Welcome to the Future of Australian Manufacturing

By / 4th of March, 2014
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Management skills and finance.

After a lifetime visiting Australian enterprises, and two days touring Adelaide companies, I am more than ever sure the future of manufacturing all comes down to these two things.

While attention is on the tribulations of some, others such as Adelaide's Redarc electronics and Clipsal electrical fittings show that success can be achieved in this country at any end of the manufacturing scale.

Redarc, with 100 staff and generally small runs of specialised products and Clipsal with 350 in manufacturing and 11,500 different product lines are both highly profitable, efficient manufacturers with a great future here.

Redarc turns over $25 million making a range of vehicle power systems products and has ambitions to double sales by 2017.

Led by owner and AM forum member, Anthony Kittell, Redarc's Adelaide electronics plant looks increasingly like a highly specialised medical instrument maker.

His high quality production systems, innovative product and committed staff combine to make his expansion goals not just possible, but likely no matter what the policy environment for manufacturing.

More than 15 per cent of turnover is spent on R&D and any product more than three years old is considered due for replacement. The company is moving at a high velocity, leaving competitors in its wake.

But even Kittel's systems pale in comparison to Clipsal, a long-standing Australian company bought by Schneider Electric.

Rather than just import, Clipsal has honed its three-shift a day manufacturing operation to both mass produce relatively cheap products such as electric sockets and light switches, and make specialised made-to-order parts.

More than 65 million of the most popular switches are made in Adelaide every year - who says we can't manufacture at scale?

Yet at the other end of the scale the company can respond to a customer order and manufacture a single item in less than one day.

This is the ultimate mass flexibility and the company is a leader in the electrical field.

Local R&D also powers elements of Schneider's global product offering.
The key is the rigour of management here is extreme.

A detailed skills matrix guides staff development while everything is measured, analysed and fed back into the system to cut lead times and improve quality and productivity.

In the latest development the warehouse was brought under the factory roof allowing manufacturing manager, Matthew Smith to fine tune output. 

Much production never even goes into a store, but moves from raw material to carton and straight out of the loading dock to customers within a day.

Together with other manufacturing leaders such as Amcor, Cochlear, ResMed and BlueScope Adelaide's firms show there is a future for manufacturing - where management is right and there is finance to support it.

Peter Roberts is the founder of the Australian Manufacturing Forum.