{"id":1,"date":"2024-11-14T09:00:09","date_gmt":"2024-11-14T09:00:09","guid":{"rendered":"http:\/\/isw2.local\/?p=1"},"modified":"2026-06-16T00:53:23","modified_gmt":"2026-06-15T14:53:23","slug":"challenges-of-the-australian-manufacturing-sector","status":"publish","type":"post","link":"https:\/\/www.isoprosoftware.com\/it\/blog\/challenges-of-the-australian-manufacturing-sector\/","title":{"rendered":"Sfide del settore manifatturiero australiano"},"content":{"rendered":"<div class=\"mt-10 max-w-2xl\">\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone  wp-image-3630\" src=\"https:\/\/www.isoprosoftware.com\/wp-content\/uploads\/2024\/11\/homa-appliances-resized-1200-300x200.webp\" alt=\"\" width=\"719\" height=\"480\" srcset=\"https:\/\/www.isoprosoftware.com\/wp-content\/uploads\/2024\/11\/homa-appliances-resized-1200-300x200.webp 300w, https:\/\/www.isoprosoftware.com\/wp-content\/uploads\/2024\/11\/homa-appliances-resized-1200-1024x683.webp 1024w, https:\/\/www.isoprosoftware.com\/wp-content\/uploads\/2024\/11\/homa-appliances-resized-1200-768x512.webp 768w, https:\/\/www.isoprosoftware.com\/wp-content\/uploads\/2024\/11\/homa-appliances-resized-1200-18x12.webp 18w, https:\/\/www.isoprosoftware.com\/wp-content\/uploads\/2024\/11\/homa-appliances-resized-1200.webp 1200w\" sizes=\"(max-width: 719px) 100vw, 719px\" \/><\/p>\n<p>Historically, manufacturing in Australia has been oriented towards the domestic market with a substantial portion of production serving local consumers and businesses. Local manufacture is predominantly in food and beverage manufacturing, construction materials and fabrication. Manufacturing in Australia contributes around:<\/p>\n<ul class=\"mt-8 space-y-4 text-gray-600\" role=\"list\">\n<li class=\"flex gap-x-3\">5.4% of Australia\u2019s GDP \u2013 AUD 120bn (GDP ~ AUD 2,260bn in 2023)<\/li>\n<li class=\"flex gap-x-3\">6.7% employment \u2013 948,000 people<\/li>\n<\/ul>\n<p class=\"mt-8\">Given the local and smaller-scale, Australian manufacturers typically can\u2019t leverage the benefits of large-scale automation possible in the larger manufacturing centres in the EU, Japan and China.<\/p>\n<p class=\"mt-8\">This occurs because a substantial part of the manufacturing or fabrication processes are manually set up and coordinated even if the operation itself is done by machines, e.g. manual setup of equipment, manual control and changeovers, manual loading etc. The costs of full automation cannot be amortised with the lower volumes and demand.<\/p>\n<h2 class=\"mt-16 text-2xl font-bold tracking-tight text-gray-900\">Challenges Of The Australian Manufacturing Sector: It Starts With Labour Productivity<\/h2>\n<p class=\"mt-8\"><a class=\"text-base underline text-cerulean-500 hover:text-gray-900\" href=\"https:\/\/www.pc.gov.au\/ongoing\/productivity-insights\/bulletins\/quarterly-bulletin-september-2023\" target=\"_blank\" rel=\"noopener\">Productivity Commission\u2019s Sep 2023 report<\/a>\u00a0<sub>[1]<\/sub>\u00a0can be summarised by:<\/p>\n<ul class=\"mt-8 space-y-4 text-gray-600\" role=\"list\">\n<li class=\"flex gap-x-3\">The pandemic caused a short-term increase in productivity from 2020 to 2022 because the sectors that were closed down or shrunk by restrictions had lower productivity.<\/li>\n<li class=\"flex gap-x-3\">As COVID-19 restrictions unwound in 2021-22, less productive industries returned to work.<\/li>\n<li class=\"flex gap-x-3\">Productivity is now (Sep 2023) at its lowest level since March 2016.<\/li>\n<li class=\"flex gap-x-3\">Only 4 of the total 19 industry sectors saw productivity increase; the remaining 15 industry sectors all saw productivity declines:<\/li>\n<li class=\"flex gap-x-3 ml-10\">Transport, postal and warehousing industry (I) increased output by more than the increase in hours worked<\/li>\n<li class=\"flex gap-x-3 ml-10\">Administrative &amp; support services industry (N) and accommodation &amp; food services industry (H) saw output rise while hours worked fell<\/li>\n<li class=\"flex gap-x-3 ml-10\">Wholesale traders (F) reduced both hours worked and output, but hours worked decreased by more than output, and so measured productivity increased<\/li>\n<\/ul>\n<\/div>\n<figure class=\"mt-16\"><img decoding=\"async\" class=\"aspect-video rounded-xl bg-gray-50 object-cover\" src=\"https:\/\/www.isoprosoftware.com\/img\/blog\/2024-11-15-manufacturing-australia-productivity-insights.png\" alt=\"\" \/><figcaption class=\"mt-4 flex gap-x-2 text-sm leading-6 text-gray-500\">Source: PC productivity insights Quarterly productivity bulletin \u2014 September 2023 (https:\/\/www.pc.gov.au\/ongoing\/productivity-insights\/bulletins\/quarterly-bulletin-september-2023\/bulletin-september-2023.pdf)<\/figcaption><\/figure>\n<div class=\"mt-16 max-w-2xl\">\n<p class=\"mt-8\"><a class=\"text-base underline text-cerulean-500 hover:text-gray-900\" href=\"https:\/\/tradingeconomics.com\/australia\/productivity\" target=\"_blank\" rel=\"noopener\">Total Factor Productivity in Australia 2014-2023<\/a>\u00a0<sub>[2]<\/sub>\u00a0is at its lowest since 2016.