Beyond Business

as Usual:
A 21st Century
Culture of
Manufacturing
in Australia
Katherine Gibson
Jenny Cameron
Stephen Healy
Joanne McNeill
© The Authors, December 2019

Copyright statement

This publication is protected by copyright laws. Apart from any use permitted under the
Copyright Act 1968, no part may be reproduced or altered by any process without prior
written permission of the authors.

For more information or to comment on this report, please contact:

Professor Katherine Gibson
Institute for Culture and Society, Western Sydney University
Locked Bag 1797, Penrith, NSW 2751, AUSTRALIA
[email protected]

Disclaimer

The analysis presented in this document is that of the authors and does not necessarily
reflect that of the research participants.

Funding

This research was funded by the Australian Government through the Australian
Research Council’s Discovery Projects funding scheme (DP160101674). The research
team acknowledges and thanks the ARC for its support of the project. The views
expressed herein are those of the authors and are not necessarily those of the Australian
Government

Suggested Citation

Gibson, K., Cameron, J., Healy, S. and McNeill, J., 2019, Beyond Business as Usual: A 21st
Century Culture of Manufacturing in Australia, Sydney, Australia: Institute for Culture and
Society, Western Sydney University.

Published by:

Institute for Culture and Society, Western Sydney University, Parramatta, NSW 2150

ISBN 978-1-74108-500-6

DOI 10.26183/5de4905d071df
Beyond Business
as Usual:
A 21st Century
Culture of
Manufacturing
in Australia
Katherine Gibson
Jenny Cameron
Stephen Healy
Joanne McNeill

December 2019
Acknowledgements About the Authors
The research team would like to thank all the participants in this Katherine Gibson is a
study for their time, interest and frankness. We particularly thank Professorial Research Fellow
the ten manufacturing enterprises and their staff who so readily at the Institute for Culture
engaged in the research process over the period 2016-2019: and Society, Western Sydney
A.H. Beard University. She is an economic
Interface geographer with an international
NCMC (Northern Co-operative Meat Company Ltd) reputation for pioneering
Norco research on diverse economies.
OzGroup Jenny Cameron is a Conjoint
Sebel Furniture Associate Professor at the
Soft Landing University of Newcastle.
The Social Outfit Throughout her academic
Varley Group career she has researched
WorkVentures. diverse and community
economies, principally using
action research methods.
We also thank the international participants who generously
provided input: Stephen Healy is a Senior
Research Fellow at the Institute
Altus Enterprises (NZ)
for Culture and Society,
Goods that Matter (USA)
Western Sydney University.
Innesto Cooperative (Italy)
He has researched social and
Interface (Netherlands)
solidarity economies during a
KOMOSIE (Belgium)
research career that spans the
Pocheco (France)
US and Australia.
Professor Vera Zemagni (Italy)
Zero Waste Network (NZ). Joanne McNeill is the Research
Project Manager for this project,
and a Research Fellow with the
The research team also thanks colleagues and friends at the Institute for Culture and Society,
Institute for Culture and Society, Western Sydney University Western Sydney University. Her
who provided administrative support for this project. research and prior professional
Jenny Cameron acknowledges the generous support of her experience engage with social
colleagues and students in the Discipline of Geography and innovation ecosystems and
Environmental Studies at the University of Newcastle. alternative economic organising.
Foreword
Is there a future for manufacturing in an increasingly digital world? Will ‘generation
next’ recognise that a product is more than an app on a smart phone? As the internet
of things becomes ubiquitous, who will make the things? These questions are timely
and relevant as Australia embarks on its post-mining boom transition to a more
inclusive and dynamic knowledge-based economy.
Clearly manufacturing has a future in this new context, but it will be different from
anything and everything we have known in the past. The advance of robotics and
automation, nanomaterials and big data, and artificial intelligence and machine
learning, means that manufacturing requires more than ‘business as usual’. It
requires the transformation of our entire industrial structure.
The authors of this report understand the need for industrial transformation, but
they go further. They argue that manufacturing also contributes to social inclusion
through the creation of high skill, high wage jobs. This is certainly the experience of
advanced manufacturing economies like Switzerland and Germany. While automation
destroys some jobs, it also creates others, both within manufacturing enterprises
themselves and in related services.
Additionally, the authors identify the importance of manufacturing in addressing
climate change and environmental degradation. This is evident in the remarkable
growth of renewable energy technologies and the application of manufacturing
techniques to improve energy productivity and sustainability. In this sense,
manufacturing has become an ‘enabler’ of technological change and innovation
across industry boundaries as well as being an industry in its own right.
The urgency of such change in Australia is highlighted by the Harvard Atlas of
Economic Complexity which shows that we sustain our developed-world lifestyle
with an ominously hollowed-out developing-world industrial structure. The atlas
measures the research intensity and diversity of a country’s exports as a proxy for
its innovation capability. Since Australia relies mostly on the export of unprocessed
raw materials, we rank well behind the advanced economies with which we usually
benchmark ourselves.
Arguably, there was no obvious disadvantage in Australia’s export mix while
commodity prices were high, and the boost to our terms of trade masked the
deterioration in our productivity performance. However, it has become apparent in
the wake of the mining boom that our future prosperity will depend increasingly on
identifying new sources of value in knowledge intensive goods and services.
The importance of this report is that it explores the reinvention of manufacturing in
Australia from the viewpoint of developing a ‘manufacturing culture’. Only by doing
so will we be able to build competitive advantage in global markets, and achieve
the combined objectives of long-term economic growth, social inclusion and
environmental sustainability.

Emeritus Professor Roy Green

University of Technology Sydney
December 2019
Executive Summary
There is a culture of manufacturing that is beyond business as usual in Australia.
This report shows that there is a viable future for manufacturing in Australia in the 21st century that is being
shaped by a culture that is beyond business as usual. This report counters ill-founded fears that manufacturing
in Australia is not viable by presenting convincing evidence of dynamic firms that are committed to just and
sustainable manufacturing.
In-depth qualitative research with 10 manufacturers based in NSW documents evidence of commitments to:
1. Maintaining firm viability and thereby safeguarding manufacturing in Australia
2. Providing decent jobs in an inclusive society and thereby building a more just manufacturing sector
3. Producing with a smaller ecological footprint and thereby building a more environmentally sustainable
manufacturing sector.

Manufacturing matters but it faces major challenges.

Manufacturing supports 1.27 million jobs in Australia. It plays a major role in the social inclusion of people from
many different backgrounds and experiences. It is where the productive capacity of the society is nurtured. It is a
point of concentration for innovation and investment in R&D.
But the business as usual model is no longer viable. Growth without regard for a social licence to produce is no
longer acceptable. Nor is growth with disregard for the environmental impacts of production and consumption.
The new culture of manufacturing identified in this report is robust enough to meet the joint challenges of
increasing inequality and environmental degradation.

A beyond business as usual manufacturing culture is more than smart and more than green.
This culture of manufacturing is ‘more than smart’. It situates the technological advancements associated
with Industry 4.0 in the wider social context where concerns for good jobs are placed alongside the demand for
greater productivity and financial returns.
This culture of manufacturing is ‘more than green’. It focuses on environmental sustainability at all stages of
the production process and supply chain, as well as looking to the greenfield renewable energy sector and its
associated new business opportunities.
This culture of manufacturing combines production of material goods in a just and equitable manner with a
contribution to social cohesion and with the minimisation of damage to supporting ecosystems.

It is building viable firms with the capacity to withstand threats that might undermine the sector as a whole.
In this culture of manufacturing, firms have a clear purpose and a long-term business horizon. This builds the
capacity to withstand undermining forces such as corporate raiding and the financialisation of the economy.

It is helping Australia make progress on the Sustainable Development Goals (SDGs).

The firms that are adopting a beyond business as usual approach demonstrate how manufacturers can lead the
way in addressing:
SDG 8 Decent Work and Economic Growth
SDG 9 Industry Innovation and Infrastructure
SDG 12 Responsible Consumption and Production.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | vii

 Contents
Acknowledgements iv
Foreword v
Executive Summary vii
Contents viii
1. Introduction 1
1.1 Why Manufacturing in Australia Matters 3
1.2 Challenges to Manufacturing 3
1.3 Future Pathways 4
1.4 What this Report Offers 5
2. Research Method and Company Profiles 6
2.1 Research Method 6
2.2 Company Profiles 10
A.H. Beard 10
Interface 12
NCMC 14
Norco 16
OzGroup 18
Sebel Furniture 20
Soft Landing 22
The Social Outfit 24
Varley Group 26
WorkVentures 28
3. Safeguarding Manufacturing 30
3.1 Motivations that extend beyond profit 31
INSIGHTS: Business motivations beyond profit 32
SNAPSHOT: From shareholders to stakeholders 34
3.2 Long term business horizons 35
SNAPSHOT: Interface – From Mission Zero® to Climate Take Back TM
36
SNAPSHOT: WorkVentures – Growing seedlings into trees 37
SNAPSHOT: A.H. Beard – Risking all to save the firm 38
SNAPSHOT: Varley Group – Cutting back to save the business 39
SNAPSHOT: Norco – Resisting demutualisation 40
3.3 Thoughtful growth 41
INSIGHTS: Growth that serves multiple stakeholders 42
SNAPSHOT: Soft Landing – Growing and remaining ethical 44

viii | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

 SNAPSHOT: Sebel Furniture – Refocusing growth on what is core 46
SNAPSHOT: NCMC, Norco and OzGroup – Thoughtful growth in a
climate changing world 47
4. More Just Manufacturing 49
4.1 Technological Change and Decent Jobs 50
SNAPSHOT: Norco – Introducing automation on the shopfloor 51
SNAPSHOT: Automation and jobs 52
4.2 Workers as Valued Contributors 53
INSIGHTS: Workers as valued contributors 54
SNAPSHOT: Interface – Valuing workers in a crisis 58
4.3 Factories as Sites of Inclusion 59
INSIGHTS: Factories as sites of inclusion 60
SNAPSHOT: New technologies, inequality and training 65
5. More Sustainable Manufacturing 67
5.1 Product as High Quality and Durable 68
SNAPSHOT: Varley Group – High-quality and durable products 69
SNAPSHOT: Product-as-a-Service 70
5.2 Efficiency as Waste Reduction 71
SNAPSHOT: Sebel Furniture – Lean manufacturing as waste reduction 72
5.3 Product Circularity 73
SNAPSHOT: The Social Outfit – Extending the life cycle of fashion 74
SNAPSHOT: WorkVentures – Extending the life cycle of electronic
and IT equipment 75
SNAPSHOT: Interface – Extending the life cycle of carpet tiles 76
SNAPSHOT: Soft Landing Mattress Product Stewardship Scheme 77
6. Recommendations for Manufacturing a Liveable Future 78
6.1 Policy Directions for Safeguarding Manufacturing in Australia 80
6.2 Policy Directions for Building a Just Manufacturing Sector 83
6.3 Policy Directions for Building an Environmentally Sustainable
Manufacturing Sector 86
6.4 Conclusion 91
References 92
Appendix 1: A Public Declaration 99

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | ix

1. Introduction
With the closure of the last car assembly plants, doubts were raised
about whether there would be a future for manufacturing in Australia.1
Today many people are surprised to think that manufacturing in Australia
might be viable and that young people might expect an exciting future
working in manufacturing.
The research on which this report is based set out to answer the
following questions:
What kind of future is there for manufacturing in Australia?
How can manufacturing address the two 21st century challenges of:
1. growing inequality and social exclusion
2. environmental degradation?

The combination of the Global Financial Crisis (GFC) and the climate
crisis means previously accepted ways of doing business have been
called into question. It is now commonplace to hear that business as
usual cannot continue and that new ways of doing business are needed.
This report presents compelling evidence that there is a just and
sustainable future for manufacturing in 21st century Australia. Indeed,
the future is already here in the form of a manufacturing culture that is
beyond business as usual. But this manufacturing culture is not well
known or publicly visible.
As two of the manufacturers in this research commented:

There’s a view that we don’t make anything in Australia anymore –

full stop. So people are staggered when I say to them, ‘I’m a carpet
manufacturer.’ They say, ‘Oh, you mean you sell some stuff you
import from overseas?’ I say, ‘No, we make it here in Sydney.’ And
they go, ‘Oh, that’s astounding. I didn’t think we did anything like that
anymore.’ … Manufacturing’s not as visible as it used to be. It doesn’t
have big smoke stacks and big industrial sites and people with pickets
outside anymore. When you get in there it’s invariably clean and smart
and clever … it’s no longer the Dickensian sawtooth roof with steam
belching out of pipes.

Managing Director, Australia and New Zealand, Interface

Mindshop arrange for year 12 students from local high schools to work
on a challenge within a business and provide a solution. This is part of
their year 12 assessment. Students from Menai High School worked with
the A.H. Beard business and on completion of their project, teachers
and parents were invited to attend a student presentation. They were
astonished that although we are a manufacturing facility, the career
opportunities are many and varied. We have roles in marketing, media,
education, procurement, sales, customer service and finance as well
as operations and logistics. Many people view manufacturing as
blue-collar workers on a factory floor. I feel the Australian government
needs to consider Australian manufacturing and the career
opportunities they provide for our young people and the development
of our country into the future.
1
For example, Eltham, 2014; Ladd, 2017;
Education and Development Manager, A.H. Beard Taylor et al., 2014.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 1

 Manufacturing is rarely discussed in cultural terms. Yet the ten
manufacturing firms involved in this research all referred to their
distinctive ‘culture’ of operation. They articulated distinctive
commitments that indicate a culture that is beyond what is associated
with business as usual.
These firm level commitments shape day-to-day practices. Together,
the commitments and practices comprise a nascent culture of
manufacturing, one that transcends individual firms and has the
potential to shape the sector as a whole.
This culture is making a vital contribution to the nation by:
1. Maintaining firm viability and thereby safeguarding manufacturing
in Australia
2. Providing decent jobs in an inclusive society and thereby building a
more just manufacturing sector
3. Producing with a smaller ecological footprint and thereby building a
more environmentally sustainable manufacturing sector.

Beyond Business as Usual

A 21 Century Culture of Manufacturing in Australia
st

Safeguarding manufacturing in Australia

Commitments

1. Motivations that extend beyond profit

+ Practices
2. Long term business horizons

3. Thoughtful growth

Building a just manufacturing sector

Commitments

1. Technological change and decent jobs

+ Practices
2. Workers as valued contributors

3. Factories as sites of inclusion

Building an environmentally sustainable manufacturing sector

Commitments

1. Product as high quality and durable

+ Practices
2. Efficiency as waste reduction

3. Product circularity

This introduction sets the scene by providing background information

on manufacturing in Australia, identifying the challenges manufacturing
faces, and overviewing the types of recommendations that have been put
forward in recent reports to secure Australia’s manufacturing future. The
introduction ends by identifying what is distinctive about this report.

2 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

Section 2 explains how the research was conducted. It includes an
overview of the qualitative research method and Company Profiles for
the ten manufacturing firms that were studied.
The next sections are organised around the three vital contributions that
manufacturing can make to this nation:
Section 3: Safeguarding manufacturing
Section 4: Building a just manufacturing sector
Section 5: Building an environmentally sustainable
manufacturing sector.
Each section discusses the commitments and practices associated with
these contributions.
Section 6 concludes with recommendations for policy directions,
organised in terms of their match with three of the United Nation’s
Sustainable Development Goals.

1.1 Why Manufacturing in Australia Matters

Manufacturing remains a significant activity in Australia’s economy. It
supports 1.27 million jobs.2 The employment numbers directly attributed
to the manufacturing sector remain substantial (840,325 at end of June
2018).3 The sector continues to demonstrate good prospects in terms of
job quality, stability and wages.4
Australian manufacturing has seen a steady rise in output over the past
half century, representing a dramatic increase in productivity. In 2014/15
it was the largest contributor by sector to business expenditure on
research and development.5
A robust manufacturing sector has inherent value because it offers
practical hands-on problem-solving work (both unskilled and skilled)
that further builds up the industrial know-how of society. In Australia, 2
Advanced Manufacturing Growth Centre Ltd
2017, p. 11. This number is based on jobs
manufacturing has long played a role in building social cohesion by directly classified as manufacturing and jobs
integrating overseas migrants and young people into worksites where that are outside manufacturing but providing
direct inputs to manufacturing These latter jobs
new skills and habits are learnt on the job. include 53,000 jobs in professional services, as
well as jobs in areas such as agriculture, mining,
and transport and warehousing.
3
Australian Bureau of Statistics 2018. In the
1960s, manufacturing in Australia employed
over 1.2 million people (or just over one-quarter
of the workforce), see Clark et al. 1996; Connolly

1.2 Challenges to Manufacturing & Lewis 2010.

4
For example, as identified by Stanford & Swann
(2017, p.8), part-time work in manufacturing
The economic challenge: There is no doubt that manufacturing in is half that in the labour market as a whole;
minimum wage compensation is smaller
Australia faces many economic challenges.6 As a developed nation proportionately; and average weekly earnings
that places value on good workplace relations and regulated standards, are about ten percent higher than in the
economy as a whole.
Australia is regularly positioned as a ‘high cost’ operating environment.7
Transport costs both internally and externally are seen to be high. 5
Australian Government 2017, pp.77-78;
Australian Government 2019.
Currency fluctuations can drastically affect input costs and destabilise
forward projections. Its relatively small domestic market and distance 6
For example, see Green & Roos 2012; Ranu 2017
from mass global markets influence the potential for growth. 7
Sirkin et al. 2014.

The social challenge: The image of manufacturing offering a fair go for 8

Picketty 2014, pp.246-250. Indeed, in recent
years, international institutions such as the
all Australians is less prevalent today. In recent decades, the distribution International Monetary Fund have become
of wealth and economic wellbeing to which manufacturing once majorly increasingly concerned about the negative
consequences of increasing levels of inequality.
contributed has stalled and there is growing income inequality in many
economies, including Australia.8

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 3

 The environmental challenge: Today the world is poised on the brink
of an environmental crisis that has the potential to threaten the
livelihoods and security of millions around the world. Manufacturing
and the burgeoning consumption habits of a growing world population
are implicated in the Great Acceleration of economic growth and
environmental degradation that has taken place since the 1950s.9
What and how we produce the stuff of life is now under examination.
A loss of confidence in business: Since the GFC there has been continued
revelations of the irresponsibility of some business leaders. There is
ample evidence that the ‘greed is good’ mantra—whether in high profile
financial institutions, retailers, miners or manufacturers—has eroded
the public’s confidence.10 Business as usual has become associated
with profit making at all cost, short term gains on the stock market, a
lack of commitment to communities and regions and profligate use of
pristine resources without concern for wastage or product ‘end of life’.
Plausible counter stories are needed to restore confidence that business
in Australia can do better.
Amidst the noise of media and research reports that focus on challenges
to the Australian manufacturing sector, this report provides insights into
the following concerns:
1. How are manufacturers meeting these challenges of the 21st century?
2. How are they challenging stereotypes?

1.3 Future Pathways

The Australian public has become used to hearing that what stands in
the way of a more viable manufacturing sector is a business culture that
is not sufficiently innovative and labour relations that are too combative.
Research and debate often centre on how Australian manufacturing
can ‘get competitive’.11
Two pathways to competitive success are currently being advocated via
the promotion of:
1) Industry 4.0 also known as ‘advanced manufacturing’ or ‘smart
manufacturing’ based on new technologies that bridge the physical
and digital worlds12
2) a Green New Deal, which refers to a renewables-led transformation
of the economy.13

The Industry 4.0 revolution emphasises the introduction of automated

technologies that will transform product design, production, processes
of communication with clients and overall management. Robotics, smart
sensors, big data analytics, customer profiling, and the Internet of Things
are all part of this contemporary industrial revolution.
9
Steffan et al. 2015.
10
The recent Australia Talks National Survey The Green New Deal sees the development of renewable energy as
conducted in July 2019 by the ABC of more leading a widespread transition to green jobs away from jobs tied to
than 54,000 Australians found that corporate
executives were the third least trusted fossil fuels. The shift to renewables will prompt new high-tech industries,
profession (with politicians and celebrities the distributed around the country and no longer tied to centralised energy
least trusted). See https://www.abc.net.au/
news/2019-11-27/the-professions-australians-
grids. In the US, the Green New Deal is also focused on addressing racial
trust-the-most/11725448. and environmental inequities.14 In Australia, it is informing discussion of
For example, see Australian Government
11 alternative industry policy within the Federal Opposition and the Greens.
2014, p.77.
Both these pathways largely focus on the things that manufacturers
See https://www.industry.gov.au/funding- and governments could and should be doing in order to reach this
12

and-incentives/industry-40.
yet to be realised future. As well, the future that is projected is one
For example, see Ireland 2019; Murphy 2019.
in which technological advancements do the heavy lifting of
13

14
See Friedman 2019. economic transformation.

4 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

A potential (but not insurmountable) problem with these popular and
heralded pathways is that they do not challenge the business as usual
model. The culture of manufacturing remains focused on being at the
competitive edge, ahead of the game.
Another is that they ignore what is at hand. That is, they overlook the
ways that existing companies are already practising advanced (and just)
and green (and sustainable) forms of manufacturing.
This report showcases a range of enterprises that are responsibly
producing goods essential to material wellbeing and comfort. We
document their pathways to success as a contribution to widening the
debate about what manufacturing futures could be.

