This year, Covid-19 has exposed vulnerability in Australia’s supply chain. For the first time in years, our dependence on manufactured goods from outside of Australia has been questioned – all of a sudden, the kilometres in a supply chain really matter. By Peter Rowland.
Made in Australia
Over the last 50 years we have seen our manufacturing industries slowly dry up. Once, Australia’s manufacturing sector employed around a third of Australia’s workforce and we were fiercely proud to make cars, clothes, steel and shoes. Today, only 3% of new jobs in Australia are in manufacturing, and that figure is predicted to fall. After reaching a high of nearly 30 per cent of gross domestic product (GDP) in the 1960s, manufacturing has since fallen to 6 per cent of GDP and Australia ranks last in manufacturing self-sufficiency among all OECD countries.
Bucking the trend
In South Australia, we are trying to reverse this trend. Our company Micro-X, which makes a range of X-ray products for global medical and security markets, has doubled its manufacturing over the last year and continues to grow exports apace.
In Micro-X’s infancy, we had the foresight to hire leading engineers, supply-chain managers and assembly workers from the former Holden operations in Adelaide. The team have used their meticulous eye for detail, quality and passion for efficient processes and have applied these skills to new technology.
Micro-X was the first company to bring a medical product to market using an x-ray tube with a cold cathode, carbon nanotube (CNT) emitter technology. This tube technology enables the production of x-ray tubes that are lighter in weight, smaller in size and more energy efficient. We believe manufacturing is a critical part of owning and controlling your technology advantage.
The manufacturing sector is evolving. The stereotype of a dull, dirty industry in vast factories, populated by boilersuits belongs in the last century. Our industry is agile, exciting and offers great careers – from law and design to engineering and marketing. We see the future where product competitiveness is about smartness in manufacturing not finding the cheapest rate offshore to build the product. Australian manufacturing has to be centred around ‘advanced manufacturing’. Where global best practice, constant improvements and lean manufacturing result in high-yield production lines – to create something tangible is timeless.
Keep it local
I have worked all over the world and when we started production in Australia, we used a lot of imported high technology parts – problem was, they were expensive and unreliable. They were also harder to transport to our assembly site in Adelaide. The solution was simple – we sought to establish an Australian supply chain for even the most unique and critical technology components. Everything we have sourced from Australia has been of excellent quality, affordable and on time. We are passionate about making high quality and high reliability products, and for us, that means investing in Australian-made. We are aiming to have 95% of our supply chain within Australia.
Now, living in an era where long supply chains from overseas are restricted and uncertain, I urge other companies to do the same.
Local manufacturing could be the hero of the pandemic and we believe our sector can rise to the challenge and offer Australia a path out of recession. We just need business leaders to look around, and choose to establish Australian sources. You must always get the best sources in your supply chain, what you have to do is make sure the best is local. Our experience is that local Australian suppliers are globally competitive in quality, technology and price.
The Government is promising a renewed focus on manufacturing, but until we all get behind niche manufacturing markets, scrutinise our own supply chains and start supporting each other, these will just be empty words. The change will come from business, for business.
Peter Rowland is CEO of Micro-X, a developer and manufacturer of a range of medical and security products.
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