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Closing the manufacturing divide

Posted by Knox Economic Development

At a time when technology has a huge bearing over the industry’s future, Australia’s manufacturers are running at different paces. Mark Dingley, Matthews Australasia’s newly appointed CEO, discusses the implications for an industry stuck in two minds.

Industry thrives on diversity; those interactions between companies and sectors that run up and down the supply chain.

As it stands, Australia has a strong start-up sector making strides during transitional times for a manufacturing industry that, in recent years, has been in decline.

Whereas some are taking strategic risks and pushing for more technological integration on the factory floor, others are playing the cautious card or are, simply, not yet financially capable of such industrial change.

Considering this “bimodal” picture of Australia’s industry – where its entrepreneurs and workhorses are running different courses – Mark Dingley, CEO for Matthews Australasia, spoke with Manufacturers’ Monthly about the opportunities and challenges of a diversified economy.

“The digital and innovation world makes sense in Australia yet, in a way, there are a lot of smaller manufacturers who are still coming to grips with how they can adopt new technology to improve their supply chain,” Dingley said.

“One of the challenges for a lot of companies is that they aren’t building greenfield sites where they can roll out state-of-the-art equipment. For some of the companies I talk to, it is very difficult to outlay any significant capital that is required to upgrade every part of their infrastructure.

“But it certainly doesn’t mean you shouldn’t do anything because standing still means you will whittle on the vine. So, in around a lot of our conversations around Industry 4.0, we talk about the need to look at future innovation and how that can improve the current processes and environment of a business.”

The “digital hype” around manufacturing and the supply chain has put companies in two minds, Dingley continued.

“A lot of companies are trying to get their heads around the future and how they can harness new technologies,” he said.

Mark Dingley, CEO of Matthews Australasia

The result, Dingley says, is a “two-paced” supply chain.

On one side, there are those who are concentrating carefully on maintaining the status quo, including the overall cost structure of their business and its continuous improvement.

But where this is risky, Dingley explains, is that these types of manufacturers often stick with the same technology that is currently residing within their four walls.

“Yet, there are those other companies that are also looking at new ideas, innovation and opportunities to test new technologies and see what impact it can have to their business and along the supply chain,” Dingley said.

“There are obviously a lot of pressures on businesses today and a lot of businesses are focused on cost-down reduction. But there are certainly a growing number of manufacturers who invest in automation and seeking out new ideas.

“Certainly companies need to look at how they can utilise that within their own four walls but the common denominator here is staying relevant in a fast-paced, changing industry.”

This, according to Dingley, starts with the simple step of gaining a true representation of the company’s own production line and, in particular, the processes that are currently in place.

All the way from the raw produce and well beyond the finished product, Matthews’ role is to demonstrate to businesses how they can harness and implement technology in strategic steps that don’t sink the ship before it is built.

Developing a database that demonstrates where a company can increase productivity to experience efficiency gains is the first step.

“From a Matthews standpoint, our solutions depend greatly on this kind of feedback data and allow us to make real-time decisions for an individual business,” Dingley said.

“Traceability is becoming more about the ability and in particularly exports into Asia – for product authentication to promote anti-counterfeiting and brand protection.

“Export is certainly growing and technology will certainly play an important part in that market and supply chain. For those who want to take the opportunity, it will assist manufacturers to sell, promote and get their products into positions of growth.”

In July, Dingley took charge as CEO of Matthews Australasia in place of former managing director Lester Nichol, who served the company for 36 years.

“Australian manufacturing has always had agility and flexibility when the opportunity is right,” Dingley continued.

“There have been many challenges with the decline of manufacturing over recent years in Australia but those who are succeeding are those who are innovating and looking for new market opportunities and a different supply-chain route.

“Over the next five to 10 years, the industry of identification and inspection is going to see significant changes both in its technology and changing consumer trends.

“Business is only going to get faster because we truly live in a global economy and, at Matthews, we are very well placed to be a part of that future – to help guide the manufacturing industry that we aim to serve.”