1.4 What this Report Offers

This report has three distinguishing features.
First, it is based on in-depth qualitative research with ten manufacturers
using what is called a strengths-based approach.15 This means the
research sought to find what it is that manufacturers are already doing to
build a viable, just and sustainable manufacturing sector that will meet
the challenges of the 21st century.
Second, this report is based on the idea that there are manufacturing
cultures. This means that manufacturing is understood as entailing ways
of thinking (commitments) and doing (practices). As a culture, these
commitments and practices are also entangled with standards, norms
and rules informed by shared values. Mostly, a culture goes unremarked,
until called into question, often when there is a crisis. The questioning of
business as usual was prompted by the Global Financial Crisis and the
climate crisis.
Third, the project took as one line of inquiry the differences that
enterprise ‘type’, in terms of ownership and governance structure, might
have on manufacturing commitments and practices. The business
as usual mode of operation is largely associated with an ideal type of
‘capitalist’ enterprise, one that is animated by profit-making, competitive
growth and the private accumulation of wealth. This study incorporated a
range of enterprise types (as discussed more in Section 2.1).
By using a strengths-based approach to study public, private and family-
owned companies, as well as co-operatives and social enterprises, all
engaged in manufacturing, this research has produced new findings
about a culture of manufacturing beyond business as usual.

15
A strengths-based approach seeks out the
assets and capacities of individuals, communities
or, in this case, enterprises. While not ignoring
needs and deficiencies, this approach does
not dwell on them as this stokes a negative
affect that undermines the incentive for creative
action. The authors of this report have used this
asset-based approach, as originally developed
by Kretzmann and McKnight (1993), in many
of their action research projects (for example,
Mathie et al. 2017).

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 5

 2. Research Method and
Company Profiles
In order to explore the strengths of manufacturing in Australia, the
research used an in-depth qualitative approach based on interviews
and site visits with ten manufacturers. This section provides more
information about how the research was conducted, how the resulting
data were analysed and how it is presented in this report. This section
also introduces the ten manufacturers, providing an overview of their
operations and important background on their historical development.

2.1 Research Method

Participating manufacturers were recruited on the basis of documented
reputation, recommendations from industry experts and snowball
sampling. The selection aimed to secure a range of different types of
manufacturers, in terms of products, age, size, market reach and scale of
supply chains. Table 2.1 overviews the range of manufacturers.

Table 2.1 The Range of Manufacturers

Products • Blueberries and Packaging

• Carpet Tiles
• Dairy Products
• Electronics and IT Repair, Refurbishment
and Recycling
• Fabricated Metal Products
• Fashion
• Furniture
• Mattresses
• Mattress Recycling
• Meat Products
Age From 5 years to 133 years
Size From four to over 1,000 staff
Markets Local, national and international
Supply Chains From local to global supply chains

As the research team was based in New South Wales (in Sydney
and Newcastle), there was a focus on firms operating in NSW. Some
of the firms have manufacturing operations only in NSW and some
manufacture in other states and in other countries. It should be noted
that NSW contains nearly 30 per cent of Australia’s direct manufacturing
workforce, with Food manufacturing far outstripping other product areas
in terms of numbers employed (followed by Fabricated Metal Products
and Other Machinery).16
Different enterprise types were recruited to encompass different ways
of making decisions and conducting business, and to see whether and
how these varied approaches to business contributed to ways of ‘doing
16
NSW Department of Industry 2018, pp. 8 & 9. manufacturing’. Table 2.2 identifies the enterprise types included in the
study and locates the ten manufacturers in terms of their enterprise type.

6 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

Table 2.2. Diverse Enterprise Types

Public company Public companies have shares that are traded on the
stock market. These shares can be purchased by
members of the public who then become shareholders
in the company. Interface is a public company.
Private company Private companies are owned privately, usually by a
small group such as a company’s founding partners.
Some of the world’s largest firms are private
companies. Sebel Furniture and Varley Group are
private companies.17
Family-owned Family-owned companies are a sub-group of private
company companies that are owned by family members. In
Australia, there are over 1.4 million family businesses,
accounting for 70 per cent of all businesses.18
A.H. Beard is a family-owned company.
Co-operatives Co-operatives are firms that have members who
are also the owners. Co-operatives aim to achieve
members’ shared economic, social and/or cultural
goals. They are governed by the principle of
democratic decision-making and each member
has one vote. Worker co-operatives are owned by
the worker-members; producer co-operatives are
owned by the producer-members; and consumer
co-operatives are owned by the consumer-
members. Co-operatives are classified as either
distributing or non-distributing, which refers to
whether or not any profit can be distributed to
members. The three co-operatives that participated
in this study, NCMC, Norco and OzGroup, are
distributing producer co-operatives.
Social Social enterprises are for-purpose businesses led by
Enterprises an economic, social, cultural and/or environmental
mission that generates a public or community
benefit. Any profit or surplus generated is primarily
reinvested into the enterprise so it can continue to
fulfil its mission. In 2016 it was estimated that there
are around 20,000 social enterprises in Australia,
operating across all industry sectors.19 Social
enterprise can take different legal forms. Two of the
social enterprises that participated in this study,
Soft Landing and WorkVentures, are registered as
Companies Limited by Guarantee, a non-profit-
distributing form of company with a national
jurisdiction that reports to the Australian Securities
and Investments Commission (ASIC). The Social
Outfit is an Incorporated Charitable Institution.

The research was conducted in three main phases.

Phase 1, January-March 2017. Interviews were conducted with core
staff, including owners, Managing Directors and CEOs. 34 interviews
were conducted in this phase, and all were transcribed.
Phase 2, May 2017-August 2018. Additional interviews were
conducted with a range of staff including managers, engineering
and design staff, HR staff, and production staff (including shop 17
As discussed in the Company Profiles (Section
2.2) both began as family businesses.
floor operators, leading hands and supervisors). 46 interviews were
conducted in this phase and all were transcribed. Site visits of See https://www.familybusiness.org.au/
18

about-us/we-are-family-business-australia.
manufacturing operations were also conducted, and this provided an
opportunity to observe production processes and design meetings. 19
Barraket et al. 2016.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 7

 During this phase, the researchers provided a written submission to
the Future of Work and Workers Senate Inquiry and presented invited
testimony to the Inquiry Hearing in Sydney (February, 2018).
Phase 3, July-December 2018. The initial analysis of results was
undertaken using an inductive approach. This involved identifying
the main themes that emerged from the transcripts of interviews
(supplemented by notes from the observations). The main themes
specific to each firm were presented at in situ workshops involving
nine of the firms and 36 participants.20 The participants were chiefly
those who had already been interviewed. Participants at each
workshop ranged from one (at the smallest firm) to nine (at one of
the largest firms).
The research team presented analysis of the findings using the ‘just
sustainability’ conceptual framework (see below) focusing on what the
manufacturer was doing to contribute to just sustainability, the types of
factors that were enabling this contribution and the challenges faced.
Time was then dedicated to discussing the ‘fit’ and usefulness of this
concept with the participants. Participants affirmed the analysis with
most commenting that the main features of the firm had been accurately
captured and that the conceptual framework reflected their thinking.

Box 2.1: Just Sustainability

The concept of just sustainability was developed by Julian Agyeman

and colleagues to refer to the importance of ensuring “a better
quality of life for all, now and into the future, in a just and equitable
manner, while living within the limits of supporting ecosystems.”21

The final activity in this phase, was a ‘whole group’ workshop (in
December, 2018) that brought together most of the manufacturers
(several were unable to attend). The research team presented the
overall findings, and representatives from each firm participated
in panel discussions based around themes such as strategies for
communicating the value of manufacturing as a contributor to a more
just and environmentally sustainable Australia.
On the recommendation of the workshop participants, a joint Public
Declaration on Just and Sustainable Manufacturing in Australia
was prepared, signed by the participating firms, and circulated to
politicians, policy makers and industry researchers in December, 2018
(see Appendix 1). This led to meetings with several Parliamentarians
and public sector policymakers in early 2019, where the research
approach and findings were discussed.
Over the course of the project, there were also 15 meetings with
representatives of industry associations and think-tanks, policymakers
and unions. These meetings provided valuable insights into the broader
context for manufacturing in Australia. As well, interviews and site
visits were conducted with seven overseas manufacturers involving
10 interviewees.22 This helped to provide insights into similarities and
differences between manufacturing in Australia and manufacturing in
other contexts.
20
Note: NCMC participated in Phase 1 only.
This report presents the findings that emerged around the three main
themes of safeguarding manufacturing (Section 3), just manufacturing
21
Agyeman et al. 2003, p.5.
(Section 4), and environmentally sustainable manufacturing (Section 5).
22
Altus Enterprises, NZ (https://altusenterprises.
co.nz/); Goods that Matter, USA (https:// In each of these sections there is a focus on the underpinning
ourgoodsmatter.com/); Innesto Coop, Italy commitments and the practices that reflect these commitments. In
(http://www.innesto.org/); Interface’s plant in
the Netherlands (https://www.interface.com/EU/ keeping with qualitative research methods, quotes from the interviews
nl-NL/homepage#); KOMOSIE, Belgium (http:// are used to elaborate the themes, and the commitments and practices.
www.herwin.be); Pocheco, France (http://www.
pocheco.com/); and Zero Waste Network, NZ These data are principally presented in the form of:
(http://zerowaste.co.nz/).

8 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

• Insights comprised of quotes from a range of manufacturers, and
• Snapshots that explore a theme in a more detailed way by focusing
on one or several manufacturers.

Quotes are attributed to participants’ Position Title at the time of

interview (in 2017 or 2018). In some cases, participants have moved into
other positions or have moved to other employers.
The research was given ethics approval by the Western Sydney University
and the University of Newcastle Human Research Ethics Committees.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 9

 2.2 Company Profiles

A.H. Beard

ESTABLISHED: 1899
LOCATIONS: Sydney, NSW; Brisbane, QLD;
Melbourne, VIC; Hobart, TAS; Adelaide, SA; Perth, WA;
Auckland, NZ
OWNERSHIP: Family-owned company
EMPLOYEES: 445
PRODUCTS: Mattresses, bases, adjustable bases,
bedheads, pillows, Smart Sleep solutions
ANNUAL REVENUE: $134,000,000 (2017/18)

A.H. Beard is a family-owned company, established in 1899. The

family legacy is crucial to A.H. Beard’s identity and there are fourth
and fifth generation members of the Beard family working in the firm.
This sense of both family and history has shaped how A.H. Beard
operates (and this is discussed more in Section 3.2).
The company is one of Australia’s three main mattress
manufacturers that together service around two-thirds of the
national market (with Sealy and Sleepmaker being the other two main
manufacturers). A.H. Beard specialises in the production of high-
quality mattresses (such as the King Koil brand). Automatic quilting
and tape edge machines allow a mattress to be made in 20 to 40
minutes; other mattresses are hand-stitched by third generation craft
workers and take up to two days to make.
The highest quality mattresses are sold into the expanding Chinese
market and retail in China for up to AU$70,000. One crucial selling point
is Australia’s clean and green image, and the mattresses in this market
use natural fibres such as merino wool, alpaca fibre and mohair.
One remarkable aspect of this company is its longevity. In a context
in which family business in Australia is, according to the Chairman
and Managing Director, “going through one of its biggest attrition
rates, with the grey hairs getting out of business because the kids
don’t want to be in the business,” A.H. Beard represents a company
that has successfully managed succession planning.
Another remarkable aspect is the major role it has played in initiating
and promoting an industry-wide voluntary mattress stewardship
scheme, the Soft Landing Mattress Product Stewardship Scheme.
Here A.H. Beard is extending the practice of integrity they pride
themselves on within the firm into the industry and beyond. This
scheme features in Section 5.3.

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Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 11
 Interface

ESTABLISHED: 1973
LOCATIONS: Minto, Sydney, NSW (and Georgia, USA;
Taicang, China; Scherpenzeel, The Netherlands;
Craigavon, Northern Ireland; Chonburi, Thailand)
OWNERSHIP: Public company
EMPLOYEES: Australia, 200; Globally, 3,500
PRODUCTS: Carpet tiles, vinyl tiles, rubber flooring
ANNUAL REVENUE: Australia - $111,216,000;
US - $178,000,000

Interface is the world’s largest manufacturer of modular carpet tiles.

It began as a family company founded by Ray Anderson in the US
in 1973. Interface established operations in Australia in 1988 when
it took over the Picton factory of Dutch company Heuga Carpets, a
pioneer of carpet tile production. The company produces high-quality
carpet tiles for institutions and business clients.
Interface has an international reputation for leadership in
environmentally sustainable production. This reputation dates back
to the major turn the company took in 1994 to decouple from fossil
fuel inputs, after the founder had a moment of realisation that the
business was plundering the earth’s resources and contributing to
environmental degradation. Since then Interface has pioneered green
production and reoriented its entire manufacturing system (and this
is discussed in Sections 3.2 and 5.3). The Sustainability and Lean
Manager describes it this way, “The idea was that sustainability would
be part of our DNA. It would be embedded in the company culture.”
Ray Anderson approached the sustainability agenda with absolute
determination. The Sustainability and Lean Manager relates that
when the firm embarked on this journey “Ray Anderson didn’t really
care about the costs … He said, ‘You make it cost effective.’ So that’s
where engineering comes in, innovation, new technologies.”
With Ray Anderson’s death in 2011, the conditions were ready to test
the embeddedness of the sustainability agenda. The Vice President,
Asia Pacific recalls what happened when the new CEO started, “He
said, ‘How much is sustainability costing the business. If we didn’t
do sustainability what would we save?’ It was $50 million a year ...
But he quickly did the maths and said, ‘Well, we’re ahead … that $50
million is a good investment, ongoing investment year-after-year.’ So
even financially it makes sense. At times you need to make sure that
you’re still on the right path.”

12 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

Today the Australian plant, located in Minto in south west Sydney,
is the most efficient operating plant in the Interface corporation.
It supplies locally made carpet tiles and tiles imported from Asian
plants to the Australian and NZ market.
Interface continues to lead the way in sustainable manufacturing
showing that this is also an economically viable pathway.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 13

 NCMC

ESTABLISHED: 1933
LOCATIONS: Casino & Booyong, NSW
OWNERSHIP: Producer co-operative (1,000 Members)
EMPLOYEES: 1,200 (full-time, part-time, casual)
PRODUCTS: Fresh meat; meat products; hides
ANNUAL REVENUE: $239 million

Northern Co-operative Meat Company Ltd (NCMC) is the only meat

and pork processing co-operative in Australia. It produces meat and
pork products at their Casino and Booyong sites, and has licences to
distribute across the globe to more than 20 countries including major
trading partners, Japan, Korea, United States, China (chilled & frozen),
Indonesia, Europe and many Middle Eastern countries, as well as
Halal and organic markets. It also produces and sells high-quality
wet blue hides on the international market, as well as co-products
and by-products.
The co-operative has been operating for 86 years and has a focus
on looking after its members. The Chairman highlights this aspect
of the business when he says, “We’re a co-operative and we’ve been
here since 1933. There’s no intention to change that, as we embrace
the co-operative ethos and by embracing that, we recognise the local
membership … It’s part of our mission. Everyone grows together.”
There have been moments when this co-operative ethos has been
tested. During the 1980s there were, the Chairman notes, “huge
debates about the value of shares. There was a big push to walk
away from a co-operative into a company limited, a private company,
and be able to trade shares. A lot of AGMs were consumed by this
debate.”
One of the challenges for the co-operative is to make sure that members
understand the benefits. Indeed, this is something the Chairman had
to learn himself. He recalls, “When I was sitting on a horse at home
and not worrying about it years ago, I didn’t see much of a role for
the co-operative, I thought they were a bit antiquated … Even though
there’s been some great things done within these walls, but it never
had a very high profile. Sitting in this chair, I see huge benefits.”
For members there are direct benefits, such as the services provided
through the Member Services Department. This includes educational
workshops for carcass and live animal assessments, off stream
livestock water infrastructure pilot projects, instigation of a NCMC
soil club and focus on best management practices.

14 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

For the broader community, the benefits are threefold. First, there is the
benefit that comes from a co-operative that is geared towards looking
after its members, and this has flow-on benefits for rural centres.
The Chairman explains, “You’ve got to look after your local members,
because they shop locally in the local towns. Whether it is buying tyres,
livestock produce, going to the local doctor, or sending your kids to
the local school. So we’re very much about the community.”
A second benefit are the job opportunities provided by the co-
operative. One member expands, “Parents are thankful to have
an avenue for young people to obtain employment in their local
community and one that also offers career opportunities in a number
of areas – administration, maintenance and engineering, logistics,
quality assurance and meat processing. We love to collaborate
with the local schools to promote the co-operative at their career
days. We see the importance of education and are heavily focused
on training and are well supported by TAFE NSW. Providing jobs for
young school leavers and jobs for both men and women is vital for
maintaining rural centres such as Casino and Booyong (in NSW).”
Third, is the support the co-operative can provide the community.
NCMC is a major sponsor of the local Westpac Surf Life Saving
Rescue Helicopter Service. The co-operative also donates money to
different charities and not-for-profit organisations including the local
Agriculture Shows, local sporting clubs and Indigenous programs.
The Chairman notes, “The community really appreciates it.”

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 15

 Norco

ESTABLISHED: 1895
LOCATIONS: Lismore and Raleigh, NSW; Labrador, QLD
OWNERSHIP: Producer co-operative (309 Members, as
at 30 June 2019)
EMPLOYEES: 834 (full-time, part-time, casual)
PRODUCTS: Milk products, cheese, ice cream and other
dairy products; resin based packaging
ANNUAL REVENUE: $603,000,000 (FY19)

Norco opened in 1895 in Byron Bay as North Coast Fresh Food & Cold
Storage Co-operative Company Ltd. This almost 125-year history
gives Norco a depth of connection to the region and to the generations
of farming families that have been members of the co-operative.
The importance of the co-operative to the North Coast region of
NSW community was demonstrated in May 2018, when the state
government announced that Norco had lost the contract to provide
milk to fifteen North Coast health facilities. Instead the contract was
awarded to Dairy Farmers which is owned by Japanese brewer Kirin
Holdings. However, within days the decision was overturned because
of the level of community pressure to reinstate the local supplier.
For Norco, the contract was small—only a $15,000 contract in a
business with an annual turnover of just over $600 million. What was
significant, and what both delighted and surprised Norco, was the
level of support that was initiated by community members without
any involvement from the co-operative. As reported on ABC News,23
Lismore Hospital staff and the Health Services Union were active
in this campaign, and some patients joined in by refusing to drink
the hospital milk unless it was Norco. The Health Services Union
secretary Gerard Hayes said, “The dairy industry has played a huge
role in the North Coast for many years and health workers want to
support their local economy.”
Norco processes around 200 million litres of milk each year, with
fresh milk plants in Labrador (in South East QLD), and Raleigh (in
Northern NSW); and an ice-cream plant in Lismore (in Northern
NSW). Norco milk retails throughout QLD and NSW. Norco produces
ice cream for third parties that is sold in Australia, China, Japan
and the US.

16 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

It also owns 30 rural supply stores in Northern NSW and South East
QLD, generating additional revenue and supporting its members with
bulk purchasing arrangements.
Over the course of its history, Norco has weathered changeable
conditions. It survived the deregulation of the dairy industry in
the early 2000s, and the following pressure on co-operatives to
demutualise (discussed more in Section 3.2).
More recently, climate has become a challenge with Norco’s
members being affected by drought. Norco supports its farmers
by paying them a highly competitive milk price. From September
to November 2018 this was increased by an additional five cents
per litre (a move which cost the business net $1.8 million); and in
October 2019 Norco announced a drought support premium payment
of five cents per litre effective from 1 October 2019 (which will result
in an average increase to the milk price to 30 June 2020 of five cents
per litre). As well, from 1 April 2019, the Co-operative implemented a
6.5 cent per litre increase to all customers which was fully passed on
to members.24
A commitment to co-operative principles (especially support for
members) and a quality product has helped Norco to thrive in a
global industry while maintaining a deep connection to communities
in regional Australia.

23
Mascarenhas et al. 2018.
24
Norco 2019a & 2019b.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 17

 OzGroup

ESTABLISHED: 2013
LOCATION: Coffs Harbour, NSW
OWNERSHIP: Producer co-operative (124 Members)
EMPLOYEES: 35 permanent; 160 casual
PRODUCTS: Blueberries, raspberries, blackberries,
cardboard packaging
ANNUAL REVENUE: $153,000,000 (FY19)

OzGroup is a producer co-operative that processes and packs

blueberries (and other berries). In the 2017/2018 financial year, it was
Australia’s biggest blueberry supplier producing 37 million punnets
of blueberries (and 1.1 million punnets of raspberries and 202,000
punnets of blackberries).
As a 100 per cent farmer owned co-operative there is a focus on
improving, training and developing farming skillsets and standards.
The co-operative is reinvesting heavily to ensure and build the
highest standards in both farm practice and quality of products.
OzGroup’s point of difference and competitive edge is that it is a true
local farmer co-operative. It is now building channels into export and
the route/food service markets.
OzGroup was formed by a small group of farmers in the north
coast of NSW who had started to grow blueberries on what were
previously their banana farms. During the late 1990s, many farmers
in the region were finding it difficult to compete with Queensland
grown bananas, and so they transitioned out of bananas into
berries. The infrastructure required and picking techniques used are
quite different, requiring higher capital input and periods of labour
intensity. The more complicated coordination and capital investment
needed to process, pack and transport a high-quality blueberry
product to market prompted collaboration among the largely Sikh
grower community.
The initial group of around 20 blueberry growers that came together
in 2001 were either family or close friends. Ten years later the
group had grown to include 70 farmers. By this stage the company
ownership structure was more difficult to manage. The Chairman
explains that as each new grower joined the then named OzBerries
company “they had to dissolve the previous company and make a
new partnership for the new people to come on board.” The Chairman
recalls how they were advised, “You’re acting as a co-operative.

