Blakemore Consulting International

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Australias Manufacturing Future in a Global
Marketplace
Dr John Blakemore National President
ManSA Chairman BC International Martin Place
masc_at_blakemore.com.au 61 2 9238 7670 Mob 0414
970758
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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 worlds Uranium but not Nuclear?
• Why is Business RD lowest in OECD?

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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

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New Rules 2

• Move from Mass Production
• To Agile Made to Order
• Dont size demand to fit Capacity
• Fit Capacity to fit Demand
• Low cost and high quality

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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

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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.

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Inventory in Supply Chain Autos
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Sales Sourcing Autos
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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 RD efforts where we have a SAW
• Modular fusion of new technology.

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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

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New Generation Manufacturing 3

• Establish knowledge networks
• To supplement in house
• Limitations
• Increased emphasis on speed
• and RD and innovation of
• process and product

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New Generation Manufacturing 4Human Resources

• Control core competencies
• Collaborate and Synergise
• Reward Innovative knowledge
• developers
• Continuous learning
• Imagination Knowledge Discovery

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NGM IP Model Oz1
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NGM RD Model Oz2
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NGM Green Model Oz3
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NGM All Co Model Oz4
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NG Pull IT Model Oz5
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NG Retail Models Oz6
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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 RD 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 RD using Japanese model

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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.

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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.
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The End
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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?

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Innovation, RD and Australias Manufacturing
Future We need to be Creative, Innovative, Fast
Flexible(Like Australia 2 1983)
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Australia Has a Problem
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RD Productivity
Source OECD Main Science and Technology
Indicators, 2005-1
Source OECD Productivity Database, 17 December
2004
GERD is defined as total expenditure by all
sectors business enterprise, government,
private non-profit, higher education on RD
that is performed within the boundaries of the
country
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My RD Observations

• 800 EM Applications (5yrs)
• Approx 5 successful
• IP mostly exploited Overseas
• Small no. people rich
• Little benefit National Benefit

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Reasons for Failure of RD

• 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

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Agile Rule 3

• Drive Process Innovation with
• Product Innovation
• (25 creative Flow Rules)

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Australia Exports EmploymentExcellent
Correlation
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Australias Comparative Advantage
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Agile Results PL
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What Has Been Done (Carpet)300M T/O
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Smart Production ..Output Defectives (Loss to
Profit)
Defectives
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CSIRO Exp vs Comparative Adv
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Agile Rule 1

• Demand Production
• Make to Order
• Pull by Customer
• Apply Continuous flow rules

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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

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Agile Rule 4

• Recognise that Digital
• Data can be obtained at the POS and
• sent to any point in the supply chain

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Agile Rule 5

• Reduce Complexity
• and Modularise

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