Manufacturers' Monthly Leaders Summit July 2012

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CONTENTS 04 Statement from Minister Greg Combet

MANUFACTURING FUTURE: the revolution begins

05 ifm efector 06 Sage Business Solutions 07-11 Manufacturers’ Monthly Leaders Summit: Discussing Australia’s manufacturing future 08 Speaker 1: Dr Swee Mak, CSIRO The role of R&D for a competitive future 11 Speaker 2: Lyle van der Veer, Schneider Electric Building education and training success in the future

Publisher Martin Sinclair martin.sinclair@reedbusiness.com.au Deputy Editor Annie Dang Ph: (02) 9422 2964 annie.dang@reedbusiness.com.au GraphicDesigner Nicolas Cox Ph: 029422 2166 nick.cox@reedbusiness.com.au

The complexities of manufacturing, and manufacturing in Australia are undisputed. Those in the business of manufacturing today are facing some extremely tough questions about their future survival, some of which are within their control and others not.

While many outside the industry look in and see old values dominating the industry, those of us in the industry are well aware of the arrival of a new wave of modern manufacturing thought bringing newer and more creative designs and processes that some have called a third industrial revolution.

The key is to find ways to ensure these opportunities flow through to all segments of the industry and to not let it settle in a concentrated few; after all we want a robust manufacturing sector that is thriving and profitable now and in the future.

That’s why in May this year, Manufacturers’ Monthly held its inaugural Leaders Summit “The Future of Manufacturing in Australia” which brought together a select gathering of professionals to debate and discuss just that – the hurdles and opportunities facing manufacturing in Australia with the aim of generating new ideas to help transform manufacturing into an industry of the future.

In 2013, we will be holding more themed roundtables to capture and capitalise on the knowledge, experience and expertise of our industry leaders.

Over the coming months we will invite more decision makers and thought leaders to contribute and develop new ideas and ways of thinking to help shape our country’s manufacturing’s future.

Thank you to the participants of our first ever roundtable for sharing their knowledge, experience and perspective; it was clear that everyone who attended had a strong interest and a strong passion for our manufacturing industry and its future.

The following pages provide special coverage of our 2012 Leaders Summit “The Future of Manufacturing in Australia”. We hope the coverage helps to spark new ideas and shed new light on some prickly issues for our local manufacturing industry, and help those in it to evolve and meet the formidable challenges that lie ahead.

Manufacturers’ Monthly acknowledges sponsors ifm efector and Sage Business Solutions for their support in our inaugural roundtable.

Annie Dang Deputy Editor

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Collaboration will provide opportunities for businesses to compete effectively in the global manufacturing environment – Minister for Industry and Innovation, Greg Combet

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HE world economy is currently experiencing a structural shift in the weight of global economic activity to Asia. In Australia, the mining boom, the strong Australian dollar and intense international competition are putting manufacturing under significant pressure. The Government is working to help manufacturers transition to profitable new business models and seek out new markets for manufacturing in the world economy.

With around one million Australians currently employed in the manufacturing sector, we are committed to ensuring it remains competitive into the future. And while there are undoubtedly challenges, there are also tremendous opportunities from growth in our region. In 2009, there were around half a billion middle class consumers in the Asia-Pacific region. By 2020 this is expected to rise to 1.7 billion people, as growth in economies like China and India rise out of poverty.

Australia’s Innovation Agenda, Powering Ideas, is a 10-year project to build innovation skills, support research, increase business innovation and boost collaboration both domestically and internationally. Key initiatives for the agenda include: • The R&D Tax Incentive which is better targeted and less complex than the tax concession it replaced; • The Commercialisation Australia Program to assist enterprises and public sector organisations to translate ideas into commercial outcomes; • The Innovation Investment Fund program to support the provision of high risk capital to innovative companies; and • The Enterprise Connect program to help established companies build their capacity.

The Government’s Clean Energy Future package further demonstrates the strong commitment to manufacturing in Australia. Under the package, the $1 billion Clean Technology Programs will provide manufacturers with grants to assist in the purchase of new plant and equipment which cuts energy costs or reduces carbon emissions.