18 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

You’re paying basically all your profits back to growers. You’re calling
it a bonus. The co-operative calls it a rebate.” Thus in 2013, OzGroup
Co-op Ltd was formed. The effect has been positive. The Chairman
says that now “growers have an equal say … Everything is on an equal
playing field. Each grower feels that they’re part of it and they own it.”
OzGroup now has over 120 farmer-members, and these have
broadened out to include local farmers outside the original Sikh
community. In the rapidly growing market for blueberries OzGroup
has seen its turnover almost double each year for the past three
years from $40 to $80 to $130 million. Turnover in the current
financial year is heading towards $200 million and profit currently
year-to-date is up 50 per cent on the previous. As the CEO says, “the
hard work and focus is paying off for our members.”
This has meant that OzGroup has been able to invest in new
technologies to ensure a premium product. For example, on the
packing line there are now machines that photograph 280 blueberries
per second. Each blueberry is photographed eight times, from
different angles, in that one second. The machine can be set for
different specifications in terms of variables such as size, colour,
softness and insect damage. Within one nanosecond the machine
will eject a berry that does not match specifications. OzGroup has
also invested in carton erection machinery and it puts together
cartons for its own use, as well as for other firms in the area.
These types of investments have enabled OzGroup to create
permanent roles for some of the previously casual staff, especially
those who live locally. During the berry season when extra workers
are required, OzGroup employs around 160 casuals, principally
backpackers who are on Working Holiday visas and can work up to
six months with one employer. This produces obvious economic
benefits for the Coffs Harbour region. As the Director describes,
“They come in … they make money, they spend their money here.”

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 19

 Sebel Furniture

ESTABLISHED: 1951
LOCATION: Minto, Sydney, NSW
OWNERSHIP: Private Company
EMPLOYEES: 110 (approx.)
PRODUCTS: Commercial furniture – seating (chairs
and stools), soft furnishings; tables; desks; storage
and accessories
ANNUAL REVENUE: Confidential

Sebel Furniture (Sebel) manufactures furniture for a wide variety

of user segments, especially specialising in meeting the needs of
schools, colleges and universities, healthcare, religious places of
worship, convention centres and venues, and stadia.
Harry Sebel established the company in 1951 and began making
toys and furniture, including the first iconic ‘Stak-a-bye’ chair. In the
1960s the company ceased making toys and continued with furniture
making. Sebel chairs were the first to replace wooden chairs in
schools with plastic (polypropolene) and the company was an early
adopter of ergonomic designs.
After 30 years of growth and consolidation during Australia’s long
boom, the family-owned company was sold in1982 to GWA, which has
interests in domestic construction hardware (including locks, hot water
systems and bathroom fittings). GWA was publicly listed in 1993.
Sebel was the sole furniture maker within the conglomerate “sitting
there pretty much as an orphan” (as described by the former CEO).
With the purchase in 2011 by the employee-owned US company KI,
Sebel was better positioned as part of a global furniture company,
enabling KI a larger presence in the Asia-Pacific region. KI facilitated
Sebel’s move from the legacy Padstow site to a more modern factory
in Minto in 2014, and here the company embarked on the ‘Lean’
journey (discussed more in Section 5.2).
A mark of Sebel’s resilience is that it has continued its manufacturing
in Australia, unlike the vast majority of companies in this sector. In
2017, it was acquired by Resero Group, a New Zealand-based group
that hitherto operated mostly in the school furniture market. Resero
Group reinforced the product design and manufacturing ethos of
Sebel, and the company began to refocus on products as the key
platform for success and growth, a strategy that the current owners
ardently support (and that is discussed in more detail in Section 3.3).

20 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 21
 Soft Landing

ESTABLISHED: 2009
LOCATIONS: Wollongong, Sydney, Newcastle, NSW;
Hume, ACT; Melbourne, VIC; Perth, WA
OWNERSHIP: Social enterprise, Company Limited
by Guarantee
EMPLOYEES: 139 (including FTE and Casual Pool)
PRODUCTS: Recovered mattress components
(steel springs, foam, husk, timber, fabric/textile)
ANNUAL REVENUE: $12,000,000

Soft Landing is a not-for-profit social enterprise that has been

operating for ten years. Soft Landing has a dual mission. It has a
social mission to provide employment opportunities for people who
experience barriers to entering the open labour market including
people who have experienced long term unemployment. It has an
environmental mission to contribute to the recycling of waste, and it
does this by collecting and disassembling end of life mattresses and
recycling the components back into the circular economy, where that
pathway is possible.
The enterprise was established as a response to the increasing
number of mattresses that were being dumped at Mission Australia
shops and clothing bins in the Wollongong region of NSW. This
was occurring as a result of an increase in the fee charged to dump
mattresses at local landfill sites. In 2015, Soft Landing was acquired
by Community Resources Ltd, a national not-for-profit organisation
that creates jobs and opportunities for groups and communities that
experience disadvantage. The social enterprise has expanded from
its initial site at Bellambi (just north of Wollongong) to now having
operations across four states and territories (including three sites in
New South Wales).
Currently, up to 75 per cent of the components are recycled:
• steel springs into products such as roof sheeting
• foam into carpet underlay
• husk into weed matting and mulch
• timber into kindling, mulch and animal bedding
• fabric into acoustic panelling.25

22 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

The goal is to recycle 100 per cent of the mattress, and Soft Landing
has been working with researchers from the Centre for Sustainable
Materials Research and Technology (SMaRT) at the University of New
South Wales to try to make this happen.
With more than 1.6 million mattresses being discarded each year in
Australia, this effort to recycle the components avoids the problem
of landfill sites being clogged with mattresses, bushland being
blighted by illegally dumped mattresses or storage sheds being
used as scrapyards for thousands-upon-thousands of highly
flammable mattresses.
Soft Landing is also the recycler for an industry wide mattress
product stewardship scheme, the Soft Landing Mattress Product
Stewardship Scheme. Soft Landing’s parent body, Community
Resources Ltd is the administrator of the scheme. This scheme is
discussed in more detail in Section 5.3.
The former Executive Officer of Community Resources Ltd says
about Soft Landing, “We’re in this lovely sweet spot with waste … it’s
not terribly sexy, but our staff in this industry are doing really useful
and important work. Not only is it good physical work, but staff can
be proud you’re doing something for the environment, for the planet.”

25
https://www.softlanding.com.au/the-recycling-process/. In the Sydney, 65 to 70 per cent
of the mattress is recycled because there is no market in Sydney for the timber.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 23

 The Social Outfit

ESTABLISHED: 2014
LOCATION: Newtown, Sydney, NSW
OWNERSHIP: Social Enterprise, Incorporated
Association (Charity with DGR Item 1 Status)
EMPLOYEES: FTE 6 (FY19)
PRODUCTS: Ethical clothing
ANNUAL REVENUE: $580,377 (FY18)

The Social Outfit was established in 2014 as a social enterprise that

manufactures clothing with a difference.
The Social Outfit has a social mission to provide training and
employment in clothing design, manufacture, retail, and marketing
for people from refugee and new migrant communities. By working
from the traditional and cultural strengths of its diverse communities,
it aims to build-up lasting skills while also providing an introduction
to an Australian workplace. Since mid-2014, 26 people have been
employed at The Social Outfit, for 21 of these people it was their first
job in Australia and 20 have transitioned into other employment.
The Social Outfit takes seriously the quality of the garments they
produce. The company’s first tag line was “good to wear, made
for good.” The Chair of the Board says, “We can’t compromise the
quality of the product, and so we need a certain level of skill in terms
of manufacturing the clothes.” This means that employees with
strong existing sewing skills are recruited directly into the business;
while others are recruited through the training programs. The aim
is not for all participants in the training programs to go on to work
at The Social Outfit. The training programs serve multiple purposes,
including meeting and interacting with other people; and learning a
skill that can be used at home or to produce items that can be sold at
markets stalls.
The Social Outfit also has an environmental mission. Around half of
the fabrics used are donated by other firms in the fashion industry
who have excess or waste fabrics. Without The Social Outfit, these
fabrics, from labels such as Bianca Spender, Carla Zampatti, Cue,
Romance was Born and Seafolly would end up in landfill. The
fabrics are manufactured into clothing and accessories, many of

24 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

which feature the design and production work of refugees and new
migrants. The Social Outfit thus provides one avenue for fashion
labels to act on their concerns about the environmental impacts of
the industry while also making a social contribution.
The Social Outfit also has fabric screen-printed in Australia. These
fabrics are printed on Crepe de Chine silk using only water-based dyes
that have a low environmental impact. The print designs are often based
on artwork by young new migrants that The Social Outfit engages in
art projects to increase their learning, motivation and confidence.
The Social Outfit is accredited with Ethical Clothing Australia.
Therefore, when The Social Outfit sources additional inputs (such
as screen printing, and zips and cottons) the companies in the
Australian supply chain are checked by Ethical Clothing Australia to
ensure that they are transparent and legally compliant. For example,
this confirms that local factory-based workers and outworkers are
receiving Award rates and entitlements.
The Social Outfit’s revenue is generated through sales, grants and
donations. Around half the revenue is from sales, and the rest is
secured through grants and donations (as The Social Outfit is a
registered charity). This enables The Social Outfit to offer a range
of training programs, such as free sewing classes to refugees.
These programs are delivered at a cost to the enterprise and do not
generate any revenue.
The Social Outfit is a social enterprise with a social and
environmental mission, operating in a subsector of manufacturing
that has experienced substantial transformation since the 1980s and
that is under increasing pressure to address its negative social and
environmental impacts.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 25

 Varley Group

ESTABLISHED: 1886
LOCATIONS: Newcastle, Sydney, Gosford, NSW;
Brisbane, QLD; Ballarat, Melbourne, VIC
OWNERSHIP: Family-owned private company
EMPLOYEES: 815
PRODUCTS: Fabricated Metal Products (including
in Defence & Aerospace; Specialised Vehicles;
Marine, Rail & Power Services; Electric Vehicles)
ANNUAL REVENUE: $200,000,000

Varley Group (Varley) is a private company that is family owned.

The firm has its origins in the Newcastle region where it has
been operating since 1886. Over that time, Varley has employed
generations of workers, and it is not uncommon for staff to spend
their entire working lives at Varley, nor for managers to have ‘worked
their way up’ from the shopfloor.
Varley has Business Units in areas that include Defence and
Aerospace, Specialised Vehicles, Marine Service, Power Services, Rail
Services and Electric Vehicles. The skills and knowledge that have
developed are specialised and unique to the firm, as the Managing
Director describes: “An example is here on this site, where we design
and manufacture special vehicles and lightweight military modules,
where else in this whole region can you draw on people with that
expertise? They don’t exist.”
Varley is strongly connected into the Hunter region in NSW and works
closely with educational institutions in the area (including schools,
TAFE and the University of Newcastle), and is also part of regionally-
based industry networks including HunterNet.
Varley also operates across Australia and internationally. The quality
of its work is reflected in the contracts it secures, such as those with
the United States Armed Forces and with Lockheed Martin as part of
the Joint Strike Fighter program.

26 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

Although Varley is family-owned, today the family members are
effectively investors who are at arms-length from the company.
There is a board of directors with both internal and external directors.
The Managing Director notes that the external directors are important
as they “bring a necessary skill into the company to help guide it.”
The sheer determination to stay in business and continue more than
a century-long history of producing quality equipment is what led to
a wholesale overhaul of the company in the early 2000s (and this is
discussed in Section 3.2). Since then Varley has grown from strength
to strength, reflected in expanded operations and a focus on quality
and customer service in niche markets.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 27

 WorkVentures

ESTABLISHED: 1979
LOCATIONS: Sydney, NSW; Melbourne, VIC
OWNERSHIP: Social Enterprise, Company Limited
by Guarantee
EMPLOYEES: 72 full-time, 35 trainees
PRODUCTS: Electronics and IT repair, refurbishment
and recycling
ANNUAL REVENUE: $10,500,000 (FY18)

WorkVentures is a social enterprise of 40 years standing that has

pioneered an innovative approach to refurbishing, repairing and
recycling electronics and IT equipment. This includes a data-
secure approach to decommissioning equipment, a feature that
is crucial to its corporate customers in the areas of finance and
telecommunications.
WorkVentures’ primary goal is to improve social and economic
inclusion through employing marginalised young people, migrants,
and older people at the end of their careers. As part of its approach it
has developed extensive training and apprenticeship programs, and
this helps to encourage intergenerational learning around complex
problem solving.
An example of one of its programs is the KickStart Academy. When
WorkVentures advertises for participants, a range of people apply
including ‘gamers’ who are interested in playing and building
computer games and refugees who are keen to work and contribute
to Australian society. There is an open day and interview session to
help screen applicants, and especially to identify their passions and
their expectations. Once applicants are selected for the Academy,
they are exposed to a range of work pathways, including hardware
repair; warehousing and logistics; call centre and technical support;
and software testing and programming.
From these training programs, many participants go on to be
employed by WorkVentures, or by other electronics and IT businesses.

28 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

As part of its social purpose, WorkVentures also refurbishes
computers that its corporate customers no longer need, and these
computers are sold at low cost (with 6-months warranty and
technical support built into the price) to non-profit organisations
and low-income households. In 2014, WorkVentures delivered its
50,000th low-cost refurbished computer.
WorkVentures challenges some of the stereotypes about social
enterprise. As the General Manager, Operations puts it: “A lot of
people don’t see social enterprise as high end. They could see the
recycling. They could see the refurbishing or low-level formatting
of computers and things. The reality is 60 per cent of all Telstra’s
infrastructure spare parts are coming out of this organisation; also,
Westpac’s branch teller equipment, that’s all their branches, rely on
us to be open and going.”
WorkVentures demonstrates how social enterprises can operate at
the core of a society’s commercial economy, while also playing a
crucial social role through training and employing diverse groups of
people, and an environmental role through pioneering responsible
handling of e-waste.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 29

 3. Safeguarding Manufacturing
Manufacturing in Australia is being safeguarded by firms that are
focused on maintaining their viability. For the participants in this study,
commercial and financial viability are certainly important. However, these
firms have a broader vision of viability that encompasses qualities such as
creativity, passion, integrity, honesty and community accountability.
They reflect this broader vision of viability through
three commitments:
1. Motivations that extend beyond profit
2. Long-term business horizons
3. Thoughtful growth that benefits multiple stakeholders.

The broad vision of viability and the three associated commitments

provide the foundation for a 21st century culture of manufacturing that
pushes beyond a business as usual approach.
In Section 3.1, the motivations that extend beyond profit are introduced
in the following Insights, using statements from each manufacturer.
Sections 3.2 and 3.3 focus on the commitments and practices related to
the business horizon and growth, using Snapshots of five manufacturers
that present a more detailed exploration of how the commitments are
enacted in practices.

Beyond Business as Usual

A 21st Century Culture of Manufacturing in Australia

Safeguarding manufacturing in Australia

Commitments

3.1 Motivations that extend beyond profit

+ Practices
3.2 Long term business horizons

3.3 Thoughtful growth

30 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

3.1 Motivations that Extend Beyond Profit
The economist Milton Friedman once stated that “[t]he social
responsibility of business is to increase its profits.”26 This influential
proclamation became a key business as usual tenet. But it has
increasingly come under question.
The manufacturers in this study expressed a responsibility to much
more than increasing profits and maximising returns. This commitment
to business motivations beyond profit was displayed across all the
enterprise types. The essence of this commitment is captured in the
following Insights.
This section concludes with a Snapshot that discusses how the diverse
motivations of firms in this study align with recent discussions about
shareholders and stakeholders.

26
Friedman 1970, p. 1.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 31

 INSIGHTS:
Business motivations beyond profit
Integrity Integrity is one of our core values—we want to ensure that whatever
we produce and whoever is sleeping on it, it’s the best possible product
that we can produce within that price point. We also want to ensure that
wherever it ends up, we’re doing, with the utmost of integrity, the best to
look after the environment.
Education and Development Manager, A.H. Beard

Money … it’s not Business purpose is something that we’re talking a lot more about
because I think that really brings together what it’s about … People think
the only thing the company is only here to make money and they never think about it
again but that’s not the only thing that it’s there for ... Business purpose
is an important term because it’s probably more enduring as it means
that you’ve got something which is beyond just making product, or that
you’re operating a factory, or getting your sales, or getting your design,
et cetera. What is your role basically? Your personal role, the company’s
role? … I think that that has helped us redefine internally as well as how
each one can contribute and build up the culture.
Vice President Operations Asia Pacific, Interface

For the community We don’t sit around chasing share prices. The CEO’s not out there trying
to lift the share value from $1 to $1.20 … Our future directions are always
about being a commercially focused and sustainable co-operative, and
investing in our people. Why? Because we want to be here in the future
for the community.
Chairman, NCMC

Being accountable In co-ops, especially regional co-ops, you are accountable. It doesn’t
matter where you go in Lismore or parts of Northern New South Wales,
people are going to recognise me and they want to have a conversation
about the business. So stopping and taking the time to have a
conversation in the street about something is really, really important.
Chairman, Norco

Spend in the OzGroup Co-operative is a 100 per cent Australian farmer owned co-
operative. We’re not a multinational, public or private company so
local economy therefore there are no external shareholders, only our farmer members.
This means after reinvestment, all profits go back to the members who
then spend in the local economy.
CEO, OzGroup

32 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

We try to be aware of how we can impact the environment that we The longer-term benefit
operate in because we’re leaving it to our kids. Whatever mess we
make we leave to our kids and all that sort of stuff … You’ve got to start
thinking about it and be aware of it, and have an attitude to wanting to
contribute to the longer-term benefit, which is what we’re trying to do in
everything that we do. The design team thinks about it as much as they
can. ‘How do we transport things? How do we pack things? How do we
make them move around Australia?’
Former CEO, Sebel Furniture

Without our integrity … what are we … you’ve got these different Remaining ethical
pressures hitting the business, but you go, ‘Why is everyone on board?’
Well they’re on board because we have remained ethical, we do provide
jobs for disadvantaged people, and we’re trying our best to solve that
environmental piece of the puzzle.
Former National Manager, Soft Landing

This is a zero sum. When we think that a t-shirt can be made for $5, we Creativity
are in the bad end of the manufacturing industry and we are a hundred
per cent there now. So that side, I have no interest in that … I want to
focus on the really good stuff. I want to focus on the good sides of the
fashion industry and its creativity.
Founder and Former CEO, The Social Outfit

So we’re not always necessarily looking to maximise the profit and Being honest
benefit to the company. The customer is first, so we like to be honest.
Perhaps giving or suggesting options to the customer might not provide
the best opportunity for Varley to make more money. At the end of the
day, it’s that honesty that they appreciate, ‘You’re looking after
me.’ You see that instead of spending $100,000, we could provide a
solution for $15,000.
General Manager, Defence and Aerospace, Varley Group

Man oh man, making that weekly pay check. That’s the name of the Helping people
game … All the time it’s a constant battle between what’s it cost to help
people. How can I get the money, and how can I keep feeding people ...
We could cut our staff now. If we were a normal business we’d be able to
cut our staff and continue on. But we won’t.
General Manager, Operations, WorkVentures

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 33

 SNAPSHOT:
From shareholders to stakeholders
One of the deeply held precepts of business as usual is primacy of the shareholder. This is the
idea that “corporate managers are agents of shareholders and should act exclusively in their
financial interests.”27
This idea has been called into question by legal scholars who argue that it has no legal basis in
corporate law but is ‘merely’ a cultural norm that has taken hold only relatively recently.
Before her death in 2018, the distinguished corporate law scholar Lynn Stout wrote: “Fifty years
ago, if you had asked the directors or CEO of a large public company what the company’s purpose
was, you might have been told the corporation had many purposes: to provide equity investors with
solid returns, but also to build great products, to provide decent livelihoods for employees, and to
contribute to the community and the nation. Today, you are likely to be told the company has but
one purpose, to maximise its shareholders’ wealth.”28
Stout was particularly concerned with the detrimental consequences of shareholder primacy. For
example, she highlighted how the almost exclusive focus on maximising shareholders’ wealth led
to BP’s Deepwater Horizon disaster in the Gulf of Mexico.
To save time and money (at least in the short-term), standard safety procedures were ignored. While
drilling at the Macondo oil well in 2010 the massive rig exploded and sank, killing 12 workers. The oil
that spewed from the uncapped well over the next six months impacted a wide group of stakeholders:
fishing and tourism operators who struggled to make a living; BP’s competitors who could not
operate because of a moratorium on oil drilling; and ecosystems in the Gulf which were damaged and
destroyed (and the full extent of the damage is still not known). Of course, BP’s own shareholders
were also negatively impacted, with BP’s stock market value plummeting almost US$100 billion.
Stout uses the example of BP to demonstrate how shareholder primacy has been embraced with
what she calls “near-religious fervor.” As a result, the boards of many public companies have lost
sight of their capacity to run these companies with other goals in mind, including “creating quality
products, protecting employees, and serving the public interest.” Under corporate law, boards have
the discretion to address these goals so long as they do not enrich themselves.
The legal analysis is concerned with public companies (i.e. those companies whose shares are
traded on the stock market, as outlined in Table 2.2. above). What is evident in this study is that
there are public companies such as Interface that are operating successfully while also serving
these wider goals.
The legal analysis is relevant to other types of enterprises as they also have boards or similar
governing bodies. This study finds that these private companies, family-owned companies,
co-operatives and social enterprises are serving wider goals. All are examples of successful
companies that are concerned with the wellbeing of multiple stakeholders.
Together, these companies are leading the way in shaping a culture of manufacturing that goes
beyond business as usual.
The Snapshots and Insights in the rest of this report demonstrate some of the commitments and
practices associated with this emerging culture.

