Catch the global habit: expert

Manufacturing is on the eve of a renaissance according to a recent Deloitte & Touche and Deloitte Consulting study.

Called The 1998 Vision in Manufacturing, the study shows how Australian manufacturers need to realign their businesses in order to stay competitive in the new technological era.

The survey, which questioned some 900 manufacturing executives in 35 countries, showed eight out of 10 manufacturers were not well positioned to succeed in global markets, and according to Deloitte Consulting manufacturing practice leader Alan Milwidsky, companies must confront globalisation head on to stay in the running.

New global competitors will emerge as availability of information and Internet technology allows niche players to leap cost-prohibitive infrastructure barriers to join global markets, Milwidsky said.

Leading manufacturers, he said, are also moving from selling and marketing their products around the world to creating global networks of research, manufacturing and distribution. Virtual links are central to this, he said, and Internet technology is allowing this to occur faster and cheaper.

According to the study, the number of products on the market are expected to increase by 50 per cent over the next three years. Flexibility and rapid response are therefore essential to being able to compete, Milwidsky said. Leading manufacturers, according to the study, are speeding up new product development processes with initiatives such as "follow the sun" 24-hour R&D facilities and virtual engineering over corporate intranets.

The study also showed while product quality is going up, customer satisfaction is dropping. "This demands a more customer-centric focus," Milwidsky said. To achieve this leaders are making increasing use of technologies such as data warehousing, customer integrated data, electronic commerce and integration of R&D with the supply chain.

Integration of the global supply chain will also determine success into the future he said. The study showed that while enterprise resource planning (ERP) systems have already been deployed to remove excess costs, leading manufacturers are using Internet technologies and adding functionality to ERP applications to capture and integrate key customer information. Internet-based technologies are providing new, lower cost options, Milwidsky said.

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