Currently the focus is on Asia’s demand for Australian resource exports. However with this rapid growth in the Asian middle Minister Greg Combet speaking with workers at rail carriage manufacturer, class, these economies will also become DownerEDI, in Cardiff NSW. major new markets for our agricultural, The Government is investing $800 million in the Clean Technology Investment manufacturing and services exports. The Government is helping to address the challenges Program and $200 million in the Clean Technology Food and Foundries Investment facing the manufacturing industry through a variety of measures. These measures include Program. These programs will give firms the edge they need to reduce energy the formation of the Taskforce on Manufacturing, established late last year. The Taskforce is consumption, improve carbon efficiency and embrace the latest technology. responsible for mapping the future of Australia’s manufacturing sector. It will report to the Government in mid-2012.

The Government is committed to supporting Australian jobs, improving productivity and boosting competitiveness. Major reforms to our Vocational In the 2012 Federal Budget, we announced it would fund a $29.8 million Education and Training system also have the potential to improve manufacturing Manufacturing Technology Innovation Centre. In collaboration with the manufacturing competiveness by strengthening training partnerships with industry. industry, this will create a network of leading edge researchers and industry experts around the country. The network will be coordinated through the existing infrastructure Whilst competitive pressures cannot be eliminated by Government, we are of the national Enterprise Connect program, to ensure it leverages existing Government working in partnership with can work with manufacturers to help better manage support for business. The Centre will also provide the opportunity for businesses to their businesses, increase their capabilities and become higher value enterprises. share information, harness new technologies and processes, as well as technical We believe a dynamic and advanced manufacturing sector is an important part of knowledge to improve their productivity. It is important that industry and Government Australia’s economic base. work together at this time. This will better equip businesses to compete effectively in the global manufacturing environment and help them realise new market opportunities, We will work with the sector to develop a vision for its future and we will particularly in the Asian market. A number of existing Government initiatives continue continue implementing the policies to realise that vision. to play a key role in supporting the manufacturing sector.

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Being open to change and new opportunities will help industry in Australia face current and future challenges - ifm efector

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N 1990, ifm management in Germany questioned what our world would look like in 20 or 30 years time and what demands we would face in the future. Of course, this is not something that can be answered objectively by anybody as we are not able to see into the future. Their belief was that we are all responsible for the future which takes into account social, economic, and ecological influences. Issues such as food supply, health, urbanisation, infrastructure, transportation and recycling were hot topics of discussion. Also was the concern for a greener future. Many experts assume that in a not too distant future the population of the Earth will be 15 billion people. In 1990, ifm’s vision discussions took this into account.

In 2012 these issues are hot points of discussion. These issues, along with topics such as the skilled labour shortage and the productivity slump are commonly discussed in relation to industry trends and the future of industry in Australia. All of these trends and issues can be looked at as challenges or opportunities, depending on your point of view. At ifm we tend to try and look at the positives of any situation.

All of these things create opportunities, for example automation and production in food manufacturing, pharmaceutical, material handling and airport and transport industries.

RELIABLE PERFORMANCE In order to support the expected increase in population and urbanisation, enormous amounts of energy are required.

The food and nutritional industry is essential to produce sufficient quantities of food. People want and need to live longer and be healthier utilising the best medical treatment and pharmaceuticals available. ifm is very focussed on these important industries, offering sensors tested to withstand extreme conditions. They are subjected to a variety of tests that ensure reliable performance in their application. These test conditions include the IP69K high pressure cleaning test, thermal shock test, and shock and vibration tests. This makes them suitable for the food processing and pharmaceutical industries.

The technical industry is driven by consumer demand for products and innovations to improve quality of life, through enjoyment or increased efficiency. This can be as simple as the newspaper that you read in the morning while listening to music on your iPhone – all of these things need to be produced. There is not a limitless supply of raw materials. Product lifecycles and consumer demand for continuously updated products, means that goods need to be recycled. Therefore, with population growth, the recycling industry will also experience strong growth. Environmentally friendly production methods and green energy are also becoming increasing important. ifm recognised this need early on and for forty years the company has been researching, developing and producing with the aim of optimising technical processes and conserving resources.

