SYSPRO APAC CEO on relocating manufacturing to Australia

The Australian-Made movement is bringing manufacturing back to national shores. But for the drive to relocate to succeed, we need to be more competitive with our advanced Asian neighbors. The need for digital transformation across Australian manufacturing has never been more critical, especially now that a global recession appears to be looming.

According to McKinsey & Company Economic Outlook, September 2022 Survey-based inflation, energy prices, geopolitical instability and rising interest rates were flagged as potential risks to economic growth in the Asia-Pacific region over the next 12 months. Growing inflation concerns have seen fears of supply chain disruption drop to the fifth most cited risk to economies.

Closer to home, the Australian Bureau of Statistics Monthly turnover indicator, August 2022 found that compared to July 2022, the manufacturing sector recorded a 4.1% increase in business turnover. It is in the top 3 of the 13 sectors that the strongest increases in monthly turnover are recorded. This follows July datawhich found that after registering five consecutive monthly increases, the turnover of manufacturing companies fell by 3.8%.

Since COVID has completely disrupted the market and rising inflation is threatening the economy, manufacturers need to refocus on digital strategies to continue growing their business, be competitive and meet growing market demands. . Our ability to compete globally will only be achieved if there is widespread adoption of advanced Industry 4.0 technologies, automation and innovation as an opportunity to help businesses stay strong. .

Reinforcing the need to relocate Australian manufacturing

The reshoring trend was initiated by the desire to sustain critical supply chains due to high market demand and ongoing pandemic-induced disruptions. What we’ve learned from COVID is that companies that are already producing goods locally, with advanced manufacturing at their core, have the flexibility to pivot quickly and respond to Australia’s needs.

This flexibility will prove even more valuable if we head into a recession. However, the Australian Ai Group Manufacturing Performance Index (Australian PMI®), September 2022, recorded an increase of 0.9 points to 50.2 points in September 2022 (a score above 50 points indicates expansion). September is only the second month of stable results since February. While chemicals and machinery and equipment were two of seven activity indices that did not contract, inventories were flat and new orders showed strong growth. Sales, deliveries and exports were also slightly positive.

Regardless of what industry and economic data show, it’s important that manufacturers don’t lose sight of the opportunities that challenges can create. For example, the offshoring trend of recent years has provided opportunities to reduce manufacturing disruptions while maintaining customer satisfaction through better supply chain management.

‘Australian Made’ can be a guarantee of manufacturing quality

There is a strong demand for products made in Australia, especially since the start of the pandemic. It opened many people’s eyes to the importance of Australian made products and how we can all play our part in prioritizing Australian products to help strengthen the economy and boost our job market.

One area with huge potential for the manufacturing sector is batteries, which are expected to grow tenfold over the next decade, according to a report carried out for the Australian government by Future Battery Industries CRC. He revealed that by 2030, battery industries could contribute $7.4 billion a year to the Australian economy and create up to 35,000 jobs.

The nation is in a unique position to capitalize on this growth via our Australian-made battery plan. We should be able to manufacture batteries locally, given the vast natural resources needed, including lithium. Most of these resources are currently being shipped overseas for processing. Energy storage systems are in high demand by the rest of the world, and therefore it is extremely important to make the most of this opportunity.

Marjorie N. McClure