<\/p>\n<\/div>\n<figure class=\"mt-4\"><img decoding=\"async\" class=\"aspect-video rounded-xl bg-gray-50 object-cover\" src=\"https:\/\/www.isoprosoftware.com\/img\/blog\/2024-11-15-manufacturing-australia-total-factor-productivity.png\" alt=\"\" \/><figcaption class=\"mt-4 flex gap-x-2 text-sm leading-6 text-gray-500\">Source: Trading Economics (https:\/\/tradingeconomics.com\/australia\/productivity)<\/figcaption><\/figure>\n<div class=\"mt-4 max-w-2xl\">\n<p>The Productivity Commission\u2019s key takeaway was:\u00a0<strong><span class=\"font-medium\">Productivity is about working smarter, not working harder or longer; so, attention should be directed toward increasing output through increased investment, efficiency and innovation to achieve sustained labour productivity growth over the long-term.<\/span><\/strong><\/p>\n<\/div>\n<div class=\"mt-16 max-w-2xl\">\n<h2 class=\"text-2xl font-bold tracking-tight text-gray-900\">Quality Assurance \u2013 ISO 9001<\/h2>\n<p class=\"mt-6\">ISO 9001 is the \u2018father\u2019 of all ISO Management System Standards, originating from\u00a0<a class=\"text-base underline text-cerulean-500 hover:text-gray-900\" href=\"https:\/\/en.wikipedia.org\/wiki\/ISO_9000\" target=\"_blank\" rel=\"noopener\">British Standards BS 5750<\/a>\u00a0in the late 70\u2019s and early \u201880s\u00a0<sub>[3]<\/sub>. The High Level Structure (HSL) outlined in ISO\u2019s Annex SL aims to \u201c\u2026 enhance the consistency and alignment of MSS by providing a unifying and agreed-upon high level structure, identical core text and common terms and core\u00a0<a class=\"text-base underline text-cerulean-500 hover:text-gray-900\" href=\"https:\/\/en.wikipedia.org\/wiki\/Annex_SL\" target=\"_blank\" rel=\"noopener\">definitions<\/a>.\u201d\u00a0<sub>[4]<\/sub><\/p>\n<p class=\"mt-6\">According to\u00a0<a class=\"text-base underline text-cerulean-500 hover:text-gray-900\" href=\"https:\/\/www.iso.org\/the-iso-survey.html\" target=\"_blank\" rel=\"noopener\">ISO\u2019s 2022 Global Survey<\/a>\u00a0<sub>[5]<\/sub>, there are over 1.2 million ISO9001 active certified organisations worldwide and around 12,600 ISO9001 certificates issued in Australia across almost 30,000 operational sites.<\/p>\n<p class=\"mt-6\">While ISO\u2019s industry groupings for ISO9001 globally don\u2019t directly match the ANZSIC Industry sectors, around 570 manufacturing companies in Australia have an ISO9001 certified QMS. This is approx. 4.5% of ISO9001 certified companies in Aus. and is consistent with both employment numbers and contribution to GDP for the sector.<\/p>\n<\/div>\n<div class=\"mt-16 max-w-2xl\">\n<h2 class=\"text-2xl font-bold tracking-tight text-gray-900\">Quality Controls<\/h2>\n<p class=\"mt-6\">Unlike WHS controls, where the PCBU\u2019s \/ organisations\u2019 operational and reporting obligations are clearly defined in legislation, industry body codes of practice and legal precedents, quality controls are\u00a0<strong><span class=\"font-medium\">completely dependent on the organisation<\/span><\/strong>.<\/p>\n<p class=\"mt-8\">While virtually all enterprise-scale WHS software packages will provide acceptable levels of recording and reporting for WHS events because the requirements are universal, for quality control, no two organisations, even those producing identical products will not have the same set QC process steps, controls and checklists.<\/p>\n<p class=\"mt-8\">Quality controls are specific to the company\u2019s and site\u2019s processes, equipment, operational constraints, physical materials flows, level of outsourcing and management approach to quality. Manufacturing quality controls, while originating in Guilds in the Middle Ages, became industry norms in the early 1900\u2019s when in 1924, Walter A. Shewhart of Bell Telephone Laboratories developed a statistical chart for the control of product variables in\u00a0<a class=\"text-base underline text-cerulean-500 hover:text-gray-900\" href=\"https:\/\/asq.org\/quality-resources\/history-of-quality\" target=\"_blank\" rel=\"noopener\">manufacturing<\/a>\u00a0<sub>[6]<\/sub>.