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The federal government’s $1.5 billion investment in the Modern Manufacturing Strategy will see a significant increase in locally made components and machinery, SAI Global forecasts.

SAI Global quality management specialist Saeid Nikdel said the result will be improved availability and safety of consumer goods in Australia.

The Federal Government made its investment available to two of the six priority manufacturing sectors, as of this month. Manufacturers can apply for a grant to help them strengthen their local supply chain, handle mass production, upskill employees, scale up and improve competitiveness.

Nikdel has helped manufacturers in Australia manage their risk through standards, assurance and training. He said: “Restrictions enforced across the world have resulted in a lack of availability, or delivery delays, of goods, due to parts and components held up in international supply chains. The slowing of production lines has led a flow-on effect to Australians wanting to access goods.

"The problem has highlighted our manufacturing sector’s deepest vulnerability: its dependence on overseas markets for the supply of machinery, tools, parts and product components. Most of the machinery that we bring into Australia comes from the US and Europe, while product components and parts mostly come from China.”

Nikdel said that in the last 12 months, local manufacturers, assemblers, and distributors have faced delays almost twice as long as in 2019. “These have impacted their ability to produce local goods. Numerous manufacturers have also struggled to scale up operations to meet the increase in demand. It has been a wake-up call for our manufacturers, who now realise they must strengthen their supply chains.

"A number of our manufacturing clients have revealed to us they are now looking to produce their own product components in Australia. The growth and strengthening of Australia’s manufacturing sector is dependent on this happening and the government investment is timely.”

Nearly nine in 10 Australians believe we should produce a higher proportion of essential products locally, and 82 per cent think our infrastructure projects use of Australian-made products whenever possible, even if it costs more.

While, most evidently, the growth in production and manufacturing on our shores will benefit our economy, consumers will also see a significant shift towards quality through supply chains, not just improved availability.

“We have higher standards and product statutory and regulatory requirements than other countries, benefitting the end user with superior-quality products with safer design considerations. Safer products will result in minimal incident risks or product recalls, increasing customer satisfaction. Our high safety legislations, codes of practice, and quality standards are the reasons why Australian-made products are so popular in international markets.

"As our manufacturers start to produce more locally, they can place a stronger focus on providing quality and safety products and services by certifying to Quality Management System ISO 9001 and OHS Management System ISO 45001,” Nikdel says.

He is optimistic that the $1.5 billion government investment will improve its target markets of space, resources technology, critical minerals processing, food and beverage, medical products, recycling and clean energy, and defence sectors.

“As demand for Australian suppliers increases, our local manufacturers will also need to boost their workforce and facilities to scale-up their operations. Right now, the manufacturing sector has a shortage of skilled machinery operators. The government’s direct funding of the sector will not only result in new manufacturing areas, but also an increase in skilled workers and manufacturing facilities.”

 

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