Australian Manufacturers Say Reshoring by 2023 is Likely Due to Market Volatility, According to PROS Survey
Investment in digital selling is imperative for long-term success, but most are underprepared
- One in two manufacturers (55%) intend to bring operations back to Australia within the next three years.
- 78 percent of survey respondents believe Australia has the technology, people and economy to support the industry boom.
- Western Australia, Northern Territory and South Australia look set to lead the charge on reshoring.
- But the majority (82%) of survey respondents are underprepared to compete in a digital economy and believe they must fast-track eCommerce channels to overcome competition from imports and online sources.
12 April 2021 – One in two Australian manufacturers responding to the survey (55%) intend to reshore their operations to Australia by 2023 following market volatility caused by the COVID-19 pandemic and international relations with neighbouring countries, according to a new survey released by PROS, a provider of SaaS solutions that optimise every shopping and selling experience.
The Australian Manufacturing Outlook survey revealed confidence in that the Australian economy is growing, with more companies signaling they intend to bring manufacturing operations back to Australia. Nearly one quarter (22%) of respondents have already reshored their operations, with nearly half of companies’ overall manufacturing capacity (48%) targeted to return to Australia by 2023.
Western Australia, Northern Territory and South Australia are poised to lead the nation’s charge on reshoring over the next three years according to respondents, with a focus on creating local jobs and growing priority sectors such as lithium batteries, defence and space, and capitalising on their respective geographic advantages.
The rise to reshore has been driven by the need to future-proof critical supply chains in the face of market change and disruption, to minimise risk and protect jobs in key industries. This is coupled with the Australian Government’s support through the Modern Manufacturing five-year plan and strong consumer preference (89%) towards our nation producing more products, according research conducted by Roy Morgan[1].
Three-quarters of those surveyed (78%) believe Australia possesses the technology, people and economic strength to support the creation of an agile manufacturing base, which would better protect and reinstate the local production of goods. Recent quarterly GDP data (released in December) also revealed a growth of 3.1 percent[2], as Australia pushed through the height of the pandemic.
However, Australian manufacturers are underprepared to compete in a digital economy, with 82 percent of survey respondents still in the planning process or yet to implement eCommerce channels to sell to domestic or international buyers; only nine percent also have market-aware, dynamic pricing strategies.
“The economic recovery is well underway, but Australian manufacturers must equip themselves with eCommerce and dynamic pricing capabilities, otherwise we risk not only stalling the economic growth already achieved but missing the right moment in history to reclaim our manufacturing heritage,” said Haley Glasgow, APAC Head of Strategic Consulting and Alliances at PROS.
“Australia is incredibly well-placed to leverage smart technologies like artificial intelligence and digital selling channels to overcome the competition challenges from imports and online sources. But to reinvent themselves, investment must be made by the government, industry and companies themselves.
“Accelerating the sales process with AI-powered insights can also deliver prescriptive guidance on product recommendations, identify cross-sell and up-sell opportunities and proactively mitigate churn risk. This investment can improve the buying experience, order accuracy and accelerate business growth as the economy recovers.”
In support of strengthening self-reliance, nine in ten (90%) Australian manufacturer respondents are confident their company has access to a skilled Australian workforce capable of producing, marketing and selling its products through traditional and digital channels.
Prior to the pandemic, multinational glass manufacturer Saint-Gobain had a traditional approach to purchasing and selling, completing only 10 percent of its orders online. Now, more than 80 percent of orders are conducted through AI-powered digital selling platforms, demonstrating the growing appetite from manufacturing buyers to purchase through digital channels.
“In the emerging digital selling landscape, customers are looking for a frictionless buying experiences, with immediate responses about pricing and delivery,” said Jean Phillippe Bitouzet, Supply Chain and Business Model Director at Saint-Gobain. “PROS has proved to be an excellent partner, committed to our success. Today we’re able to simplify the order process, deliver quotes more quickly, and provide tracking and delivery.”
“As Australian manufacturers seek to reshore, it is vital they lead with a digital strategy and mindset if they are to achieve local and global competitiveness. Leveraging price optimisation solutions to process billions of unique prices in real-time, while catering to the complexity of each buying interaction, creates a harmonised pricing strategy for 2021 and beyond,” Ms. Glasgow said.
The Australian Manufacturing Outlook survey was conducted by independent market research firm OnePoll in December 2020. The research sample consisted of 500 senior employees in the manufacturing sector across Australia.
We live to connect PROS solutions to manufacturing challenges. To learn more, contact us on infoapac@pros.com.
About PROS
PROS Holdings, Inc. (NYSE: PRO) provides AI-powered solutions that optimise selling in the digital economy. PROS solutions make it possible for companies to price, configure and sell their products and services in an omnichannel environment with speed, precision and consistency. Our customers, who are leaders in their markets, benefit from decades of data science expertise infused into our industry solutions.
Forward-looking Statements
This press release contains forward-looking statements, including statements about the functionality and benefits of AI-powered solutions to organisations generally as well as the functionality and benefits of PROS software products. The forward-looking statements contained in this press release are based upon PROS historical experience with AI-powered solutions and its current expectations of the benefits of AI-powered solutions for organisations that implement and utilise such software. Factors that could cause actual results to differ materially from those described herein include the addressability of an organisation’s AI-powered solution needs, the risks associated with PROS developing and enhancing products with the functionality necessary to deliver the stated results and the risks associated with the complex implementation and maintenance of AI-powered solutions such as PROS software products. Additional information relating to the uncertainty affecting the PROS business is contained in PROS filings with the Securities and Exchange Commission. These forward-looking statements represent PROS expectations as of the date of this press release. Subsequent events may cause these expectations to change, and PROS disclaims any obligations to update or alter these forward-looking statements in the future whether as a result of new information, future events or otherwise.
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Media Contact:
Tom Scambler
Porter Novelli Australia
tscambler@porternovelli.com.au
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[1] Roy Morgan: The impact of COVID-19 on purchasing decisions, September 04 2020, Retrieved April 09, 2021, from https://www.australianmade.com.au/media/1579922/Roy%20Morgan%20Research%202020%20-%20COVID-19.pdf
[2] Australian Bureau of Statistics: National income, expenditure and Product, December 2020. (n.d.). Retrieved April 09, 2021, from https://www.abs.gov.au/statistics/economy/national-accounts/australian-national-accounts-national-income-expenditure-and-product/dec-2020