Smart manufacturing and the next industrial revolution

Nathan Simiana, Director for Industrials and Smart Manufacturing at Deloitte, discusses transforming industry through data-driven decision-making.

Abbey Phillipps: I'm Abbey Phillipps for the Finance News Network, and today we're talking about emerging industrial technologies. I'm joined by Nathan Simiana, who is a Director at Deloitte and a member of the Executive Council for the Internet of Things Alliance of Australia. Nathan, welcome to the network.

Nathan Simiana: Thanks, Abbey. Thanks for having me.

Abbey Phillipps: No worries. Firstly, what are smart factories and smart manufacturing, and how are they transforming industries?

Nathan Simiana: That's a really good question. So, I guess if you think about the history of manufacturing, many, many, many years ago, hundreds of years ago, before the first Industrial Revolution, everything was done manually. Since then, there's been several different evolutions that have taken place. The first was the use of steam for generation of power, the next was electrification, and then we moved on to automation, so how you actually automate a manufacturing process. This next industrial revolution is all about the use of data and how you take data off the plant floor and from all of your other systems and use it to either make better decisions or automate your processes in a more effective way.

So I guess in terms of the way that they're revolutionising manufacturing today, the same fundamental problems have always existed in manufacturing. We've just got different ways to be able to overcome them now. So, you think about issues such as how do you streamline your shop floor manufacturing processes and make use of your scarce resources, how do you optimise your energy usage, how do you hit your quality targets for what you produce, and how do you actually take non-value-adding tasks away from your workforce so they can spend their time adding value instead of doing things that are just repetitive.

Abbey Phillipps: So, from your perspective, where does Australia sit globally in terms of taking advantage of smart manufacturing technologies?

Nathan Simiana: So, yeah, it's an interesting one. I think if you look at all the past reports and research that's been done in this space, we tend to see that we always fall around the middle of the pack. So, we're not non-users of this technology, but we're not leading users either. And I guess when you look at what we've done as a nation, it kind of explains why we sit in the middle of the pack. We've spent the past four decades offshoring as much manufacturing as we could to other regions because of effectively the cost of labour.

Abbey Phillipps: What can we do better to build new industries and industrial ecosystems?

Nathan Simiana: Yeah, so I think if you look at our history as a nation for innovation, we've done some pretty amazing things, right? So, we pioneered the black box flight recorder, Google Maps originated in Australia, the cochlear implant originated here, right? So, we don't have an issue when it comes to R&D and innovation. I think the key challenge that we've had as a nation is how do we actually keep that innovation within the country and use it to actually scale up here.

So, I guess the key thing that we want to do as a nation, if we want to actually help our innovators scale in place and stay in Australia, we need two things. We need that economic environment that's attractive for an organisation to stay here instead of going offshore to manufacture, and the second thing is we need a way to get above the labour cost challenges that we've historically had in this country.

So, if you look at what the government's doing at the moment, you can see that there's a lot of incentives starting to roll in to try and get innovation to stay in the country. But, again, that second aspect that we need to really focus on if we want to actually overcome the labour cost challenge, is to embrace smart manufacturing technologies, because we can't keep doing things the way that we used to. Otherwise, we're never going to actually overcome the source of the problem.

Abbey Phillipps: Okay, Nathan, so changing track to semiconductors, what role do they play in smart manufacturing, and how do you see Australia playing a role in the global semiconductor sector?

Nathan Simiana: Yeah, so look, I guess when you think about what smart manufacturing is, it all has to do with taking data from the manufacturing floor and using it to make better decisions or provide higher levels of automation. So, fundamental to that, being able to take those huge, huge swathes of data and process it are semiconductors, because that's the foundation of the hardware that's needed to actually enable these smart manufacturing technologies.

The first thing around us actually embracing it is the first part, which I think we can do as a nation quite easily. I think the second part, though, is how do we play more of a role in the value chain of semiconductors. So, as an example, we manufacture or we produce some of the highest-grade silicon metal in the world, but we send it offshore and have value added to it, and then we buy them back as semiconductors to use in our own processes. So, I think we've got a bigger role that we could be looking at playing as a nation in terms of owning more of that value chain.

Abbey Phillipps: So, last question from me. Deloitte is hosting the first Semiconductor Australia conference, which will showcase Australia's deep tech entrepreneurs. Can you tell us why you're supporting this event and what you hope attendees will gain?

Nathan Simiana: From a perspective of why Deloitte is supporting this type of event, again, semiconductors are going to be at the forefront of what we need as a nation to build our sovereign capability, not only just in the semiconductor industry, but also the wider manufacturing industry as well. So, I think when you look at us as a nation, we've got all the key ingredients that you need to build these industries. I think, at the moment, what we don't quite have is that cohesive ecosystem together to actually make it happen. So, I think, from my perspective, my hope is that all the attendees from all these various parts of the ecosystem, whether it has to do with actual investment, or regulation, or process and technology, bringing all these people together will hopefully provide an environment where we can start looking at how we form that ecosystem and make it more effective.

Abbey Phillipps: Nathan Simiana, thank you for joining us today and sharing your insights.

Nathan Simiana: Thank you very much.

Ends

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