27
Deakin 2012, p. 339, see also the discussion in Cameron 2020 and Healy 2018.
28
Stout 2012, p. 2.

34 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

3.2 Long-Term Business Horizon
To maintain their viability, the manufacturers in this study are committed
to a long-term business horizons. This commitment helps steer a course
in a changing business environment.
In recent years the increasing power of a financial sector geared towards
capitalising on short terms gains and losses in the economy has seen
steady investment in productive manufacturing destabilised. All over
the world the viability of manufacturing activities within larger corporate
entities has been undermined by asset stripping and subsequent layoffs.29
The Chief Operating Officer from Varley Group has seen this happen time
and again in Varley’s area of operation: “Our opposition went broke. A lot
of funny things happen in this industry … They get taken over by these
superannuation funds looking for a quick dollar, buying into it. They think
they’re going to make a lot of money and they sign up all these contracts,
real cheap, to try and make the business look good to sell, and then
the business starts to run out of cash and fails. That’s basically what’s
happened to every one of those firms that I’ve mentioned.”
What characterises the firms in this research is their commitment to
manufacturing for the long term.
Three of the enterprises included in the study are over 100 years old.
They have witnessed amazing changes, participating in the development
of the manufacturing sector in Australia. Five enterprises are 40 to 80
years old, having been established during and at the end of Australia’s
post-war long boom. Together, these eight enterprises have had to
withstand major restructuring forces as the Australian economy
globalised in the last quarter of the 20th century. The remaining two
have been established in the last ten years, responding to new market
opportunities created by environmental and social challenges while
having to contend with the challenges of starting a business in the
post-GFC context.
A culture of manufacturing for the 21st century involves commitments to
the long term as reflected in the following practices.
1. Continual reinvention of what is being made and how. Companies
driven by a well-articulated purpose seek innovative avenues
to achieve their purpose while navigating financial and other
circumstances. This means engaging in a continual process of
revising or reinventing product and production process.
2. Strategic negotiation of financing. The determination to keep the firm
going has sometimes meant taking a short term hit to secure long-
term viability. Some of the firms in this study have faced financial
crises in the form of liquidation or voluntary administration. These
firms have negotiated their way through these crises by holding true
to their long-term commitment and finding ways of securing working
capital to manage their way out of crisis.

This section demonstrates these practices with Snapshots of how two

manufacturers have reinvented themselves over the long term (Interface
and WorkVentures) and how three have staved off crisis through skilful
negotiation of financing (A.H. Beard, Varley Group and Norco).

29
See Christopherson 2015.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 35

 SNAPSHOT: Interface
From Mission Zero® to Climate Take BackTM
Interface has a long-term business horizon to transform how carpet tiles are manufactured so that
negative environmental impacts are not just eliminated but reversed.
This has involved a journey of reinventing the production process.
The journey started in 1994 when Interface’s founder and chairman, Ray Anderson, experienced
what has become known as his ‘spear in the chest’ moment of realising the extent of his
company’s negative impact on the environment. Ray was determined to turn things around, as he
described: “I wanted Interface, a company so oil-intensive you could think of it as an extension of
the petrochemical industry, to be the first enterprise in history to become truly sustainable—to shut
down its smokestacks, close off its effluent pipes, to do no harm to the environment, and to take
nothing from the earth not easily renewed by the earth.”30
Ray’s vision was formalised in 1996 with the adoption of Mission Zero®, an initiative with the goal
of eliminating any negative impact on the environment by the year 2020. That goal has been largely
achieved. For example:
• By 2018, the manufacturing sites in Europe and the US were using 99 per cent renewably
sourced energy
• By 2018, Interface globally was using 89 per cent total renewable energy
• From 1996 to 2018, there was 89 per cent reduction in water usage, 92 per cent less waste going
to landfill and 96 per cent reduction in GHG emissions intensity from the manufacturing sites
• Overall, the carpet carbon footprint has been reduced by 69 per cent.31

The agenda of “disconnecting from the oil well” (as described by the Vice President, Operations
Asia Pacific) meant years of researching new materials and trialling new production techniques,
especially ways to make new carpet tiles based on recycling the materials in old ones (see Section
5.3). While the technology was being developed “Ray Anderson filled warehouses with carpet, filled
them, he hired warehouses all over the planet … Old carpet, that was coming back, storing and storing
and storing” (Sustainability and Lean Manager). Once the breakthrough technique was developed,
Interface was able to move forward with whole new product lines integrating recycled materials.
Interface is moving on with the next step in its journey, and it is built on the second part of Ray’s
commitment. As Interface’s Sustainability and Lean Manager explains: “Ray Anderson always said
that doing no harm is not good enough. We’ve got to restore. We’ve got to restore the environment.”
This vision is captured in Interface’s latest campaign, Climate Take BackTM. The goal is to run a
business in a way that reverses global warming. When the campaign was announced in 2016 it
seemed the firm was ‘shooting for the moon’. In the interview in early 2017, the Sustainability and
Lean Manager said: “Climate Take BackTM is an audacious claim. It’s not actually happening. It’s
something we say we’re going to do. So then the question is, ‘Okay, now we’ve said it, what are we
going to do.’”
Already, Interface is making inroads with new products and new production processes. For
example, it is exploring raw materials that use waste carbon or sequester carbon and has
created a prototype of the first carbon-capturing carpet tile. It is researching how to improve its
performance in producing ecological services such as water purification, shelter for wildlife and
soil conditioning.
Since the 1990s, Interface has led the way for manufacturers committed to environmental
sustainability. Interface shows how long-term goals, even those that seemed unachievable at one
point in time, can steer a company into uncharted waters and maintain business viability.

30
Anderson 2009.
31
Interface 2019.

36 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

SNAPSHOT: WorkVentures
Growing seedlings into trees
WorkVentures has a long-term perspective that encompasses both the future and the past.
The electronics and IT industry is constantly changing and developing. For WorkVentures this
means continually looking to the future so they remain relevant and competitive in their markets.
At the same time, some sections in WorkVentures deal with legacy products. At least until the
National Broadband Network is completed, these sections keep parts of rural and regional Australia
connected to the telecommunications network. Even when the rollout is completed, and most
legacy equipment phased out, there will be some vital radio frequency communications that
WorkVentures will continue to maintain and repair.
The CEO says “we’re repairing legacy or old equipment, and we have to reinvent ourselves over the
years to remain relevant.”
This long-term perspective that encompasses both the past and the future, means that
WorkVentures has a deep understanding of and appreciation for the skillset that remains core to
their industry. The CEO explains “we’ve got new types of technology coming in, but electronics is
electronics is electronics. So, you might be on this team and then you’re on this team, whereas
before, you might have been on this team for years and doing the same thing.” In other words, the
core skillset is the same, even if employees are now moving more frequently between different
applications of those skills.
This long-term understanding of the nature of the electronics and IT industry means that
WorkVentures can confidently take a long-term perspective to the wellbeing of the people it trains
and employs.
WorkVentures addresses social and economic inclusion by training and employing people who
face barriers in the labour market, especially young people and migrants. Many of those who start
in one of WorkVentures’ electronics and IT training programs, go on to be employed by the firm—
sometimes for decades. WorkVentures also provides meaningful employment for older workers
including those who have retired from employment in major corporations but have a lifetime of
skills in electronics and IT that they are keen to share with younger people.
A WorkVentures’ manager describes the relationship between these different groups in the
following way: “The way I want to describe it is you go into a nursery. At that nursery there’s a
seedling, there’s something that’s a bit bigger, and bigger, and eventually you end up with a nice big
tree. Well, what we do is we have people that are just at the seedling stage working with someone
who is a little bit more advanced, and so on and so on and so on. What they see is – and they’ve all
got similar stories or backgrounds – so what they see is that seedling can actually end up a nice
tall tree … So [person X] started off as a seedling and here she is 25 years later.”
This is a firm with a well-articulated social mission that has maintained business viability by
reinventing itself in its chosen area of operation while also staying on course through valuing the
core skillset.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 37

 SNAPSHOT: A.H. Beard
Risking all to save the firm
A.H. Beard has a strongly-held identity as family-owned company that in 2019 is celebrating 120
years of operation. It has a business horizon of the next 200 years.
This gives the firm a distinctive culture, as the CEO (a non-family member) reflects: “We have a fifth
generation operating in the business and a sixth generation starting to run around in nappies in the
factories. I think the culture is still very genuinely aligned to those values. There’s a lot to do with
tradition, a huge amount of mutual respect between the family and the professional management
team and the employees within it. There is still a high degree of integrity across the organisation.”
The Director (a family member), says: “We certainly have a vision for the business still being
under family ownership in 200 years … We’ve set up all the things; we have a family council at
shareholder’s meetings on a quarterly basis et cetera. A lot of that is about the reinvestment and
what we do with the business … So we are seen as one of the iconic family businesses that has
managed succession, which is usually where a lot of family businesses fail.”
Nevertheless, A.H. Beard has encountered challenges including one with the potential to destroy
the company. This challenge was met with a determination that reflects the commitment to a long-
term business horizon and to leaving a viable company for generations to come.
This challenge came after a period of rapid growth in the 1990s when A.H. Beard was riding high
on the expansion of home goods retailers like Harvey Norman and Forty Winks. But then, as the
Director recounts, A.H Beard had “a near death experience post the 2000 introduction of the GST
and the Olympics which created a very big boom but a very big hole afterwards. After being with
[one bank] for 70, 80 years, we fell below their line as a risk factor. They were exploring having
liquidators appointed and all that.”
With no credit available to deal with the expensive aftermath of a company acquisition, A.H.
Beard was able to draw on longstanding connections with Gerry Harvey, majority owner of Harvey
Norman. As the Director explains, “Fortunately, our relationship with Gerry, he actually lent us
millions at the time, to get us through that period, which we repaid ... my father had helped Gerry
get started in the early days with credit and so forth … So Gerry said ‘You sell your houses, put it
back into the business. I’ll fund you in the meantime.’”
As it turned out, the family were able to mortgage their houses to raise capital. Being prepared to
take a risk in the short term in order to maintain the long-term viability of the firm built staff loyalty.
For example, the Education and Development Manager reflects: “It was very confronting, because
the family had literally mortgaged their homes. So, there were a lot of tears at the time because
they could have lost everything but they mortgaged their homes – almost like, in their DNA, which
has been passed down from their father, is this sense of loyalty to employees. Back then, we
probably had maybe 200 employees. They mortgaged their homes to keep the business afloat to
keep employees employed. You just think, ‘Who does that?’ So, people that were around at that
time have this sense of, ‘Wow, what a great family to do that.’”
It also helps that A.H. Beard is a private firm that is 100 per cent family owned. This gives the firm
a certain amount of independence that allows for unconventional and risky business strategies.
As the Director says: “It makes you a bit nimbler, that you can make decisions faster as a private
business than a public listed corporation. Obviously, the benefits of public listing are the influx
of capital. If you need that, or an exit strategy (we’re not looking for an exit strategy). By being a
bit more diligent about the running of the business and making it more profitable, we’re able to
fund our own growth and be in control of our own destiny. It hasn’t been easy because it’s been
constant reinvestment.”

38 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

SNAPSHOT: Varley Group
Cutting back to save the business
Varley Group (Varley) is 133 years old. This longevity is central to the identity of the firm. Within
the plant site, there are streets named after the firm’s early owners. For the 125th anniversary a
historian was commissioned to write a book about Varley’s past and present.
The Managing Director points out how this longevity affects the culture of the business: “Everybody
who works here is tuned automatically to think about the longer term … you just ask staff, I guess
I’d be surprised if none of them talk about 50 years or another 100 years in the business.”
However, longevity is not guaranteed.
In the early 2000s the company’s returns were plummeting and it faced closure. The Managing
Director, who had just started in the role at the time, recalls that his first task “was about saving the
business and that was the first primary goal, to save the business rather than let it die, which was
the most likely event if no action was going to be taken. The bank had moved in administrators.”
The new Managing Director was forced to make hard decisions about consolidating operations to
save money: “To me it was black and white decision making; do this or if we don’t do it we’re gone.
It was like that for certainly 12 months, maybe even two years.”
The sweeping program took some time to work: “that took a big chunk of overheads out of it. Then
we started to refocus the business on the key areas we saw as the growth ones. But, the growth
ones at the time were very much about what we can make money out of this year, next year and
the year after because it was very much survival thinking and to survive you had to be generating
profitable business” (Managing Director).
At this point funds were scarce and couldn’t be accessed from mainstream sources. The Managing
Director remembers this with some frustration “You didn’t have the luxury when you wanted to
plan for the future and go, this is the market we should be in, because we couldn’t fund any of that.
Everything was very short term, very much, as I say, survival, about making sure that everything we
were pushing into was going to win us work the next day and the next day after.”
Varley emerged from this crisis period as a very different company. By tightening their belts and
cutting costs they survived and were able to ride out the subsequent GFC.
Varley’s survival largely hinged on it being a private firm with a long history. The Managing Director
points to some of the differences that this makes. One is the opportunity to take risks without fear
of being sacked: “We’ve had a few failures that we’ve gambled with. We’ve come back, if it was a
public listed company I probably would have lost my job over a couple of gambles that we took that
were the wrong ones.” Nevertheless, risk-taking is tempered by respect for the firm and its history.
The Managing Director describes this as being, at times, “a burden” for he does not “want to be the
one who does something wrong that sends it down. So it keeps you a little conservative then in
some of your risk taking.”
Another point of difference is the relative freedom to make decisions without the pressure of
shareholders demanding short term returns. The Managing Director explains: “I am not worried
about what my share price is reading at the moment. I’m not worried about what some analyst is
predicting is going to happen to us in the future. I’m not being told by other people out there that
our overheard ratio is too heavy for this or I’m not returning enough or I shouldn’t be investing in
this or that. That allows us a great scope of freedom.”
Another difference is the respect for corporate knowledge and a reluctance to implement staff changes
when things fail. The Managing Director notes: “We’re not as ruthless in the aspect too of where public
companies will just put a knife through their management team or through people very quickly,
we’re much more considered in doing that, in what we’re throwing out in corporate knowledge.”
The sheer determination to remain viable and continue more than a century long history of
producing quality products is what led to a wholesale overhaul of the company that is today
reflected in Varley’s expanded and multi-local operations, its lean production approach and its
targeted focus on quality and customer satisfaction in niche markets.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 39

 SNAPSHOT: Norco
Resisting demutualisation
Over the past 30 years or so, Norco has had to weather an environment of corporate takeovers,
pressures to demutualise and an Australian market that has become increasingly globalised.
Norco has met these challenges and stayed viable by holding firm to its identity as a co-operative
of almost 125 years standing that has long looked after its members and plans on doing so
into the future.
Australia’s other longstanding dairy producer co-operatives have been sold or demutualised.
Some, such as the Murray Goulburn Dairy Co-operative Ltd (now part of Saputo Dairy Australia)
started to operate less like a co-operative and more like a conventional company.
At times, these changes in the industry have led to conflict between the farmer-member-owners
and the managers of the business. For example, in the lead up to the deregulation of the dairy
industry in the early 2000s, Norco’s CEO and half of the Board were tempted by the prospect of
demutualisation. According to the current Chairman, the then Chairman “wasn’t overly co-op
minded.” For him “it was more about, how do we actually get this beast to a listing and actually
get rid out of all the farmer directors and move away from the cultural issues of the co-operative?”
But others wanted to stay true to the ethos of cooperation that was both the foundation and the
strength of the firm. As well, the farmer-member-owners were clear about their motivations for
farming. The Research and Development Officer reflects: “so whereas I thought the only thing that
drives farmers is say profit, well it’s not, it’s lifestyle, it’s the family, it’s workload. There’s so many
other things, it’s ethics.”
Norco has had to navigate a pathway through an increasingly globalised marketplace. Under the
guidance of the current Chairman, Norco strategically entered into partnerships with the largest
industry players on the planet to keep afloat. This meant working with the multi-national milk
marketer Parmalat, and then Fonterra, the NZ dairy multinational that is a co-operative in name
only. The expectation was that they would be absorbed. But in both cases Norco was able, at a
later date, to strategically and lucratively withdraw. The current Chairman characterises the current
context in the following way: “Globalisation has served its purpose and made us all aware that we
need to change and move forward, but it doesn’t mean that we need to abandon our own.”
One of the ways that Norco has looked after its farmer-member-owners has been strategic
investment in growing Norco’s ice-cream manufacturing factory in Lismore so that it operates all
year and smooths out the seasonal fluctuations in milk production.
Today, Norco has over $600 million in sales per annum and pays its members a highly competitive
milk price. In Australia’s globally competitive and volatile food processing industry, Norco has
stayed true to co-operative values and sought to safeguard the long-term interests of members,
employees and the communities in which it operates. The Co-operative Secretary puts it this way:
“Governance and decision making is very much always with the interests of the members at heart.
That’s totally contrary to an international corporate who’s a processor, a milk processor. They’re
not particularly worried about their producers. They’re particularly worried about their bottom line
and their shareholders, investors.”

40 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

3.3 Thoughtful Growth
That ‘growth is good’ is another of the business as usual tenets that
is undergoing significant scrutiny. Economic growth can no longer be
advocated without some thought to the consequences for people and the
planet. Yet the jobs and growth mantra continues to be mouthed without
any scrutiny as to what kinds of jobs and what kind of growth.
Interface’s Managing Director, Australia and New Zealand pinpointed the
business as usual approach to growth: “In a public company I think there’s
always tremendous pressure for growth, that’s what Wall Street wants to
see, growth in the business, it underpins growth in the share price.”
For the manufacturers in this study, growth is not something that they
shy away from. Indeed, it is by growing that they can achieve their
business purpose. Growth keeps staff engaged and motivated. It also
creates the opportunity for making decisions about pathways forward. But
growth for growth’s sake is not the focus; instead, it is thoughtful growth.
This section highlights the different kinds of growth that feature in the
firms in this study, and unpacks the practices that come with thoughtful
growth, as follows.
1. Growth that serves multiple stakeholders.
2. Responding to the challenges that can come with growth by focusing
on the firm’s mission and core strength.

This section demonstrates these practices with Insights from

manufacturers about how growth can serve multiple stakeholders. It
then provides Snapshots of how manufacturers have negotiated the
challenges that growth can bring by holding onto their mission (Soft
Landing) and their core strengths (Sebel Furniture).
The section concludes with a Snapshot that takes a more speculative
look at some future challenges and what this might mean for thoughtful
growth. This Snapshot features the three producer co-operatives in
Northern NSW (NCMC, Norco and OzGroup).

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 41

 INSIGHTS:
Growth that serves multiple stakeholders
Growth to challenge staff Profitable growth is one of our driving forces, if other people are
growing then you are going backwards by comparison ... Don’t just
grow for growing’s sake. Do it profitably to ensure the business grows
and expands. I think if staff see that the business is plateaued they
get bored and especially if they’ve got talent, they will look for a bigger
challenge. You’ve got to keep creating challenges to keep motivation and
engagement high.
Director, A.H. Beard

It’s rewarding to see the company making money and growing and that
there is a future. We’re always trying to stretch the envelope, to do more
than what we’ve been doing, so we can grow the business. The vision
that I share with the Managing Director is seeing Varley becoming an
Australian prime contractor. Most prime contractors in Defence are
foreign, or have foreign ownership.
General Manager, Defence and Aerospace, Varley Group

The challenges are to me, people often talk about there’s capital
or restrained growth and to me it’s management talent, keeping
management talent and management buy-in. Buy-in just doesn’t come
from just giving them shares or more money or that. Buy-in has really
got to come from passion. That’s part of it, that’s the hard thing is
still finding people, finding the right people who are passionate about
wanting to do a good job ... So here I’ve always been very mindful of
making sure that people can see the effect of their effort in the business.
So that’s part of keeping people engaged and interested and wanting to
keep driving the business and giving them, the managers, that freedom
to say ‘This is what I think we should be doing in the future, this is what
I’d like to do.’ So you’re keeping them engaged and always challenged.
Managing Director, Varley Group

Growth to deepen [Vinyl tiles have] some common raw materials with our backing and
importantly we’ll be able to put it into our re-entry reverse supply chain
sustainability and recycle those materials. It makes sense on a business level in
terms of achieving growth but it also makes sense from a sustainability
perspective because it can be part of our supply chain.
Managing Director, Australia and New Zealand, Interface

We have to be able to grow our business, be a more efficient business

to make sure that we are sustainable in manufacturing. And that’s what
we’re continuing to do right now, looking at waste, looking at energy.
‘How do we make sure that we are sustainable going into the future?’
Manager, Ice Cream Factory, Norco

42 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

We’ve had a long experience with our bank and we said, ‘Look we thought Growth to extend
we might buy this mattress recycling business.’ We explained the
turnover and some three years’ history. ‘We reckon we could grow it.’ Our social impact
relationship manager came back and he said, ‘They’ve been doing their
research and this charity, social enterprise, stuff you’re in, it’s a rapidly
growing thing isn’t it?’ He said, ‘This waste industry wow, it’s growing 21
per cent a year. You guys are in both of these industries.’ … So we got the
finance and we did the deal ... within 12 months we doubled the turnover
from $3.5 million to $7 million.
Former Executive Officer, Community Resources Ltd,
(Soft Landing’s parent body)

We’re about creating social impact either with young people around
employment or digital inclusion … But we’re always going to be limited
by our size. So [we’re asking] what we can do, what we can manage,
how many people we can influence, how many people get trained here
or even get a job here. We’ve been talking strategically, how else do we
grow that social impact from 100, 1000, whatever it is, to greater … this is
why understanding what we do and what we do well and what are the key
success factors of that is important … and then for us to be able to go to
social enterprises and say ‘Look, this is what we’re doing’ and share that
learning. ‘Here are our network of customers that you might be aligned to.’
CEO, WorkVentures

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 43

 SNAPSHOT: Soft Landing
Growing and remaining ethical
Waste management is a growing public concern and with increased regulation of what goes into
landfill, a new market for waste disposal and recycling has grown rapidly.
As a result, the waste industry has elements that one Soft Landing staff member describes as “cut
throat.” When it comes to mattresses, another staff member says, “There’s guys out there that are
picking mattresses up on the kerbside, pulling the old cover off, putting a new cover on, sewing
it up and selling it as a new bed.” Soft Landing strives for the best environmental outcomes in
accordance with the waste hierarchy, including options for reuse. However, it does not refurbish
mattresses at this time as it is not satisfied the risks to people’s health can be managed.
How then does a business that is governed by a social and environmental mission navigate a
growing and, at times, unscrupulous industry?
The temptation is to be influenced by the conduct of other firms. The former National Manager
recalls: “I could tell you 100 different decision points where we could have gone this way or could
have done a dodgy there or could have cut a corner there and we’ve just said ‘No, this is the path.’
… Although we’d have made a truckload more money and less headaches at every step of the way.
We said, ‘We’re not getting involved in what we see as unethical behaviour.’ We’ve maintained that
the whole way through … I guess it’s those key forks in the road where you could go this way or that
way. Had we done it and maybe made a lot of money and maybe made some more jobs, but we
would totally undermine our credibility.”
The General Manager states, “We have to ensure the business remains commercially viable. It’s the fuel
that keeps our car going down the road. But it’s not why we’re in this; it’s not our destination. It allows
us to create employment opportunities and outcomes for the environment. It allows us to consistently
strive to be a better place to work and to improve our work for better environmental outcomes. We
navigate towards this goal in a commercial context that throws up constant challenges.”
This commitment to acting ethically and maintaining credibility has shaped how Soft Landing has
operated in relation to other firms and its growth trajectory.
Initially, Soft Landing was part of Mission Australia. However, as Soft Landing’s growth potential
became more evident it also highlighted that the business was moving away from Mission
Australia’s core activity. Through a series of negotiations, Soft Landing was purchased in 2015 by
Community Resources Ltd (based in Tuncurry, NSW), and it is now part of Community Resources’
family of social enterprises, which currently includes four with an environmental focus.
With the backing of Community Resources, Soft Landing began expanding across Australia.
However, a private company based in Melbourne (with 15 locations worldwide) had also identified
the commercial potential and was moving into mattress disassembly in the two main markets of
Sydney and Melbourne using an automated process.
The response of Soft Landing to its potential competitor in Sydney and Melbourne was to partner.
Within months of Community Resources acquiring Soft Landing, they were in discussions with the
potential competitor. An agreement was reached for working in partnership, including co-locating
the manual and automatic disassembling operations in Sydney and Melbourne.

