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Australia’s Manufacturing Future in a Global Marketplace

Australia’s Manufacturing Future in a Global Marketplace. Dr John Blakemore National President ManSA Chairman BC International Martin Place masc@blakemore.com.au +61 2 9238 7670 Mob 0414 970758. Questions. Which Industries? Only those where we have a Strategic Advantage (SAW)?

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Australia’s Manufacturing Future in a Global Marketplace

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  1. Australia’s Manufacturing Future in a Global Marketplace Dr John Blakemore National President ManSA Chairman BC International Martin Place masc@blakemore.com.au +61 2 9238 7670 Mob 0414 970758 Blakemore Consulting International www.blakemore.com.au

  2. Questions • Which Industries? Only those where we have a Strategic Advantage (SAW)? • How much protection? None? Have we moved too fast? • CAD and Foreign Liabilities too High? • 40% world’s Uranium but not Nuclear? • Why is Business R&D lowest in OECD? Blakemore Consulting International www.blakemore.com.au

  3. The New Rules 1 • Battle Present Vision and Global Drivers • Blending of Civilisations & Cultures? • New world order based on Culture. • Companies larger than countries • Massive Debts of poorer countries • Western world trading deficits huge • Continuous global conflicts • Global Warming and Peak Oil. • Wealth Spread very uneven, ageing. • Decline of USA, growth of China & India Blakemore Consulting International www.blakemore.com.au

  4. New Rules 2 • Move from Mass Production • To Agile Made to Order • Don’t size demand to fit Capacity • Fit Capacity to fit Demand • Low cost and high quality Blakemore Consulting International www.blakemore.com.au

  5. New Rules 3 • Low Working Capital and Low • Inventory and rapid response • Satisfy all members of the value chain • Superiority of Knowledge Capital • Digital data available instantaneously • Compression of Lead time and • elimination of Non Value Added steps Blakemore Consulting International www.blakemore.com.au

  6. Leading Edge Trends • Why does it cost the consumer $150 for gym boots that cost $2 to make? • Why does a digital download music Album cost the consumer $16 when the cost including royalties is $2? • The supply chains will compress and prices fall, the answer is speed and elimination of steps in the physical supply chain as variety increases. Blakemore Consulting International www.blakemore.com.au

  7. Inventory in Supply Chain Autos Blakemore Consulting International www.blakemore.com.au

  8. Sales Sourcing Autos Blakemore Consulting International www.blakemore.com.au

  9. New Generation Manufacturing 1 • Use Digital data to maximum advantage • Choose those industries where we have a natural Comparative Advantage eg Uranium, Energy, Aluminium, Food etc • Build integrated digital supply chains • Plus high value goods like scientific instruments, sensors, medical devices, • Focus R&D efforts where we have a SAW • Modular fusion of new technology. Blakemore Consulting International www.blakemore.com.au

  10. New Generation Manufacturing 2 • Recognise the value chain • Rapid use of digital data • from the source to any position • in the value chain • Mass to build to order Blakemore Consulting International www.blakemore.com.au

  11. New Generation Manufacturing 3 • Establish knowledge networks • To supplement in house • Limitations • Increased emphasis on speed • and R&D and innovation of • process and product Blakemore Consulting International www.blakemore.com.au

  12. New Generation Manufacturing 4Human Resources • Control core competencies • Collaborate and Synergise • Reward Innovative knowledge • developers • Continuous learning • Imagination +Knowledge= Discovery Blakemore Consulting International www.blakemore.com.au

  13. Blakemore Consulting International www.blakemore.com.au

  14. NGM IP Model Oz1 Blakemore Consulting International www.blakemore.com.au

  15. NGM R&D Model Oz2 Blakemore Consulting International www.blakemore.com.au

  16. NGM Green Model Oz3 Blakemore Consulting International www.blakemore.com.au

  17. NGM All Co Model Oz4 Blakemore Consulting International www.blakemore.com.au

  18. NG Pull IT Model Oz5 Blakemore Consulting International www.blakemore.com.au

  19. NG Retail Models Oz6 Blakemore Consulting International www.blakemore.com.au

  20. Where do we Start ? Macro • Convince and Lobby Politicians and Business Leaders so that they understand the need to take a long term view. • Convince Business Leaders that it is their best interests to have R&D representation on the Board. • Educate the Industry Bodies. • Focus our Research efforts not spread them thinly like the CSIRO • Make Universities Commercially accountable through Cooperative R&D using Japanese model Blakemore Consulting International www.blakemore.com.au

