The digital playbook is lifting the country’s manufacturing complexity, and there are gaps yet to be filled.
Traditional manufacturing in Australia, once heavily reliant on assembly lines and mass production, has experienced decades of steady decline. Our manufacturing base shrank from 30 per cent of national employment in 1965 to less than 8 per cent in 2017 – contributing only 6 per cent to GDP.
But over the last few years, Australia’s capability has pivoted from trying to compete on mass assembly to moving up the value chain into complex, knowledge-rich product and system design.
This shift aligns with the Federal Government’s Future Made in Australia agenda and the National Reconstruction Fund Corporation’s mandate to diversify and transform industry. These investment mechanisms are designed to grow sovereign capability in national priority areas such as defence, space, medtech and clean energy, with most value now from niche componentry.
It’s a transformation engineers are leading, through additive manufacturing, rapid prototyping, AI-enhanced design and low-volume, high-mix production systems.
For competitive edge
These days, advanced manufacturing is less about what you make and more about how you make it, said Dr Jens Goennemann, Managing Director of the Advanced Manufacturing Growth Centre.
“Digital tools such as computer-aided design, digital simulation and digital twins give manufacturers a competitive edge – helping them design smarter products, cut development time and even collaborate seamlessly across borders,” he told create. “For example, digital twins are used in aerospace to test components virtually, while local medtech firms use simulation to fast-track new devices.”
To be globally competitive, Goennemann said, Australian manufacturers must focus on being better, not cheaper, with widespread adoption of these technologies playing a significant role in achieving that.
A key element to facilitating this is practical technological integration to grow at scale, said robotics engineer turned consultant Dr Michael Lucas FIEAust, founder and Principal Manufacturing Advisor at Manufacturing Catalyst.
“When people design or lay out a factory, traditionally they haven’t done a lot of good thinking about it,” Lucas said. “They put a production line into the space, then they try to squeeze in the next one and the next one.”
Lucas, who provides manufacturing and material flow advice, tries to get manufacturers to consider growth early on.
“If we take a 3D scan of the space, build a good digital twin and then analyse how everything flows through the manufacturing system, we can consider if there’s space to get more people, product and equipment through.”
He said capturing good data was essential, but many manufacturers struggled with it.
“You can then feed that into AI-based machine learning models to predict production outcomes. One chemical company I worked with was able to predict what humidity would do to their product through a straightforward machine-learning model, and then was able to make changes to their processes.”
In Lucas’s view, issues can be solved with smart, simple automations that don’t necessarily require an expensive, heavy-duty robot and all the difficulties that go with that.
“One company I’m working with invested in a cobot (collaborative robot) because it’s easily reprogrammable; they didn’t need the fancy functions a bigger robot would bring.”
Prototyping the manufacturing process helped this company fine-tune its operations.
“Testing processes with their parts during assembly quickly and cheaply with cobots taught them what they needed for their future automation line, which helped bring the product to market faster,” Lucas said. “They then used more advanced robotics in their manufacturing line, enabling them to scale faster as well.”
Additive advances
Once confined to prototyping, 3D printing is now being industrialised, delivering certified end-use parts, compressing development cycles and de-risking production across sectors from medtech to defence.
Australian company Additive Assurance – which was recently named the top performer in an additive manufacturing challenge, led by the Applied Science Technology Research Organization of America – is providing in-situ quality assurance for metal 3D printing via AMiRIS, its externally mounted, vendor-agnostic sensing and analytics system.
“Additive Assurance leverages a lot of digital design,” said the company’s COO, materials engineer Dr David Menzies. “We develop many additional products through smart software design for digital assets and rapid prototyping using in-house capability for mechanical components.”
This process makes for a faster development cycle through transfer to manufacturing partners for final component production. “The benefit is in the fast iteration cycle,” he added.
In practice, that means treating quality as a live data stream rather than a post-build report.
“AMiRIS monitors the entire build plate for every layer produced in PBF-LB,” Menzies said. “We do this using an array of near infrared cameras, an automated analytical package using machine learning and an intuitive software package for monitoring, reporting and analytical purposes.”
The use of machine learning dramatically reduces the time it takes to analyse each layer produced in PBF-LB.
“This brings the information to the user in near real time to make informed decisions about the quality of their build, reducing the risk of poor quality and, more importantly, the time for developing new products and certifying them to the applicable standards,” Menzies said.
For small and medium-sized manufacturers, the decision often comes down to balancing risk against opportunity – especially when certification and time-to-market are on the line.
“AMiRIS users tend to understand the failures that occur in metal additive manufacturing and the subsequent cost of poor production. What is becoming a more important aspect of monitoring devices such as AMiRIS is the benefits that it brings for certification and quality assurance.”
If the SME is developing its own products and requires the parts to be certified, the benefits align strongly with shorter development and certification cycles.
Secondary niche
Premcar has carved out a niche in secondary manufacturing – engineering original equipment manufacturer vehicles such as Nissan models – while expanding beyond Australia to build capability in new markets.