44 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

Community Resources then reached agreement to acquire the mattress operations of the private
company. This is perhaps the first time in Australia that a not-for-profit social enterprise has
bought out the operations of a for-profit company.
Now, Soft Landing has to decide how to balance the incorporation of automation into the business
operations of a social enterprise that has employment generation as one of its prime purposes.
The former National Manager reflects: “I think the business pressures that we have in social
enterprise are probably common to all business. You’ve got supply chain issues, you’ve got just-
in-time logistic problems, you’ve got staff issues, budgets. So they’re all similar. I guess with social
enterprise you’ve got these other layers of, ‘To what extent can we move out of our sweet spot of
our mission, how far can we push our labour directive to automation.’ Well, we’ve found that we
could only go so far and if we went any further it wasn’t good.”
Currently, mattress disassembly in Sydney is fully manual, and this has meant employing an
additional twenty staff to keep up with the demand of taking apart 700 mattresses each day. The
General Manager puts this decision in the context of the enterprise’s mission: “We’re in a good
position now with manual processing. It’s where the business is most comfortable. We’re doing
what we say we do. So, that’s the big thing.”

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 45

 SNAPSHOT: Sebel Furniture
Refocusing growth on what is core
With an increasingly open global economy, the Australian manufacturing sector has encountered
rationalisation, restructuring and takeovers.
Sebel Furniture (Sebel) has first-hand experience of these changes since its beginnings in the
1950s as an Australian-owned company that developed the iconic seating product—the ubiquitous
Postura® chairs.
Each round of rationalisation, restructuring and corporate takeover since the founder sold the
company in the early 1980s has slightly shifted the business focus. This has had implications for
Sebel’s sense of identity.
In the period leading up to Sebel’s ownership change in 2017, the company had been trying to
operate in a way that did not match what the General Manager describes as Sebel’s “DNA.” He
goes on to say, “It was like an identity crisis for us … We were probably a little confused, because
we’re trying to be a solutions company when actually we were clearly a product company.”
The General Manager explains that being a solutions company meant working more closely with
the customers to develop various design options for a workspace: “Let’s sit with you. Let’s develop
16 alternatives for this workspace. Let’s now try to put different products. We’ve got this and
we’ve got that.”
In contrast, being a product company matched Sebel’s identity, as the General Manager clarifies:
“The Sebel identity is about what is the thing that represents Sebel, it’s those iconic products and
the durability of those products. And these great products make great spaces.”
The ownership change was an opportunity for Sebel to take stock and make the decision to return
to the product focus. The General Manager explains, “We are product engineers. We have the best
engineered products – designed and manufactured in Australia and made for the world. We have
those products, so we want now to go back to that to be the basis for our growth.”
Since the company was acquired by the New Zealand-based Resero Group Ltd, Sebel has been
able to focus its efforts. The General Manager continues: “The last few months we have focused on
what made us great, which is the iconic products. We have the world’s best student chair, Postura®.
We have iconic products like our Performance Edge™ desk. We have a Twist’n’Lock™ desking system
we developed recently last year. We have the fixed seating (mass seating) products. We are going
back to those products in a big way and saying, ‘Let’s not spread ourselves too wide and then try to
chase so many things. Let’s … go back to those strengths that made us great in the first place.’”
This return to Sebel’s strengths affirms what is core to the company. The General Manager
finishes: “What’s the one thing which any customer would think of when he’s talking Sebel? It’s the
durability of our products. Oh my God, they last a lifetime!”

46 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

SNAPSHOT: NCMC, Norco and OzGroup
Thoughtful growth in a climate changing world
The unprecedented fires in Northern New South Wales and Southern Queensland in the spring of
2019 have heightened concerns about climate change.
The three producer co-operatives involved in this study have farmer-member-owners who have
been directly affected by the fires and the underpinning drought conditions.
This is pertinent to this study about manufacturing for two reasons.
First, all firms will have to contend with the direct and indirect effects of climate change at some
point. For the moment, it is those firms in rural and regional areas, especially those involved in
agriculture, that are on the frontline. But the effects are coming for all.
Second, Australian manufacturing is intertwined with Australian agriculture. The food subsector is
by far the largest employer of manufacturing workers in Australia with almost a quarter of a million
workers. This is well ahead of the next largest subsector, fabricated metal products, which employs
76,000 workers.32 Australia once rode on the sheep’s back, but today it seems that a good chunk of
Australian manufacturing rides on the farmers’ backs.
How Australia’s agriculturally-based manufacturers contend with the climate crisis will be
instructive for all manufacturers as effects continue to take hold.
It is therefore useful to consider the experiences of the three producer co-operatives involved in
this study: NCMC, a meat processing and products manufacturer; Norco, a dairy processing and
products manufacturer; and OzGroup, a blueberry processing and related packaging manufacturer.
Until now, the three co-operatives have approached growth as a means of securing the livelihoods
of their farmer-member-owners, while also providing benefits for the communities in which they
are located (including through employment opportunities, and contributing to regional economic
vibrancy). This thoughtful approach to growth has served the farmer-member-owners and their
communities well.
What are the implications of the climate crisis for thoughtful growth?
In their most recent report, the Australian Farm Institute (AFI) has assembled current research
on the potential impacts of climate change on agriculture in Australia and recommended ways of
responding through a three-pronged approach based on:
1. Strong research, development and extension
2. Adoption of clean energy
3. A focus on the capture and storage of carbon.33

The AFI report documents various strategies including on-farm adaptation and mitigation (for
example, smaller herd sizes to accommodate the land’s reduced carrying capacity; and changing
animal breeds and the timing of planting to suit a different climate regime). In some cases, the
strategy is relocation (as is happening in viticulture with moves to Tasmania) or even industry exit.

CONTINUED ON NEXT PAGE >

32
Advanced Manufacturing Growth Centre Ltd 2017, p. 11.
33
McRobert et al. 2019.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 47

 As well, agricultural industry bodies are looking to the future and developing various road maps.
For example, Meat and Livestock Australia are pushing for a carbon neutral red meat industry by
2030 through strategies such as using renewable energy sources and increasing vegetation cover
to offset methane emissions.
Such initiatives do not stop at the farmgate; there are also implications for food manufacturers.
The three food manufacturers in this research are also looking to the future and ways of
responding to climate change and other environmental issues.
NCMC’s target is to be, in the words of the CEO, “absolutely sustainable.” He says, “We have a moral
obligation to ourselves and our children to make sure it’s right.” For example, NCMC is reusing its
wastewater to help grow and irrigate fodder crops on land that it owns to provide feed for livestock.
Along with this, NCMC is developing, supporting and innovating ways to reduce water and energy
use, and greenhouse gas emissions.
Norco is also looking at sustainability initiatives and is well-aware that “we need to be doing the
right thing,” as described by the Operations Manager, Foods. Acting on this, Norco is investing in
a new wastewater plant that will generate sludge that can be used in composting. The plastics
division (which produces milk bottles) is also reducing its waste and increasing its plastics
recycling (both on-site, and by selling to recyclers off-site).
OzGroup are introducing various initiatives. They have installed a 100kW system on the main roof,
with the aim of being fully solar powered; they are trialling compostable packaging for berries. Here
the focus is on “being a good corporate citizen” as the Operations Manager puts it. In the case of
OzGroup, the farmers are relatively young compared with farmers in other agricultural subsectors,
with an average age of around 35 years. As the Operations Manager explains, this means that
“they’re not tied up in the old ways.”
The attitude of these co-operatives to do the right thing by being good corporate citizens provides
a firm foundation on which to further respond to climate change. This attitude will also be
important as the effects of climate change deepen, and responses are developed.
Also important will be the respect and loyalty that these co-operatives have built in their
communities over the years. This puts them in a strong position to bring people together around a
shared concern.
As manufacturers, these co-operatives display the problem-solving capacity that characterises all
the firms in this study. This capacity is usually directed towards addressing technical issues and
financial matters. There is no doubt that the co-operatives in this study have formidable aptitude,
having been operating for a combined two centuries plus! The challenges of the 21st century will
provide another testing ground for this capacity.
Finally, there is the strength of the cooperation of co-operatives. All are members of the Northern
Rivers Cooperative Alliance (along with eight other co-operatives). This network is important
for their existing collaborations for regional development, and will become more so for sharing
insights into strategies for rethinking what growth might mean in a climate-changed world.

48 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

4. More Just Manufacturing
A just manufacturing sector provides decent jobs. It also makes a
contribution to an inclusive economy by offering opportunities for people
from diverse backgrounds to participate.
Decent jobs and an inclusive economy are created and maintained by
businesses that understand the role that employment plays in contributing
to the wellbeing of workers and a cohesive society. In this research,
manufacturers reflected this understanding through three commitments:
1. Technological change and decent jobs
2. Workers as valued contributors
3. Factories as sites of inclusion.

In this research, the evidence for these commitments is found in a range

of practices, which are highlighted in this section.

Beyond Business as Usual

A 21 Century Culture of Manufacturing in Australia
st

Building a just manufacturing sector

Commitments

4.1 Technological change and decent jobs

+ Practices
4.2 Workers as valued contributors

4.3 Factories as sites of inclusion

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 49

 4.1 Technological Change and Decent Jobs
There is a widespread belief that the technological developments of the
21st century such as automation will inevitably displace jobs leading to
high levels of unemployment and an entrenched underclass.
The manufacturers in this research introduce and use technology,
including automation, to increase efficiency and output. They also find
ways for technology to align with decent jobs and even increase the
number of decent jobs.
The commitment to technological change and decent jobs is reflected in
the following practices.
1. Technologies are introduced to reduce physical stress. Here there is a
focus on using technology to reduce the physical stress of repetitive
jobs and ensure safe working conditions.
2. Technologies are introduced with training and support. This means
that workers can keep up with new developments and take on the
increased responsibilities that can come with more technologically
advanced manufacturing.
3. In some contexts, technologies result in more decision-making being
devolved to the shopfloor and increased worker participation in the
design of production processes.
4. Technologies are introduced with the option of redeploying staff
whose roles become redundant. This can mean offering opportunities
for staff to move into other areas of the factory, or even to other
production sites.
5. When these practices are in place, what results are expanded
employment opportunities for workers, in terms of the number of jobs
and the quality of jobs.

This section demonstrates these practices with a Snapshot of how one

manufacturer (Norco) has integrated automation into their factories, and
a Snapshot of overseas experiences of automation.

50 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

SNAPSHOT: Norco
Introducing automation on the shopfloor
Norco’s production is highly automated with processing lines for milk bottling and ice cream
making. Automation increases efficiency and helps to cut production costs, but at Norco the
human impacts of automation are considered when making decisions about where and how to
introduce and use technologies. The Operations Manager, Foods describes the introduction of
automation as “a fine line” and he explains: “It is a fine line because how far do you automate and
you put people out of work. People still need to make an income to be able to buy your products.”
One way that Norco addresses this concern is to introduce automation to reduce physical stress
on employees, as the Operations Manager, Foods explains: “What we look at first obviously is
we look at our OH&S as far as repetitive tasks … there are several of those sorts of tasks that are
throughout all three manufacturing sites. So we look at that first and ‘Can we automate that?’
That’s how we start making our decisions.”
These new technologies are introduced with training and support, and with worker participation
in the design of production processes. For example, managers, supervisors and operators jointly
devise procedures and ‘decision trees’.
One effect is that some decision-making is being devolved to the operators on the shopfloor who
now take on increased responsibilities. As the Operations Manager, Foods describes: “If we’ve got
machines breaking down all the time or wasting a lot of product, then stop the machine. You can
make that call. We understand.” This manager goes on to say that now the approach of managers
and supervisors toward operators is one of “You’re the one who knows the machine, you run it …
it’s your machine. You take ownership.”
A second effect is that the quality of the jobs has changed and there is now greater cooperation
between staff, as one of the Stick Line Operators explains: “When those machines are going wrong
you really need to be on your toes and know that that person has got that covered … you get to
know your partners, you get to know routines and stuff like that … there’s a lot more trust.” One of
the managers describes this as a transition from “button pushers” to operators who have an eye to
the whole process, not just their piece.
In reflecting on the introduction of automation one of the operators describes how, from the
perspective of the shopfloor, the changes are providing expanded employment opportunities in
terms of both job numbers and job quality: “This big scare of automating, everything is not as scary
as it seems. At first, I was the same, it’s like bam, but … this is going to create more jobs, we’re
going to need more people, but people with skills … you can’t just sit there and put an ice cream in a
box anymore. You’re going to have to learn just a little bit, you don’t have to be a super star but just
learn a little bit, and your job will always be there … you’re going to have to actually think, ‘Oh, I’ve
got to run this machine today.’”
When automation does displace workers, Norco attempts to redeploy staff, as the Operations
Manager, Foods explains: “We look at can we redeploy those employees elsewhere within Norco?
Because that’s our obligation. We’ll offer, if there’s jobs available somewhere else, ‘Are you willing
to engage in that area?’ … We try to look after them as much as possible where we can.”
The net effect of automation is that Norco has grown and there have been no redundancies, as one
manager explains: “Before we started putting automation in, we employed around about 160 down
in ice cream. Now we’re employing close on 250, but we’ve more than tripled our throughput. So we
have become more efficient.” The effect is crucial as this enables Norco to put resources into its
environmental sustainability agenda. To reiterate an earlier quote from one of Norco’s Managers:
“We have to be able to grow our business, be a more efficient business to make sure that we are
sustainable in manufacturing. And that’s what we’re continuing to do right now, looking at waste,
looking at energy. ‘How do we make sure that we are sustainable going into the future?’”
Thus Norco shows how automation provides a win-win-win—a more efficient business, a more just
workplace and a more sustainable form of manufacturing.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 51

 SNAPSHOT:
Automation and jobs
There are widespread concerns that new technologies such as automation will lead to job losses.
In Australia, a 2015 report by CEDA (Committee for Economic Development of Australia) estimated
a high probability that up to 40 per cent of jobs “could be replaced by computers within a decade
or two.”34 Similarly, a 2017 paper by Frey and Osborne estimated that 47 per cent of employment in
the US is in the high risk category of jobs that are expected to be automated over the next decade
or two.35 However, a report to the European Parliament highlighted that, in the past, innovation has
had a job-creating effect and that predictions have tended to under-estimate the number of jobs that
might be created because there is insufficient knowledge and imagination about jobs of the future.36
In reconciling these two perspectives, it is instructive to look to research on the impacts of
technological developments on manufacturing jobs. Germany is considered by many to have
handled technology most successfully as it has maintained a strong and technologically advanced
manufacturing sector that accounts for 20 per cent of employment, generates 22 per cent of GDP
and contributes 82 per cent of Germany’s goods exports.37 A study, published in 2011, of a twenty-
year data set on innovation and employment in more than 1,000 German manufacturing firms,
found that innovation had a positive effect on employment. As well, the effect was stronger for
process innovation (i.e. new processes for manufacturing goods) than for product innovation
(i.e. new products).38
The data set used in this study was for the period 1982 to 2002 and there seem to be no
comparable studies using more recent data on manufacturing in Germany. However, the findings
are consistent with more recent studies on innovation and employment across a range of sectors,
including manufacturing. For example, a 2019 Deloitte Report asked senior-level managers from
760 companies in 16 European countries what impact they expected new digital technologies
(including robotic process automation and AI) would have on their labour force.39 The report found
that 41 per cent expected their full-time labour force to increase, 29 per cent expected it would stay
the same, and only 23 per cent expected it would decrease. Furthermore, 54 per cent of managers
expected that new digital technologies would go hand-in-hand with investment in staff training.
It is also useful to look at how manufacturers are introducing and using technology ‘on the
ground’. The experience of Norco, discussed above, shows how technologies can be carefully
integrated into operations in a way that takes into account the human factor. Norco’s approach
is similar to the overseas example of Pocheco, the French envelope making company.40 Pocheco
has approached automation as a way to reduce risks and stresses in the workplace, using new
machines to do tasks that have the highest burden on staff. When this labour-saving technology
displaces staff, they are retrained in quality control and this has resulted in a 30 per cent reduction
in the number of products that do not conform to client’s specifications.
The shift to a focus on quality through the introduction of more advanced machinery and the
retraining of staff was also noted by Interface. The Vice President, Operations Asia Pacific says:
“I know we’re doing a good job when I see you sitting on a chair doing nothing … It means that the
machine is operating properly … So they’re monitoring the machine, and they are there so that if it
stops, it’s got all sorts of alarms and triggers when something goes wrong. It’s about being able to
identify what is a problem, solve it quickly and then restart the machine. Make sure the quality is
right, fixing quality issues.”

34
CEDA 2015, p. 8.
35
Frey et al. 2017.
36
Dachs 2018.
37
Parilla et al. 2015.
38
Lachenmaier & Rottmann2011.
39
Deloitte 2019.
40
The information on Pocheco comes from a factory visit in 2017 and a book on Pocheco by
the company’s President (see Druon 2015) (see also http://www.pocheco.com/?lang=en).

52 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

4.2 Workers as Valued Contributors
Recent reports in Australia have revealed the extent to which some
businesses provide poor working conditions for their staff, including
through the practice of underpaying staff.41
The manufacturers in this research recognise their workers as valued
contributors. Rather than entrenching an oppositional approach or
exploiting workers, every opportunity is taken to acknowledge and reward
their contribution, and to ensure that they have decent jobs and the
potential for long-term employment in manufacturing.
The commitment to workers as valued contributors is reflected in the
following practices.
1. Workers are always paid at or above award wages.
2. There are opportunities for advancement and employees are
encouraged and supported to take these opportunities.
3. Part-time and casual staff are treated with care, and where possible
firms attempt to transition part-time and casual staff to full-time
and permanent roles.
4. There is transparent communication between managers and workers.
This is important as it engages workers in the ‘big picture’ by keeping
them informed about how the business is progressing and what future
changes and developments can be expected. This is also important for
part-time and casual staff as it helps them plan for the future.
5. The skills and knowledge of workers are valued, and their input
into production processes is sought and acted on. As identified in
Section 4.1, this input can be especially important when technological
changes are introduced.

This section includes Insights into how the manufacturers in this study
are demonstrating their commitment to workers as valued contributors.
There is also a Snapshot of one critical incident in which one
manufacturer (Interface) demonstrated the depth of their commitment to
their workforce.