There is increased demand for customisation or personalised service rather than just a product. This can range from a custom built networking system to an engineer visiting a customer on site to give them a solution to their application. With the trend towards company cost cutting, this personal touch is something not all company’s can deliver on. ifm has the security and quality assurance of a global company with a strong local network of field sales engineers to provide onsite solutions to application problems, as well as customised solutions to fit your requirements.

The skilled labour shortage creates challenges in industry with employers facing the pressure of not being able to fill positions and jobs being left vacant, often for long periods of time. As a result, there is an increase in demand for product and technology that is both powerful and easy to handle. This has the advantage of not necessarily requiring a skilled worker to set it up and use. We offer products that meet these specifications that are simple to set up with great price performance ratios.

TALKING ABOUT AUSTRALIA Australia can be an expensive country in which to manufacture, in part due to high labour costs compared to other nations. In terms of labour capital versus output, the productivity slump in Australia has lead to manufacturers looking for ways to increase efficiency and reduce costs. Examples include lean manufacturing, automation of processes that traditionally were manual, product innovations and providing new products to market. Also seeking out and entering new markets where you have not had presence in previously.

Many manufacturers can seek out efficiency gains with their machinery by investing in real time maintenance. This reduces the need for costly machine down time as a result of breakdowns. We offer products that highlight early detection of damage, offering machine protection. Detection of unbalance, monitoring of overall vibration and bearing condition and trend analysis with integrated history function and condition counters are possible. This increases machine availability and secures quality and makes maintenance planable, reducing plant downtime.

We are embracing opportunities in automation in food manufacturing, pharmaceutical, material handling and airport and transport industries, offering solutions in these areas to reduce costs, improve efficiency and streamline production. ifm wants to help keep and make our world a place worth living in, and are therefore investing in products suitable for recycling and green energy. Industry in Australia is experiencing a time full of both challenges and opportunities. We all need to be open to change, particularly to make the most of the opportunities.

ifm efector 1300 365 088, www.ifm.com/au

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Investing in cost-effective, end-to-end solutions that are simple to implement and easy-to-use will deliver smooth system operation throughout the production line – Sage Business Solutions

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ANUFACTURING systems form a core part of the modern process line. Having the right, flexible and fully-functioning system will ensure the smooth operation and control of production and inventory data on a micro level; while delivering macro benefits to the business as a whole.

Manufacturers can achieve a number of business goals by investing in cost-effective, end-to-end solutions that are simple to implement and simple to use. There are several factors to take in consideration when choosing the right system fit for purpose and use; however manufacturers need to be aware of why things can (and do) go wrong in the first instance to better understand what system is most suitable to meet their needs and demands.

SIX REASONS WHY MANUFACTURING SYSTEMS FAIL 1. A FAULTY INVENTORY ITEM NUMBERING SCHEME Consider a company that has two sources for chips. Even though each supplier has its own part number for the item, the company didn’t map out its own part numbering scheme properly. As a result, the item appears to be out of stock even though there are still chips on hand from the other supplier. There’s a right and a wrong way to set up inventory control when you have more than one supplier. If the program you’re using doesn’t have multiple supplier capabilities, you won’t be able to properly set up Inventory Control to reflect this. Make sure the system you are considering maintains a cross-reference between your internal part number and each supplier’s part number.

2. INSUFFICIENT CONTROL OF CONTENT FOR BILLS OF MATERIAL Every BOM needs to be entered correctly from the start, based on specifications received from engineering. Even if the BOM has all of the right components in theory, sometimes in practice quantities aren’t exactly what they need to be and then people on the shop floor start to personalise as they assemble. It’s critical that engineering and manufacturing communicate effectively over the correct structure of BOMs and that only qualified people are keeping BOMs up-to-date. Regardless of the size of your manufacturing operation, a robust security system will restrict unqualified people from using certain critical functions of the software.

3. INACCURATE INVENTORY ON HAND One of the benefits of an integrated solution is that you eliminate redundancies in your system. One of the drawbacks is that errors can be compounded. If your inventory on hand is miscounted from the start, the error will repeat itself throughout your system.

And the last thing you want is to be forced to close down for several days to do a physical inventory in order to identify discrepancies and reset your on-hand quantities.

Manufacturing systems that offer “net-change” physical inventory functions will make it easy to correct stock counts without having to halt production activities.

