Daikin gives Australian manufacturers an insight into the benefits of ‘on-shoring’



On Tuesday 20th February 2018, Daikin’s Manufacturing Manager Nicholas MacDonald was invited to speak at the Southern Strength Agile Manufacturing Network forum – and impressed attendees with the insights he gave into Daikin’s current practices.

Established in 2012, Southern Strength has been created to enhance the economic development of Southern Sydney’s manufacturing region. The goal: to collectively develop new trading and business streams for the region, drawing on both local and global opportunities.

Nicholas made a great contribution with his speech, which focused on Dakin’s increasing focus on ‘on-shoring’ – that is, bringing to Australia the manufacturing of products previously sourced overseas. This strategy will see Daikin start to produce both compact ducted air conditioning units and large rooftop units here in Sydney; items that have until now been sourced from Malaysia and China.

As explained by Nicholas, one of the factors driving this was a desire was to fast track the time from product development to product release, and meet the needs of the local Australian market with an expansion of our local research and development facilities and capabilities.

Daikin has invested in developing localised and decentralised supply chains, and effectively de-risked the business. In the past 18 months, the locally sourced content of products made in Daikin’s Australia factory has risen from 25% to 50%. In Nicholas’ words: “Australian Manufacturing is not dead – on the contrary, it’s waking up and moving to Sydney.”

Nicholas also explained how Daikin’s “people centred management” approach had made this on-shoring evolution possible. “We have recently localised some products previously made in Malaysia. As well as shortening our lead times and creating jobs. We’ve seen that the productivity of well managed Australian workers is internationally competitive. That’s why for us, the development of people is a major focus.”

At the Southern Strength event, Nicholas’ presentation was met with enthusiasm. Steve Atherton, Chairman of the Southern Strength Board, said “It was great to hear from Nicholas the fantastic people development practices at Daikin, and the Local/Global mix in their manufacturing here in Sydney.”

As Daikin continues to grow and evolve, the team looks forward to being part of more similar events in the future.

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