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4 tried and tested ways to lift your manufacturing performance

Posted by: Danielle Moore at November 30, 2021

Despite showing a solid recovery throughout 2021, the Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI) dropped by 9.2 points to 51.6 in August. This was a steep retreat from the healthy expansion we’ve seen in manufacturing most of this year.

It’s no surprise that lockdowns right across the country – and particularly in NSW and Victoria – were the biggest problem. The building materials and metal products sectors were hardest hit, mainly due to the impact of lockdown measures on construction.

While food and beverage and chemicals continued to grow strongly, the machinery and equipment sector only just hung on to its recent gains. Employment grew slightly across the manufacturing sector as manufacturers built up stocks rather than cutting back on production.

Worryingly, a recent report from Flinders University’s Australian Industrial Transformation Institute shows the country’s capacity to manufacture essential goods is the lowest in the developed world. It shows Australia is unable to independently meet its own essential needs in health, energy, and infrastructure, defence and space, science, communications and technology and advanced manufacturing.

This collapse has left the sector needing support to access their workforce and global and local markets.

Government financial support for manufacturers

One of the Australian Government’s solutions to this problem is their $1.5bn Modern Manufacturing Strategy. This is described as a whole-of-government strategy to help our country’s manufacturing sector scale up and become more competitive and resilient.

The focus will be on six National Manufacturing Priorities, which include medical products, clean energy and recycling, food and beverage, defence, space and resource technology, and critical minerals processing.

The action plan aims to develop and strengthen Australian manufacturing under four pillars:

  1. Getting economic conditions right.
  2. Making science and technology work for industry.
  3. Focusing on areas of advantage.
  4. Building national resilience in supply chains.

The bulk of available funding ($1.3bn) falls under the Modern Manufacturing Initiative, which is designed to help businesses translate their ideas into commercial success, create jobs, and integrate into local and international value chains. There will be annual funding rounds for the Initiative in the first half of each year.

4 winning traits to aim for in your business

Aside from government financial support though, what can Australian manufacturers do themselves to become more resilient and internationally competitive? Advisory firm BDO describes four traits it believes allowed manufacturers to pivot successfully and thrive during the pandemic.

The first point – the general lack of flexibility and ingenuity among Australian manufacturers – was highlighted in a recent report. It found that Australia ranks 2nd last of 37 OECD countries when it comes to the investment in and uptake of digital technologies. According to the AFR, this places some of our core industries, such as manufacturing and healthcare, under direct threat from switched-on overseas digital competition.

While most Australian manufacturers have done well in recent years to use technology to optimise the means of production (otherwise known as the fourth industrial revolution, or Industry 4.0), the COVID-19 pandemic has hastened the world’s move towards Industry 5.0 – connecting man and machine.

This has meant it’s become even more important for manufacturers in our country to continue to embrace change to stay ahead of their global competitors and win market share using the latest technologies and trends. Here are just three ways that technology and innovation can help Australian manufacturers perform better:

Harness predictive maintenance to keep production on track

98% of organisations say a single hour of downtime costs them over $100,000. This highlights how important it is for all equipment to function at optimal performance levels. Manufacturers are turning to predictive analytics and predictive maintenance to achieve this.

Make employee safety the top priority

While workplace safety has always been a priority for manufacturers, the pandemic adds further significance. This involves monitoring who enters and exits their premises and which people and equipment they interact with. Technology can add robustness to tracing efforts.

Find out and deploy IoT – the Internet of Things

IoT is about embedding sensors, software and other technologies within devices, then connecting them via the internet so they can ‘talk’ to each other. This helps manufacturers make informed strategic decisions using real-time data, leading to cost reductions, enhanced efficiency, better safety, and product innovation.

How Rebus Capital Partners can help with funding

If you need capital to help your business embrace innovation and catch the Industry 5.0 wave, talk to us here at Rebus Capital Partners.

By working in partnership with our clients, we gain a deep understanding of their business, industry and innovation opportunities. Coupled with independent and unbiased conversations around capital needs, you can be confident you’re receiving the best advice for your specific needs.

Danielle Moore

The Trustee for the Rebus Capital Partners Unit Trust ABN 88 452 904 420. Authorised Credit Representative 523233 under Australian Credit Licence 536100.