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Resource Centre | February 16, 2019

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A digital disruption is brewing in manufacturing

A digital disruption is brewing in manufacturing

The Australian manufacturing industry has just recently slowed down from a year of consistent positive growth, but it's clear the sector won't trend negative for too long.

A bevvy of new customers and innovative technologies has made the industry an example of how effective modern operational strategies can be given the right resources and personnel. Robotics, the Internet of Things (IoT) and 3D printing are just a few of the digital solutions disrupting the space, which has many organisations turning to IT consultancy to help guide them in the right direction.

Australia and its digital revolution

Intuitive technologies have become a staple among well-run Australian organisations, especially in sectors like Fintech. A recent Deloitte study agrees, estimating that 7 per cent of the country's gross domestic product in 2020 will be made up of digital contributions to the economy.

Robotics are extremely valuable in reducing overhead expenses.Robotics are extremely valuable in reducing overhead expenses.

At the heart of the transformation lies a few key industries that are taking the idea and running with it. Of the 10 major disruptive solutions the report identified as emerging over the next few years, half can be applied to manufacturing. This includes:

  • Artificial intelligence
  • Drones
  • Robotics
  • 3D Printing
  • IoT

The benefits of those particular digital developments are already being seen; 3D printing for instance can slash the time it takes to develop a product by 96 per cent, according to Deloitte. In agriculture, farmers are leveraging IoT to gain insights on crop cycles in a bid to make their production more efficient – though the same practice could easily be applied to manufacturing as well.

The potential is massive and Australian companies are already recognising the shift. Allocated funding for IT is expected to increase by 2.2 per cent on average at each organisation, ZD Net reported. Agnus Armour, head of the innovative programme at the Business Council of Australia, believes technology will play a pivotal role in carving out international prominence for the country's manufacturing sector.

3D printing can cut the product development time by 96 per cent.

"In some areas Australia already has a competitive advantage," Armour told Deloitte. "We could do well with 3D printing, building on the growth in our advanced manufacturing sector. But we may only do 'okay' if we don't invest in research, collaboration and innovation."

Using technology to overcome looming hurdles

Rising energy costs are the reason behind manufacturing's fall to Earth after 12 consecutive months of positive gains on the Ai Group industry index, according to Trailer magazine.

"Of great concern to all manufacturers continues to be the impact of energy and gas prices on their bottom line. Mounting energy costs are further squeezing already-fragile profitability," Innes Willox, chief executive officer of Ai Group, told the magazine.

3D printing is cutting costs left and right for manufacturing companies.3D printing is cutting costs left and right for manufacturing companies.

The sector's success will largely depend on one of two situations occurring; energy prices fall, or organisations find ways to improve efficiency in a bid to reduce operating expenses. It's clear that many enterprises are opting for the latter, given the fact 3D printing, automation and business intelligence from IoT are already so pervasive in the market.

Businesses looking to continue to improve or gain an advantage over competitors that are stalling should begin to evaluate their digital capabilities. Moving to the cloud will soon be a requirement given the computing power all the new technologies will require.

As such, it might be best to work with an IT consultant to identify vulnerable areas of your business, how you can mitigate that exposure and which types of upgrades to IT infrastructure can be made now that also set up the company for success in the future. Manufacturing will only offer tighter margins as energy prices continue to fluctuate, limiting the success of companies that don't figure out how to circumvent it. Contact an ANATAS representative today for more information.

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