Australia is a continental country, as big as the United States (excluding Alaska), but as populated as the city of Shanghai. Australia’s unique features forged its specificities and have a significant impact on the country’s development. To have a broader understanding, a modern and popular version, “Straya” of the national anthem “Advance Fair Australia” attempts to summarise it:

My country don’t share no borders
‘Cos of all the waters that surround our land
Thank god for our resources
‘Cos they are the sources of our wealthy land
Don’t try to find the capital
Or fight the animals
You’re on your own
[…]

One should not consider Australia as another OECD country when improving its industrial performance in an establishing subsidiary or deploying its industrial group (by organic growth or acquisition). We can note three main elements:

Know more about our skills in Australia

A country where growth has hidden optimisation





 

[2] Australia’s growth has been built, as we have seen poetically, on natural resources (agriculture, oil and natural gas, minerals), and has therefore been stimulated during the past three decades by the rise of the Chinese industry and the development of its domestic consumption. Even the 2008 crisis ultimately had little affect on Australia, whose resilience has found another pillar: financial services.





[3] Industrially, however, the country has generally started to decline after a peak in 2008, and most industries are now in permanent decline. Even larger groups are concerned, such as Toyota, which announced in February 2014 that it is halting its automobile production in Australia in 2017 as a result of an “unfavorable dollar, high costs and lack of economy of scale”. Due to the current economic situation, this harsh reality demands a recovery. The well-known ‘firefighter’ mode.


It seems to be too late for these larger groups to recover, our customers request Freelog Australia Pacific to recover service level rates in 2 to 4 months, in order to reduce delays and regain control of their warehouses, manufacturing lines or planning process.

Logistics will decide

Everyone is aware of the challenges that exist to make deliveries in D+1 everywhere around ‘dense’ France. Australia is on a whole new scale, the country consists of 5 time zones, 8 states and many capital cities (Sydney, Melbourne and Canberra housing headquarters)! Consumers, meanwhile, are using e-commerce like everyone else in the developed world (and sometimes even more due to the distances). Manufacturers want an impeccable service rate, more so in sectors that “never sleep” (oil and gas, mining, fresh produce). 40% of road freight is done on a B-Double (one 20 feet container and another 40 feet one), but the network for these “road trains” in Australia allows convoys up to 200 tons and 197 meters long.

[6]

In the industry, the first two questions one makes are: “In which of the capitals are you located? What provider do you use?” Your provider may not be the one who processes the good through customs in one of the Australian ports or airports. They will maybe subcontract in certain states and the reactivity will suffer. Further issues arise when the fast evolution of the projects will require the opening or the closure of a base (hub) thousands of kilometres away.

In Australia, logistics represents 8.6 % of GDP, a rate finally similar to Europe. However, each point of productivity in logistics is estimated at 1.2 billion Australian dollars in GDP. With an economy strongly dependent on imports and exports and subjected to strong international costs competition, the logistic performance of the economy will trigger your success in Australia.

With consolidated experience in Europe and being ten years in Brazil – country with similar distance problems –, Freelog brings its expertise to producers, 3PLs and 4PLs on the definition of logistics plans (number and sizing of distribution centres, lead time reduction, etc.). In addition Freelog, participates in Future Living Labs, and the centre of innovation and applied research, with NICTA and Fraunhofer[7].

A skilled market to be understood





[8] Rapid Growth, full employment, very distant labor pools and Anglo-Saxon historic context make Australia’s labor market a fast eel, which can become a headache for many companies. While trying to develop in the long term, companies must juggle employing people to fill jobs or face from 2 to 6 months to hire foreigners on an urgent basis, and a youth which favour more than anything ‘immediatism’, flexibility and personal success (and not the company’s). For every employee, HR expects that 46% will leave the company within the next year and 52% of the employees are looking into a new direction for their career to enrich their experience or improve their remuneration.

The island of immigration, Australia, is an attractive destination and known for its lifestyle and its levels of salary. The country also employs a qualified foreign workforce via a selection program called the Skilled Migration Program that covers, in particular, all engineering and production jobs. Nevertheless, companies often look for professionals with experience in leader markets in their sectors (Europe, United States) to improve efficiency and implement best practice. These rare pearls are difficult to find and to retain.

