This is the third article in the series and will describe: “How to Onshore to Australia” with discussion of business strategy opportunities which may be achieved and what the role of engineering plays when onshoring to Australia.
As Australian companies’ onshore portions of their supply chains there will be significant benefits across the Australian economy. Onshoring manufacturing operations like machining, plastic moulding and metal fabrication will benefit Australian companies reducing costs and risks, which was described in the previous article of this series. Over the past couple of decades, Australia has experienced a reduction in the number of companies providing these types of manufacturing services as well as a reduction in the number of manufacturing sector workers. Current Australian government programs, a resurgence of Australian nationalism and the increasing trade tensions with China are all serving to accelerate onshoring to Australia efforts.
Industry 4.0 (The Fourth Industrial Revolution), the digital revolution and the increasing availability of automation are changing the labour market and making workers more productive. Combined, these technology transformations will contribute to make Australian manufacturers more cost competitive helping to further drive onshoring to Australia.
Technology tools that are collectively referred to in Industry 4.0, are raising the skill levels needed to use these tools. As manufacturers look to leverage the productivity improvements of these technologies, their workers will need additional and ongoing training to stay current.
In the previous article in this series, the total cost of ownership (TCO) model was introduced and described in detail. This cost modelling tool will support supplier selections that reduce total costs for Australian companies resulting in an increased reliance on Australian suppliers. Using the TCO model to compare supply chain sourcing options will provide the ‘Why’ to onshore to Australia. Then your company needs to plan the ‘How’ of onshoring.
As these supply chain transitions take place, companies need to carefully plan transition approaches to minimise cost and risk while taking advantage of opportunities to accomplish strategic business objectives at the same time. This article will discuss some topics for consideration when formulating supplier transitions. The role for engineering departments in building and executing these plans will also be examined within this article.
How to Onshore to Australia
Once a company has identified a cost or strategic justification for onshoring particular goods or services within their supply chain to Australia, how should this be done?
In the previous article titled ‘Why Onshore to Australia?’ the concept of evaluating the total cost of ownership was introduced with six cost areas. When planning the ‘How’ in onshoring to Australia it’s important to understand the resources required, cost and risks within each of these same six areas. The seven steps of how to onshore to Australia are listed below with a detailed review of each within this article.
- Document Why Onshoring to Australia is Justified
- Identify Full Range of the Supply Chain Affected
- Identify Business Strategy Opportunities
- Describe Onshoring Success
- Create the Onshoring Plan
- Execute the Plan
- Audit the Results
Some onshoring supplier changes will require minimal planning or justification, such as changing the supplier for standard office supplies. Other onshoring changes can be very significant such as building a facility to onshore a plastic injection moulding operation requiring a significant amount of planning.
