John Cotton Australia

Like many manufacturing businesses in Australia, a big portion of our product base had been outsourced to cheaper overseas supply by local retailers for two main reasons:

The USD/AUD was at parity back in 2010.

• The cost of importing was very reasonable.

From 2020 to 2023, however, these two above factors have started to become very unfavorable, and while pricing was one factor, supply availability and capability were another, which has re-invigorated local demand. While demand through a crisis was there, there are a few key aspects to winning the demand and sustaining it as the world is returning to normal – the main contributing factors for us being:

 Invest in Industry 4.0:

• Investigate your Manufacturing OEM’s capabilities and explore automation opportunities – with automation & Scada system analysis, we were able to deliver a new production line with twice the output for half the manning requirement compared to one of our existing Production lines.

• Invest in ERP/WMS automation: While the number one focus is always on manufacturing, the supply chain also has a big cost impact on your P&L – with a lot of manual tasks and manual reporting – Look for the best ERP and enhance the automation of tasks through Excel reporting with built-in macros, Power BI, Cognos, etc.

Embrace sustainability pledges – in textiles, most particularly:

• Explore Process and Capital investments to enhance the compression of goods and deliver cost & CO2 reduction through the supply chain.

• Eliminate fully or partially virgin plastic material (recycled fiber/recycled packaging).

• Explore waste reduction and closed-loop recycling of your goods – most textile industries will waste up to 8 to 10% of their materials – while this is generally built into product costings, it is a big opportunity if it can be reused in-house. Automation and Vision/PLC monitoring defects will highly reduce waste. Invest in Innovation:

• For example, all the major retailers are moving to RFID technology for live inventory tracking of all stores.

• While this can be seen as an initial hurdle to add to your product base, explore integrating RFID technology in an automatic fashion to save cost and link the customer requirement to your WMS to increase inventory accuracy.

•Product innovations are key to demand, as are innovative business process changes.

Invest in Quality:

• Auditing requirement has increased over the last few years, and it is critical to stay up to date with the latest certifications available.

• Ethical sourcing, Operational QA checks (process control sheets, vision systems/ metal detection), and Sustainability and Recycling certifications are key to ticking boxes and keeping the supply going.

Invest in Talent:

• Collaborate with universities & recruitment agencies to find the best talent for your organization – quality over quantity – and remember past performance isn’t always an indicator of future performance – Sometimes, choosing attitude and potential over experience will deliver better results.

Collaborate with your government entities:

• Your local and federal government should always have grants you can apply for, which generally sponsor capital investment in industry 4.0, sustainability improvement, upskilling, and job creation.

• Make sure you explore those and apply them to contain your capital spend requirement to a manageable amount.

Upsell the benefit to the retailers of local supply from a financial and managerial perspective:

• Consider cash flow, inventory holding, and lead time requirement of overseas supply.

• Consider increased supply availability & shorter lead time from local supply.

While the burden of cash flow and inventory holding goes back to your local manufacturing business, the investment is worth it in the long run.