Historically, manufacturing in Australia has been oriented towards the domestic market with a substantial portion of production serving local consumers and businesses. Local manufacture is predominantly in food and beverage manufacturing, construction materials and fabrication. Manufacturing in Australia contributes around:
Given the local and smaller-scale, Australian manufacturers typically can’t leverage the benefits of large-scale automation possible in the larger manufacturing centres in the EU, Japan and China.
This occurs because a substantial part of the manufacturing or fabrication processes are manually set up and coordinated even if the operation itself is done by machines, e.g. manual setup of equipment, manual control and changeovers, manual loading etc. The costs of full automation cannot be amortised with the lower volumes and demand.
Productivity Commission’s Sep 2023 report [1] can be summarised by:
Total Factor Productivity in Australia 2014-2023 [2] is at its lowest since 2016.
The Productivity Commission’s key takeaway was: Productivity is about working smarter, not working harder or longer; so, attention should be directed toward increasing output through increased investment, efficiency and innovation to achieve sustained labour productivity growth over the long-term.
ISO 9001 is the ‘father’ of all ISO Management System Standards, originating from British Standards BS 5750 in the late 70’s and early ‘80s [3]. The High Level Structure (HSL) outlined in ISO’s Annex SL aims to “… enhance the consistency and alignment of MSS by providing a unifying and agreed-upon high level structure, identical core text and common terms and core definitions.” [4]
According to ISO’s 2022 Global Survey [5], there are over 1.2 million ISO9001 active certified organisations worldwide and around 12,600 ISO9001 certificates issued in Australia across almost 30,000 operational sites.
While ISO’s industry groupings for ISO9001 globally don’t directly match the ANZSIC Industry sectors, around 570 manufacturing companies in Australia have an ISO9001 certified QMS. This is approx. 4.5% of ISO9001 certified companies in Aus. and is consistent with both employment numbers and contribution to GDP for the sector.
Unlike WHS controls, where the PCBU’s / organisations’ operational and reporting obligations are clearly defined in legislation, industry body codes of practice and legal precedents, quality controls are completely dependent on the organisation.
While virtually all enterprise-scale WHS software packages will provide acceptable levels of recording and reporting for WHS events because the requirements are universal, for quality control, no two organisations, even those producing identical products will not have the same set QC process steps, controls and checklists.
Quality controls are specific to the company’s and site’s processes, equipment, operational constraints, physical materials flows, level of outsourcing and management approach to quality. Manufacturing quality controls, while originating in Guilds in the Middle Ages, became industry norms in the early 1900’s when in 1924, Walter A. Shewhart of Bell Telephone Laboratories developed a statistical chart for the control of product variables in manufacturing [6].
After WW II, W. Edwards Deming and Joseph M. Juran extended the quality control methods that US industries had developed during the war and successfully implemented them in Japan[6]. Japan’s industrial manufacturing base embraced “Total Quality” and focused on improving all organizational processes through the people who used them.
A whole slew of techniques and approaches were developed in the 70’s through to the 90’s such a quality circles, lean sigma, JIT and sophisticated statistical approaches to fault analysis and failure prediction.
Despite a vast body of knowledge on Quality Controls, a well-established and mature Quality Assurance framework, and major advancements in automation, equipment scope, and operational quality, labour productivity and total factor productivity in Australia continue to decline.
There are many macroeconomic reasons for this decline. Many, if not most, are outside the control of operational or quality assurance managers. While statistical methods are very powerful for analysis and prediction of faults, the challenge in Australia’s labour-intensive manufacturing and fabrication processes is to capture actionable and timely quality information from the production floor.
This requires almost all operational steps to be controlled or, at a minimum, their parameters to be recorded at the time and place that the operation occurs. In a manual or manually-supported operation this needs to be done by the operator.
Because traditional QC software systems typically can’t be made to fit the company’s specific processes, most businesses end up capturing their quality control information on paper forms on the operations floor.
In many cases, this manually-recorded information is then input into a software system later for record and ‘counting’ or aggregating purposes. The paper QC forms are then collated as part of the QC administration. Checking and signing off QC information becomes an administrative activity; paperwork is collated with the project or batch and only referred to in the event of an issue.
Operational and QC/QA Managers typically dedicate a meaningful (and in many cases a large) part of their day ensuring the process and QC administration is complete; they typically only respond to issues after the fact, i.e. when stopped at final QC or even later when the client has lodged an issue.
Quality Control however is about actionable and timely exception management; information needs to be managed and evaluated in real time by ‘the system’, not by an administrator or manager.
Supervisors and managers only need to be alerted immediately whenever an exception occurs, i.e. when something unexpected or outside a set parameter is recorded. This changes the Operations or QC manager’s role from an information administrator to an exception manager.
Quality Assurance is about ensuring ALL the quality elements, i.e. quality controls, equipment, training and operator skills and operational instructions are always aligned and responsive to changes in output demands (customers), inputs (supplier and materials changes) and internals (equipment, resources).
Rephrasing the Productivity Commission’s key takeaway: Attention should be directed toward increasing output through increased investment (in Quality Control software/technology that works for you), efficiency (via timely and actionable information) by and innovation (through alignment of QA, WHS and Enviro controls) to achieve sustained labour productivity growth over the long-term.
Traditional Quality Control software cannot support Australia’s highly diversified, smaller and local manufacturing and fabrication industry; ISOPro’s highly configurable process control platform and data capture software can.
Reducing the administrative workload of quality control will increase an organisation’s productivity. Ensuring all quality-related elements are aligned will change an organisation’s Quality Assurance posture from ‘reactive’ to ‘exception-based and pro-active‘. If this doesn’t improve output quality and reduce per-unit costs in your organisation, nothing will.
Learn more about how ISOPro can help your company overcome the challenges in the Australian manufacturing sector and help managers in the manufacturing industry balance quality and productivity. Book a free discovery call with one of our team members below.
Co-Founder / CEO
[1] Productivity Commission Quarterly Productivity Bulletin Sep 2023: https://www.pc.gov.au/ongoing/productivity-insights/bulletins/quarterly-bulletin-september-2023
[2] Trading Economics - Australia Productivity: https://tradingeconomics.com/australia/productivity
[3] ISO9000 – Wikipedia: https://en.wikipedia.org/wiki/ISO_9000
[4] Annex SL – Wikipedia: https://en.wikipedia.org/wiki/Annex_SL
[5] ISO Global Survey 2022: https://www.iso.org/the-iso-survey.html
[6] American Society for Quality (ASQ) – A History of Quality: https://asq.org/quality-resources/history-of-quality
