A light study might lead a reader to believe that Australia’s manufacturing industry is at risk. After all, the change brought on by the digital wave is not easy to adopt and seemingly leaves it unprepared for its adoption.
Reasons and examples are galore.
Australia ranks 24th in 138 countries in Technological Readiness, according to WEF’s 2016-2017 Global Competitiveness Report. Despite the fact that it invests heavily in higher education and training, the manpower hasn’t been used for the optimal commercial gains when it comes to technology.
Even without the digital menace, this situation further spirals down. The industry reported a 4% decline in employment growth rate last year and a 3% decrease in productivity. Besides, increase in wages, energy costs, and commodity prices are additional reasons to worry about.
Steady is the key
While embracing digital transformation might be a challenge to the industry, its implementation is likely to improve things in the long run.
For example, using digital manufacturing software like computer-aided design (CAD) & Enterprise Resource Planning (ERP) makes valuable information imperative to growth accessible and sharable easily. It coupled with innovative design process, which might lead to quality assurance, enables manufacturers to work within a shorter delivery time. Thus, the process of predictive analysis could help them anticipate demand and improve plant utilization and minimize outages.
As it makes the industry more sensitive to the demands of the customers, it encourages the manufacturers to focus on managing logistics and making it efficient. It might result in cost reduction.
Once it gathers data using data analytics, manufacturers can even use it to find out weaknesses and improve on it. This might mean preventing and addressing potential malfunctions and accidents.
Additionally, IoT implementation might mean a “unified ecosystem”. It might connect operation data from different resources which will aid in real-time customization for a better performance.
This might further make real-time monitoring possible, giving the users the power for a quick and accurate decision-making.
Above all, IoT might make the machines involved self-aware when it comes to potential cyber-physical problems. The manufacturers could avoid operational cost and have a functional and healthy machine at their disposal for a long time. This increases the productivity of the machines.
Not that easy
Of course this is the estimation for future. In a survey, 91% respondents admit that digital transformation can be enabled only after an essential makeover to the business model.
But if they gear up to adopt IoT in the industry, then it is likely to contribute significantly to the growing IoT market, being a part of almost AUD 2 trillion dollar as a result.
Sachi Mulmi is a researcher with Frost & Sullivan. She can be reached at firstname.lastname@example.org
Sapan Agarwal drives content and marketing for Frost & Sullivan. Sapan is based out of Kuala Lumpur Malaysia and can be reached at email@example.com | +603 6204 5830