R_amp;D and Australias Future - Blakemore Consulting

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					Australia’s Manufacturing
    Future in a Global

    Dr John Blakemore
    National President ManSA
    Chairman BC International
    Martin Place
    +61 2 9238 7670
    Mob 0414 970758
• Which Industries? Only those where
  we have a Strategic Advantage (SAW)?
• How much protection? None? Have we
  moved too fast?
• CAD and Foreign Liabilities too High?
• 40% world’s Uranium but not Nuclear?
• Why is Business R&D lowest in OECD?
            The New Rules 1
•   Battle Present Vision and Global Drivers
•   Blending of Civilisations & Cultures?
•   New world order based on Culture.
•   Companies larger than countries
•   Massive Debts of poorer countries
•   Western world trading deficits huge
•   Continuous global conflicts
•   Global Warming and Peak Oil.
•   Wealth Spread very uneven, ageing.
•   Decline of USA, growth of China & India
          New Rules 2

• Move from Mass Production
  To Agile Made to Order
• Don’t size demand to fit Capacity
  Fit Capacity to fit Demand
• Low cost and high quality
         New Rules 3

•Low Working Capital and Low
  Inventory and rapid response
• Satisfy all members of the value chain
•Superiority of Knowledge Capital
•Digital data available instantaneously
•Compression of Lead time and
  elimination of Non Value Added steps
   Leading Edge Trends
• Why does it cost the consumer $150
  for gym boots that cost $2 to make?
• Why does a digital download music
  Album cost the consumer $16 when
  the cost including royalties is $2?
• The supply chains will compress and
  prices fall, the answer is speed and
  elimination of steps in the physical
  supply chain as variety increases.
Inventory in Supply Chain Autos
Sales Sourcing Autos
           New Generation
          Manufacturing 1
• Use Digital data to maximum advantage
• Choose those industries where we have a
  natural Comparative Advantage eg Uranium,
  Energy, Aluminium, Food etc
• Build integrated digital supply chains
• Plus high value goods like scientific
  instruments, sensors, medical devices,
• Focus R&D efforts where we have a SAW
• Modular fusion of new technology.
     New Generation
     Manufacturing 2

•Recognise the value chain
• Rapid use of digital data
 from the source to any position
 in the value chain
•Mass to build to order
    New Generation
    Manufacturing 3

•Establish knowledge networks
To supplement in house
•Increased emphasis on speed
 and R&D and innovation of
 process and product
     New Generation
    Manufacturing 4
    Human Resources
• Control core competencies
• Collaborate and Synergise
• Reward Innovative knowledge
• Continuous learning
• Imagination +Knowledge= Discovery
NGM IP Model Oz1
NGM R&D Model Oz2
NGM Green Model Oz3
NGM All Co Model Oz4
NG Pull IT Model Oz5
NG Retail Models Oz6
      Where do we Start ?
• Convince and Lobby Politicians and Business
  Leaders so that they understand the need to
  take a long term view.
• Convince Business Leaders that it is their
  best interests to have R&D representation on
  the Board.
• Educate the Industry Bodies.
• Focus our Research efforts not spread them
  thinly like the CSIRO
• Make Universities Commercially accountable
  through Cooperative R&D using Japanese
            Where Do You Start?

•    Integrate processes and systems, pull
      by customer, then spread out both ways.
2.   Substitute pull for MRP
3.   Use internal digital data on shorter periods
4.   Hook up digitally with customers & suppliers
5.   Eliminate forecasting as much as possible
6.   Educate Industry Bodies.
       Manufacturers Need
         Agile Systems
We must embrace change, globalise, and
Innovate continuously. If this means supply
from low wage countries then accept this but
control the IP from here and manufacture
for the world in a modular design for higher volume
or customise where we have a comparative
advantage, but the overriding rule is that we must be
agile and flexible like Australia 2 in 1983 and
replace labour with capital and use blue sky
strategies, and use digital data more cleverly.
The End
     Manufacturing or
•There is no such thing as a pure
 Manufacturing Company

• All companies are Service Driven

•What is your Position in the Supply
  Innovation, R&D and
Australia’s Manufacturing

  We need to be Creative,
Innovative, Fast & Flexible
  (Like Australia 2 1983)
Australia Has
 a Problem
                 R&D $ & Productivity

Source: OECD Main Science and Technology Indicators, 2005-1                    Source: OECD Productivity Database, 17 December 2004
GERD is defined as total expenditure by all sectors — business enterprise, government, private non-profit,
higher education — on R&D that is performed within the boundaries of the country
       My R&D Observations

•   800 E&M Applications (5yrs)
•   Approx 5% successful
•   IP mostly exploited Overseas
•   Small no. people rich
•   Little benefit National Benefit
      Reasons for Failure of
Poor Understanding of:
• The Scientific Method
• The use of the correct resources
• The needs of the market
• Difference between Process & Product Innovation
• The need to articulate the concept and plan
• The way to raise funds to support the application
• Financial accounts
• Cashflow
• Poor measurement of risk
           Agile Rule 3

•   Drive Process Innovation with
     Product Innovation
     (25 creative Flow Rules)
Australia Exports & Employment
     Excellent Correlation
Australia’s Comparative
Agile Results P&L
What Has Been Done (Carpet)
        $300M T/O
Smart Production ..Output &
 Defectives (Loss to Profit)

CSIRO Exp vs Comparative Adv
        Agile Rule 1

Demand = Production
• Make to Order
•Pull by Customer
•Apply Continuous flow rules
          Agile Rule 2

•Match Manufacturing
 Capability with Demand
•   Product Range complexity often creates
  poor servicing and excess waste and working
•Tirelessly improve agility by reducing the EPR
 by removing non value added activities
          Agile Rule 4

• Recognise that Digital
 Data can be obtained at the POS and
 sent to any point in the supply chain
    Agile Rule 5

• Reduce Complexity
  and Modularise

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