41
For example, see Ryan & Chau 2019.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 53

 INSIGHTS:
Workers as valued contributors
Paying at or above We always make sure that we pay above award ... it ensures a high
calibre of job candidates, so it’s a value add for the business.
award wages
Operations Manager, A.H. Beard

The New South Wales branch of the AMIEU [Australasian Meat Industry
Employees Union] have rated the abattoirs across the state. We were very
highly rated by the AMIEU in regards to pay and conditions, friendliness
of the management and a positive culture and environment to work in.
CEO, NCMC

We have a challenge, ‘How do I compete with all of these forces that I

have in manufacturing.’ … I don’t want to hire and fire employees. I don’t
want to pay them a small wage or just above the minimum wage. We
don’t compromise on safety; we haven’t had an injury for 1350 days …
So we want to keep all this. How do we make sure that we don’t dilute
anything because of the cost pressures in the business, in the market?
That’s a challenge.
General Manager, Sebel Furniture

Opportunities for I’ve been here twenty years, since a youngster out of school. I started off
on the factory floor where I bagged the mattresses by hand ... Following
advancement this I worked in the quilting section where I became a supervisor.
From there I became a production manager and eventually the product
development manager, which is my current role ... I wouldn’t change a
thing here, I’d always work for A.H. Beard. It goes back to the culture and
the opportunities I was given. I wasn’t given a lot of opportunities in life,
but this place gave me a lot of opportunities to change.
Product Development Manager, A.H. Beard

What we’re looking for when we hire is someone with the potential to be
the next leader or operator. That’s what we’re looking for is that
progression because we’d rather promote within the business, than
from outside the business.
Operations Manager, Foods, Norco

We give people a second chance … you’ve got a guy say who’s a great
engineer, a great tradesman, who’s really outperforming and outshining
and … you promote him up to a manager and suddenly they’re no good
because they can’t handle people or they’re not a manager. We don’t just
sack them and get rid of them because they’re no good. We preserve
the reason why we thought they were good enough in the first place and
generally drop them back into being that engineer or that tradesman
again … I’m tolerant of failure the first time around … we learn from it and
treat it as a positive for the business rather than as a negative.
Managing Director, Varley Group

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Our retention of staff is huge. You can walk out there and there’ll be
30 people with 30 years, 25 years with us … We all go to work to make
money to provide money to our family. Because we want to give them the
best we can, right? That’s a no-brainer … But there are some people that
go to work, and I was in a job like this way back where you sit there and
you watch that clock go tick, tick. To go to work, and feel not only you’re
valued and doing something of value. But you actually help someone
and you help someone’s life change. How do you put a price on that?
Especially when you know what it’s like to be down like that.
General Manager, Operations, WorkVentures

Most of the people were casual, like four years ago, but recently we’ve Transitioning away
converted some of the positions to full-time positions … This year we’ve
made 21 people full time. We need more a skilled labour force now … I
from part-time and
can’t train people every year so we are holding onto the core people. So casual work
we offered them positions this year.
Operations Manager, OzGroup

We’re a big company operating small … I can walk onto a floor and people
will go, ‘Hey, how are you?’ If I see a new face I’m, ‘How are you going?
What are you doing?’ ‘I’m only a casual.’ ‘Well keep going. One day you
won’t be.’
General Manager, Food Operations, Norco

My ideal is to have that plant running efficiently all year round with
a constant production line so that you have your 200 people and
they’re all permanent.
General Manager, Food Operations, Norco

[Recruiting casuals ourselves] gave us the ability to try and identify

people that had potential to become full time – move into full-time
roles eventually and then into leading hand type roles, supervisory
type roles as well.
Factory Manager, Labrador, Norco

A lot of our full-time roles are people that started off as casuals and
we’ve made sure that we give them enough hours that they’ll hang
around and won’t go away.
Factory Manager, Labrador, Norco

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 55

 Transparent I address the employees probably once every six weeks. It’s five minutes
communication between in our company time in front of them. It’s a great opportunity to let the
employees know where the business is at, dismiss any rumours and
managers and workers give them an idea of future activities. I’ve congratulated them on their
achievements at work and the good things that have happened. The first
time I congratulated them they said, ‘That’s the first time anyone ever
actually thanked them.’ Open and transparent communication is our focus.
CEO, NCMC

A great thing that they introduced, they called State of the Nation talk.
What they do is every couple of months, everyone – the whole lot – go
down and we have a meeting and the managers tell a bit of a spiel about
what’s coming up. It was the best thing they’ve ever done, because it
stops negativity for starters. It stops the rumours.
Defence Supervisor, Varley Group

We put in our EBA that the company actually talk to us and tell us what’s
going on so you don’t get to the point where you hear the Chinese
whispers, ‘Oh, there’s guys getting sacked or the company’s not going
good.’ We used to do it probably once a year. Now we make them do it
three times a year … it opens it up, and they can see that it’s not us and
them mentality. Also, when you’ve got people who haven’t got permanent
jobs, but they’ve got families and so on. ‘Do I go and buy a second-hand
car or a new car? Or am I going to get laid off in two months? What’s our
scope of work coming up?’
Boilermaker, Varley Group

The State of the Nation meeting has gone from being a thing that we kind
of do that’s a bit odd, to now this is just part of our culture.
HR Manager, Varley Group

Worker input into I ran five workshops with all the operators and we identified every waste
stream … Then we identified ways of reducing or recycling or eliminating
production processes completely … They designed the zero waste management system …
They insisted that there should be one person collecting that waste and
measuring that waste because if it’s not then it won’t get separated
properly. They were insisting that if it was mixed up that whoever mixed it
up would get hammered. They basically said, ‘You guys, if we’re serious
about this then we’ve got to be strict about it because I’m not going to
waste my time separating waste if Joe Bloggs is throwing cans into my
bucket.’ So that was a very good exercise.
Then when we were starting to build the factory, I got them involved in
trying to estimate the quantities of waste. For instance, we stripped the
plastic off four or five rolls of glass fibre and weighed that and then we
worked out how many rolls we were going to use in a year, that would then
tell us how much plastic we’re going to produce every month, how many
bales we produce and then they could start getting a feel for the quantities.
Sustainability and Lean Manager, Interface

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The whole thing of participation came through Lean.42 The Lean process
said okay we need to change how we operate with our people. They’re
a resource. They’re not a cost. If they’re a resource, they have to be
treated differently. When we started the journey, I had guys in the factory
that walk up to me and say, ‘You’re actually going to listen to us?’ I said,
‘Yeah, we’re going to listen to you, because you know what the job is.’
They know how to fix things. I have this belief that people don’t come to
work to be a problem to Sebel, they come to be a contributor to Sebel so
we have to help them figure out how they can contribute ...
The whole Lean journey, it has provided significant benefit to us by
the flexibility of our workforce and they’ve journeyed with us. They’ve
changed some of the dye changing times. They’ve come up with
sequences for colour. Because if you think about it you can’t go from
black to white. You’ve got to go through a staged process to get the
white purely because you’ve got to get the colour out of the system.
They’ve come up with those things. They’ve come up with. ‘How do I do
the dye changes faster?’ We used to do eight hours for a dye change,
now it’s down to four. And it can go down further.
Former CEO, Sebel Furniture

42
Lean is a manufacturing approach that
focuses on waste minimisation (including waste
in resources and materials, and waste in time).
Lean in Sebel Furniture is discussed in more
detail in Section 5.2.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 57

 SNAPSHOT: Interface
Valuing workers in a crisis
For one manufacturer, a critical incident provided an opportunity to demonstrate the depth of their
commitment to workers as valued contributors—not just as valued contributors to the firm but as
valued contributors to the community.
On a Friday evening in July 2012, a fire caused by a mechanical fault totally destroyed Interface’s
carpet manufacturing plant in Picton on the southern outskirts of Sydney. At this point, a realistic
option was to wait for a likely insurance payout, expand the two other manufacturing sites in the
Asian region (in Thailand and China), and pull out of production in Australia to remain only as an
importer of carpet tiles.
This did not happen.
On the Monday morning after the fire, the firm announced to the 180 staff that it would guarantee
the wages of all permanent employees for at least 12 months while the firm went through “a
process of discovery of exactly what we’re going to do” (Managing Director, Australia and New
Zealand). One of the senior executives described how when the announcement was made “We
didn’t know. We had an intention of building but we didn’t know whether we would rebuild or not”
(Vice President Operations, Asia-Pacific).
Once the firm decided to rebuild, staff were assured that they would have a continuing role in the
new factory. Meanwhile, staff were redeployed. Some were enrolled in helping design the new plant;
production workers were moved temporarily into warehousing and logistics, and customer service
(and gained a new appreciation of office-based roles); and others did community service projects
in and around Picton—all on full pay.
The Managing Director, Australia and New Zealand reflects on the community service projects:
“It was a huge opportunity to do something in the community. Some of our supervisors got
together and we organised – we went and spoke to the council, we spoke to some of the schools,
we spoke to the rural fire service. We did things like – our maintenance guys because they had no
plant to maintain they rebuilt some pumps and serviced the equipment at the rural fire service.
Some of our people helped the library re-catalogue books. We did some reading programs with
kids at Picton High School. Picton Landcare work ... The people who were supervisors in the plant
became supervisors of these activities.”
The decision to rebuild was certainly financial as it re-established an operation that was “not
only the company’s best market share but by far the most profitable” (Managing Director,
Australia and Zealand).
The decision reflected the ethos of the company to be “a heartbeat from the customer” (in the
words of the Vice President, Asia Pacific) so they could tailor their product for customers and do so
with short lead times.
The decision reflected a valuing of the workforce and their skills. This has had the effect of helping
to retain scarce skills in Australia “because carpet manufacturing or textile skills are very thin on
the ground in Australia these days” (Managing Director, Australia and Zealand).
An unexpected disaster is the kind of event that would push many firms toward a business as
usual response of taking the insurance payout and running. But in a firm such as Interface, where
the eye is on the long term, obstacles are opportunities to consolidate the firm’s mission. In this case,
the fire provided an opportunity to value the skills and contribution of workers.

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4.3 Factories as Sites of Inclusion
Since WWII, Australian manufacturing has been a crucial site of inclusion,
providing entry-level jobs to school leavers, migrants and those who
face barriers in the labour market. The manufacturers in this study
are continuing this tradition, but with a twenty-first century spin. The
Partnerships Manager from Soft Landing’s parent body (Community
Resources Ltd) puts it this way: “it’s giving people an opportunity
they didn’t have, and it gives them a leg up to move forward rather
than pigeon-holing them forever … that’s an important contribution to
reducing inequality.”
In a diverse society, an inclusive workplace offers an opportunity for
people from a range of backgrounds and with varied life experiences to
interact with each other, and in so doing a more cohesive society takes
shape. In reflecting on this aspect of her workplace, the CEO of The
Social Outfit highlights how an inclusive approach generates the benefits
of “integrating people, not necessarily the foreign – the refugee – with
the Aussie but also the foreign with the other foreign, right? How much
wealth is there in that and when we come up here on a busy day, we have
women sewing together, eating, laughing, and they’re all from different
cultures; and that has an enormous value as well.”
The commitment to factories as sites of inclusion is reflected in the
following practices.
1. There is a focus on inclusive recruitment, especially of people who
can face barriers in the labour market. This focus is underpinned by
tailored support and training appropriate for a diverse workforce.
2. There are partnerships between social enterprises and other types of
businesses. The social enterprises that specifically employ people who
face barriers in the labour market usually provide considerable training
and support for their employees as part of their approach, and they
have to find ways to cover these costs. Having long-term partnerships
with other types of businesses is one way to secure commercial
viability; at the same time these partnerships are a way that these other
businesses can enact their corporate social responsibilities.
3. Apprenticeships are crucial for providing manufacturers with skilled
workers and for also providing opportunities for young people. Some
of the manufacturers work closely with schools to develop pathways
into apprenticeships. There are concerns, though, that support for
apprenticeships is not as robust as it has been in the past.
4. Along with apprenticeships, there is on-the-job skills development
that occurs through more informal exposure such as cross-skilling
and intergenerational learning. Some firms run their own accreditation
programs to acknowledge this form of on-the-job learning.

This section provides Insights into the ways that manufacturers in this
study are acting on their commitment to factories as sites of inclusion.
This section includes a Snapshot about new technologies, inequality
and training.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 59

 INSIGHTS:
Factories as sites of inclusion
Inclusive recruitment One of the jobactive providers is specifically for people with disabilities.
Some of those people are on the spectrum or have significant anxiety
with appropriate disorders. We’ve had a number of other people, a couple, who have had
support and training fairly long stints in jail. Some are Indigenous. We didn’t go out going ‘Oh,
we want to increase our Indigenous work base’ or anything like that. But
it was about going ‘Do they fit the organisation?’
This project, the ambulance project, was really quite different because
typically the vast majority of people in our factories are tradespeople
and this one was a job where you could actually do really well without
tradespeople. You needed a proportion of them. So we had some time
to do a little bit of planning. I went out to the jobactive providers and we
actually got them in here. We showed them the prototyping and went
‘What do you reckon?’ And they went ‘Yeah, we think we can find you
people that can do that work.’ They had some time to start pre-screening
and they ran information sessions and they went very well targeting
people to refer to us.
I grew up in the Western suburbs of Sydney and I have a pretty strong
social justice spin. I’ve seen the delight and the loyalty that employers
get when they give someone that second chance.
HR Manager, Varley Group

The type of people that we want to work with, that’s people that have had
very chequered pasts or very disadvantaged upbringings. A lot of these
guys are not work-ready, they don’t have the work ethic that you would
expect to walk into most other businesses … Every single guy that works
here, has either done a qualification in waste management, that might be
a Certificate II or a Certificate III. If you’re going to come here and work
for me, you must be doing some kind of study as well. The girls in the
office have to be doing some training, so they’re doing business admin
training. It’s all about constantly learning. We put this kind of effort into
their education and training because a lot of them finished in Year 9 at
school. We tailor their training because we understand that a lot of them
don’t have a high level of literacy and numeracy skills. So it’s tailored to
their needs where they’re going to learn something out of it … We want to
hang onto those people that we’ve put a lot of training and time in for.
Former Manager, Soft Landing

We develop people, and we move people up, and we try and retain people
for as long as possible. From a business perspective that makes sense.
So, the business definitely needs people that know the job and can have
good tenure and low turnover of staff.
General Manager, Soft Landing

Social enterprise can play a great role in supporting people for a period of
time that suits their learning and support needs. This can lead to people
transitioning to another workplace over time, or some staff choose to
stay with Soft Landing or one of our other social enterprises if the work is
a good fit for them.
Partnerships Manager, Community Resources Ltd
(Soft Landing’s parent body)

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If you think of our plant in a more holistic sense, what’s its role in the
community, providing employment, how do people get a start and
learn skills.
Managing Director, Australia and New Zealand, Interface

The criteria we have for new workers are … consistency, ability to listen,
ability to learn … willingness to learn ... it’s more that type of people and
we’re quite keen to have people who are looking for an opportunity to
grow and grow up. We will offer them the training to grow up.
Vice President, Operations Asia Pacific, Interface

We provide jobs and training for refugees is my starting point always

… We do that through manufacturing and sale of clothes, and training
programs, and partnerships with the fashion industry … I’m really
committed to running or being the chair of an organisation that gets
the team stuff, the culture and actually mirrors good work practices …
we deal with people who often have significant trauma, and we mirror
what an Australian workplace should be … we’re providing employment,
an Australian work environment, a multicultural Australian work
environment and a training component.
Chair of the Board, The Social Outfit

I guess coming from their background, having experienced being a

refugee, which I will never know what that’s like … some days are good
days and some days are bad days. So it’s not as if you’ve got to make
this, you’ve got to make so many garments each day. We recognise that
they do have good days and bad days. It evens out in the end.
Sewing Trainer, The Social Outfit

There’s not many companies in Australia that repair such a broad band
of electronics gear. I could take anything into the workshop that’s got
an electronic heart in it and these guys can repair it. If you consider the
sort of people that are repairing that and their backgrounds and their
pasts and what their futures look like, that’s what makes us a very proud
company … probably half the people in that workshop up there with those
great skills, not so long ago, were on the scrapheap of society. It was our
organisation, and I’m very proud of it, that brought them in, gave them a
good environment to work in, gave them the training and the challenges,
and they did the rest.
Operations Manager, WorkVentures

We give them an opportunity. We get them work ready first so they get to
work on time, they understand what their responsibility is in employment
and what an employer’s responsibility is ... Because as an employer, and
we can speak as an employer, because we’re not just a college, we’re a
working, functioning, commercially-based business.
Client Relationship Manager, WorkVentures

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 61

 We went forward with training … young people. But there was a mixture
of unemployed people that have been unemployed for many years ... One
of the first things that appeared very obvious to us is the self-esteem.
The self-esteem was terrible … So we quickly learned that we can’t start
teaching electronics if their self-esteem is terrible. So the first couple of
weeks we’re getting them to do minor projects. There was the praise and
bringing them together as a group and all that sort of stuff. They worked
quite well after that phase.
Operations Manager, WorkVentures

Partnerships between I think the most important thing [about the partnership with Soft
Landing] is creating employability opportunities for people that might
social enterprises and not otherwise get the opportunity. I think that’s incredibly important. I
other businesses spent a lot of time in education. What inspired me back then is the belief
that you get a better society with better educated people. The other thing
that drives a great society is opportunity to participate. Those sorts of
ventures [such as Soft Landing] are creating opportunities that people
would never have had.
CEO, A.H. Beard

One of the things that we are hoping will result from product stewardship
… is that there are additional pathways provided for people working out
on the shop floor in Soft Landing … a good outcome or an indicator of
the success of Soft Landing is when someone poaches their staff … for
somebody who’s out on the floor there, to say, ‘Well in four years’ time
you could be working in a mattress manufacturer as a leading hand,
or as a whatever, or you could be working in logistics.’ … One of our
retailers, one of the things that got the marketing manager really excited
was the prospect that there could possibly be a pathway for them to
seek employees from Soft Landing, and that’s a great Corporate Social
Responsibility story for them.
General Manager, Soft Landing Mattress Product Stewardship Scheme

I understand we’re in the fashion industry … I’m not separated from

fashion. We’re trying to use the best of what fashion does to build what
we’re doing … That’s been one of the pleasures, to meet Australian
industry people. We partner with a whole lot of the fashion industry, who
want to help us, who love us, who give their time.
Founder and Former CEO, The Social Outfit

We don’t only want to be supportive to the refugee communities, we also

want to be supportive to those companies that are producing ethically
themselves and environmentally themselves. So when we do spend the
money [on screen printing], the good money that we spend, we want to
spend it with them, not with someone else.
CEO, The Social Outfit

With the people that we work with, reputation matters to them … only
yesterday we were talking to Westpac and even though we’ve had a long,
long-term relationship with them, we’re always reinventing our relationship
when there’s different players, different people coming in. So you’ve got
to have consistency from both parts to see value to that. We’re constantly
reigniting that, on the technical side and on the social side.
CEO, WorkVentures

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We’ve got one bloke who does our decommissioning, coordinates it …
People thought he worked for Westpac and never, ever realised that he
wasn’t a Westpac employee because he walks through and people are
hi, because he’s seen CEOs go, come and go, he’s seen floors of people,
departments come and go.
Client Relationship Manager, WorkVentures

You need more techs for the automated stuff, so you’re changing the Apprenticeships
landscape of the types of skills that you actually require. For us at the
moment we’re looking at apprentices … that’s something we can offer,
whether it’s here in Lismore, in Raleigh for that region and on the Gold
Coast, I don’t think there’s enough apprentices coming through the
system, so it’s where we see our social responsibility to offer that.
Manager, Ice Cream Factory, Norco

The thing that worries me is apprentices, they don’t exist really in

Australia anymore. There is an apprenticeship sort of scheme out there
but it worries me a little bit for the younger ones coming through who
may not be able to work in IT or stuff like that but still want to use their
brains and hands and things. So that worries me a little. Over the last
10 years we’ve lost so much skills. All my life at Sebel, I’ve worked with
toolmakers who made injection moulding tools or press tools for steel,
to punch out steel shapes and things like that. There’s hardly anyone in
Australia these days that does that.
Design and Engineering Manager, Sebel Furniture

Pathways to Technology P-Tech, it’s a pilot program funded by the

Commonwealth and it’s aimed at exposing year 10 students to STEM
careers … Then in years 11 and 12 they’ve got a number of different
VET options from drone piloting to airline maintenance to advanced
engineering and electronics. There’s four industry partners on that one.
So we’re all working very closely … they come for a tour in year 10 and
then they select which businesses they would like to do their placements
with … we would hope that they’ll become ideal apprentices and we
haven’t advertised for apprentices for a long time. We invite people in
for interview. So if they impress the guys out on the floor they go, ‘Oh,
that’s a good one,’ or ‘Don’t worry about that one’ ... Mainly boys, but not
entirely. We’ve had a few girls come through … We’ve got a girl apprentice,
a metalworker … and we had a year 10 do work experience with the auto
electrical boys and she loved it, she wants to come back again.
HR Manager, Varley Group

A lot of work balancing happens because they’re operating in a super-cell On-the-job

together with lots of processes. A simple tool from Lean43 is Kanban where
you basically build up the inventory, but not too much … they’ll put their skills development
process down, walk around the cell and see who’s actually run very low on
their stock and then go help them out … What we’ve got now is they’re all
watching out for each other ... They’re always seeing what each other are
doing. They’ve realised the complexity. They’re now getting involved with
each other’s processes so you’ve got a lot of cross-skilling.
Former Manufacturing Manager, Sebel Furniture As noted above in Section 4.2, Lean is a
43

manufacturing approach that focuses on waste

minimisation (including waste in resources and
materials, and waste in time). The use of Lean
in Sebel Furniture is discussed in more detail in
Section 5.2.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 63

 We haven’t got the standard classifications ... we’ve introduced a
concept of an R1 to R4. The R refers to a readiness mode. You’ve got an
R1, an R2, an R3, and R4. An R1 is ’I’m a newbie. I don’t know what I’m
doing here.’ That’s someone that when you put them on the line they’re
at the start at the line. Someone after them will pick up anything that
they’ve done. Then you go R2, and R3. An R4 is basically someone who
can run the line. But you then become an R1 again if you go to a different
function. We’re actually taking all of this and creating a Skills Matrix. If
you walked out there there’s all the people’s names and the Skills Matrix
tells them exactly where they are. They agree, they disagree. There’s a
protocol they go through if they say ‘Okay I want to be another one of
those. I want to get to an R2.’ … People who used to be only in upholstery
are now multiskilled. So, we can move people out of upholstery, onto a
plastics machine. They can go back to assembling a table … They can
take holidays and someone else can do their job for them ... and we’re
educating them and teaching them.
Former CEO, Sebel Furniture

It’s a good atmosphere, it’s inclusive, most people are happy to help
if you need it, whether it be an experienced person needs help or an
inexperienced person needs help. The information goes both ways and it
makes a very big difference.
Senior Technician, WorkVentures