Knowing why systems fail can help manufacturers choose the right system.

4. LACK OF AGREEMENT BETWEEN ENGINEERING AND MANUFACTURING Before implementing any system, it is absolutely essential that you reach an agreement between engineering and manufacturing on your goals and how you’re going to get there. It doesn’t matter how sophisticated your software is if you don’t have appropriate buy-in from these two departments. Work with your consultant to develop a thorough implementation plan. Make sure everyone in engineering, manufacturing, and management signs off on the plan before you begin installing software.

5. UNREALISTIC EXPECTATIONS OF WHAT THE SYSTEM WILL BE ABLE TO ACCOMPLISH Know exactly what you want to accomplish with your new system. You wouldn’t buy a Chevrolet to travel 200 MPH, nor would it make sense to pay a lot of money for a Lamborghini just to keep it in the driveway. Buying functionality you won’t ever need is just a waste of money. Make a careful list of the functionality you really need, adding a few of those “would be nice” items. Award major points to manufacturing systems that have a built-in growth path, especially if you can test-drive advanced functions using your own familiar data.

6. FAILURE TO DETERMINE THE COMPANY’S NEEDS IN ACCOUNTING, MANUFACTURING, ENGINEERING AND DATA COLLECTION It is vital that you spend time thoroughly evaluating your company’s needs before choosing and installing any system. Get a complete review of the requirements in accounting, manufacturing, engineering and data collection. This is a mandatory step in the process – and one that cannot be skipped. Doing your homework in the planning stages will pay off ten-fold when it’s time to connect all the pieces. Ask your reseller if consultation and training is available directly from the software supplier.

Sage Business Solutions 13 72 43, www.sagebusiness.com.au

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Manufacturers’ Monthly Leaders Summit

At the inaugural Manufacturers’ Monthly Leaders Summit “The Future of Manufacturing in Australia” industry leaders discussed the challenges facing our manufacturing industry and identified possible solutions to ensure its strong future in Australia.

WORDS BY ANNIE DANG

DESPITE receiving an unfair amount of adverse media coverage, economic figures reveal that manufacturing is still the fourth largest sector in Australia’s economy. The industry allocates $4.5 billion each year to R&D, and even today, despite several highly publicised lay-offs, close to one out of ten jobs in the country are directly in manufacturing. The number of indirect and associated jobs is far higher.

History has shown that whenever a country faces an economic crisis, manufacturing has always led the way out. Germany, with its strong manufacturing base is a good example of manufacturing’s longevity and resilience in the recent global financial crisis.

However, it is true that Australian manufacturing faces enormous challenges like never before – the strong dollar, poor political leadership, a continuing global economic crisis, a skills shortage, and unions that belong to a bygone era.

But manufacturing has a key role to play in the country’s economic and industrial landscape. We need to adapt, draw on our country’s innate spirit of innovation and discover new ways to secure the industry’s future.

The first Manufacturers’ Monthly Leaders Summit, held in May this year, brought together industry experts, academics and manufacturers and resulted in an interesting and invigorating conversation. The sole purpose of this summit was to discuss “The Future of Manufacturing in Australia”.

The Leaders Summit panel identified and debated key areas where there are gaps and opportunities, as well as room for improvement.

While the devil is in the detail, all agreed that the path which lies ahead is not an easy one. Hard work, commitment and a willingness to think differently, will underline the industry’s efforts. We must closely watch megatrends and assess how these will impact and shape local industry. We must draw on our resources and talent and work collaboratively to find practical solutions to ensure Australia’s manufacturing future.

The panel identified five key areas where challenges and opportunities intersect. This is a summary of their discussions and comments.

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FIRST SPEAKER, DR SWEE MAK FROM CSIRO, DISCUSSES THE ROLE OF R&D IN BUILDING A COMPETITIVE FUTURE FOR THE MANUFACTURING INDUSTRY. Dr Mak heads CSIRO’s Future Manufacturing

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R Swee Mak, Director of the Future Manufacturing Flagship, is leading CSIRO’s development of cleaner advanced materials and manufacturing technologies aimed at growing Australia’s future productivity and prosperity As a one of nine national research flagships, the Future Manufacturing Flagship is set up to help manufacturing firms become more competitive, productive and sustainable through research based solutions and technologies. The Flagship does this by partnering and collaborating with industry and research organisations around Australia and overseas. Over the last 3 years, the Flagship has partnered with more than 300 organisations in Australia and overseas.

