Australia's manufacturing opportunity
By Scott Moffat
Wednesday, 19 April, 2017
The recent sector competitiveness plan released by the Advanced Manufacturing Growth Centre (AMGC)1 highlights a number of areas that the sector needs to improve to become more competitive, along with identifying various opportunities for Australian manufacturers. They suggest a focus of shifting manufacturing towards higher potential markets as well as increasing the value differentiation of Australia’s manufactured products and associated services. All this to be achieved by the adoption of Industry 4.0 (I4.0) as a key plank to the reports implementation strategy.
The report is lengthy and very detailed, and cites a number of good examples and cases of local success stories. Interestingly enough, although there are over 100 companies that have contributed to the report, there is no engagement with any of the technology providers in the I4.0 space.
The main difference I see between Germany and Australia with the adoption of Industry 4.0 is that I4.0 is an initiative of the German government and they have a whole industry approach. This includes government departments, industry bodies, machine and plant OEMs, and manufacturers all working collaboratively on I4.0 themes and initiatives. As a result it has permeated through all levels of business and there is no question that I4.0 is a must for German manufacturing and equipment suppliers to be successful in the future.
In Australia the approach is a little more disjointed, with a large reliance on I4.0 technology being mainly promoted by individual Germany-based vendors or suppliers and their experience with it from their head offices. We see individual manufacturing companies going it alone, keeping technology providers at arm’s length and not truly leveraging the global collective knowledge on I4.0.
We are starting to see pockets of good collaboration within industry, with examples such as the establishment of Factory of the Future research centre (Swinbourne), the Prime Minister’s Task Force for Industry 4.0 and the setting up of the Advanced Manufacturing Growth Centre (AMGC). However, there does not seem to be the same level of acceptance of I4.0 as I see when visiting Germany.
In my opinion, the only way Australian manufacturing is going to be able to compete on a global scale is with the adoption of I4.0. We need to reinvigorate and further develop our local manufacturing with smart technology, so that it is both efficient and globally competitive as well as being supported by a vibrant local high-tech machine, plant and equipment supply market.
We need to also choose the specific industries in which we can compete and develop our capabilities, with a view to being global leaders and suppliers for these markets. We then need to adopt I4.0 themes and concepts in these markets and develop specifics around this. We are already seeing progress in this space, with some new phrases coined like Mining 4.0, Medical 4.0 and Defence 4.0.
Finally we need to make sure we create a vibrant and globally competitive machine, equipment and plant supply industry to support this. This second-tier industry can also be a provider of equipment and machinery globally and provide great export opportunities. Unfortunately at the moment I am seeing the opposite with a trend towards the supply of plant and equipment from overseas while local manufacturers are being squeezed out of the market.
We will need to develop local talent as well as import talent from overseas to help train up and develop local resources. One of the frustrating things I see at the moment within Australia is the negative connotations of the 457 Visa Scheme and the rhetoric that it is taking local jobs. For me and the business I run, the 457 Visa Scheme should be a fantastic mechanism for us to be able to import talent from overseas and use this resource to train up multiple resources locally. But at the moment, the paperwork and length of approval process significantly detracts from being able to do this easily, efficiently and cost-effectively.
Let’s hope this is the new dawn in which we see all Australian manufacturers continually advance and remain globally competitive in the future of advanced manufacturing.
1. Advanced Manufacturing Growth Centre Ltd 2017, Sector Competitiveness Plan 2017, <https://www.amgc.org.au/Article?Action=View&Article_id=1>
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