“We’ve now set up in South Africa, doing a very similar thing, and we’re looking to expand into other markets, such as North America, as well,” said Premcar CEO Bernard Quinn, a former Ford Performance Vehicles engineer.
To compress programs and reduce warranty risk, the team has evolved its product-development system into a digital-first workflow that front-loads analysis and decisions.
“From an engineering point of view, we have a product development system which has evolved into a digital-based system where engineers use online forms, databases and AI to create failure mode and effects analyses,” he said.
Instead of iterating through expensive physical prototypes, engineers now design parts for first-pass success with virtual testing that targets the known gate criteria.
“We design the part properly, then test it virtually – via stress, modal and frequency analysis – to give ourselves the best chance that the first prototype will pass all the tests we have to put it through,” Quinn said.
Materials and methods have shifted too. 3D printing is used to accelerate learning and, where it stacks up, to supply production at meaningful volumes, cutting tooling time and cost.
“We now have two 3D printers in the business and use them to make prototype parts very quickly and efficiently at low cost,” he said. “We’re also starting to use 3D-printed parts in production where it’s cost-effective – even at rates of around 10,000 parts a year.”
Innovation specialist
Premcar now has a full-time innovation specialist who focuses on synthesising processes and systems in manufacturing, engineering and program management.
“AI and structured query language are used to integrate everything so it’s more efficient and robust,” Quinn said.
Looking ahead, the team sees scope for machine learning in vision-based motion studies and workflow optimisation.
“The next step, if we wanted to push efficiency further with AI, would be machine learning – for example, cameras along the manufacturing process to record how operators move, then using machine learning to alter processes to improve efficiency.”
To stay future-ready, Premcar deliberately hunts variety so engineers absorb new technologies they can redeploy into core programs.
“For example, we did a helicopter design project with a full carbon-fibre monocoque. A monocoque structure doesn’t have a separate frame; the carbon-fibre structure itself provides the strength. We learned a lot from that program – alternative materials, and doing stress, modal, and fatigue analysis with carbon fibre, which has completely different properties to steel and alloys.”
With diesel vehicles being phased out, the team is also working with newer automotive technologies.
“If we only did traditional projects, we wouldn’t learn,” he said. “By building a catalogue of projects across EVs, hybrids, new materials and different technologies, we can apply our core engineering skills to those areas as well.”
A way to go
Despite Australia’s innovation in the digital space, we continue to underperform on the sophistication and diversity of what we make and export. Recent analyses by the Harvard Growth Lab’s Economic Complexity Index (ECI) puts Australia in the bottom third globally, between Botswana and Côte d’Ivoire, fuelling debate about the urgency of moving up the value chain.
“Some of Australia’s manufacturers are highly capable. But most of them remain small due to limited access to growth capital in their size bracket, which restricts them from investing in technology, equipment, skills and growth,” Goennemann said.
“With more than 90 per cent of Australian manufacturers employing fewer than 20 people, our lack of scale hurts our competitiveness. Unlocking growth opportunities for our most capable firms is critical to lifting competitiveness and driving transformation.”
Seven steps
In Goennemann’s view, companies need to span the seven steps of manufacturing – R&D and design, to logistics, production, distribution, sales and service – to retain value.
“Companies such as ResMed, RØDE and DroneShield show how leveraging the full value chain creates resilience and global competitiveness,” he said.
Manufacturing along the seven-step value chain is also a major job creator, providing opportunities for all skill levels, from professionals to skilled trades.
“Manufacturing and engineering are symbiotic. Manufacturers rely on engineers across all seven stages of the process, while engineers need a strong local industry to provide meaningful roles and retain talent in Australia,” Goennemann said. “These roles provide engineers with diverse career pathways and are more diverse, attracting around 30 per cent more female participation than traditional production roles.”
But the challenge now is scaling small manufacturers so they can deliver the high-value, complex products the world needs.
“This will require backing our manufacturers and empowering them to harness and further invest in our skilled workforce and natural resources to drive prosperity and growth at home while exporting to the world.”
However, a major barrier to this process is access to capital. Too many small-sized manufacturers can’t secure funding that matches their growth abilities, limiting them from adopting technology, scaling and competing globally.
Shifting policy
The other challenge is unpredictable policy. Constant shifts in policy or a lack of incentives create uncertainty, making it hard for manufacturers to plan and invest.
“Clear, stable, long-term policy settings are essential to give Australian manufacturers the confidence to innovate, scale and compete internationally,” Goennemann said.
While the Future Made in Australia policy is a good start, initiatives must be right-sized and agile to match the overwhelmingly SME-based nature of Australia’s manufacturing industry, he said.
“Get funding into the hands of capable manufacturers quickly, in practical, digestible amounts, through industry-led programs and I’ll show you how manufacturing can thrive.”
This article was originally published in the November 2025 edition of create with the headline “Made to measure”.
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