Four keys to future success for Australian manufacturing: report
KPMG has released a report on Australian manufacturing that examines key global issues facing the sector.
The report, Australian Manufacturing: Discover Growth amid Turbulence, says that while the industry has declined since the 1970s — challenged by rising energy costs, skills shortages and outsourcing to other markets such as China — the impact of COVID-19 and subsequent government initiatives have “not only improved domestic supply chain resilience but also opened up Australia to new international value chains”.
The report concludes that ESG, productivity, supply chains and digital transformation will be key to future success.
As global headwinds mount, KPMG Australia’s Head of Manufacturing, Toni Jones, says many companies remain optimistic about their future. However, important challenges exist in the short term which must be met to preserve business momentum for any economic rebound.
ESG
The cost of natural disasters to the Australian economy is expected to almost triple by 2050. Consequently there is a huge focus on ESG solutions and new products that address resource constraints. Areas such as synthetic biology and advanced recycling will be key in net-zero transitions and represent big potential opportunities for companies willing to invest time and resources into their development.
Productivity
With a recent KPMG Global survey showing 86% of respondents planning to boost productivity or having already introduced measures to do so, beginning the process now presents an ideal opportunity to synchronise the benefits with increased operations once the economy picks up.
Supply chains
Higher geopolitical risks pose greater uncertainty of supply than ever before. Building nearshore and onshore links to increase resilience will be vital as will monitoring shipping trends now that some pandemic era constraints are easing.
Digital transformation
Increasing the efficiency of operations through better back-end systems and embracing emerging technology such as AI and ADM will become increasingly key to competitiveness and business propositions when seeking partnerships. Companies should invest in updating legacy systems and streamlining systems to aid productivity increases.
The report can be downloaded here.
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