Smart manufacturing is characterised by the convergence of physical and digital technologies, with Internet of Things (IoT) technology playing a crucial role. IoT involves a network of interconnected devices that collect and exchange data, enabling seamless communication and operational efficiency. For Australian manufacturers, the adoption of IoT can lead to significant benefits such as enhanced process efficiency, reduced operational costs, improved product quality, and the ability to offer differentiated services.
A recent study within the Australian manufacturing sector, involving 505 professionals across various levels, revealed a significant inclination towards IoT adoption.1 With 92.6% of respondents from Australia and the APAC region, the study highlights a growing recognition of IoT's potential to drive efficiency and competitiveness. The study found that “since 2018 and extending into the post-pandemic era of 2022, IoT technology has been steadily adopted in various sectors, including wastewater treatment plants, mining, and small and medium enterprises in process industries.” The report also predicted that manufacturing industries have the potential to benefit to the tune of an estimated AU$80 billion from IoT technology.
The report also highlighted those factors that are still hindering IoT adoption in Australian manufacturing:
- Initial investment costs
- Cybersecurity concerns
- Skills shortages in relation to IoT technology and cybersecurity
- Complex regulatory frameworks, particularly for highly regulated industries
- An absence of uniform standards and protocols
- Organisational inertia and resistance to change
However, the study also found that the most significant factor in driving adoption is management support for greater cost savings and increased competitiveness in the marketplace. In those companies that are adopting IoT technologies, it would seem that these factors are significant enough to overcome the concerns listed above, as companies see the advantages of adoption.
Food and beverage taking the lead
In Australia, the food and beverage sector dominates the manufacturing industry, employing more than 20% of all manufacturing workers. The Australian Government is currently running a parliamentary enquiry2 to “examine the state of innovation in the industry, including new technologies for post-farmgate food and beverage manufacturing and packaging.” Submissions to the enquiry have come from a broad range of parties, particularly in the beverage sector.
Being such a large part of the Australian manufacturing sector, the food and beverage industry stands to benefit most quickly from the adoption of smart manufacturing technologies, and is well poised to lead the way in IoT adoption.
“Australian scientists and food manufacturers are making inroads into high-tech emerging sectors and developing new high value-added products built on our world-class agricultural sector,” said Rob Mitchell MP, Committee Chair for the parliamentary enquiry. “They are adopting process innovations to make traditional food and beverages tastier, safer, cleaner and more productive.
While there may be a tendency to want to maintain the status quo for many manufacturing businesses in Australia, those who do not adopt modern digital manufacturing may find themselves becoming increasingly uncompetitive in a fast-changing world.
Luckily, the adoption of modern smart automation technologies may not be as difficult as it seems, as we shall see in future editions of this series.
References
1. Mitra A, Seetharaman A, Maddulety K 2024, ‘A Structural Equation Model Study for Adoption of Internet of Things for the Growth of Manufacturing Industries in Australia’, Journal of Comprehensive Business Administration Research, vol. 00(00), pp 1–12, <https://ojs.bonviewpress.com/index.php/JCBAR/article/view/2482>
2. Parliament of Australia 2024, The food and drink of tomorrow, House of Representatives Standing Committee on Industry, Science and Resources,<https://www.aph.gov.au/About_Parliament/House_of_Representatives/About_the_House_News/Media_Releases/The_food_and_drink_of_tomorrow>
