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Australia has faced wave upon wave of supply chain shocks.

From the chaos of the COVID-19 pandemic to the Ukraine-Russia conflict, these global events have exposed the fragility of manufacturing in this country. Now, a movement is underway to strengthen Australia's manufacturing capabilities and bolster national resilience, as revealed in our recent interview with Paula Dematos, Chief Product Officer at Cispro.

Dematos explained that local manufacturers are responding by rethinking established processes. "There are disruptions that are going to be occurring onto the supply chain - obviously this affects the nation's capabilities in its manufacturing output and its manufacturing abilities in order to produce to meet market demands," she said. The lesson, according to Dematos, is clear: disruptions are inevitable, but Australia's response does not have to involve helplessness.

A key trend she identified is "reshoring" - the shift to bringing manufacturing processes back to Australia. This, she argued, "offers the ability to provide a more resilient supply chain in the manufacturing processes." Such resilience is now seen as fundamental to Australia's ability to ride out geopolitical and economic shocks.

Reshoring also has significant economic benefits. Dematos pointed out, "Historically the manufacturing sector, certainly in the small to medium-sized tiers, in the mid market, in the lower end of the market - that tends to be the areas where there is the highest degrees of growth." She believes government and industry alike should focus investment and development in these segments, which, she explained, are prone to nurturing innovation and increasing employment.

With these changes, Dematos sees the potential for a virtuous cycle: "You're likely to see this building on of new innovation. You're also likely to see a very upbeat market as far as labour is concerned." In that sense, strengthening manufacturing locally is not just about resilience but is central to economic recovery.

To keep up with the fast-changing reality of global supply chains, however, Australia must innovate in how it manages them. Dematos described a fundamental shift: "Supply chains were basically configured to be looking at cost optimisation first... now it's the case that manufacturers need to be considering supply chain resiliency."

She outlined three main pillars for building such resilience. The first is diversifying procurement: "Looking at multi-sourcing so instead of just looking at single-source supply, being able to source from multiple locations geopolitically across the world, or looking to source locally."

The second necessary change is greater collaboration between supply chain participants, powered by new technologies such as blockchain. "All the stakeholders that are sitting in a particular supply chain are talking and providing a lot of status updates as far as the movement of parts, availability of parts, production totals, reduction availability - and this allows for people either upstream or downstream to react a lot more quickly to changes," Dematos said.

Her third pillar is the adoption of smart manufacturing practices. She highlighted the importance of "automation, artificial intelligence, and utilising all of Industry 4.0 with the digital transformations to be able to react to changes in the supply chain a lot quicker." This, she predicted, will leave Australian manufacturers far better placed to weather future crises.

But in a world of globalised commerce, competitiveness remains an ongoing challenge. How can Australia rise to the occasion? Dematos believes a focus on quality and skilled labour is key: "Australia's always been a country that has focused on producing high quality products that are personalised... we can actually produce quality product more readily and again making that available on a global stage is definitely an area that needs to be focused on."

Australian industry has some natural advantages, according to Dematos, including "the availability of inputs, everything from raw materials to a highly skilled labour market." Yet to translate those advantages into real-world success, she sees technology as essential.

At the heart of this technological push lies Enterprise Resource Planning (ERP) software, which Dematos described as the linchpin of modern manufacturing operations. "Manufacturing really is about a sort of a marriage of resources, assets, machinery, production; it's also about the processes and the people," she said, stressing that systems tie all these elements together.

She went on, "Really for that to work harmoniously in there, it's about balancing the demand and with the supply – everything from the internal supply chain to the internal production lines to incorporating the broader complete supply chain dealing with all stakeholders such as suppliers and customers."

ERP software, once used primarily to keep records, now plays a far more active role: "We see the transition from ERP systems shifting from the traditional systems of record to now being the systems of analysis and the systems of information," Dematos said. This, she added, "assists in the decision-making process, assisting organisations to be better, to being far more efficient and to be looking at the manufacturing processes as being not only cost competitive but being able to react to the changes in the ecosystems more readily."

As Australia looks to the future, international instability seems likely to continue. Dematos believes the nation's best defence is a smart, flexible, and resilient manufacturing sector. "Enterprise Resource Planning assists in that," she concluded.