A further slowing in growth
Automation can help to reduce costs, boost production and make Australian SMEs more globally competitive. Professor Roy Green, Dean of the UTS Business School, and RØDE Microphones founder Peter Freedman discuss the best ways to make the most of emerging opportunities.
Automation could help SMEs to become more competitive. Professor Roy Green, Dean of the UTS Business School, and RØDE Microphones Founder and Managing Director Peter Freedman explain how.
In 2014, about 200,000 industrial robots were sold around the world. According to the 2015 World Robot Statistics issued by the International Federation of Robotics (IFR), this number is likely to have doubled by 2018.
“The main driver of this development is the global competition for industrial production,” says former IFR president Arturo Baroncelli.“Human-robot teams are on the cusp of a breakthrough, and easier-to-use robots will also open up new applications for small and medium-sized companies.”
Professor Roy Green, Dean of the UTS Business School at the University of Technology Sydney, believes that all business owners should investigate emerging opportunities.
“One example is growth in so-called ‘servitisation’ – the blurring of the line between manufacturing and services,” he says. “This can allow manufacturers to build value by adding a service to their products, such as a maintenance contract. And some manufacturers might replace their product with a service – a car manufacturer could offer a leasing program that includes all of the maintenance work, for instance.”
The connection between manufacturing, design and branding in one corner and analytics, robotics and machine learning in another is also creating opportunities for what Europeans call ‘smart specialisation’.
“The world no longer belongs to large organisations that have become globalised,” Professor Green continues. “Micro-multinationals are on the rise – SMEs that are the best at what they do in a particular niche now have the opportunity to operate on a global scale.”
Professor Green estimates that between 1000 and 1500 companies in Australia are already succeeding in international niche markets.
“One of the most outstanding examples is RØDE Microphones,” he says. “They are constantly innovating and improving their production system through automation. They also listen to their customers and redesign and reconfigure products to meet their customers’ needs.”
They top many categories worldwide in the home recording, cinematography and professional sound and music recording markets.
“We’re even the top-selling high-end microphone brand in Germany,” says Founder and Managing Director Peter Freedman, who recently received the Member of the Order of Australia in recognition of significant service to business, manufacturing and export and his philanthropy.
The company’s manufacturing plant in the Sydney suburb of Silverwater is fitted with precision machinery including computer-controlled metal lathes, mills and plastic injection-moulding machines. The total workforce barely tops 200 – about 140 designers, engineers and production people work in Australia while the rest are employed in offices in Los Angeles, New York, Hong Kong and a recently opened sales and marketing office in China.
When Freedman began investing in machinery 16 years ago, his intention was to gain agility and speed-to-market by having most of his operations in-house.
“If I placed an order now with a factory in China it would take them about a month to get the parts, a month to manufacture the product and a month for the finished product to arrive in Australia – and that’s all presuming that nothing goes wrong,” he says. “These days things are changing so rapidly that you don’t have the luxury of planning three or four months ahead. You need to be able to move fast – and having an automated manufacturing plant here in Australia allows us to do just that.”
He has also been able to establish a strong brand with a reputation for excellence.
“Rather than try to compete with cheap imports we can charge a premium price for high-quality products,” he says. “We have to be strategic. There are still some areas where too much manual labour is required for us to be competitive but, as volumes increase, we will continue to automate production.”
Anyone keen to exploit automation and robotics must understand the capabilities of the technology and how to deploy it strategically.
“There are many ways to get up to date with technology and business strategy including government programs, courses at universities and TAFE and offerings from private providers,” says Professor Green. “It does require an investment of time and effort, but I think it’s vital that business owners commit to educating themselves. If they just sit back and let these new developments wash over them, they could soon find they’re no longer in the race.”
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