2022 Predictions for Australian manufacturers and suppliers

Jan 31, 2022 by Mark Dingley

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2022 is finally here, after another tumultuous year of pandemic lockdowns and unpredictability.

The year of 2021 saw the trends brought on by the pandemic become Covid normal. We saw the rise of ecommerce and localisation. We watched sustainability take the world stage at COP26 in Glasgow, and closer to home, we saw New South Wales announce its upcoming ban of single uses plastics. It was also yet another year where consumers turned to vegan foods and non-alcoholic beverages.

Now it’s time to look forward and ask our experts:

What will 2022 bring in the world of manufacturing?

As we do every year, we asked our panel of experts for their 2022 predictions for Australian manufacturers.

Meet the experts:

Get ready for these big changes in 2022

We asked our panel what they think Australian manufacturers and suppliers need to prepare for in the coming year. Here are their 2022 predictions:

Supply chain continuity. “An ongoing focus on supply chain continuity to minimise disruption continues to be a key focus. It seems like every aspect of a typical supply chain has been and continues to be impacted in some ways, whether it be raw material availability, pallet and shipping container shortages or workforce disruptions it’s hard to remember a time when supply chains have faced so many challenges.” Andrew Steele

Prepare for the unexpected. “The adage, ‘expect the unexpected’, has been our last two years and it is likely to continue well into 2022. While we all hope that Omicron will be the end of the pandemic, both our personal and business worlds have changed forever. The focus for all companies that want to continue to thrive is to continue investing in critical areas such as supply chain, staff training and digital transformation strategies. Future proofing your business now means being prepared for continued challenges and creating an agile culture which can best respond to the fast pace of change.” Mark Dingley

More learning and automation. “It is all about well-prepared people. A well-trained team that is continuously learning should have the skills to deal with whatever is batted up to them in the coming year. The rate of learning of your people must continuously exceed the rate of challenges they face. If you have a great team of leaders and strategic thinkers in your team you probably don’t need to read this blog! Secondly, have a good hard look at where technology can help your business. Think about what systems and processes can be automated. The power of technology is growing exponentially, and the cost compared to labour is rapidly declining so now is the time!” Michael Burke

Costs are rising. “Inflation and the growing cost of production coupled with labour shortages, higher costs for inputs and transport, means that everything is going to cost more in 2022. This will be a major stressor from food manufacturing and production, whether we’re talking about consumables, packaging or labour”. David Inderias

 

 

Top challenges and opportunities facing manufacturers in 2022

What challenges and opportunities will manufacturers and suppliers face this year?

Here’s what our panel told us:

Supply chain delays. “Potential delays in implementation of new technology and supply chain technologies and solutions due to supply issues. Reliance on overseas supply chains for raw materials, components and finished goods will continue to be prevalent.
There are opportunities for companies to evaluate their existing supply chains and potentially look for other local sourcing options where possible. Innovation and collaboration between supply chain partners will provide interesting opportunities in 2022 as companies look to how they might shake things up to.” Andrew Steele

Continued growth. “In my view, post COVID supply chain aftershocks will continue for some time. With respect to opportunities, it is about growth. There is huge upside across every sector in the coming years in terms of opportunistic revenue growth. If you are not growing there is something wrong. The challenge will be to ensure the growth is profitable and also fits your market positioning. What you say no to is just as important as what you say yes to. The other opportunity we all have is staring at us right now. It’s called the summer break. I look forward to January each year as it is a time when our heads are at their clearest. The two-to-three-week break removes all the noise. Therefore, manufacturers and suppliers’ biggest opportunity is to write down what they need to stop doing, and what they need to start doing and ensure they have a plan to deal with these ideas before they get back on the treadmill in February.” Michael Burke

Transparent sustainability.

Sustainability is going from one-dimensional claims to more concrete, visible and transparent claims. Consumers are more engaged, and that means they want to know at a product level, or company level at a minimum, what they are specifically doing around sustainability. At the Australian Open this year, we saw Mastercard run business sessions where people could scan their drinks coasters to validate that all beverages for all sessions were carbon neutral. This is the kind of degree of granulity companies need to strive for.” David Inderias

Recruitment and retention of good talent

“Growing and maintaining a strong corporate culture will continue to be a critical challenge as staff spend less time working face to face. The opportunity to innovate in this space is also huge and finding new ways to value add from an employee wellness and wellbeing perspective will become even more important as we all strive to achieve business continuity.” Mark Dingley

“Recruitment of the right people and holding on to existing staff will be an ongoing challenge for many businesses.” Andrew Steele

“Top challenges will be attraction and retention of good people and ensuring continued close monitoring of your supply chain.” Michael Burke

Priorities for manufacturers and suppliers in 2022

With these challenges and opportunities, what should manufacturers and suppliers put at the top of their list in 2022 to set themselves up for success and grow their business?