  21. Where Do You Start?Micro • Integrate processes and systems, pull • by customer, then spread out both ways. • 2. Substitute pull for MRP • 3. Use internal digital data on shorter periods • 4. Hook up digitally with customers & suppliers • 5. Eliminate forecasting as much as possible • 6. Educate Industry Bodies. Blakemore Consulting International www.blakemore.com.au

  22. Manufacturers Need Agile Systems We must embrace change, globalise, and Innovate continuously. If this means supply from low wage countries then accept this but control the IP from here and manufacture for the world in a modular design for higher volume or customise where we have a comparative advantage, but the overriding rule is that we must be agile and flexible like Australia 2 in 1983 and replace labour with capital and use blue sky strategies, and use digital data more cleverly. Blakemore Consulting International www.blakemore.com.au

  23. The End Blakemore Consulting International www.blakemore.com.au

  24. Blakemore Consulting International www.blakemore.com.au

  25. Manufacturing or Service? • There is no such thing as a pure • Manufacturing Company • All companies are Service Driven • What is your Position in the Supply • Chain? Blakemore Consulting International www.blakemore.com.au

  26. Innovation, R&D and Australia’s Manufacturing Future We need to be Creative, Innovative, Fast & Flexible(Like Australia 2 1983) Blakemore Consulting International www.blakemore.com.au

  27. Australia Has a Problem Blakemore Consulting International www.blakemore.com.au

  28. R&D $ & Productivity Source: OECD Productivity Database, 17 December 2004 Source: OECD Main Science and Technology Indicators, 2005-1 Blakemore Consulting International www.blakemore.com.au GERD is defined as total expenditure by all sectors — business enterprise, government, private non-profit, higher education — on R&D that is performed within the boundaries of the country

  29. My R&D Observations • 800 E&M Applications (5yrs) • Approx 5% successful • IP mostly exploited Overseas • Small no. people rich • Little benefit National Benefit Blakemore Consulting International www.blakemore.com.au

  30. Reasons for Failure of R&D • Poor Understanding of: • The Scientific Method • The use of the correct resources • The needs of the market • Difference between Process & Product Innovation • The need to articulate the concept and plan • The way to raise funds to support the application • Financial accounts • Cashflow • Poor measurement of risk Blakemore Consulting International www.blakemore.com.au

  31. Agile Rule 3 • Drive Process Innovation with • Product Innovation • (25 creative Flow Rules) Blakemore Consulting International www.blakemore.com.au

  32. Australia Exports & EmploymentExcellent Correlation Blakemore Consulting International www.blakemore.com.au

  33. Australia’s Comparative Advantage Blakemore Consulting International www.blakemore.com.au

  34. Agile Results P&L Blakemore Consulting International www.blakemore.com.au

  35. What Has Been Done (Carpet)$300M T/O Blakemore Consulting International www.blakemore.com.au

  36. Smart Production ..Output & Defectives (Loss to Profit) Defectives Blakemore Consulting International www.blakemore.com.au

  37. CSIRO Exp vs Comparative Adv Blakemore Consulting International www.blakemore.com.au

  38. Agile Rule 1 • Demand = Production • Make to Order • Pull by Customer • Apply Continuous flow rules Blakemore Consulting International www.blakemore.com.au

  39. Agile Rule 2 • Match Manufacturing • Capability with Demand • Product Range complexity often creates • poor servicing and excess waste and working • capital • Tirelessly improve agility by reducing the EPR • by removing non value added activities Blakemore Consulting International www.blakemore.com.au

  40. Agile Rule 4 • Recognise that Digital • Data can be obtained at the POS and • sent to any point in the supply chain Blakemore Consulting International www.blakemore.com.au

  41. Agile Rule 5 • Reduce Complexity • and Modularise Blakemore Consulting International www.blakemore.com.au

  42. Blakemore Consulting International www.blakemore.com.au

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