Amongst the recent news of Clive Palmer irritating the Liberal Party about the carbon tax, and the furore around sending asylum seekers to where they just escaped from, I realised today that there really hasn’t been any news about the Australian manufacturing industry in the last couple of months. With the assistance of Google, the most recent article I could find was published by the Age here, and then there were some intermittent stories about industry employment figures.
Operating on the assumption that the lack of news isn’t because every Australian manufacturer has given up and stayed in bed, I have been considering the inherent contradiction in discussing our manufacturing industry (and it needing to be more efficient and more prosperous), and then reporting on the state of the industry by reference to the number of manufacturing jobs.
The contradiction here is that even if the manufacturing industry was achieving growth, efficiency, and prosperity, there is a real chance that employment figures would not rise in a directly proportional way. I say this because if manufacturing is going to succeed in Australia, cost minimisation needs to happen. Period. And, because Australia’s labour force is so expensive, a key method to achieve cost minimisation is to employ fewer, more skilled, better performing people.
By using automation (robots, machinery, control systems, etc) to do repetitive tasks, manufacturers can get the benefit of higher precision, better performance, higher efficiency, better reliability, and they don’t have the additional costs associated with workplace injuries, work cover, and payroll (amongst others). Automation does have its own costs, but in the drive to be competitive in a high cost economy like Australia, reductions in employment numbers per unit of productive output can’t be avoided.
You can’t manage what you don’t measure. So, instead of intermittently reporting the doom and gloom of waning employment figures in the manufacturing industry, I want to see an industry performance indicator developed and used. This performance indicator needs to provide industry with insight into the performance of the sector as a whole and to allow participants within it to readily evaluate how their operation compares to current and historic trends.
I hope this sparks some discussion of what this performance indicator might be, and how it might be used to gain some insight and advantage for our manufacturing industry.