The Flagship helps companies make a transition to the future with technology solutions that help improve their products and processes, as well as support the creation of new businesses and new supply chains through commercialisation of new platform technologies.

For instance, the flagship is currently working towards creating and supporting the birth of two new industries – titanium and flexible electronics – which have the potential to transform future manufacturing in Australia.

As Flagship director, Dr Mak provides scientific, strategic and commercial development leadership across a broad portfolio of research activities which includes agile manufacturing, titanium technologies, flexible electronics, sustainable high performance materials and manufacturing technologies for transport and resource industries.

“We often picture future manufacturing with high tech images of advanced technologies such as robotics and automation. While this is part of the future manufacturing story, it is perhaps more important to ask the question of ‘What future manufacturing needs to become to contribute to the nation’s future prosperity,” he said.

“Australian manufacturing needs to be globally competitive, productive and sustainable. Since Australia is inherently a small market, it is important that we ask ourselves, how we can create wealth through Australian companies succeeding in global markets?”

Dr Mak says that where a lot of companies fall behind in their competitiveness, both locally and globally, is not understanding their markets and customers well enough. There has also been a drop in productivity in Australian manufacturing in recent years.

“Quite often companies do not know who their customers and competitors are and therefore have a problem ensuring they make products and services that people actually want to buy,” he said.

“The fundamental issue is if companies don’t know their markets how can they compete, how do they know what to make and what to sell, let alone how to sell it?”

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CORRECTING THE MANUFACTURING IMAGE Australia’s manufacturing image has deteriorated significantly in recent years with media organisations tightly focusing on stories of factory closures and the offshoring of local processes. While the reports are largely true, the pursuit for these types of stories has left manufacturing companies who are performing well, and performing well on a global scale, arguably out of sight and out of mind; leaving a bad stain on the industry’s image in the eyes of the general public and the business market.

A reason for manufacturing’s poor image is the complexity and scope of the industry itself, which is made up of various pockets facing different issues, challenges and successes, not to mention the number of invested interests, as well as the varying size, structure and age of companies, the panel noted. At one end of the manufacturing spectrum there are steel mills, and at the other, biomedical manufacturing with 3D printers – this makes the story of manufacturing a difficult one to tell because each industry sector within manufacturing has a different agenda and can be dominated by different interest groups. Looking at the industry as a whole, such factors can affect the growth and business reputation of newer, stronger industry sectors.

It was considered that the word ‘manufacturing’ itself was the issue as its draws the perception that companies are just product-making entities; failing to give distinction among companies and sectors across the manufacturing spectrum.

“A way forward would be to start with a commitment from government and industry that manufacturing will have a role to play in the economy in the future, and to recognise that manufacturing could look very different in the future,” said Dr Swee Mak, Director of the Future Manufacturing Flagship at CSIRO. The key is working out what these new things could be and how to begin working towards it. That way we will have a clear picture of how to equip firms to be part of manufacturing in the future. Developing a collective vision for the future was suggested as a possible first step in the process.

Ultimately, the end goal is to work out what type of manufacturing the country would like to have in the future, and therefore what we need to start doing to get there. Having multiple conversations about the future of manufacturing in Australia will provide the nuance industry sectors need to tackle the issues it faces. Bracketing it under one wide-scooping term will not allow the detailed thoughts and discussions necessary to move the industry as a whole forward into the future.

SHIFTING THE FOCUS External economic factors influence and in some cases, dictate how local manufacturers do business, especially those whose business rely heavily on import and export trade. Traditionally, manufacturing firms were set up to be in and operate in one supply chain. However, in the modern global market space the most successful companies are those that are able to enter and participate in multiple supply chains.

