$13.7 M program that will provide matched funding to manufacturers to engage experts to develop and implement productivity and competitiveness projects.
The Specialist Manufacturing Service aims to improve business access to expert and specialist advice by subsidising the cost to business of accessing the services of the best specialist providers available. By supporting this activity firms will be able to utilise the expertise of Victorian and international manufacturing experts to become more high performing and globally competitive.
This new approach moves away from targeting industry sectors and specific activities towards targeting the challenges faced by individual businesses in achieving high performance. This shift recognises that productivity growth is determined primarily by the actions and decisions made within businesses.
The Specialist Manufacturing Service is intended to operate in an integrated way with the other initiatives in the manufacturing strategy to deliver a more competitive industry. The programs, working together, will help to create a pipeline of business opportunities that can be supported through each phase of development for more productive and globally competitive enterprises.
The initiative is intended to support (eligible) projects which involve areas of expertise that are new to the company or require specialist skills to fully implement. An important element of each project is to demonstrate how the company will integrate the project to achieve the maximum available productivity and competitiveness gains as a result of the project investment.
The Specialist Manufacturing Service (SMS) is an initiative under the Victorian Government’s manufacturing strategy, A More Competitive Manufacturing Industry: New Directions for Industry Policy and Manufacturing. The Specialist Manufacturing Service is a targeted initiative that will provide the co-investment (matched grant funding) for manufacturers to engage experts to develop and help implement productivity and competitiveness projects for their own firms.
In March 2011, the Victorian Competition and Efficiency Commission conducted an inquiry into A More Competitive Manufacturing Industry. In response, the government released “A More Competitive Manufacturing Industry- New Directions for Industry Policy and Manufacturing” in December 2011.
A More Competitive Manufacturing Industry addresses the key barriers to growth faced by the manufacturing industry. The strategy will assist Victorian manufacturers to overcome these challenges and lift their performance by providing greater opportunity to access the knowledge, skills and resources to grow their businesses.
Improving productivity at the firm level is critical to raising the overall performance of the manufacturing sector. It also has the potential to make a significant contribution to Victoria’s economy. Productivity improvements can be generated in a number of ways, such as introducing better production processes, developing new products or re-branding and improving existing ones, accessing new markets and supply chains, reducing energy use and adopting new business models. These improvements can be substantial, requiring major investment and changes to systems, or relatively small, such as having better information about new opportunities, potential markets and customer preferences.
Currently, a number of barriers prevent individual businesses from making these improvements. At the firm level, performance can be affected by skills shortages, insufficient market coordination, underinvestment and an insufficient appetite or ability to innovate. While many manufacturers have strong production knowledge and expertise, they require additional support in business development expertise to improve their performance in modern supply chains.
A focus on enhancing performance at the firm level is important because actions and decisions made within businesses are key determinants of the rate of productivity growth. Assistance provided to firms to lift their ability to compete, manage risks and remain viable will have benefits for not only the firms, but for upstream and downstream businesses and the manufacturing industry as a whole.
There are a broad range of eligible project activities that can be supported in this initiative. The Department does not intend to be prescriptive about the specific projects, as these should be targeted to each individual business.
However, some examples of areas where there are opportunities for productivity and competitiveness improvements for Victorian manufacturers are in areas including:
- Innovation and design – commercial development of innovation;
- Strategic Planning – market development, new commercial product/service development;
- Global engagement – export strategy development, international business development;
- Systemic continuous improvement projects – lean manufacturing and quality improvements;
- Management and workforce development;
- Supply chain management;
- Operational/quality improvement;
- Research and development related to the acceleration of acquisition or uptake of new technologies (excludes the purchase of the technology); and
- Business model innovation – adoption of effectiveness-improving innovation.
The Specialist Manufacturing Service will focus on medium-sized firms (up to $100 million), although smaller companies with significant proposals to lift productivity can be considered. This group represents businesses with significant growth potential that are not large enough to have the resources to undertake productivity improvements without support. Lifting performance in this group is expected to have a significant impact on Victoria’s manufacturing performance and provide a demonstration of actions and approaches that can be emulated in smaller firms.
The service will be delivered through the strengthened business engagement model and be supported by a small number of in-house specialist staff. The service will facilitate bringing together the best service deliverers in Victoria from the public and private sectors.
Government will also engage with key stakeholders to ensure information about the program and the results achieved by individual firms are disseminated to the target group and beyond.
The range of services offered will be tailored according to assessment by business development managers in the field, and will be sufficiently flexible to change with industry needs.
The Department expects that the Specialist Manufacturing Service will commence in March 2013.
More information will be made available when the program offically opens.