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Opinion: Prepare for European and US comeback


Chris Stathy
 
The local manufacturing industry needs to prepare for intense competition from ‘battle-hardened’ European and American rivals in the year ahead.
 
It would be a mistake for companies to focus solely on Asia and overlook the looming threat from traditional manufacturing regions on the rebound.
 
It is these regions that have come through the worst of the GFC and are now looking to compete more rigorously on the global stage.
 
While there is a lot of attention being given to Asian competition, one of the biggest challenges facing Australian industry now and in the future is from the re-emergence of manufacturers in Europe and the United States.
 
The European and American manufacturers that have survived the GFC have done so by streamlining their processes and significantly improving productivity. They are battle hardened, hungrier than ever and looking to expand. They have excess capacity to work with and will become increasingly aggressive in the global market place, competing directly with Australian manufacturers.
 
That’s not to discount the competition from Asia.
 
However, it would be a big mistake to discount countries like Germany, Italy, Spain and America, which retain a technically advanced and efficient manufacturing base.
 
This has real implications for the South Australian economy. Smarter, more efficient local manufacturing is the key to continued success in the post-GFC global environment.
 
Faced with this increased competition, Australian industry must become even smarter with its manufacturing practices to keep its place at the global forefront.
 
High-quality automation, innovation, flexibility, greater production efficiencies, streamlined costs and continuous customer service improvements all have a part to play. A level of investment is required for any firm to become more globally competitive and allow it to respond even more quickly to customer demand and yet better manage working capital.
 
Being located in South Australia allows many local manufacturers the opportunity to tap into the outstanding automation expertise that has developed alongside our manufacturing sector.
 
Robotics, for example, is now a key feature of many automated assembly lines and have revolutionised the manufacturing process. It is not necessarily about reducing the workforce, rather increasing volume as a result of improved productivity. This therefore boosts global competitiveness and places you on a better growth path.
 
At Philmac we have completed the final stage of a three-year robotics investment program with 20 new robots now assembling products around the clock for the global market.
 
We’ve decided to focus on robotics that allowed for greater flexibility in production to cater for a large amount of product configurations. We needed cells that could adapt to different scenarios rather than just solely focussing on speed throughput.
 
It’s been a very timely investment given the evolving global market conditions.
 
Chris Stathy is the managing director of Philmac, an Australian pipe fittings manufacturer and distributor of water management products.

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