Why innovation is the key to manufacturing success

One of the few positives to have come out of the COVID-19 pandemic is a frank and open discussion about manufacturing in Australia. Serious questions have been raised about our heavy reliance on goods produced overseas, especially considering the crippling effects on our economy when global suppliers are unable to deliver, like when supply chains are disrupted.

Many of the goods we import can be made locally. We already have many natural resources, so why don’t we make more here?

Few would argue the merits of domestic manufacturing to secure national supply. Local production makes us far less vulnerable to overseas factors that we have little to no control over. Moreover, a vibrant manufacturing sector will drive our economy and ensure interesting and well‑paid jobs are retained here instead of disappearing overseas.

While the economic advantages of local manufacturing may be self‑evident, the question has always been how to compete effectively against fierce global competition.

In the past, goods have tended to be sourced from wherever they can be produced for the lowest price. This usually meant going abroad, as our comparatively high labour rates made many locally produced goods less cost-effective. The cost of labour is generally seen as the single biggest hurdle for local producers, although our isolation and comparatively small domestic market are also factors.

However, there is a mood for change in the general community with many Australians now prepared to accept paying slightly more for locally manufactured goods.

The key for creating a robust local manufacturing sector is to be innovative in what we do. Innovation means ‘thinking outside the square’ and inventing better, more advanced products. Such products create value through know‑how, are less sensitive to price pressures and give local producers the edge over overseas‑based competition.

But innovation also needs to be applied to the manufacturing process. Modern automation techniques, such as artificial intelligence and robotics, need to be utilised as much as possible. Automation reduces the manpower required and increases both the quality and quantity of output. Suppliers of automation equipment offer a plethora of products that can provide the impetus for innovative manufacturing; some of the latest ideas include smart, edge‑based controllers and cloud‑based engineering services.

Innovation will at times mean trialling different ideas and taking some calculated risks. Some government support and academic assistance may be needed along the way, but while the changes required may be challenging and uncomfortable for some, the rewards will be there for those who venture out.

Examples abound of businesses using innovation to take on tough markets and still come out on top. Dyson’s cyclonic vacuum cleaners provided better filtration and thereby revolutionised that market — virtually every vacuum cleaner is now bagless.

Tesla took on the international car market, dominated by some of the world’s biggest multinationals with massive R&D budgets. Yet they were able to make substantial headway in just a few years with a highly innovative product and some very smart manufacturing techniques.

Australian manufacturers will have a bright, sustainable future, with strong employment prospects, if we can learn to apply innovation to what we do.

Harry Mulder is the principal automation engineer at Beckhoff Automation. He’s been involved in industrial automation for over 30 years and is fascinated by how new innovations keep affecting the direction of the industry. He really enjoys the practical element of his job, where he has a chance to get his hands dirty!

Image: ©iStockPhoto.com/Andrii Yalanskyi