Panellists considered the notion that manufacturers of the future were more than just “makers” of products; they are also service providers and suppliers of products they create. The concept is based on solid economics; that a company with diverse business segments can weather peaks and troughs better as they will have at least

INDUSTRIES OF THE FUTURE

Australia’s manufacturing future will be one of mass customisation, not mass production.

one segment that will be in demand while others maybe soft. While diversification has allowed many manufacturers to sustain, revive and drive growth, and gain entry into new markets it has come as a result of huge investments by companies, especially SMEs who make up over 90% of the local manufacturing industry, and whose pockets are not as deep compared with its bigger, multinational counterparts. But it is not the cost or amount of investment that is the barrier for most SMEs in Australia.

“The fact that a lot of companies are operating in survival mode, particularly with smaller firms who lack the absorptive capacity, so even if they want to do something different, they don’t have the resources to take things up,” said Dr Mak. “It’s not that they don’t have the knowledge, but they might not have the time, the bandwidth, and the people within the organisation to set up or change their processes as easily as larger firms. That’s the nature of small firms and that is a real challenge for them.”

Taking a look at the business structure “from the inside” was considered also to be a possible option for companies to find better ways of doing business and help them to set up internal procedures to make their business operate more efficiently, and therefore more sustainable in the future. Assessments or reassessments of business structure that gives way to development of strategies more focused on internal procedures and operations of a company, including creation of succession plans for the business as well as the manufacturing process.

The issue of succession planning was raised by Scott Blakemore, Director of Blakemore Source, who said that the majority of managing directors and CEOs of SMEs in Australia are “too busy keeping there heads above water” to have given thought to developing such a plan for their business.

“I see manufacturers who are Baby Boomers now looking at the future and they don’t have a succession plan in place for handing over the technology and handing over the business,” he said.

“This is one of the many things that weight on the minds of the CEOs and MDs of the 90% SMEs we have in this country in manufacturing.”

Blakemore made the comments in response to discussions on the lack of opportunities for SMEs in the domestic market. He pointed out that there were “high potential industries domestically” listing the power industry, the healthcare are industry (not biomedical), and the infrastructure and safety industry that services mining industries as examples of Australia’s “domestic shining light”.

Changing demographics – one of the five megatrends – will see the Australian manufacturing industry shift from one geared towards mass production to mass customisation. Products on demand are fast becoming the way of life for today’s consumers who opt for uniquely designed products that meet specific requirements over mass produced products that are generic in feature and benefit.

“What Australian manufacturers did in the past was to make fewer things in higher quantities, at smaller margins. The volume was high enough that a certain amount of profit was made. Perhaps the manufacturing future is one where firms can make different things quickly, responsively, and customised it to whatever the customers what,” said Dr Swee Mak. The growth and interest around 3D printing and additive manufacturing technologies is an example of emerging industry that could help to define what Australia’s manufacturing future could look like should companies choose to go down the mass customisation path to better respond to changing customer demand. And as Australian doesn’t have the capacity, the labour and market to build mega factories, it was considered to be a potentially viable option for companies to prosper with quick, low volume manufacturing lines. It was also suggested that such technologies could improve Australia’s ability to do volume manufacturing more effectively.

While new industries are emerging as potential leaders for the future, the heavy task lies in transforming ‘old’ industries which have long dominated Australia’s manufacturing landscape, such as the automotive industry, into ones which are viable and profitable in the future. It was generally agreed that there is no hard and fast rule around this, but being informed about changing trends and being aware of the unique structure, nature, capacity and capability, and strengths of each company will go a long way in reassessing, reorganising and restructuring manufacturing companies and help them transition into companies of the future.

Dr Mak says one way to get the message of success across is to use “exemplar companies that shine through as the future of manufacturing” and use those companies as an example or case study for industry. This approach can be applied across issues and challenges industry is trying to resolve, the panel noted.

BUILDING A COMPETITIVE ADVANTAGE There was general consensus that having a competitive advantage strengthens a company’s position in industry and will provide more surety of its survival into the future. However, creating this competitive advantage was considered to be something of a case-by-case basis and depended on factors such as type of industry, resource, size, capability and capacity.

Majority of the panel agreed that designing and or manufacturing a niche product, or providing a unique service will build a company’s competitive advantage and its ability to be a main, or the only player, in the global market.

Intellectual property is one area where Australian companies can potentially leverage a lucrative comparative advantage.

