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Conference day 2 highlights

Posted on March 27th, 2019 in News

2019 off to a rocky economic start

The first half of 2019 is going to be tough for the Australian economy – but it’s not all bad news, according to one expert.

Economic guru Stephen Koukoulas took guests at the AUSPACK 2019 Business and Industry conference through the state of the economy and what lies ahead. According to Koukoulas, Australia is strongly linked to economic trends around the world.

“What happens in the global economy is absolutely vital to us. When the world economy has a hard landing, we get caught in the backwash of that,” he said. “The world economy is going to be OK. It’s not going to be boom times, but it’s not going to be a hard landing.”

Business and consumer sentiment are down, acting as a drag on the economy, and the housing market is also in a downturn; the low Australian dollar is, however, helping exports.

Koukoulas also cited lower interest rates, plus growth in public sector spending and non-mining business investment, as good economic news for Australia.

Three key takeaways:

  • The economy is in for a soft six months.
  • Much hinges on housing, global economic conditions, and business and consumer sentiment.
  • It is vital we see interest rate cuts, a lower Australian dollar, and maybe sooner tax cuts and other fiscal measures, says Koukoulas.

Don’t miss the Industry 4.0 boat

Businesses that are slow to adopt Industry 4.0 and Industrial Internet of Things technology risk being left behind, says industry expert John Broadbent.

Broadbent told guests at that early adopters of this technology will find themselves at a significant advantage once the mainstream catches up, while laggards will struggle to catch up.

“The longer you kick the can down the road, the bigger the gap becomes,” he said.

According to Broadbent, the nine main use cases for Industry 4.0 and IIoT technology are asset tracking, automation, predictive maintenance, safety and security, smart buildings, customer engagement, data intelligence, product-as-a-service, and agile design processes.

The utility of properly gathering and analysing business data is huge, says Broadbent, and can save businesses time and money,

“How would you feel about sitting in your car with no dashboard, windscreen blacked out, rear view is where you were thirty days ago, and the managing director is in the passenger seat asking are we there yet? You wouldn’t drive like that, but people run their businesses like that all the time,” he said.

Three key takeaways:

  • Early adopters will have a leg-up once Industry 4.0 technology becomes commonplace.
  • Data analytics can save time and money.
  • Though investment can be expensive, there is a cost to doing nothing as well.

Take a leap of faith, say Industry 4.0 experts

Businesses should not be afraid of change and must embrace Industry 4.0, according to an expert panel at AUSPACK 2019.

John Broadbent facilitated a panel comprising Paul Barber of Lighthouse Systems, Michael Parrington of Pact Group, Richard Roberts of the Open IIoT industry group, and Alan Spreckley from ABB, to discuss practical implementation of Industry 4.0 systems.

Spreckley said one major barrier to adoption of Industry 4.0 is change-aversion in businesses.

“People in general have a resistance to change. They feel too comfortable with where they are and what they have,” said Spreckley.

Broadbent argued that there is never a “right” or “wrong” time to invest, and that businesses need to get on board and constantly update themselves.

“The right time for continuous improvement is always,” said Broadbent. “It doesn’t matter when you’re doing well or not doing well.”

According to Roberts, one crucial early step in embarking on an Industry 4.0 project is forming partnerships, either internal or external, to ensure your business has the skills needed to operate the new technology.

“If you don’t have that expertise, you can look to bring it in, or you can seek out other experts in the area,” said Roberts.

Parrington agreed, saying seeking external help is one way Pact has tried to overcome the skills gap.

“We try to understand what we don’t know, and where we’re not skilled we bring people in,” said Parrington.

Lastly, Barber said integration of data and systems is vital to the success of a cloud-based Industry 4.0 project.

“Already there’s silos of data in every manufacturing company. Just pushing them into the cloud and creating more silos in a different place doesn’t solve the problem,” he said.

Three key takeaways:

  • Don’t be afraid of change – embrace it.
  • Partner with people who can get you access to the skills you need.
  • Don’t transplant existing data silos into the cloud – integration is king.

Uniting man and machine for Industry 5.0

Where Industry 4.0 is about connectivity and integration of machines, Industry 5.0 will involve humans and machines working closer together, argues a robotics expert.

Peter Hern of Universal Robots told guests at the AUSPACK 2019 Business and Industry Conference that collaborative robots, or “cobots”, are able to complement a human workforce.

“What we find is that the human-robot collaboration is actually 85 per cent more productive than humans or robots alone,” he said. “It’s not about replacing human employees – it’s about helping them to do their jobs and stay involved in the process.”

