Advancing manufacturing

by Jim Walker, CEO - QMI Solutions

QMI Solutions has a history of aligning itself with world leaders and experts on manufacturing. This is how we are able to transfer proven practices and technology for the benefit of local industry - the primary reason for the establishment of QMI Solutions.

Most recently, we have been fortunate enough to work with Professor Goran Roos, a leading thinker on manufacturing and a world-renown academic and strategic advisor to industry around the world. It was great to see Professor Roos as one of our keynote speakers on “The future of Australian Manufacturing” at our Manufacturing Skills Conference held in May.

 

In 2008, Australia moved from being a low cost environment to a high cost environment and is ranked the third most expensive country in which to conduct business. Professor Roos says because the shift to a high cost environment has occurred relatively quickly, many support businesses and systems have not been able to make the change required to compete successfully.

 

Compounding this, over the past decade, Australia has experienced a flattening trend in productivity. Although the Australian economy has experienced average annual GDP growth rates ahead of many other developed economies, ours dropped over the past decade and is only now showing signs of relative improvement. Sometime around 2002, Australian productivity went from growing substantially faster to growing substantially slower than the OECD average. Added to this, Australia’s innovation performance over the past eight years slipped from 5th to 15th according to the World Economic Forum’s Global Competitiveness Index.

 

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Advancing Australian manufacturing

Attached is an article by Craig Milne, Executive Director of the Productivity Council of Australia, that gives a potted history of manufacturing in Australia and the associated problems it has faced over time. He also attributes the negative effect economic reform has had on the industry, however my favourite part is this:

"There are strong arguments for Australia staying in manufacturing, and being prepared to pay a high price to do so. Manufacturing is the sector that contains and advances the skills and capabilities that prescribe membership in the ranks of the advanced nations of the world. For research and innovation, manufacturing provides the essential ground from which future streams of products and incomes can emerge. Whatever form the economy of the future may take; manufacturing will provide the enabling foundation for it."

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Flood assistance turns to profit

Thousands of businesses were directly impacted by Queensland’s 2011 flood crisis. Many faced extensive recovery costs; some failed to survive.

The Rocklea Group Pty Ltd’s 1,000m² factory, in the Brisbane riverside suburb of Rocklea, was inundated by floodwaters. The company lost at least $300,000 and could not operate for two months.

But, thanks to QMI Solutions’ assistance, The Rocklea Group did more than survive; it is better off now than before the floods. Co-owner Walter Vrbancic said: “Before the floods, we would break even most months, or sometimes suffer a loss. Now, we consistently make a profit.”

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Today's jobs are manufacturing jobs

A study published by the National Association of Manufacturers and the Manufacturing Institute, titled “Keeping America Competitive” states that “today’s manufacturing jobs are technology jobs, and employees at all levels must have the wider range of skills required to respond to the demands of an increasingly complex environment.”

However, the US identifies a number of obstacles in employing more in manufacturing:

1. Manufacturing’s image
2. Parents
3. Teachers and counselors
4. Shop classes
5. Vocational Training
6. Advanced Technical Training

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US manufacturing has a great opportunity

US manufacturing has a great opportunity. In an election year, candidates are falling over themselves to be seen as the champion of rebuilding the economy, through creating jobs and making it easier for business to do business. Jeff Moad from Manufacturing Executive Community says it is likely candidates will cater to larger manufacturers rather deal with the issues faced by smaller manufacturers. He says for them, it is the reduction of red tape and export guidance that improve potential, not reduction of the corporate tax rate which resonates with the big players.

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