<\/p>\n<p class=\"mt-8\">After WW II, W. Edwards Deming and Joseph M. Juran extended the quality control methods that US industries had developed during the war and successfully implemented them in Japan<sub>[6]<\/sub>. Japan\u2019s industrial manufacturing base embraced \u201cTotal Quality\u201d and focused on improving all organizational processes through the people who used them.<\/p>\n<p class=\"mt-8\">A whole slew of techniques and approaches were developed in the 70\u2019s through to the 90\u2019s such a quality circles, lean sigma, JIT and sophisticated statistical approaches to fault analysis and failure prediction.<\/p>\n<\/div>\n<div class=\"mt-16 max-w-2xl\">\n<h2 class=\"text-2xl font-bold tracking-tight text-gray-900\">Challenges Facing Manufacturing Managers in Australia<\/h2>\n<p class=\"mt-6\">Despite a vast body of knowledge on Quality Controls, a well-established and mature Quality Assurance framework, and major advancements in automation, equipment scope, and operational quality, labour productivity and total factor productivity in Australia continue to decline.<\/p>\n<p class=\"mt-8\">There are many macroeconomic reasons for this decline. Many, if not most, are outside the control of operational or quality assurance managers. While statistical methods are very powerful for analysis and prediction of faults, the challenge in Australia\u2019s labour-intensive manufacturing and fabrication processes is to capture\u00a0<strong><span class=\"font-semibold underline\">actionable and timely<\/span><\/strong>\u00a0quality information from the production floor.<\/p>\n<p class=\"mt-8\">This requires almost all operational steps to be controlled or, at a minimum, their parameters to be recorded\u00a0<strong><span class=\"font-semibold underline\">at the time and place<\/span><\/strong>\u00a0that the operation occurs. In a manual or manually-supported operation this needs to be done by the operator.<\/p>\n<p class=\"mt-8\">Because\u00a0<strong><span class=\"font-semibold underline\">traditional<\/span>\u00a0QC software<\/strong> systems typically can\u2019t be made to fit the company\u2019s specific processes, most businesses end up capturing their quality control information\u00a0<strong><span class=\"font-semibold underline\">on paper forms<\/span><\/strong>\u00a0on the operations floor.<\/p>\n<p class=\"mt-8\">In many cases, this manually-recorded information is then input into a software system later for record and \u2018counting\u2019 or aggregating purposes. The paper QC forms are then collated as part of the\u00a0<strong><span class=\"font-semibold underline\">QC administration<\/span><\/strong>. Checking and signing off QC information becomes an administrative activity; paperwork is collated with the project or batch and only referred to in the event of an issue.<\/p>\n<p class=\"mt-8\">Operational and QC\/QA Managers typically dedicate a meaningful (and in many cases a large) part of their day ensuring the process and QC administration is complete; they typically only respond to issues\u00a0<strong><span class=\"font-semibold underline\">after the fact<\/span><\/strong>, i.e. when stopped at final QC or even later when the client has lodged an issue.<\/p>\n<p class=\"mt-8\">Quality Control however is about\u00a0<strong><span class=\"font-semibold underline\">actionable and timely exception management<\/span><\/strong>; information needs to be managed and evaluated in real time by \u2018the system\u2019, not by an administrator or manager.<\/p>\n<p class=\"mt-8\">Supervisors and managers only need to be\u00a0<strong><span class=\"font-semibold underline\">alerted immediately<\/span><\/strong>\u00a0whenever an exception occurs, i.e. when something unexpected or outside a set parameter is recorded. This changes the Operations or QC manager\u2019s role from an information administrator to an exception manager.<\/p>\n<p class=\"mt-8\">Quality Assurance is about ensuring ALL the quality elements, i.e. quality controls, equipment, training and operator skills and operational instructions are always aligned and responsive to changes in output demands (customers), inputs (supplier and materials changes) and internals (equipment, resources).