Manufacturing

Business Improvement Within Manufacturing

The Australian manufacturing sector has, even in a period of decline, continued to represent a core source of economic prosperity for Australia. It has outperformed many other sectors in terms of its contribution to Australia’s sustained economic performance and its capacity to generate quality jobs.  It delivers this value through downstream wealth creation, import replacement and maximising the value of our natural resources.

We help manufacturing clients achieve dramatic improvements in productivity, cycle times and quality through the application of best practise process re-engineering tools, lean six sigma fundamentals and industry specific methods such as utilising Supply Chain Management techniques to reduce inventory and increase throughput.

FMCG
Chemical & Process Manufacturing
Electronics & Hi-Tech Manufacturing
Primary Production
Fabrication & Job-Shop
Industrial Design

Our Track Record

Operational Excellence

Implemented Operational Excellence across two 400-person process manufacturing sites, delivering first-year uplift in yield from 82%-94%, reducing operating costs by 8%, reducing plant downtime by 65%, and delivering major staff and shopfloor skills transformation

Transforming Product Quality

Major transformation of product testing with automation of laboratory ordering and sample reception, lean production system for test setup and completion, new and far more integrated plant quality control strategy, enabling a suite of quality improvements based on robust process and information.

Plant & Line Optimisation

Shopfloor optimisation of canning plant with four production lines, implementing fast change (SMED), work flow (POUS, floor redesign), realtime operations reporting and control, plus automated material requisitioning, batch scheduling and short-run optimisation.

Industry Background

Australia has a proud record of originality in advanced manufacturing. It is the country that gave birth to the ultrasound scanner, the black box flight recorder and the bionic ear. Today, advanced manufacturing accounts for around half of Australia’s A$100 billion plus annual manufacturing output and is one of the fastest growing export sectors.

Part of this success is due to cross-polination between R&D institutions and the manufacturing sector. For example, co-operative research centres have been established to provide links between industry and the research community. They help to commercialise technologies in specialist fields such as advanced composite structures, automotive technologies, cast metals manufacturing, railway engineering, polymers and spatial information.

Advanced Manufacturing

Advanced manufacturing has become a prime avenue for inward investment. Some industry sectors have attracted particular attention among overseas high-technology companies. These include: Boeing and BAE Systems for specialist aerospace components; Ford, General Motors, and Toyota in the automotive sector; BASF and DuPont in the chemicals industry; and Siemens in energy and water treatment technology.

As with many other Western countries, the relative importance of the manufacturing industry in Australia has been declining. Its contribution to total Australian output is less than half what it was four decades ago. Looking at a number of key economic indicators provides an overview of what has been happening in the industry.

Industry Output & Profitability

The contribution of the manufacturing industry to the overall size of the Australian economy has been falling over many years.  A measure of the underlying profitability of manufacturing businesses can be obtained from the gross operating profit margin, which expresses the gross operating profit of manufacturing businesses as a percentage of the income from the sale of goods and services by the sector. Since at least 2001–02, the profitability of manufacturing businesses has been consistently lower than that of all businesses. Moreover, while the gross operating profit margin for all businesses has increased, that of manufacturing businesses has fallen resulting in a widening gap in profitability between manufacturing and all businesses generally.

The Future

While manufacturing has declined in the proportion of the workforce it employs, its death has been highly exaggerated, according to Professor of Management Danny Samson, who has been observing and teaching, researching and advising businesses on matters related to manufacturing and operations strategy for 25 years.

While Professor Samson agrees the challenges have never been greater, brought on by the forces of globalisation, high local currency, and diminishing scale in some industries, the fact is that some manufacturers are thriving. Professor Samson has shown that while ‘cost leadership’ and scale economies are particularly difficult for local firms as a basis for competing, there are still many niche strategies, where companies can specialise, and in which Australian manufacturers can be sustainably profitable and successful.

Professor Samson recently conducted a series of case studies and a large survey of local manufacturing firms, large and small and the results were compelling. The successful firms innovated in a few different ways, ranging from their leading-edge product designs, their process innovations, and even to their marketing methods and business models.

“In a generally declining sector, we have shining beacons of success, still profitably and sustainably manufacturing everything from machine tools, electronics, textiles, plastics, food, trucks, and a host of other things,” Professor Samson says. “These fine firms have found a point of difference.”

Our Capability

Across Manufacturing we offer a complete range of consulting, resourcing and capability uplift solutions.

Industry Challenges

Persistent cost, production and quality challenges mean the drive to roboticise production and lights out automation remains significant.

Classic lean manufacturing practices apply across the board in order to drive yield, eliminate scrap, reduce inventory and reduce downtime and queue time.

Emerging markets, offshoring and substitute sourcing strategies pose continued challenges to manufacturers as well as sometimes-volatile logistics and transportation contexts.

Challenges to asset utilisation, yield and demand volitality erode return on invested capital for plant and automation, and present real and persistent challenges to expansion and funding