Cobots are specifically designed to work alongside humans, and according to Hern, can offer benefits such as increased productivity, lower costs, improving quality, boosting innovation, competitive advantage, and reshoring of manufacturing. They also free up human workers from repetitive, dull, dangerous or mundane tasks to focus on jobs that can bring more value to the company.

Industry 5.0 will couple cognitive computing with human intelligence, and manufacturers who adapt quickly will be rewarded.

“Those who are slow to respond risk losing business to others who will embrace the future of manufacturing,” warned Hern.

Three key takeaways:

  • Cobots and human staff can work safely side-by-side for increased productivity.
  • Workers are freed up for high-value tasks.
  • Industry 5.0 will bring the human element back into manufacturing.

Ups and downs for Aussie exports

Tensions between globalism and protectionism are impacting on Australian exports – but the Trump trade war could pay off for Australia.

The spat between the US and China has effects beyond those two countries, according to Ben Lannan, partner for international trade at PricewaterhouseCoopers.

“While there’s a general proposition at a macro level that nobody benefits from a trade war, from an Australian perspective at least, there can be winners and losers from this. Australia has the potential from an export perspective to be marginally ahead,” he told guests at AUSPACK 2019.

While free trade agreements have boosted Australian exports, they’re not a panacea, said Lannan, who added that while most people think of tariffs when they picture trade barriers, they are not the only thing hindering exports.

“From our perspective, tariffs are just the tip of the iceberg. What we’re seeing is the impact of non-tariff barriers that are the real impediment to Australian exports,” he said, citing quarantine procedures and packaging compliance as two such barriers.

Three key takeaways:

  • The US-China trade war can benefit Australia in export areas such as commodities and education.
  • Large businesses are better placed to gain benefits from free trade agreements than SMEs.
  • Non-tariff barriers impact trade to the value of $790 billion USD per year in the Asia-Pacific alone.

Close the loop now, urges guru

AUSPACK 2019 guests have heard of the vital importance of shifting from a linear to a circular economy.

Michael Grima, director of QDesign Enterprises, took attendees through the challenges and opportunities in breaking away from the make-use-dispose model and into a closed loop.

According to Grima, talk of recycling and environmental issues is no longer a tokenistic discussion for packagers, with many now seriously shifting to more eco-friendly materials and methods.

He warned that making the leap to a circular economy, as printing equipment manufacturer Fuji Xerox did in the 1990s, must be done sooner rather than later.

“The longer you wait to make that change, the less likely it will be to have any impact whatsoever,” he said. “It’s not for humanity – do it for the love of your own family.”

Grima held up Fuji Xerox as an example: they took responsibility, created their own integrated recycling network, established a secondary value on their product, and designed their products with a closed-loop mindset.

Three key takeaways:

  • Closing the loop must be done sooner rather than later.
  • Companies should stop thinking of used product as waste and start thinking of the additional value that can be gained from its reuse or recycling.
  • There are massive financial opportunities in the circular economy as well.

Diversity – it’s not just about being “PC”

Far from being an intrusion, taking time to consider diversity and inclusive corporate culture can unlock new opportunities and boost businesses, says one expert.

Dr Katie Spearritt, consultant at Diversity Partners, said moving to a more diverse and inclusive business model should be a focus for industry.

“Diversity is not something that might be a nice sideshow to your main business issues – if you’re not paying attention to it, you’re potentially missing out on better decision-making, more innovation, safer work practices, and better commercial performance overall,” she said.

In an interactive plenary session, Spearritt encouraged the audience to think through their own conscious and unconscious biases.

“The reality is we all have biases, and they will impact our decision-making,” she said.

Spearritt highlighted benefits such as more innovative thought and better corporate decision-making as key reasons to embrace diversity, warning not just about the dangers of low demographic diversity but low diversity of thought as well.

“Executive echo chambers are probably among the most dangerous phenomena in Australian corporate boardrooms today,” she said.

She gave an example of a direct benefit to packagers as well: being able to relate more closely to consumers.

“When you’re more reflective of your customers, you have better engagement levels,” she said.

According to Spearritt, the four most common forms of bias found in corporations are affinity bias (we like people who are like us), confirmation bias (we like to have our views confirmed, not challenged), priming (where exposure to stimulus influences later response), and stereotyping.

Three key takeaways:

  • Bias is natural – but being aware of our biases is important.
  • Demographic diversity isn’t everything – diversity of thought matters as well.
  • Diversity can unlock a number of business benefits including better decision-making and more innovation.