The inaugural APPMA Digital Lunchtime Series featured a keynote by the World Economic Forum head of advanced manufacturing Francisco Betti, providing a global perspective on manufacturing as the new engine of growth. Colleen Bate writes. This article first appeared in the October 2021 issue of Food and Drink Business.
Over the course of three sessions, The Australian Packaging and Processing Machine Association (APPMA) instigated a discussion around the future of manufacturing.
The first session featured World Economic Forum head of Advanced Manufacturing Francisco Betti unpacking the complexities facing manufacturing companies with smart manufacturing and Industry 4.0 evangelist John Broadbent.
Betti began by discussing where Australia sits in what he calls “the structure of production”, which he believes provides the key capabilities that every nation should be investing in if they want to thrive and play a major role in the future transitions of manufacturing.
The World Economic Forum’s Readiness for Future Production report on manufacturing companies around the world documents these capabilities and more.
Potential to lead
Honing in on the Australian market, Betti pointed out that while Australia operates on a small scale of the current production base, it is performing well.
“The foundational elements that are required for Australia to be a success are probably already in place, which may provide a competitive advantage within the global map,” he says.
Betti says the value chain disruption caused by COVID-19 has forced companies to rethink their manufacturing and supply chain strategies as well as provided new opportunities.
He says it has also forced many global companies to look at new locations to increase production as they diversify and change their manufacturing plans.
Betti believes that Australia could have a significant competitive advantage.
“If you look at the Australian economy today, 70 per cent is probably around services and the rest is commodities. Manufacturing represents less than one per cent.
“So, realising the potential, understanding how global balances have shifted, requires a strategic decision of the sectors Australia needs to go forward,” he says.
In reply to Broadbent’s question on how Australia could move from its manufacturing status of ‘high potential’ into a position of leadership on the global map, Betti says it would be beneficial for the country to select sectors in which there is immediate competitive advantage to attract at least part of the global share.
The foundational elements that are required for Australia to be a success are probably already in place, which may provide a competitive advantage within the global map.
He also points out the importance of sustainability.
“You cannot think about a future of production that is not sustainable – it is a major driver of management strategy and a competitive advantage as consumers become more demanding.”
Mega trends
Betti went on to discuss how manufacturing companies could adapt to mega trends and prepare for future global threats such as climate change, a volatile global economy and fragile geopolitical conditions.
He says the emerging fourth industrial revolution has also presented opportunities for growth, pointing out how the exponential rate in which technology is transforming operations and driving efficiency, productivity and growth is opening up thousands of opportunities for companies.
“These mega trends have been affecting operations for the past three to five years and when combined with COVID-19, you have a perfect storm – a stress test that we have never seen before.”
Betti cited a survey of more than 500 manufacturing CEOs. More than 80 per cent said the disruptions they faced were unprecedented, and admitted they were affecting both demand and supply.
“It means ‘just in time’ didn’t allow manufacturing companies to respond or come up with alternative solutions when part of the world was totally cut off and disconnected from global value chains during COVID-19. Companies that had adopted mass manufacturing technologies beforehand were able to navigate the crisis more successfully.
“If you look at what has played out this year, it is fair to assume that the crises will be happening more often and have further consequences.”
Betti says companies should accelerate the adoption of advanced manufacturing technologies and move into a mindset of continuous adaptation to build resilience and cope with future disruptions.
“Countries such as Australia, who are performing pretty well on the drivers of production, need to bring in new levels of flexibility and agility and create an end-to-end supply chain visibility.”
Global lighthouse
In closing, Betti discussed the World Economic Forum’s Global Lighthouse Network – a community of manufacturers that show leadership in using fourth industrial revolution technologies to transform factories, value chains and business models, for compelling financial and operational returns.
According to Betti, 69 manufacturing lighthouses have been identified from different industry sectors, and have embarked on a joint learning journey to share insights and experiences and incubate new partnerships.
“The result of this is that we have over 110 user studies and applications that demonstrate where companies can learn and leverage from, for their own transformation,” says Betti, who believes the greatest value lighthouses bring to the industry is the way they leverage digital technologies to set new benchmarks for the global manufacturing community.
“These benchmarks are a source of inspiration and set the next bar in what every manufacturing company should be aspiring to achieve.”
For Betti, we still haven’t found the factory of the future but instead, a continuous journey of evolution.