Making data-informed decisions. “Identifying and removing weak points in their supply chain that could or are already causing disruptions. There will be an ever-increasing reliance on quality data required to make informed business decisions. Digitisation of the supply chain and finished goods enabling greater connectivity right through to the end customer presents an exciting opportunity.” Andrew Steele

Focus on your strengths. “During times of continued uncertainty, focusing on your core strengths and creating an environment of stability will become crucial for many businesses. It is all too easy to become distracted by the latest shiny tech trends (NFTs anyone?) however the risk of disruption in a volatile environment is greater than ever.” Mark Dingley

Stay close to your employees. “Firstly, ensuring they stay close to their people and help them with their career/life goals. Sit down with every employee and ensure there is a one-page career plan developed that both employer and employee work on over the year. Studies have shown employees will stick around if they are clear on where they are headed and know their current workplace can meet the opportunity. Secondly, have a good hard look at your business model. Is it future proof? Don’t have your head in the sand. The world is changing rapidly, particularly through technology.” Michael Burke

Invest in resilience and IT infrastructure. “From the focus on working from home through to internal IT systems and the ability to measure different things, there’s an acceleration of digitisation. This is being propelled by disruption, more distributed teams, the growing requirement for more information and digitally evolved behaviour and processes. As such, businesses need to prioritise the next level of investment in their IT infrastructure to keep the business running efficiently and to enable team connectivity.” David Inderias

So long, farewell…

For good or bad, what will we say goodbye to in 2022?

Lockdowns. “Like most people I am hoping for an end to lockdowns and state border closures the disruptive impacts that they have on people and supply chains. Personally, I am looking forward to less virtual and more face-to-face interactions in 2022!” Andrew Steele

Zoom fatigue. ““You’re on mute!” Seriously, Zoom and Teams meetings absolutely have their place and are here to stay for short “one on one” discussions, but I sincerely hope for brainstorming or planning meetings people can get back together in a room, eyeball each other and have good robust discussions! In the same vein, full time working from home has to stop. While personal productivity generally improved with employees working from home, group productivity and thinking has fallen due to isolation. Bouncing around ideas with fellow employees around a spontaneous coffee can be highly productive. Microsoft doesn’t schedule spontaneity!” Michael Burke

Inflexible workplaces. “Organisations that fail to embrace the work from home shift will become a rarity in 2022. With large parts of the Australian economy growing at record rates and a white-hot employment market, employees will continue to vote with their feet if businesses do not embrace flexible work environments and create an environment that people are developing their capabilities not just ‘manning the fort’ to keep the business on track.” Mark Dingley

Cutting corners. “We need a greater acceptance of digitisation of processes for businesses to be more resilient. That means saying goodbye to cutting corners. Those things that would usually be put off, we’re going to see businesses invest in – from better webcams for Zoom to more connected systems throughout the business.” David Inderias

New Year's Resolutions every manufacturer and supplier should make

“Don’t take anything for granted. If we have learnt anything over the past two years, expect the unexpected to occur and when it does try to adapt as quickly as possible!” Andrew Steele

“Stay focused on core competencies and long-term growth strategies. Business resilience and sustainable growth become more valuable than ever in an environment of heightened uncertainty and disruption.” Mark Dingley

“Resolve to reimagine your business as if it was a Silicon Valley start-up, as Elon Musk has done by challenging the incumbent manufacturers in the car industry. If you had an Elon Musk coming into your industry, how would they structure their business model. Identify the differences to your current business model, and start implementing the changes.” Michael Burke

“Build resilience from a business continuity perspective. Think about what you can do in your business from an IT perspective to make your business more resilient. Also, keep a keen eye on the footprint of your product and production, in terms of carbon footprint as well as other environmental stewardship. It’s not a big ask, but if you choose to ignore it now, you’ll have to play catch up – and that’s much harder.” David Inderias

OVER TO YOU

You’ve heard what our experts think, but what are the challenges and opportunities you are facing in 2022? What business resolutions are you making for the year ahead?