industries/customers are just some of the areas where Australia's manufacturing future lies.
Transitioning from process to advanced
This transition to advanced manufacturing will most likely mean fewer overall jobs in "traditional" manufacturing. However, these new jobs will be higher skilled, higher paying and make a bigger contribution to the economy.
The value chain, from the conceptual stage all the way through to providing after-sales service, is becoming more complex and interlinked. The role of services is becoming more crucial for manufacturers in developed economies. As customers continue to demand highly-customised products, the ability to respond quickly to dynamic demand conditions will be an important competitive advantage for manufacturers.
Advanced manufacturers should specialise in areas within the value chain in which they have a comparative advantage (their core competence), outsourcing and/or offshoring the rest. This comparative advantage lies in low-volume, high-value manufacturing, with a strong focus on the pre and post production activities such as research and design, innovation and communications.
There are a few hurdles in the way of Australian manufacturers transitioning to advanced manufacturing. These hurdles include; Australia lagging behind in collaboration, innovation and capabilities, a dearth of funding for innovation, information communication technologies and other key enabling technologies and poor public perception of the sector. While all these need to be addressed, the industry itself has a major role to play in changing the culture of its companies. To be a successful advanced manufacturer, an organisation must foster a culture of innovation, collaboration, globalisation and competitiveness.
The Ausbiotech summit provided some great insights into the Advanced Manufacturing space, disruptive technologies and a host of government and industry bodies supporting the transition from a process focus to the advanced space.
For additional information on Advanced Manufacturing in Australia I recommend the following informative publication from CEDA, "Advanced Manufacturing: Beyond the Production Line" which, along with notes taken from the Advanced Manufacturing Summit, was used for research for this blog.