Expanding production in a post-COVID business environment
Now that Australian business is recovering post-COVID, businesses are looking for new opportunities to expand and grow. Production is indeed growing: The Australian Performance of Manufacturing Index or PMI rose by 4.8 points to 53.2 in February 2022; a rebound from some precipitous declines over the last year. Industrial production also increased by 1.39% in the fourth quarter of 2021.
This might be buoyed by the Commonwealth Government planning to invest $1.3 billion into its Modern Manufacturing Initiative, bringing key industrial and supply capabilities back on to Australian shores.
If your business is looking to capitalise on new trends, such as Coopers Brewery pivoting more into packaged beer instead of keg sales, your business can seize the day by expanding production.
Is expansion feasible with current supply chains?
At the moment, the entire globe is experiencing supply chain shortages, especially of semiconductors. According to Gartner, supply may only stabilise through Q3 2022. Though 2022 will show supply catching up to demand once more, other issues such as geopolitical instability and price fluctuations for raw materials including gas and oil may need a tempered or strategic approach. Before expansion, you will need to ensure your business will have an adequate level of support in terms of resources and services. Forward planning may yield critical improvements.
Funding your growth
The tried-and-true method of funding your business growth is through loans. Don’t just rely on whatever your bank offers — always compare business loans. Find loans that suit your expansion strategy — do you need lines of credit? Secured or unsecured loans? Seasonal repayment flexibility? Chattel mortgages, where you take ownership of the asset immediately, or hire purchases where repayments are classified as operating expenses? A broker can help you make sense of all the different funding options available to your business, ensuring a smoother and sustained growth trajectory.
Remember to look for comparison rates — these are interest rates that include most of the fees associated with a loan. This helps you get a fuller picture of the cost of the loan. Make sure the loan terms and amount borrowed also align to make a direct comparison.
Grants and programs
Under the Modern Manufacturing Initiative, your business may be eligible for grants and other booster programs, depending on your structure, sector, and grant availability. Expansion may also require human resources; and taking on apprentices can also mean wage subsidies for your business (if eligible). In addition to loans, grants and government funding is a trusted method of encouraging your production expansion. Check the business.gov.au grants and programs page to find out more.
Using innovative technology
Expansion can also be achieved through using innovation and new technology. This could mean automating processes where none existed before, boosting throughput, simplified supply chains, and a reduction of waste, as showcased at the Modern Manufacturing Town Hall in Sydney. Adding the same machine may not necessarily double output; while a new manufacturing process could revolutionise your entire operation.
Rockwell Automation launches ROKLive 2022 in Sydney, presenting vision for the future of industrial automation and software in the Process Technology industry
This in-person event will bring together operations, maintenance, engineering, and technology...
Dr Hans Joachim Jacob of Ystral will present an online seminar in June on process technology...
Performance Intelligence, the combination of data, analytics and human insight, will transform...