Four years after the onset of the COVID-19 pandemic, the impacts on Australia’s manufacturing ecosystem continue to reverberate, and there is a slow but steady trend towards increased manufacturing in Australia.
Earlier this month, the Australian government passed its $22.7 billion Future Made in Australia legislation, and it is timely to revisit the core rationales for manufacturing locally in the context of that significant milestone. Following is the first of a four-part series examining the benefits of local manufacturing. The four parts cover commercial, operational, environmental and brand reasons for manufacturing locally in Australia or New Zealand.
While many manufacturers are motivated by operational, environmental, and brand reasons, the bottom line for most companies will always be commercial. Many perceive that manufacturing in Asia is cheaper and the smart thing to do. However, there is a growing sentiment that the smart move is to manufacture locally. Following are six commercial reasons to manufacture locally.
Better IP protection: Australia has a robust legal framework protecting intellectual property rights. Keeping your manufacturing local significantly reduces the risk of intellectual property theft or infringement, which can be difficult and costly to enforce in international courts. This legal security safeguards your innovations and gives you peace of mind.
Faster time to market: Being geographically closer to your manufacturing facility allows for quicker production cycles and easier communication. Proximity means you can respond to changing market demands and trends faster, giving you a competitive edge and potentially increasing your market share.
Access to grants: The Australian government offers various grants and incentives to support local manufacturing and innovation. These programs can fund research and development, capital expenditure, and skills training, making local manufacturing a more financially attractive option.
Reduced uncertainty: Manufacturing locally helps you avoid disruptions caused by international trade disputes, geopolitical tensions, sanctions, or sudden policy changes in other countries. Local manufacturing ensures more stable operations and reliable supply chains, allowing more assured business continuity.
Lower tariffs and duties: When manufacturing in Australia, you eliminate many tariffs and customs duties that can significantly inflate costs when importing goods manufactured abroad. Lower tariffs and duties can result in substantial cost savings and improve your profit margins.
No compliance surprises: Australian manufacturers are already familiar with and operate under Australian standards and regulations, including those related to electromagnetic compatibility and product safety. Local expertise reduces the risk of non-compliance penalties, production delays, and potential damage to your brand reputation.
Talk to us at the Circuitwise group of companies about savings that can be gained by manufacturing locally in Australia or New Zealand.
This is the 2nd article in a four part series highlighting the benefits of local manufacturing. Part 1 - The commercial case for manufacturing locally - this post.
Part 3 - The environmental imperative for local manufacture - coming soon.
Part 4 - Why local manufacture matters for your brand - coming soon.
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