“Australian SMEs need to play globally and to play globally they need to have Manufacturers’ Monthly Leaders Summit

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CHAIR: Kevin Gomez, Editor, PACE Anthony Head, Sales Manager, Reed Business Information Australia

SPEAKERS: Dr Swee Mak, Director of the Future Manufacturing Flagship, CSIRO Lyle van der Veer, Industry Business National Support & Training Manager, Schneider Electric

PANEL: Andrew McLellan, Commercialisation Manager, Advanced Manufacturing CRC Bob Germaine, Executive Officer, Regional Development Australia Sydney Carlos Broens,

the ‘ticket’ to play globally, which is the intellectual property,” said Andrew McLellan, Commercialisation Manager for Advanced Manufacturing CRC. McLellan refers to intellectual property (IP) as having the capability in a particular area, and having that capability being protected whether as intellectual property through a patent or a form of copyright. Protecting intellectual property is something he believes is essential for companies to consider if they don’t want to fall behind in the game.

“Looking at the statistics on OECD countries, Australia performs really well for business start-ups. We perform really well for absorption of advance technologies into organisations and we perform really well with publication, but when we get to IP and protection we start falling down the curve. By the time we get to new products introduction in to market place, we fall right down to the bottom of the table.”

To prevent the downward slope, McLellan said companies need to work to improve the area around the culture shift by recognising the importance of intellectual property and the need for it to be adopted and taken up. “It’s our view that if you control IP, you can maintain it and take it globally and people will have to talk to you if they want to use your IP. If you don’t have that control people don’t have to talk to you and they can go elsewhere. Controlling IP is fundamentally critical for companies in the future as is working through the culture mind shift to get to this,” he said.

Managing Director, Broens Engineering Darryl Blackeby, Australasian Product Manager, ifm efector Dave Delany, Managing Director, ifm efector Etienne Vermeulen, Strategic Sales Manager, Sage ERP and CRM, Sage Business Solutions Hagop Tchamkertenian, National Manager, Policy and Government Affairs, Printing Industries Association of Australia Jessica Burke, Editor, Food Magazine Janelle Henson, Partnership Broker, Business and Industry, MWLP Ken Liddle, Market Manager, Manufacturing, BlueScope Steel Michael Moran, Onestone Executive Support Miro Miletic, Managing Directror, Memko Rudi Singh, Finance Director, GSF Australasia Scott Blakemore, Director, Blakemore Source Stephen Johnson, Manager Industry Team, Training and Education Support, TAFE NSW

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EDUCATION AND TRAINING Changing Gen-Ys’ perception and attitude about manufacturing and working in manufacturing, was in agreement, a core issue that needed attention now, rather than later. There are two ways to approach this, Lyle van der Veer, Business National Support and Training Manager for Schneider Electric suggested – the first, is working out how the industry can replace itself in terms of skills. The second is trying to build a sense of purpose around the activity a jobs requires.

“It’s not about what the job is, but whether Gen-Ys feel useful doing it. It’s about challenging the activity with the job, and not the job itself. If they feel like they have sense of purpose and believe they can get an outcome, not just a production outcome with what they are doing, and that out come benefits themselves and the business, they will engage in that activity every time,” van der Veer said.

“Education and training is not about glamourising the industry, it’s about making it sustainable. To do so, we first need to start making sure that mining has enough skilled workers to deal with its own demand for skills so they aren’t pulling workers out of the manufacturing sector.”

The issue of mining stealing manufacturing’s skilled workers was raised for discussion

by Carlos Broens, managing director of Broens Engineering.

“We have a tremendous shortage of skills; the skills are being taken away from manufacturing in to the resources sector. Manufacturing itself will have great difficulties in surviving, depending on how long the resources sector stays strong,” Broens said.

According to van der Veer, building sustainable skills models specific to the mining sector will help to solve the resource-manufacturing skills demand-supply issue. “It’s clear that supply isn’t meeting the demand in the mining sector, so the biggest issue we have is that our workers are being pulled out of manufacturing and put into mining.

