How to build a resilient manufacturing company

23rd April 2018




Volatility and Australian manufacturing


  • Terms of trade volatility - Australia is a relatively small economy, whose currency is heavily traded and whose exports are influenced strongly by commodity price fluctuations.
  • Geographic isolation - being far away from other markets means changes in shipping costs are magnified.


Manufacturing output in Australia is subject to dramatic volatility.Manufacturing output in Australia is subject to dramatic volatility.

How do you become a more resilient manufacturer?


Manufacturers that exemplify this characteristic have three traits in common:

1. Superiority




2. Diversity


Diversity doesn't necessarily require a number of different final products. Manufacturers should, alongside selling their own assembled products, take opportunities to be part of supply chains for other firms if they have the capacity. Should your product's industry begin to wane, you can continue to remain buoyant by selling intermediary pieces to other firms. Often this can be to firms in other countries - if you aren't exporting your completed product somewhere, you may still be able to make money there by being part of the supply chain of someone making something similar.

3. Flexibility

Firms with flexibility built into their business structures are resilient because they're able to adapt to changing economic climates. Like chameleons that change to fit their environment, firms that have flexibility can, for example, manage costs in downturns by minimising variable expenses (including labour), or shift production priorities to more financially healthy sectors of the economy.

Flexibility starts with your business structure. If you're immobile in the way you purchase from suppliers or employ workers full time, you'll be unable to flex costs down in the slow times. Likewise with the industries you choose to focus on. Flexibility in manufacturing operations means you can prioritise those sectors that are booming. 

External financing through loans or venture capital can dry up during a downturn. Having enough liquid assets to function as working capital during these times can be a lifesaver for manufacturing firms. You might find yourself making lower returns in the expansionary periods, but for the sake of being able to weather the inevitable storms, it can be worth it.

How can Advanced Business Manager help?

Our core software offering, Advanced Business Manager, is a modular software solution that can help you run your manufacturing business in the most efficient manner possible. At its core is the accounting system, onto which you can add further optional modules. For example, our manufacturing module has extensive reporting functionality for planning and managing your operations, such as bill of materials features that allow you to see what the individual components of a product are (including labour), as well as their costs. Multiple variations can be created, allowing for flexible manufacturing and diversity of product assembly.

It also has extensive demand and supply analysis tools, so you can better predict the demands of the market and your ability to supply in a timely fashion. For example, manufacturing processes become much more efficient when you're able to forecast the lead time of individual components of inventory, understand the production runs you'll need to do to meet demand, and have all this information flow back to your main accounting system for proper cost attributions.

For more information on what our software can do to make your manufacturing business more resilient, get in touch with Advanced Business Manager today.