<\/p>\n<\/div>\n<div class=\"mt-16 max-w-2xl\">\n<h2 class=\"text-2xl font-bold tracking-tight text-gray-900\">Why ISOPro Enables Companies To Overcome Productivity And Quality Challenges<\/h2>\n<p class=\"mt-6\">Rephrasing the Productivity Commission\u2019s key takeaway: Attention should be directed toward increasing output through increased investment (in Quality Control software\/technology that works for you), efficiency (via timely and actionable information) by and innovation (through alignment of QA, WHS and Enviro controls) to achieve sustained labour productivity growth over the long-term.<\/p>\n<p class=\"mt-8\">Traditional Quality Control software cannot support Australia\u2019s highly diversified, smaller and local manufacturing and fabrication industry;\u00a0<strong><span class=\"font-semibold underline\">ISOPro\u2019s highly configurable process control platform and data capture software can<\/span><\/strong>.<\/p>\n<p class=\"mt-8\">Reducing the administrative workload of quality control will increase an organisation\u2019s productivity. Ensuring all quality-related elements are aligned will change an organisation\u2019s Quality Assurance posture from \u2018reactive\u2019 to \u2018exception-based and pro-active\u2018. If this doesn\u2019t improve output quality and reduce per-unit costs in your organisation, nothing will.<\/p>\n<p class=\"mt-8\">Learn more about how ISOPro can help your company overcome the challenges in the Australian manufacturing sector and help managers in the manufacturing industry balance quality and productivity. Book a free discovery call with one of our team members below.<\/p>\n<h2 class=\"mt-16 font-bold tracking-tight text-gray-900\">References<\/h2>\n<p class=\"mt-4 text-xs\">[1] Productivity Commission Quarterly Productivity Bulletin Sep 2023: <a href=\"https:\/\/www.pc.gov.au\/ongoing\/productivity-insights\/bulletins\/quarterly-bulletin-september-2023\">https:\/\/www.pc.gov.au\/ongoing\/productivity-insights\/bulletins\/quarterly-bulletin-september-2023<\/a><\/p>\n<p class=\"mt-4 text-xs\">[2] Trading Economics &#8211; Australia Productivity: <a href=\"https:\/\/tradingeconomics.com\/australia\/productivity\">https:\/\/tradingeconomics.com\/australia\/productivity<\/a><\/p>\n<p class=\"mt-4 text-xs\">[3] ISO9000 \u2013 Wikipedia: <a href=\"https:\/\/en.wikipedia.org\/wiki\/ISO_9000\">https:\/\/en.wikipedia.org\/wiki\/ISO_9000<\/a><\/p>\n<p class=\"mt-4 text-xs\">[4] Annex SL \u2013 Wikipedia: <a href=\"https:\/\/en.wikipedia.org\/wiki\/Annex_SL\">https:\/\/en.wikipedia.org\/wiki\/Annex_SL<\/a><\/p>\n<p class=\"mt-4 text-xs\">[5] ISO Global Survey 2022: <a href=\"https:\/\/www.iso.org\/the-iso-survey.html\">https:\/\/www.iso.org\/the-iso-survey.html<\/a><\/p>\n<p class=\"mt-4 text-xs\">[6] American Society for Quality (ASQ) \u2013 A History of Quality: <a href=\"https:\/\/asq.org\/quality-resources\/history-of-quality\">https:\/\/asq.org\/quality-resources\/history-of-quality<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Esplora l'impatto delle soluzioni software avanzate sul miglioramento dell'efficienza e della produttivit\u00e0 nel settore manifatturiero.<\/p>","protected":false},"author":2,"featured_media":3630,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[37,40],"tags":[21],"class_list":["post-1","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-compliance-management","category-manufacturing","tag-manual-operations"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.isoprosoftware.com\/it\/wp-json\/wp\/v2\/posts\/1","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.isoprosoftware.com\/it\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.isoprosoftware.com\/it\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.isoprosoftware.com\/it\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.isoprosoftware.com\/it\/wp-json\/wp\/v2\/comments?post=1"}],"version-history":[{"count":2,"href":"https:\/\/www.isoprosoftware.com\/it\/wp-json\/wp\/v2\/posts\/1\/revisions"}],"predecessor-version":[{"id":4031,"href":"https:\/\/www.isoprosoftware.com\/it\/wp-json\/wp\/v2\/posts\/1\/revisions\/4031"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.isoprosoftware.com\/it\/wp-json\/wp\/v2\/media\/3630"}],"wp:attachment":[{"href":"https:\/\/www.isoprosoftware.com\/it\/wp-json\/wp\/v2\/media?parent=1"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.isoprosoftware.com\/it\/wp-json\/wp\/v2\/categories?post=1"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.isoprosoftware.com\/it\/wp-json\/wp\/v2\/tags?post=1"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}