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Manufacturing insights

Manufacturing on the Move

Contributions from industry leaders for manufacturers on the move.

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Manufacturing by Design

“Manufacturing by design” How to add value through design, branding, advertising and marketing.

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Contributions from industry leaders for manufacturers on the move.

The equation for success.

James Kirby, Wealth Editor of the Australian raised some interesting points recently, under the heading “The four big housing market lies”. It’s worth reading the Australian just for that commentary alone.

He points out that Australians are able to pay their mortgages each month because interest rates are so low. When rates move higher, as they will, there will be a problem.

Most deposits are 20%, which makes saving for a deposit just about impossible, without help from mum and dad. If that help is available.

Nearly 40% of the market is in interest-only loans. They rely on price appreciation to make money. Any change in conditions – negative gearing, tax deductions, rising interest rates, China shutting the gate, drop in house prices – and the overall market will shudder, disrupting other parts of the economy.

Anecdotally, Chinese housing investment is a subject that is regularly and quietly discussed in offices, living rooms and at barbecues when the subject of who bought the house at the end of the street comes up…”a nice Chinese couple. They outbid everybody.”

And there will continue to be Chinese investment in Australian capital cities for as long as Chinese and Australian regulators allow it. Blocking the dreams of young Australians to own anything in the city.

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17.5% unemployed or underemployed. What are we waiting for?

According to the Roy Morgan poll, unemployment in Australia is now at 10.4% with underemployment at 7.1%. Which means 2.249 million Australians are now looking for work, or looking for more work.

Add the ever increasing impacts of digital job destruction, ageism, lack of leadership and swiftly shifting job requirement skillsets and those figures will soon move higher, not lower.

And quicker not slower.

Inaction by federal government is hard to understand. It’s been a year now with no meaningful action. Just lots of empty words. Even Clarke and Dawe from the ABC have now turned government inaction on our economy into a parody.

See “The importance of a strong team in sales and marketing” on the ABC website. Amusing, but far too close to the truth to be completely funny.

Why so little action?

Is the scale and scope of the “no jobs and no growth” problem just too large and wide reaching?

Is it too hard to respond to, because we can’t simply look overseas for a quick answer like we normally do – because they face the same problems themselves?

Have the federal rabbits just frozen in the headlights? Do they even have a clue?

Waiting is not an option. We have to do something. The problem will only grow. And it does so day by day.

And allied to this problem is the slowing economy, increasing household debt, near zero interest rates across the world leading to diminishing returns for investors, pensioners and those heading towards retirement.

Less work, lower wage growth, more debt and increased stress on mortgages and retirement funds.

Waiting is not an option. Action is required.

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What do customers want?

Most mature businesses already have a pretty good idea of the answer to this question. Though they may not always keep that answer up to date. And they should.

Because customers (individuals) are changing their habits, as a result of the digital revolution delivering fast access to information.

And for startups, being able to define what customers want will determine success or failure. It is not enough to just have a “good idea”. Somebody, somewhere has to want what you create, enough to pay for it.

We all can and do learn a lot from talking to customers and listening to what they have to say.

So when it comes to a country like Australia, what do our export markets say they want from us?

What products and services are going to generate the export income we need to build a balanced economy, and provide “jobs and growth” – the two things our political leaders sloganise so glibly?

We will not generate enough jobs and growth from pushing products and services into the Australian market alone. We have to export.

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A staff development strategy for the manufacturing industry

The process of “buddying up” experienced employees with new recruits is not a new concept, in fact the traditional apprenticeship system is predicated on an experienced tradesperson mentoring and coaching an apprentice throughout their apprenticeship period. The challenge that most companies have is trying to “formalise” the “informal” nature of the knowledge being transferred within their organisations.

Mentoring has long been used in manufacturing and engineering to transfer trade skills to apprentices throughout the four-year duration of an apprenticeship. This process of knowledge and skills transfer is as follows:

  • The first year an apprentice typically works alongside a tradesperson for a year. During this time the tradesperson will teach the young apprentice how to perform basic trade skills such as welding or cutting materials to length.
  • During the second year the apprentice is then given small jobs to start and complete by themself with some guidance from a nearby tradesperson.
  • 3rd and 4th year apprentices start to work as part of a team of tradespeople and/or autonomously on projects.

“In my experience this process of mentoring in Manufacturing and Engineering organisations was quite limited with individuals who were not undertaking an apprenticeship.” Director of Outsource Institute, Carl Spruce.

Mentoring can be used in many ways in manufacturing and engineering to level the skill playing field of the workshop.  Many organisations allow workers to work endlessly in a very skilled environment such as CNC programing, Specialised Welding, Detailed Pressing Operations without transferring these skills to others in the organisation. The risks of allowing this to occur are:  that holiday periods and sick leave impact on production and quality; abrupt departures of key workers result in a rushed or failed recruitment process and wage increases requested by key tradespeople.  The transference of critical skills reduces the risk to the organisation.

The culture of most Manufacturing and Engineering organisations is very “technocratic” and “autocratic”.  Skills are king and the people with the most skills are the leaders (generally).

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