Technological Improvements In Manufacturing Processes For Australian And Indian Organizations

Manufacturing in Australia

Question:

Discuss about the Exploratory Study of Improving Manufacturing Process in India and Australia.

Traditional manufacturing in Australia has been on decline but at the same time new approaches to manufacturing have evolved fast.  Manufacturing organizations are now centred towards bringing innovation and instead of selling products; they work to deliver solutions to their customers. Organizations now work on networked relationships and information flows to make improvements in the systems in order to compete in the global landscape. The manufacturing organizations have combinations of manufactured solutions that can be mass customized, personalised, high value high volume and low value low volume (Young, 2008).

Process Improvements: Process improvements can relate majorly to improvement in the quality of processes.

Lean: Lean thinking is based on the criteria of waste elimination from various levels of management and processes.

Six Sigma: It involves implementation of certain principles and techniques formulated to attain proven quality in processes.

As per the information provided by Automotive Products Manufacturers Association, the amount spent on the manufacturing innovation by Australian companies between the years 2007 and 2011 was $4.5 billion. 5% of the total value addition was contributed by the car manufacturing sector. The benefits of innovation have also changed the way supply chains work. For instance, manufacturing of light-weight components as carbon-fibre composites produced using metals like aluminium and titanium can reduce the vehicle mass, improve fuel consumption and reduce gas emissions from vehicles. However, despite these changes, the recent years have seen a decline in manufacturing industry output in Australia and thus, there is a need to make improvements in manufacturing processes in Australian and Indian organizations  (Mentha, 2013).

Indian manufacturing industry shows a slow growth as it is plagued by a variety of challenges since the age of industrialization. Despite being in the top ten list of the manufacturing countries of the world, Indian manufacturing value-adds is only 1.8%. Even at the time of the world financial crises, the decline in MVA growth in India was quite significant as compared to other countries like Australia. While the average decline in the world was from 5.4% to 2% for MVA, in India the growth was down from 7.3% to 0.2%. It has been seen that lack of technological and innovation capabilities are the major causes of manufacturing challenges. Thus, there is a need for making improvements in manufacturing organizations in India (Alba, 2014).

Aim of this research is to explore the technological improvements that can be made in the manufacturing processes of Australian and Indian organizations. To achieve this aim, objectives of the research would be:

• Exploration of manufacturing technology trends
• Understanding of methods used by organizations worldwide to improve their manufacturing practices(Mastellari & Renegar, 2015)
• Exploring manufacturing practices of the Indian & Australian organizations to identify scope for improvement
• Making recommendations for improving manufacturing practices of Indian & Australian organizations.

United Nations International Standard Industrial Classification provides the definition of manufacturing as “any physical or chemical transformation of raw materials or any components to create new products”. ABS divides manufacturing into nine sub-divisions, 46 groups, and 153 classes (UK SIC, 2016).

Figure 1: Australian Manufacturing Landscape (Clark, Geer, & Underhill, 1996)

In Australia, there is a huge variety of activities that are carried out under manufacturing for various industries like food, textile, wood, printing, minerals, metals, machinery and others (Srivastava & Jena, 2011). Manufacturing accounts for the 10% of the GDP of Australia and the two pillars on which the industry stands strong in the country are innovation and efficient people management practices. The techniques used by Australia manufacturing organizations strive to create value in addition to increasing efficiency such that business objectives of a manufacturing organization can be met. It has been observed that organizations that are managed better are able to show a higher productivity of labour and thus, the dimension of the management of employees is another important area of practice in Australian manufacturing organization (Green, 2009).

Manufacturing in India

Lower FDI, lower levels of Research & Development activities, lack of technological sophistication, and unavailability of skilled manpower are some of the major challenges faced by Indian manufacturing organizations (Kanda, 2013).

The need for this improvement is more pronounced when considering the recent trends of dominating imports affecting operations of Indian manufacturers. Earlier, Indian manufacturing companies were practicing segregation between domestic and overseas market such that higher quality products were exported while inferior quality goods were sold within the country. However, with goods coming from other countries, this strategy becomes ineffective. The competition coming from these imports and from organizations directing entering Indian through FDI, there are reduction in costs, improvements in quality, enhancement in performance, variety in product ranges, and improvement in services (Mandal, Shah, & Love, 2000).

If Indian manufacturers need to sustain this competition, it is hard time that they adopt newer and improved practices to retain their market value. These organizations may need to search for new processes, new designs and new channels to improve its facilities and bring profitability. Improvements are required in several dimensions including quality, technology, supply chain, and product introductions (Chandra & Sastry, 1998).

Improvement in the quality of processes and maintenance of acceptable performance levels is crucial for a manufacturing organization. There are a variety of improvement methodologies that are available for the manufacturing sector such as lean, six sigma, Agile management, TQM, JIT, Kiazen, Poka-Yoka, Process Excellence, Hoshin Planning, reengineering, design of experiments, and so on (MURUGESAN, RAJENTHIRAKUMAR, & CHANDRASEKAR, 2016). Manufacturing companies usually make use of scoring system for listing process improvement implementation criteria and study various methodologies best methodology may be chosen for improvement. Most of the Fortune 500 companies have Six Sigma programs implemented for process improvements in their management structure itself (Gershon, 2007).

There is a clear need for improvement in the manufacturing processes used in India as well as its human resource management practices need enhancement. Thus, the lessons learnt from the manufacturing organizations worldwide that show good performance considering the innovation and people factor can help plan improvements in Indian manufacturing (Low, Kamaruddin, & Azid, 2013).

Thus a study is proposed on the manufacturing process improvements such that the practices of manufacturing organizations from Australia and India would be studied as well as compared such that lessons can learn to come up with needs for improving manufacturing processes used in Indian and Australian manufacturing industry. With these improvements, it can be expected that Indian manufacturers would be able to gain the skills of innovating and would bring about more efficiency in their existing practices (Achtmeyer, 2008).

For the purpose of this study, a single manufacturing organization of Indian origin would be considered. The chosen organization is Ashok Leyland which is the second largest manufacturer of commercial vehicles in India and has a turnover of over US $2.5 billion. The research would look into the manufacturing processes of the organization and identify that process related challenges that are faced by the organization such that the lessons learnt from exploration of Australian manufacturing can be used to make specific recommendation for the organization to improve its manufacturing processes (Krishnaveni & Vidya, 2015).

Conclusions

This paper presented a proposal which aimed at learning the methods of manufacturing process improvement from Australian manufacturing industry and apply the lessons to improve the manufacturing practices of Indian organizations. For this, a research was proposed which would include an exploration of Australian manufacturing and Indian manufacturing such that the two regions can be compared and manufacturing improvement methods are suggested. An Indian manufacturing organization, Ashok Leyland which manufactures commercial vehicles was chosen for getting deeper into the manufacturing practice and applying the lessons in practice to a real organization. The end result of the research would be recommendations for improvement of manufacturing processes of Indian organizations.

References

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Alba, J. M. (2014). Industrial development in North African countries –A statistical profile. UNIDO.

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Mandal, P., Shah, K., & Love, P. (2000). The diffusion of quality in Australian manufacturing. Hong Kong Polytechnic University.

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