Moving manufacturing operations back home is in full swing in the US and UK, and is starting to happen here, as Alan Johnson reports on Australian Manufacturers Monthly.
WITH the Australian dollar now firmly ensconced around the 75c level against the US greenback, more and more manufacturers are seriously looking at moving their manufacturing operations back to Australia.
The move will counter decades of off-shoring, which to date has faced no substantial market-based challenge within Australia.
The trend of “off-shoring” – sending work overseas – hit manufacturing across the developed world decades ago, and in most cases it was inevitable, as it was just not feasible at the time to compete with Asia on cost for repetitive manual labour.
Today, global competition has steered Australian manufacturing towards its advantages, for example investing in automation and hi-tech machinery, as well as meeting specialised local requirements, such as flexibility and fast turnarounds.
Given these advantages, the balance between off-shoring and re-shoring production, also known as on-shoring, is now finely balanced in Australia.
Not so in the UK for example, where last year one in six manufacturers brought production back from overseas, or are in the process of doing so.