Australia’s manufacturing industry stands to benefit significantly as the Federal Government seeks ways to spark post-COVID economy recovery. To truly grasp these opportunities, businesses must embrace digital transformation, writes Vijay Sundaram.
After an extraordinary 2020, the dawn of the new year has brought with it an Australian economy continuing to grow and recover, and new opportunities for businesses in a COVID-normal Australia. For manufacturing organisations and the industry as a whole, the importance of innovating, growing and playing a central role in Australia’s ongoing economic recovery is imperative.
While many will be understandably keen to forget 2020 altogether, last year’s Federal Budget announcement was a good one for manufacturers, with the Federal Government putting a large focus on – and announcing a significant investment in – the Australian manufacturing industry. Over the course of the next four years, billions of dollars will be invested in projects that will grow emerging technologies, or enhance those in which Australian manufacturers already perform strongly.
A few short months after the budget announcement, the Australian economy is already showing remarkable signs of recovery, coming out of nominal recession in December as most states and territories continued easing restrictions, and as industries found ways to innovate in a COVID-normal environment. However, with unemployment high, global supply chains disrupted and the looming cloud of escalating and volatile trade tensions, the industry must be dynamic and committed.
To capitalise on the Government’s recovery plan, and to continue creating local jobs within the manufacturing industry, manufacturers must embrace digital transformation and befriend the technologies that will allow them to increase productivity, lower costs and drive their operations – and Australia – forward.
Capitalising on the Government’s recovery plan
Manufacturing is a vital contributor to the Australian economy, employing 900,000 Australians and contributing around $100bn to the economy each year. However, over the course of the last 30 years, the employment rate within the industry has experienced a massive decline – once accounting for 16.5%, today it makes up only 6.4% of the country’s total employment.
While identifying the industries crucial in helping to rebuild the Australian economy, the local manufacturing sector was given an empowering and unequivocal mandate to innovate. The Government’s significant financial commitment includes $1.5bn for the Modern Manufacturing Strategy, $1.3bn for the Modern Manufacturing Initiative, and millions more for the Supply Chain Resilience Initiative and Manufacturing Modernisation Fund. This is a glowing appraisal for the short, medium and long-term importance of Australian manufacturing, presenting an undeniable opportunity to revitalise an industry in need of renewal.
Over the course of the pandemic, and even now as much of the world continues to experience varying lockdown restrictions, imports and exports have been disrupted, affecting the industry locally. It presents an opportunity for Australian manufacturers to capitalise on the faster-than-expected economic recovery, the Government’s financial injection and the disrupted status quo, to evolve internally and externally, and to lead by example. Digital transformation will be the foundation upon which manufacturers individually and the industry collectively can reinvent itself.
Befriending technologies long-term
In disrupting global supply chains in 2020, the pandemic has provided an opportunity for the local industry to evolve, become more self-sustainable and even capitalise on Australia’s strong sentiment for supporting local. By no means a new phenomenon, for years digital transformation has been highlighted as the future of work in every industry – manufacturing perhaps more than most.
Adoption of simple integrated cloud-based technologies can significantly improve the way an organisation runs, creating agility, enabling rapid innovation and allowing companies to learn from experiences of others through connections and communities. Adopting the right software can also allow businesses to streamline, scale up, lower costs, and spend more time on productivity, growth and innovation.
Customer relationship management (CRM) systems to manage leads and clients, collaboration software to bring in organisation-wide experts, and analytics tools to analyse and enhance, all customised and combined with countless other integrated platforms, from finance to process automation … this is what truly technology-empowered manufacturers look like. And then, with that as their platform, manufacturers can innovate through digital transformation and establish itself as a leader in smart manufacturing and factories, and Industry 4.0.
While Australia has entered a more stable economic environment, much of the world is still in severe economic contraction and experiencing frequent fluctuations and restrictions that make it difficult to achieve stability or pursue growth. Despite Australia’s comparative success, the pandemic and escalating trade tensions with China don’t make the task a straightforward one. But with great challenge comes great opportunity.
Through the Government’s multi-billion dollar commitment, strategic technological adoption can transform the entire manufacturing lifecycle, from the supply chain and the factory floor, through to the end users. To reap the full benefits – as an industry and as a country – digital transformation must be industry-wide. That’s the opportunity, and if seized the Australian industry can reclaim its former glory and set new standards in COVID-normal manufacturing.
Vijay Sundaram is the Chief Strategy Officer of Zoho Corporation.