Therefore, 11% of companies mention wanting to recruit abroad even with the time it takes and high costs, but 40% are also going to develop ways to keep their talents. For that purpose, 33 % of industrial companies consider that they are going to have to pay more than market average and make salaries increase over inflation rates. Paradoxically, the strong corporate culture is perceived as the main element of attraction and retention by the employees. It is a challenge to build this culture with such a staff turnover! All these factors contribute to the structure that organisations have to adapt to.

For Freelog, it is the opportunity to apply its know-how in process formalisation, knowledge capitalisation and set up learning and resilient organisations. So a key program of franchised development of maintenance activities for Airbus Helicopters was introduced in Australia for the pilot phase. With a simple idea: if it works in this small complex market, it will work in the 27 subsidiaries around the world!

If we had to keep in mind two axes of sustainable improvement in industrial performance in Australia, we would choose without hesitation the following:

Consider the global supply chain

Cliché recommendation? Not that much when we think that Darwin is closer to Jakarta than to Sydney, and that, for communication and time zones reasons, it is sometimes better to manage urgent matters between Europe and Australia via an Asian logistic hub in Singapore or Hong-Kong! Australia, often considered a second Asiatic headquarters, can only be evaluated in connection with its country of influence (New Zealand) and its business partners (China, Japan, but also emerging Asia).

[13]

Due to its coverage of Asia with its offices in Hong Kong and Sydney and its network structure (there are no country borders at Freelog!), we help companies to manage their upstream and downstream Supply Chain with an Asia Pacific vision and an execution which will take into account the financial, cultural and fiscal aspects.

To design a learning organisation

S&OP at headquarters is also called S&OP here, but at distant markets, where the CEO and Supply Chain VP rarely meet, things have evolved differently. Sometimes notions and practices hide behind the same naming or procedure! The industrial performance in Australia passes by the actual implementation of head office best practices, by keeping in mind 2 constraints: people arrive and leave quickly, and only some of them have a regular experience of exchange or training with the parent company.

All consultants at Freelog in Asia are certified APICS in Supply Chain or SMI (Small and Medium-Sized Industry) in project management, are at the state of the art with Lean operational experiences in several business sectors and in several countries. The coaching or education at Master’s level are part of our wealth. What we do in-house, we do for our customers by writing procedure handbooks, fast training and recruiting of the rare pearl. This sometimes improves elements of retention but always of performance. Especially if the person in charge of your warehouse or your logistics coordinator changes twice a year!

Know more about our skills in Australia

  1. [1] https://www.youtube.com/watch?v=rMdbVHPmCW0
  2. [2] Glen Stevens, Governor of the Reserve Bank of Australia, Sept 2014, http://www.rba.gov.au/speeches/2014/sp-gov-030914.html
  3. [3] Australian Industry Report, 2014, http://www.industry.gov.au/industry/Office-of-the-Chief-Economist/Publications/Documents/Australian-Industry-Report.pdf
  4. [4] Max Yasuda, CEO Toyota Australia, http://www.abc.net.au/news/2014-02-10/toyota-to-pull-out-of-australia-sources/5250114
  5. [5] The Economic Significance of the Australian Logistics Industry, Australian Logistics Council, 2014
  6. [6] https://www.bitre.gov.au/publications/2014/files/Freightline_01.pdf
  7. [7] http://www.futurelogisticslivinglab.com.au/, website update in progress
  8. [8] Glen Stevens, Governor of the Reserve Bank of Australia, Sept 2014, http://www.rba.gov.au/speeches/2012/sp-gov-240712.html
  9. [9] http://geert-hofstede.com/australia.html
  10. [10] Michael Page, Salary & Employment forecast 2014/2015, Manufacturing
  11. [11] Ibid.
  12. [12] Ibid.
  13. [13] Australian Industry Report, 2014, http://www.industry.gov.au/industry/Office-of-the-Chief-Economist/Publications/Documents/Australian-Industry-Report.pdf

 

 Thomas, APICS CPIM, manager of Freelog Sydney office, has been teaching industrial engineering (production management, planning, lean) at the Sino-European Institute of Aviation Engineering for more than three years.