Manufacturing is Dead, Long live Manufacturing.
At the Austech 2015 Trade Show and there was a lot of talk about manufacturing, as you would expect. But there was a lot of talk about the death of manufacturing in Australia.
Based on the empirical evidence at Austech, this is clearly not the case. Manufacturing is strong in Australia, but we are focusing on the negativity not the success stories. Some of the stories heard at the show prove that there are some fantastic companies doing amazing things.
It is fair to say that Automotive Manufacturing in Australia is in decline, but the feeling is that this is not a bad thing. The margins were extremely tight, the demands were high and the profitability was very low. Remove of the government rebates and financial incentives and it would be difficult to find profitable manufacturers in the mainstream automotive industry.
So what are the success stories?
One company, Lovitt Technoglogies based in Melbourne is a first tier supplier to Boeing in the aeronautical industry – among other things, they manufacture tail pieces for 737s and other equipment for the FA8 Super Hornets.
Another company based in Dandenong, Volgren is manufacturing buses made of aluminium. They they are more expensive than importing a traditional steel bus but because they are made of aluminum – which no other company does – they are lighter to run and that they are more cost effective, so the total cost of ownership is lower. What they are also doing is starting to export these buses to Japan.
We have another company called Tomcar making an urban utility vehicle that was originally made in Israel, but the owner of the intellectual property could not get them made to the specification he wanted, so he started having them made in Australia. They are now exporting them and selling them to the US Defense Force.
In fact, throughout the course of Austech Tomcar were searching for local suppliers to increase the Australian made content of the vehicle. Current the Australian made content sits at around 60% and their target is to lift it to 85%
There are some amazing success stories in the Australian Manufacturing Industry if we choose to look for them.
The significant shift for Australian manufacturing is that we are moving out of commodity manufacturing – mass production. Our labor costs become prohibitive to be able to afford to do that, but what we do have is the ‘smarts’.
Clever manufacturing is where the future of Australian manufacturing lies. There is no reason why we can’t manufacture high specification, high quality products that we can then sell to the rest of the world.
Both Roger le Salle from Matrix Thinking and Professor, the Honorable Stephen Martin, CEO of CEDA, stated at Austech that this is the future for Australia. One of the questions they asked is that instead of looking to Switzerland and Germany for high specification products, why can’t we manufacture them here?
We have a history of clever innovation and we have proven that time and time again. From farmers who invented the ‘stump jumpers’, which were ploughs that would jump over stumps to secure plastic bank notes and WiFi, Australia has created some amazing inventions.
David Lake, MD of ATTAR mentioned that his team were able to create some non-destructive testing processes that were previously thought impossible to do and by creating a unique team structure and management style within the business, continued to get significant innovation from his team.
Australia has some amazing universities and technical resources.
The CSIRO have recently created Lab22. They invested a significant amount on the latest in additive manufacturing equipment, typically referred to as 3D printing. Industry can access this equipment and CSIRO’s expertise and you don’t have to make a significant outlay. You can rent this Lab for some prototyping or looking at how you might be able to use additive manufacturing processes in your own business.
Australia has the ‘smarts’, we have the opportunities and we have the capacity. All we need is manufacturers who are willing to look beyond their current business to see what the future holds.
Now is the time to fully embrace being “smart manufacturers” looking for the niche, looking for the high specification product you can export to the rest of the world.
This kind of manufacturing would be ideal for our new submarines. Many visitors to Austech felt it was outrageous that our current Government is not letting Australian companies even bid for the manufacture of these submarines. There may well be politics involved, but it is important to know that we do have the ‘smarts’ to be able to do this – and we are a clever and lucky country.
Be confident that our manufacturing industry is recalibrating not disintegrating.
Manufacturing is dead, long live manufacturing.
PS Here are some videos of a couple of the interesting machines at Austech2015
Hilton Digital LED/CD Displays
Renishaw 3D Printed Bike
5 Axis Sculpting