In the workshop … we’re from different backgrounds, different

experiences. When we get together, there’s very few problems that
we can’t solve … Because we all have different experiences, different
backgrounds, different expertise and you know, when we come together,
we can do just about anything.
Operations Manager, WorkVentures

We see ourselves as the sewing people that you come to and this is a
place where you can use an existing skill, or an existing interest, to help
settle and build your skills … the reason we exist is many new migrants
and refugees have sewing skills and have an interest in sewing.
Founder and Former CEO, The Social Outfit

We have this space upstairs where we make the clothes … but we also
have a shop downstairs. So we thought, ‘Why don’t we make the most
of that space as well.’ So what we started is providing hands-on paid
training in retail, so we’re getting young women from the migrant and
refugee community to come in and learn how to communicate with
customers, how to use the EFTPOS machine, how to fold the clothes, how
to make up shop windows, et cetera, because there are so many jobs in
that area. It’s still a pilot. We have our first two women working with us
one day a week … and we do that with them for about six months and
then help them find another employment ... We feel that’s enough for
those young women; they already have English skills, they just need to
fine tune, and they need to get the confidence and get some more skills;
but what they need most of all is to have a CV or resume … that says
they’ve worked somewhere … and then they can get the second job.
CEO, The Social Outfit

64 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

SNAPSHOT:
New technologies, inequality and training
A widely expressed concern is that new technologies such as automation will result in job losses.
However, as discussed in the second Snapshot in Section 4.1, the dire warnings are perhaps
overstated. The evidence is that innovation can lead to jobs growth.
A challenge that receives less attention is the potential impact of technologies on inequality. The
concern is that technology tends to replace employment opportunities in low-skilled and routine
occupations, while extending employment opportunities in more skilled and less-routinised
occupations.44 What results is an increasingly unequal society.
This has important implications for how social enterprises that rely on manual and routinised
work respond to new technologies. This concern is summed up by Community Resources Ltd’s
Partnerships Manager when she says: “The reality is maybe one day you will be able to do mattress
recycling with AI, or at least the sorting of the materials during the process. So, our constant
challenge is going to be how do we stay knowledgeable about emerging technologies, so we
don’t get blindsided by it. But also, how do we balance incorporating technology that keeps us
productive and competitive but does not dilute or compromise the best working outcomes and
conditions we can provide our staff who bring a lot of expertise and ideas to the deconstruction
and recycling process too.”
For the moment, the approach Soft Landing takes is to provide training and support to staff so
they develop new skills. The Partnerships Manager explains: “We were able to upgrade to a route
optimisation system in our fleet through the support of one of our philanthropic partners. Some
of our staff were initially hesitant with the new system and technology, but we were fortunate to
have in-house ICT staff support managers and staff to really understand how it would function and
to provide on-site training and walk people through the system change. With this type of change
in technology, if you don’t go with it you could be creating a gap for staff in keeping up with the
industry we are supporting them to be skilled and succeed in.”
In the context of new technologies, the approach taken by Soft Landing of focusing on appropriate
training and support is consistent with the importance that the literature places on investments
in education and skills development at all levels, including in schools, in TAFE, in universities and
in firms. The challenges are “recruiting and retaining a new generation of manufacturing workers
and providing existing workers and new recruits the requisite skills for the twenty-first century
technologically advanced factory.”45
Of relevance to this report is the discussion in the literature about national level vocational
education and training (VET) systems and a more localised ‘micro-skills’ approach.46
On the one hand, it is widely recognised that a key ingredient for maintaining Germany’s
manufacturing sector has been its strong apprenticeship program that forms part of its national
VET system. Thus, recommendations for investment in education and skills development
frequently focus on similarly strong programs and a national level system.
However, some researchers point out that such national level systems do not have the flexibility
that is needed in the current context and are not able to respond to the varying pace of
technological and workplace change.

CONTINUED ON NEXT PAGE >

44
For example, see Dachs 2018.
45
Snell 2019, p. 254.
46
In what follows, we draw on the recent review and study by Snell (2019).

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 65

 These researchers point to the importance of a micro-skills approach involving secondary schools,
training centres, employers, industry associations and unions working to devise locally appropriate
training and skills development. One firm-based example from this research is the strategy used
by Soft Landing to work with a Registered Training Organisation to tailor the training for their
employees. On a regional level, there is the example of HunterNet Group Training Company. This
not-for-profit organisation was established in 1996 in the Hunter region, and it manages the
training and development program for apprentices and trainees for its member companies.47
The findings of this research suggest that it is not an either/or approach. Rather, both approaches
are important for ensuring that a diverse workforce has access to the training and skills
development needed both to equip workers with the skills needed in a world of technological
change and to help maintain and strengthen the manufacturing sector.

47
https://hunternet.com.au/about-us/

66 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

5. More Sustainable Manufacturing
An environmentally sustainable manufacturing sector is one that has
a smaller ecological footprint. It takes into account the quality and
durability of the product, the resources that are drawn on in the initial
production process, and what happens to the product at the end of its
‘first life’.
A smaller ecological footprint is achieved when businesses attend to
the environmental sustainability of what they do. These businesses see
themselves as contributing long term to environmental care and repair.
This is reflected in three important commitments:
1. Product as high quality and durable
2. Efficiency as waste reduction
3. Product circularity.

These three commitments are a move away from the familiar ‘take-
make-waste’ model of production and consumption. The Ellen MacArthur
Foundation describes this business as usual model in the following way:
“Companies harvest and extract materials, use them to manufacture a
product, and sell the product to a consumer—who then discards it when
it no longer serves its purpose.”48
However, there is growing interest in moving beyond this business as
usual approach in manufacturing towards a more circular approach.
This means keeping products in use for as long as possible through
activities such as repair, redeployment and refurbishment. In the circular
approach, where practical, recycling is delayed for as long as possible
with a product going through several lifecycles before the component
materials are converted into some other form.49 As well, products are
being more carefully designed and manufactured in the first place so
they are high quality and durable (and therefore need to be replaced less
often). Furthermore, in the initial manufacturing process there is a focus
on efficiency in the form of waste reduction.
In this research, the evidence for the three commitments is found in a
range of practices, which are highlighted in this section.

Beyond Business as Usual

A 21 Century Culture of Manufacturing in Australia
st

Building an environmentally sustainable manufacturing sector

Commitments

5.1 Product as high quality and durable

+ Practices
5.2 Efficiency as waste reduction

5.3 Product circularity

48
Ellen MacArthur Foundation 2013, p. 6.
49
For more discussion on the circular
approach see Lemille (2019) and https://
www.ellenmacarthurfoundation.org/circular-
economy/what-is-the-circular-economy.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 67

 5.1 Product as High Quality and Durable
The manufacturers in this study are committed to designing and producing
products that are high quality and durable. A staff member from A.H. Beard
sums up this commitment when she says (as earlier quoted) that the aim
is “to ensure that whatever we produce and whoever is sleeping on it, it’s
the best possible product that we can produce within that price point”
(Education and Development Manager).
This commitment has helped some manufacturers compete with cheaper
products imported from overseas as the customer is assured that they are
purchasing a quality product that is ‘fit for purpose’ and will last. It is helping
some compete on international markets and maintains the reputation
that Australia has garnered overseas for producing quality products.
The commitment to high quality and durable products also has
environmental benefits as these products need to be replaced less
often than cheaper options, and this reduces demand on finite
resources and materials.
The commitment to manufacturing high quality and durable products is
reflected in the following practices.
1. Fostering pride in the product across the workforce.
2. Being customer-focused.
3. Monitoring product use to refine product quality and durability.

This section demonstrates these practices with a Snapshot of one

manufacturer (Varley Group), and a Snapshot of an emerging trend in
which manufacturers ‘sell’ their product as a service to customers.

68 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

SNAPSHOT: Varley Group
High-quality and durable products
As a longstanding firm, Varley Group (Varley) has been able to foster pride in its product across
the workforce. This is the vision of the Managing Director, who says “I really want to make sure
everybody has got pride in what they do here because if they haven’t got that and if they don’t
really care about what they’re outputting that makes a big difference in the quality of our work.”
It is a sentiment shared by staff, from the shopfloor to senior managers, as the following two
quotes demonstrate: “The quality of work we put out, it shows that people have got some passion”
(Boilermaker, Varley); “I like to build high-quality products … I don’t want to build rubbish (Chief
Operating Officer, Varley).
One way that Varley produces quality products is by being customer-focused. No two product lines
are identical as the engineers and other production staff work closely with the customer to ensure
the final product fits the customer’s needs, including their budget. For example, reflecting different
customer requirements, the ambulances manufactured for the Ambulance Service of NSW look
very different to the ambulances that are manufactured for export to Pakistan.
The Managing Director offers the following insight into how Varley works with customers to ensure
that they are designing and producing the best quality product: “Everything we do is customised.
We don’t have a standard product we sell, it’s all customised ... A lot of customers will come to
us with the specification and saying this is what he wants and we try as much as possible to get
interactive with the customer to find out why do you want this, what’s this for? We then start to
help them problem solve to give them what they really need and how they want the thing to work
for them ... we are always trying to look at it a lot more through the customer’s lenses as to what’s
his issue he’s trying to overcome and solve.”
Sometimes this problem-solving approach means that Varley will, for example, recommend a repair
job that might cost the customer only $15,000 rather than a $100,000 new build (as the General
Manager, Defence and Aerospace points out above in Section 3.1). This builds customer loyalty
as the General Manager, Defence and Aerospace explains: “The customer is first, so we like to be
honest … it’s that honesty that they appreciate, ‘You’re looking after me’”.
Sometimes, however, Varley’s recommendation will be a more expensive option but one that more
precisely matches what the customer needs. The risk is that contracts will be awarded to cheaper
but lower-quality products. In the long run, however, this can end up being the more expensive
option for the customer, as the Chief Operating Officer describes: “I think the government divisions
tend to take the cheapest option at times, until they get bitten and then they come back and go, ‘Well,
it didn’t really work.’” Indeed, staff report that on occasion they have lost a tender that has been
awarded to a cheaper overseas import, only to receive a contract to modify and repair that cheaper
import even before its first use in Australia. This results in an overall bigger spend for the client.
Another way that Varley produces high-quality products that serve the customer is by monitoring
product use. For example, for forty years Varley has been maintaining power stations. Over that
period, the firm has collected information about the parts they maintain (such as valves) and made
improvements to these parts. As a result, one of the power stations that Varley maintains set the
world record for the longest period of time between outages.
More recently, Varley has been integrating electronics into its products so that it can run data
analytics on how the product is used. As the Managing Director makes clear, the purpose is not be
‘invasive’ but to better understand the patterns of usage and to use this information to pinpoint
what will best suit the customer’s needs and improve the product: “Your designs have got to get
smarter, based on having real live feedback not perceived feedback.”
The strong customer focus is how Varley has maintained viability, as the Managing Director explains:
“We’ve survived because we clearly set ourselves out on a path to get in smart niches, not trying
to compete on large global scales … we don’t compete against the factory that’s spitting out that
same product … where we’ve been able to survive is we build the customer exactly what they want.”

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 69

 SNAPSHOT:
Product-as-a-Service
Overseas, some manufacturers are taking their commitment to high-quality products one step
further. Rather than selling their products they lease them to customers. This is known as the
product-as-a-service (PaaS) business model. The manufacturer is staking their reputation on the
quality of the products, and they use data to understand how the customer uses the products and
how products can be refined to suit the market. The environmental benefit is that the manufacturer
is incentivised to produce durable products that will ‘last the distance’ and thereby need to be
replaced less often.
Philips’ ‘pay per lux’ package sells light to commercial clients (with plans to extend to
households).50 Customers only pay for the light consumed; Philips owns the lighting mechanisms
and systems. This puts the onus back on Philips to manufacture high-quality and durable lighting
products, while customers are encouraged to use lights as efficiently as they can to reduce the
light they pay for.
The furniture manufacturer Ikea began leasing out products in February 2019, as part of its project
to reduce its GHG emissions by at least 15 per cent by 2030 (compared to 2016).51 By leasing
their products, Ikea is creating its own incentives to manufacture more durable products that
can be repaired and reused. This is part of Ikea’s overall strategy to design products that can be
repurposed, repaired, reused, resold and recycled (strategies that are discussed further in Section
5.3). As well, Ikea is also considering running its own spare parts business so that customers can
buy replacement components, such as hinges or screws, for furniture that Ikea no longer stocks.
This range of strategies is helping Ikea to extend the life of its products and thereby reduce the
amount of resources and materials that it needs to draw on to manufacture its furniture.
Even the iconic toymaker, Lego, is proposing to lease its product to customers.
This focus on quality and a closer relationship with the customer reflects a repositioning of
manufacturers as more than makers. Plus, it has the environmental benefit of helping shift away
from the ‘throw-away’ mentality to a more considered and long-term approach to products.

50
See https://atlasofthefuture.org/project/pay-per-lux/.
51
Information on Ikea is sourced from Milne 2019; and https://about.ikea.com/
en/sustainability/becoming-climate-positive/what-is-climate-positive.

70 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

5.2 Efficiency as Waste Reduction
It is now increasingly accepted that efficient businesses are those that
are reducing if not eliminating waste. This makes business sense as
waste is a cost to a business. It makes ecological sense as it means that
the planet’s finite resources are being used more carefully in the first
place and that already-stressed environments are not having to absorb
the waste that is produced.
The manufacturers in this research are committed to achieving efficiency
through reducing waste and they are doing this through the following
crucial practice.
1. Using Lean manufacturing principles to streamline the use of
resources and materials and thereby reduce the amount of
waste produced.

The connection between ‘Lean’ and sustainability is emphasised by

Interface’s Vice President, Operations Asia Pacific as he reflects on
what happens when he presents Interface’s environmental agenda:
“When I do presentations to other companies, manufacturers … their
first question is about, ‘How much money is that costing you?’ The way
I always approach it is from the Lean philosophy point of view, because
most manufacturers now are well accustomed to Lean. They understand
that waste is the biggest thing that we have to chase out. That’s where
sustainability starts … If you remove the waste, you improve your
sustainability … So sustainability is not just about using green power and
using bio-based material or recycled material, it starts with making sure
that you just use what you need.” This Vice President’s message that
Lean manufacturing reduces the environmental impact of manufacturing
is consistent with the findings of academic studies, which also conclude
that ‘Lean equals green’.52
The idea of only using what is needed also features in other firms that
have integrated Lean into their operations. For example, Varley Group’s
General Manager, Defence and Aerospace explains: “We would buy from
our suppliers mostly everything in kits. For instance, one particular
assembly might require three bolts, three nuts, four washers and other
specific fasteners, so we’d purchase only what’s required so we don’t have
to go through boxes to segregate the items needed. What’s needed would
already come pre-packaged to go directly to the assembly work cell.”
What follows is a Snapshot showing how one manufacturer (Sebel
Furniture) has incorporated Lean into its operations and what some of
the effects have been. In this Snapshot the focus is on the environmental
effects in terms of the use of materials and resources (including costs
to the company). In Sections 4.2 and 4.3 above, the effects on worker
participation and on-the-job skills development have been noted.

52
For example, see Chiarini 2014;
Inman and Green 2018.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 71

 SNAPSHOT: Sebel Furniture
Lean manufacturing as waste reduction
Sebel Furniture (Sebel) uses what the General Manager describes as a “Lean compass.” Sebel
constantly reviews and questions its use of materials and resources.
This has resulted in changes such as a reduction in the number of machines and a reduction
in packaging, as the General Manager notes: “Why have three machines on when you’re only
running one? Why have nine machines when you can manage with five?” Why have packaging on
something that is not adding additional protection to the way you transport, that’s going to be
thrown away in two minutes at the customer end?”
Another change has been the redesign of products so there is less opportunity for waste, even
wasted space during transportation. The former CEO explained: “The steel frame component that
may be manufactured overseas can be shipped more efficiently to Australia. We have steel frames.
We bring steel frames from overseas a lot of the time and they’re inefficient by the nature of how
you bring them in. So, we’re working on KD [knocked-down] frames. We’re working on a plastic
insert into a metal frame so that it’s got an adjustable leg. So, you get the frame and you can
insert the legs when it’s here rather than have all that space taken out when you’re shipping it from
overseas … the whole sustainability thing is in the design, but it’s also in the way that you handle
the product. So, you look at, when do we assemble? Where can we assemble? … Even in shipping
and distribution. We try to think about all of those aspects in designing a product.”
As part of the introduction of a Lean compass, Sebel changed the linear-style assembly line
arrangement in which operators did one repetitive task and saw the product only at that one point
in the process. Sebel now uses what the former Manufacturing Manager describes as a “super-
cell” arrangement in which the operators for different processes are co-located and the production
of the entire product happens within metres of where operators are working. This super-cell
arrangement fits with the one-piece-flow that is associated with Lean manufacturing (as opposed
to batch-style manufacturing which is suited to an assembly line arrangement).
One advantage of the super-cell arrangement is that it has, in the words of the former
Manufacturing Manager, introduced “more accountability, ownership and pride in what they’re
doing”. One very practical implication is the cost savings in time and materials. For example,
previously it could take weeks before a mistake in one part of the production line was identified;
now mistakes are picked up almost immediately. The former Manufacturing Manager explains:
“You get to the end, oh wow, so you’ve just spent three weeks and you realise in the first operation
something went wrong. The amount of rework time is phenomenal. Now with one-piece-flow
within 10 minutes you know if something has gone wrong within the process. They go back and
they’ll talk to each other. They’ll walk straight up to the gluer and say, ‘Hey, look, this one didn’t
come out too well. What happened?’ ‘Oh yeah, sorry, okay.’ So they’re always adjusting a little bit
and keeping the variability as low as they can.”
As well, mistakes are no longer hidden away but have become a shared issue for problem-solving
and an opportunity for continuous improvement. This occurs because the production process is
more transparent, operators are more invested in the quality of both the production run and the
final product, and supervisors and managers invite and welcome input from the shop-floor. It is no
longer possible, as once happened, for a $50,000 a month discrepancy in raw materials to occur
because products with faults were not being reported and instead were thrown in general waste or
hidden in storage bins.

72 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

5.3 Product Circularity
The manufacturers in this study are moving towards a more circular
approach to manufacturing. Designing and producing high-quality and
durable products, as discussed in Section 5.1, helps to extend the initial
lifecycle of a product, but there are things that can be done so a product
goes through multiple lifecycles before recycling or final disposal. When
multiple lifecycles are not practical or when a product reaches its final
lifecycle, then there are strategies to ensure that recycling or disposal is
undertaken with care.
The commitment to product circularity is reflected in the following practices.
1. Extending the product lifecycle.
2. Stewardship across the supply chain.

This section uses Snapshots of three firms (Interface, WorkVentures and

The Social Outfit) to show how the product lifecycle is being extended,
and it uses a Snapshot of a scheme that involves two firms (A.H. Beard
and Soft Landing) to show how final recycling can be undertaken through
a stewardship and supply chain approach.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 73

 SNAPSHOT: The Social Outfit
Extending the lifecycle of fashion
In recent years, the environmental impact of the fashion industry has come to light. The figures
reveal just how dire the situation is. In Australia, 6 tonnes of clothing are thrown away every 10
minutes, and in the UK an item of women’s clothing is worn, on average, only 7 times before it is
thrown away.53
There is no doubt that fashion wastes.
Consumers are starting to do their bit to make fashion more circular. Reuse of clothing items
has become ‘hip’. For example, for The Uniform Project™ which was initiated in 2009, Sheena
Matheiken wore one dress for a whole year, but made it unique each day by accessorising with
extras, mainly reused items sourced from second-hand shops.54 Other women followed, and shared
their experiences through social media to demonstrate a different approach to fashion.
Fashion manufacturers are also starting to do their bit. For example, major international clothing
manufacturers and retail chains (such as Gap, H&M and Lee) have come together to devise the
Jeans Redesign Guidelines that establishes minimum requirements for durability, material health,
recyclability, and traceability.55 Sixteen leading brands are following these guidelines to make jeans
that will be on the market in 2021.
Through its Worn Wear program, Patagonia is introducing various initiatives to extend the life of its
products. For example, in the Sydney store there is a Worn Wear® Repair Hub that offers free repairs
and alterations on Patagonia clothing. Through this service broken zippers are fixed; rips and tears,
mended; buttons, replaced; and so on.56
One of the manufacturers in this study is also doing their bit. The Social Outfit makes clothing
from fabric that would otherwise be wasted. The Social Outfit has built relationships with clothing
companies in Australia’s fashion industry. These companies donate excess and unused fabric
to The Social Outfit. The fabric is then manufactured into high-quality and small-run designer
clothing. This clothing is designed and manufactured to last.
Just as the amount of clothing that is thrown away is astounding, so too is the amount of fabric
that is wasted before it is even manufactured into clothing. The Sewing Trainer at The Social Outfit,
who once worked in the mainstream fashion industry, commented on the pattern of wastage:
“There’s a lot of waste in the industry … it often gets stored in a warehouse for a really long time.
You’d have to count it every six months for stocktake. You think, ‘Why am I doing this ... in terms of
wasted time … wasted storage space?’ I guess [the company] had such a good profit margin that
that waste was absorbed anyway.”
Compared to the extent of wastage in the clothing industry, what The Social Outfit is doing may
seem like a drop in the ocean. The Founder and Former CEO reports that “as a conservative
estimate, we would say that at least a tonne of fabric is diverted every year going into landfill …
approximately 40 to 50 per cent of the garments we make are using excess fabric that has been
donated to us.”
However, The Social Outfit plays an important role in demonstrating how unused fabrics can be put
to good use by serving both a social and an environmental mission. The Social Outfit also reveals
just how much untapped potential and good will there is in the ‘rag trade’ for other innovative
initiatives that extend the lifecycle of materials.

53
See Ragtrader 2018; Daily Mail, 2015.
54
http://www.theuniformproject.com/.
55
Ellen MacArthur Foundation 2019.
56
See https://www.patagonia.com.au/pages/worn-wear.

