Greg Combet, the Federal Industry Minister, has come out and told the manufacturing industry that the high Australian dollar (i.e. above $US1.00) is here to stay – “The economy has to adjust to the reality of a higher dollar. The high dollar is driving a lot of change and … in manufacturing in particular, business models have got to change the economy.”
He says we have an open market-based economy and you can’t wish for the past days of protectionism to come back. What’s the solution then for manufacturers? Change your business model.
“We are at a time of quite significant structural change in the economy,” he said.
At the same time advisory firm, Manufacturship, has added its own comments – “We need to use the low interest rates at the moment to fund money in investment to buy new technology. Management is not utilising the new technology and equipment to make the most out of the labour.”
They’ve pointed the finger at 5 contributors to improved competitiveness for manufacturers: (1) suppliers must make whatever they make right the first time in every step of their production processes, (2) the plan to make products must be visual in manufacturer’s offices and factories to see what, where, who and how those customer orders are tracking, (3) understand their true contributors to the cost of goods, (4) ensure delivery is on time and (5) capture all this in a business plan which is developed top down and bottom up. Communicate and listen to the operations people.