SECOND SPEAKER, LYLE VAN DER VEER FROM SCHNEIDER ELECTRIC, TALKS ABOUT THE ROLE OF EDUCATION AND TRAINING IN PLANNING FOR THE FUTURE OF MANUFACTURING. Caption: Lyle van der Veer provides training and

“Australian SMEs need a ticket to play globally, and that ticket is IP” - McLellan Instead of plucking workers from the manufacturing industry, mining should look to build their own sustainability skills model to backfill their skills,” he said.

“If they can meet their demand through education, then hopefully other industries such as manufacturing won’t loose their key talent, who are usually the mentors that work with and train new workers.”

Finding, engaging and securing skills to the manufacturing sector still remains a challenge for industry, Janelle Henson, Partnership Broker, Business and Industry from MWLP points out. Henson works with companies such as Broens, Advance Metal Products and Nepean to run industry visits in the Macarthur area for highschool students.

“We invite students and their parents to industry visits to let them see what is happening in the industry, what it looks like today, what the career paths and opportunities are available. The idea is to introduce students to industry and give them access to information which they may not be able to get from their career advisors or parents,” she said.

The other objective is to attract “innovative kids” who may not pick engineering or metalworking as a vocational subject in highschool, but are the kids with the skills and ability industry needs now and in the future, she added.

It was suggested by Miro Miletic, managing director of Memko, that a greater focus on technology uptake in education programs aimed at highschool students may make the industry more attractive to the younger generation.

“More technology uptake will make the industry more attractive to students because they can see and make the connection that they can use the same tools in design, as in manufacturing, and in maintenance.

“I really think we need to engage at different levels to promote future generations to the industry, especially at that early level,” Miletic said.

It is also about having the right programs that provide workers with the skills they need for the future, Stephen Johnson, Manager of Industry Team, Training and Education Support at TAFE NSW, commented.

“We are seeing significant changes in skill sets of people in the engineering sector requires. I’m not convinced that the national training package is keeping up with the training requirement of industry.

“In the Certificate I to Diploma and Advanced Diploma qualifications; I see them lagging behind the skill-set industry is going to need within the future. They are not flexible enough, and they are training the people we have in the workshop now with the types of skills they are going to need in 3 to 5 years time, especially as we are going through so much change now,” Johnson said.

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S Schneider Electric’s Industry Business National Support & Training Manager, Lyle van der Veer manages a team of people who provide training and support services for staff across the company’s vertical markets. van der Veer looks after a range of projects aimed at building successful learning and development programs across the country, which includes managing the company’s ‘Energy University’ geared at educating workers and young professionals on industry developments related to energy management that affects the way they do business, such as the carbon tax and becoming more energy ‘smart’.

To help build successful learning and development programs for the future, van der Veer says there are three things to note: The workforce will eventually be dominated by Gen-Y who will think and do things differently compared to their Baby-Boomer mentors, trainers and managers; Gender will play a part in the type of work the Gen-Y workforce are interested in, so building dedicated programs that encourage participation of females as well as males will help draw in skills; Geography, through trying to attract skills into all pockets of industry, including regionally-based remote operational centres (ROC), rather than having it concentrated in one area.

A large part of van der Veer’s role is collaborating with and forming new collaborations with academia to build relevant learning and training partnerships. In May this year, Edith Cowan University in Perth opened the Schneider Electric Automation and Control Laboratory, which houses engineering and processing technology and equipment to provide students with experiential learning and a training space. The university also hired an industry professional from Orica to set up its first chemical engineering degree – which van der Veer will be involved with.

Such industry-university collaboration is not uncommon, and can be somewhat fluid, van der Veer says, admitting that he has taken on an academic from The University of Sydney with 20 years to develop a program of co-provider agreement, whereby he delivers shortcourses at universities but delivers them on behalf of the industry.

“For industry, university collaborations, are a good way to become more efficient and useful in the market space. It’s not about spending money, or labour; it’s about finding the best way to develop good processes and practices,” van der Veer said.

“It’s about finding that bridge between what is a mass education though TAFE and universities, through to that niche specialisation required when you get to industry.”

While there are multiples ways for collaboration, the ultimate goal is building and training a new generation of workers with the right skills for achieving best practice and teaching them the value and longevity a career in manufacturing can provide.

Manufacturers’ Monthly Leaders Summit

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