74 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

SNAPSHOT: WorkVentures
Extending the lifecycle of electronic and IT equipment
WorkVentures was operating in the area of e-waste and using a circular approach long before
these ideas became more widely adopted. In the late 1980s, WorkVentures asked a major IT firm
why they were throwing away so many monitors. The response came back that they were broken.
Broken, yes, but able to be repaired. The Operations Manager recalls: “It was really stupid stuff like
the switches mechanically are broken. A resistor had blown. They were throwing the whole monitor
and importing a whole brand-new monitor back in … So we came up with a business proposition
which was very attractive. Instead of paying for a new monitor they were paying for repair on a
monitor – which is a lot less.”
This exchange laid the foundation for WorkVentures’ business model.
WorkVentures works with major corporations (chiefly IBM, Telstra and Westpac) to test and repair
IT equipment so it can be redeployed within the firm. Once equipment has reached the end of
its corporate lifecycle, WorkVentures extends the life of equipment even further. As outlined in
the Company Profile (in Section 2.2), corporate computers are donated to WorkVentures, then
refurbished and sold at low-cost (with 6-months warranty and technical support built into the
price) to non-profit organisations and low-income households.
Computers (and other electronic and IT equipment) that cannot be repaired, redeployed or
refurbished are identified for recycling and recovery. WorkVentures and its corporate partners are
well-aware of the importance of responsibly managing these processes. WorkVentures sends the
equipment to one of only a handful of R2 (Responsible Recycling) accredited electronic recyclers
in Australia. This recycler uses what it calls a closed loop approach, which minimises the use of
downstream processors and ensures each component can be tracked and accounted for to the
end of chain.
The components end up in a range of processes. Plastics, for example, are recycled for use in
materials such as asphalt and posts. Circuit boards are exported to Singapore where a water
pressure system is used to separate the metal and non-metal components so that the precious
metals can be recovered.
From one major financial corporation, WorkVentures redeploys around 30 per cent of the
computers within the corporation, refurbishes and reuses around 40 per cent, and recycles
around 30 per cent. For the major corporations that WorkVentures works with, data security and
responsible e-waste management are absolutely critical, and WorkVentures supports this through
the sophisticated tracking system it has developed for pinpointing information about each and
every piece of equipment.
The Operations Manager provides the following overview of the whole process: “A lot of the stuff
that we pick up … that’s stuff that the corporations have deemed that they can’t use anymore.
That’s a totally different philosophy with us because when it gets back here much of it goes out
to disadvantaged, low-income families. The rest either goes back into the circle and back to those
corporations as usable gear … The stuff that unfortunately doesn’t meet that criteria is deemed as
a scrap … [one corporation] every quarter will beep me up. They want to know how much stuff we
picked up. They want to know where it was from. They want to know how much it weighed, how
much did the recycling weigh … What happened to all the old cables and stuff like that.”
WorkVentures could go in another direction. As the General Manager, Operations relates, “We
could flog IT equipment to people that will bring a container and they will give you a heap for
that container. Who knows where it ends up? Not interested.” WorkVentures and their corporate
partners have high environmental standards that they are sticking to; in turn this underpins and
secures the viability of the business, enabling the fulfilment of its social mission.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 75

 SNAPSHOT: Interface
Extending the lifecycle of carpet tiles
Interface is a global leader when it comes to developing innovative and sustainable production
processes. In Australia, Interface has developed an approach that helps to close the loop so that
the materials in carpet tiles can be used time and again (rather than manufacturing carpet using
new materials).
Since the mid-2000s, Interface in Australia had been taking back old Interface carpet and sending
it to Interface’s facility in Georgia in the US for reprocessing. However, since the introduction of
new state-of-the-art technologies in 2016, Interface’s facility in Minto has been able to reprocess
old carpet in Australia.
Interface’s Sustainability and Lean Manager explains: “I’ve tested equipment in Europe, Japan
and the US, and we’ve got what we think is the best solution for our process.” This involved a
combination of off-the-shelf technologies and modified technologies so that Interface was able to
achieve its aim of closing the loop of carpet manufacturing in Australia.
Under the ReEntry® program, old carpet is collected and taken to the Minto facility where it is checked
using near-infrared technology to identify the yarn. If Nylon 6 or Nylon 66, it can be recycled into
new carpet. Carpet that is made of other materials is cleaned and resold, where possible.
For the carpets that are suitable, the technology breaks the carpet down into its constituent parts,
with the Nylon 6 or Nylon 66 yarn sent back to suppliers to make new yarn. The backing material is
then reprocessed at an offsite facility ready for use as new carpet backing.
For Interface, the ReEntry® program allows the firm to adopt a product stewardship model. As the
Sustainability and Lean Manager outlines, “Rather than just being about recycling, our program is
really about taking back what we put out and being accountable for it.”
As well, the program helps to minimise waste. Initially, 600 tonnes of carpet has been diverted from
landfill each year, and this will increase as the program expands.
The program was developed as part of Interface’s Mission Zero® initiative. This gave the Australian
arm of Interface the ability to find a solution that would work in the Australian context. The
Managing Director, Australia and New Zealand explains: “Mission Zero® gives our leadership the
mandate to find the capital that will deliver savings in the mid and longer term … It forces us to look
beyond a quarter’s results – years beyond even. It’s liberating in a way – giving us the freedom to
invest in projects like this ReEntry® upgrade.”
The program also helps Interface’s position in the market. Again, the Managing Director, Australia
and New Zealand explains: “The market is trending towards the expectation that recycling is not an
aspiration but the norm. The time is coming when manufacturers will simply be unable to afford the
waste of not recycling. What’s more, even your recycling programs will need to be lean and efficient.”
Knight Frank is one of Interface’s clients that has participated in the ReEntry® program. Knight Frank
engaged Interface to uplift 42,000sqm of carpet that had been in place in a commercial property
in Canberra for the period of the prior tenancy (a decade). This carpet was then replaced with
Interface carpet tiles that had a fifteen-year long performance warranty (a 150 per cent endurance
improvement on the 10-year expectation governed by leasing requirements for major tenants).

76 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

SNAPSHOT:
Soft Landing Mattress Product Stewardship Scheme
A chance meeting in a bar in New York in the 1980s and the chance reading of an in-flight
newspaper helped lay the foundation for what is now considered one of the world’s leading
voluntary and industry-led stewardship agreements.
A.H. Beard’s Chairman and Managing Director, a fourth-generation mattress-maker, recalls the
moment in New York: “I got a layover in New York going through to Chicago and ended up in a bar
in New York. I was just sitting alongside this guy who had a big, fat cigar. He said, ‘What do you do?’
I said what I did and he said, ‘Goddamn, you’re the guy I want to talk to, you absolutely ruined my
business.’ I looked at him and I said, ‘What do you do?’ He said, ‘I own the tips in New York. Your beds
are the worst thing that can ever come into my place and you should be doing something about it.’”
The New York landfill operator was referring to the increasing number of mattresses taking up
valuable landfill space; the uncanny ability of mattresses to rise to the surface of landfill sites; and
the havoc that the wire and springs create when entangled with machinery. This chance meeting
became “the driving force” that prompted A.H. Beard’s Chairman and Managing Director to act, and
he started to pursue options for recycling mattresses. Fast-forward some twenty years and several
attempts to establish a recycling operation later. The Chairman and Managing Director is on a
Singapore to Sydney flight and his wife hands him the Sydney Morning Herald with a news item
about Soft Landing. The rest, as they say, is history.
A.H. Beard and Soft Landing developed a plan for what is now the Soft Landing Mattress Product
Stewardship Scheme. This scheme brings together the manufacturers of mattress inputs, the
manufacturers of mattresses, the retailers and the recycler, Soft Landing. The shared purpose is
to make the recycling of mattresses a streamlined operation. This involves the manufacturers of
mattresses and mattress inputs looking at their production processes so that mattresses can be
more easily disassembled and their components recycled at end of life. It also involves retailers
building in the collection of an old mattress as part of the process of buying a new one.
The success of the first stage of the scheme rests on two factors. First, is the willingness of firms
who usually compete in the market place to instead cooperate to transform the mattress supply
chain and exercise end of life care for mattresses. A prompt for this cooperation is the belief
amongst members that a voluntary and industry-led scheme is more appropriately designed,
delivered and funded than one that might be designed by government.
Second is Soft Landing’s contribution. As a not-for-profit social enterprise with charitable status,
Soft Landing plays a crucial role as the neutral and trustworthy lead agency that operates as both
the hands-on recycler and the administrator of the scheme (through its parent body Community
Resources Ltd). As the former National Manager describes: “We’re a nice not-for-profit, we do all
these great things and you can leave your guns at the door, come and sit nicely and talk about
good things, social and environmental, and that’s great for your company, and you can go back out
there and get in the trenches and tear strips off each other.”
In the circular approach, the recycling of component parts is usually seen as a last resort after the
product has gone through several life cycles. However, in the case of mattresses one life cycle is
usually more than enough. During their initial life cycle, mattresses become hosts of microscopic
life forms and human detritus. For health and hygiene reasons, it is not practical to reuse or
repurpose mattresses, but the components can be recycled.
The Soft Landing Mattress Product Stewardship Scheme shows how a product with only one life
span can be responsibly recycled and serve a social mission.

MEMBERS
Supply Chain Bekaert Deslee, Covestro, Foamco, Thermotec, Joyce
Manufacturers A.H. Beard, Sealy, SleepMaker, Tempur
Retailers Beds n Dreams, Bedshed, Chiropedic, Domayne, Forty Winks (Warrawong),
Harvey Norman, Koala, Sherman, Sleepy’s (Kotara), Snooze, Zen
Recycler Soft Landing

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 77

 6. Recommendations for Manufacturing
a Liveable Future
As this report has shown, the manufacturers in this study all display
commitments to a manufacturing culture beyond business as usual. A
number of recommendations arise from the research findings for ways
that future policy might strengthen and support the kind of just and
sustainable manufacturing these firms champion. The recommendations
bear directly on Australia’s commitment to meeting the United Nations
Sustainable Development Goals (SDGs).57
The SDGs are part of The 2030 Agenda for Sustainable Development.
The 17 goals were adopted in 2015 by all United Nations Member States,
including Australia.58
The SDGs address the relationship between economic growth,
environmental protection and social inclusion. They call for action by
all countries, poor, middle-income and rich, to promote prosperity while
protecting the planet. They recognise that ending poverty must go hand-
in-hand with strategies that build economic growth and address a range
of social needs including education, health, social protection, and job
opportunities, while tackling climate change and environmental protection.
Businesses are increasingly interested in the SDGs. But a 2018 PWC
report concluded that while they had “a clear appetite for embracing the
SDGs” there is “a gap between companies’ good intentions and their
ability to embed the SDGs into actual business strategy.”59 The findings
of this report on manufacturing in Australia show how this can be done.
In different ways the manufacturers in this report are already enacting
a thoughtful kind of economic growth, a concern to contribute to
economic justice and social inclusion, and a responsible approach to
environmental protection. They show how firms can manufacture in
just and sustainable ways, and contribute to achieving the SDGs. The
recommendations suggested here extend practices already identified.
Given the policy framing offered by the SDGs it is useful to arrange the
recommendations according to specific goals.
The commitments and practices enacted by the enterprises featured in
this report provide practical ways forward for meeting at least three of
the 17 SDGs. Table 6.1 shows how the three main sections in this report
‘map onto’ goals. Obviously, there are multiple areas of overlap between
the sections of this report and other SDGs; for the purpose of clarity the
focus is on the three main areas of contribution.
The following subsections elaborate policy directions that arise from
this research grouped according to the most relevant SDG. These policy
directions are relevant to individual firms and for governments at all levels,
as well as for regional clusters and for more dispersed supply chains.

57
See https://www.un.org/
sustainabledevelopment/development-agenda/.
58
See https://sdgs.org.au/.
59
Scott & McGill 2018, p. 7. This report analysed
the published information of 729 companies
from 21 territories across six broad industries.
The report found that 72 per cent of companies
mentioned the SDGs in their corporate or
sustainability reporting, but only 50 per cent had
identified priority SDGs, and only 23 per cent had
meaningful KPIs and targets related to the goals.

78 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

Table 6.1: The Sustainable Development Goals and This Report

THE SDGs This Report

Section 3: Safeguarding
manufacturing in Australia

Commitments
1. Motivations that extend
beyond profit
Build resilient infrastructure, 2. Long-term business horizons
promote inclusive and
3. Thoughtful growth
sustainable industrialization
and foster innovation

Section 4: Building a just

manufacturing sector

Commitments
1. Technological change and
decent jobs
Promote sustained, inclusive and 2. Workers as valued contributors
sustainable economic growth, full 3. Factories as sites of inclusion
and productive employment and
decent work for all

Section 5: Building an
environmentally sustainable
manufacturing sector

Commitments
1. Product as high quality
and durable
2. Efficiency as waste reduction
Ensure sustainable consumption
3. Product circularity
and production patterns

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 79

 6.1 Policy Directions for Safeguarding
Manufacturing in Australia
This research suggests that a robust manufacturing sector in Australia
will be safeguarded by a culture that goes beyond business as usual. A
major finding is that this culture is informed by three commitments that
are shared across a diversity of enterprise types. As discussed in Section
3, these commitments are:
1. Motivations that extend beyond profit
2. Long-term business horizons
3. Thoughtful growth.

In turn these commitments are enacted through distinctive practices,

namely: the continual reinvention of what is being made and how;
strategic negotiation of financing; growth that serves multiple purposes;
and responding to the challenges of growth by focusing on the firm’s
mission and core strength.
It is these commitments and practices that enable the diverse
enterprises in this research to contribute to Goal 9 of the SDGs:
Build resilient infrastructure, promote inclusive and sustainable
industrialization and foster innovation.
The findings of this report suggest four policy directions to help
achieve Goal 9.

Safeguarding manufacturing in Australia

Policy Directions
1. Strengthening the connection between
manufacturers and the ‘ecosystems’ in
which they are embedded
2. Increasing the diversity of finance
sources for manufacturing
3. Supporting succession planning
and transition to maintain existing
manufacturing capacity
4. Increasing the profile of just and
sustainable manufacturing

Policy Direction 1: Strengthening the connection between

manufacturers and the ‘ecosystems’ in which they are embedded
A key finding of this report is that no manufacturing enterprise is an
island—the manufacturers in this study do not operate alone; rather,
they operate in an ‘ecosystem’ comprised of rich and collaborative
relationships with other firms (sometimes even competing firms); with
various institutions and organisations (e.g. with government agencies
and with unions); with educational institutions (including schools, TAFE
and universities) and with their communities (most evident in the three
regionally-based co-operatives, but also evident in the approach of all
the firms).

80 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

Therefore, one area for policy is to strengthen and develop place-based
clusters of manufacturers to generate mutual benefit and support local
economic development. Examples of such policies, include:
• Forming manufacturing clusters. One example is HunterNet Co-
operative Limited, a network of 200 manufacturing, engineering
and specialist service companies in the Hunter region. It has been
operating since 1992. One of its benefits is that it provides smaller
companies with access to activities “previously out of reach.”60 This
includes training, joint marketing initiatives, joint project bids, trade
missions and tendering.
• Adopting anchor institution models. In these models, the procurement
spend of locally-based institutions and businesses is directed to
other local businesses (including those that directly train and employ
people who face barriers in the labour market). Especially important
in this mix are institutions such as hospitals, universities, and local
councils that are rooted in their communities and act as ‘anchors’.
Manufacturers can play an important role in the model through
their procurement spend, through manufacturing for local needs,
and through their employment approach. A small instance of this
type of approach was when NSW Health reinstated Norco as the
supplier of milk to North Coast health facilities (see Norco Company
Profile, above). The GROW initiative, based in Geelong, provides a
comprehensive Australian example of an anchor institution model.61
In the UK, the Preston model has gained much attention.62 This model
is based on worker co-operatives supplying local institutions, such
as hospitals, councils and universities. It draws on a similar approach
in Cleveland Ohio, which in turn has drawn on the example of the
longstanding Mondragon Corporation in the Basque region of Spain.

Policy Direction 2: Increasing the diversity of finance sources available

for manufacturing
In times of crisis or rapid change, manufacturers seek capital to
tide them over rough patches or to launch innovative but costly
developments. These are times when firms are vulnerable to predatory
financial investors who see an opportunity for asset stripping as a
business option, without thought to safeguarding manufacturing. What
is needed is access to patient sources of capital (especially when banks
threaten liquidation). Depending on their organisational structure,
the firms in this project drew on various non-bank sources of finance
including internal funds, personal connections, co-operative shares, and
philanthropy to secure their business purpose in the face of threat.
Current government investment in manufacturing tends to prioritise
the gap between product innovation and start-up, but there is a need
to consider effective forms of patient capital that manufacturers might
access during times of crisis or rapid change.
Examples of policies that would help to make diverse sources of finance
more readily-available for manufacturing include:
• Establishing manufacturing-focused patient capital funds, with See https://hunternet.com.au/about-us/.
60

priority for those manufacturers that have just and sustainable 61

GROW (G21 Region Opportunities for Work)
manufacturing at their core. This could include low interest loans for is a regional initiative between Give Where
You Live Foundation and G21-Geelong Region
established companies with long-term commitments, or equity-based Alliance, and involves local partners from across
crowdfunding. all sectors. The GROW Strategic Plan (https://
grow.g21.com.au/what-is-grow/strategic-plan)
• Undertaking R&D into other forms of patient capital that could details a long-term approach to strengthening
the social and economic fabric of the region
effectively support a diverse manufacturing sector. over an initial ten years. The strategy includes
a local and social procurement initiative that is
• Investigating legislative changes to strengthen the financial base supporting local collaboration (https://grow.g21.
for co-operatives. In Italy worker-owned co-operatives play a major com.au/grow-strategies/social-procurement).
role in specialist manufacturing, especially in the Emilio Romagna In the UK, this trajectory in procurement
spending has been influenced by the Public
region. Italian law provides a tax exemption on the internal reserves Services (Social Value) Act 2012.
of co-operatively owned capital, and in the event of business failure 62
Sheffield 2017.
these funds are deemed indivisible and are apportioned to other

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 81

 co-operatives. This effectively eliminates the temptation for co-
operatives to demutualise. It also safeguards internal capital reserves
so they can be fully used to facilitate growth.63

Policy Direction 3: Supporting succession planning and transition to

maintain existing manufacturing capacity
Another key finding is in the area of successful succession planning, with
A.H. Beard providing a strong example of how succession in a family-
owned business can be successfully managed (see A.H. Beard Company
Profile, above). But many family businesses in the manufacturing sector
are not managing succession transition as founders reach retirement
age. There is a danger that existing manufacturing capacity will be lost.
Examples of policies in this area include:
• Supporting the membership-based organisation Family Business
Australia, which recognises that succession is one of the greatest
challenges associated with running a family business, and provides
support for family businesses to plan for succession.
• Supporting family businesses transition to different enterprise
ownership forms. In the area of metal fabrication two small family-
based firms have taken this approach. C-Mac is a sheet metal
fabricator in Western Sydney with a 50-year history that would have
ended had it not been for a share buyout by employees and transition
into employee ownership.64 Earthworker Energy Manufacturing
Cooperative manufactures high-quality solar hot water technology.
This worker-owned co-operative grew out of a partnership with a
family-owned company Everlast Hydro Systems that eventually
closed in 2016. The factory relocated to Morwell in the Latrobe Valley
where it is an exemplar of just transition for a coal-based resource
region.65 Key to Earthworker’s future has been securing agreement
with unions for an EBA Earthworker’s Clause that will allow the
purchase of the solar heat pump as an in-kind wage supplement.

Policy Direction 4: Increasing the profile of just and sustainable

manufacturing
The manufacturing culture discussed in this report is not as visible as
it could be. It is also not well understood that viable businesses can
operate in ways that are also just and sustainable. The manufacturers
that are featured are largely the ‘quiet manufacturers’ who are getting on
and doing what they do without too much attention seeking.
However, making what they are doing more visible and better understood
would be an important contribution to shifting to more sustainable
and just ways of manufacturing and doing business (including by
encouraging other manufacturers, and businesses more generally, to
adopt the types of practices highlighted throughout this report).
Examples of policies that would increase the profile of manufacturing
that is just and sustainable, include:
• Providing further support for programs that link schools and
manufacturers in meaningful ways (such as the Commonwealth’s
pilot Pathways to Technology P-Tech program that Varley Group is
involved in, see Section 4.3; or the year 12 project-based course that
A.H Beard is involved in, see page 1).
• Adding into university-level Engineering and Business School
curricula case studies of just and sustainable manufacturing in order
63
CECODHAS and International Co-operative to: i) show how technological advances need to be situated within
Alliance (ICA) 2012, p. 47.
the wider social context; and ii) how manufacturers (and firms in
See https://www.cmac.com.au/about-us/
64
other sectors) can run viable operations while also being guided
our-history.
by motivations and commitments that are aligned with just and
65
See https://earthworkerenergy.coop/about-us/. sustainable ways of doing business.

82 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

• Promoting certification programs such as the Certified B Corporations
program that verifies the social and environmental performance of
companies. Programs such as this increase the visibility of firms that
are driven by multiple motivations and have developed practices that
reflect these motivations. B Corp certified firms are promoted as “the
new kind of business that balances purpose and profit.”66

6.2 Policy Directions for Building a Just

Manufacturing Sector
This research suggests that a manufacturing culture that is beyond
business as usual will ensure a just manufacturing sector in Australia.
A major finding is that this culture is informed by three distinctive
commitments that are held to across a diversity of enterprise types.
As discussed in Section 4, these are the commitments to:
1. Technological change and decent jobs
2. Workers as valued contributors
3. Factories as sites of inclusion.

These commitments are enacted through a raft of practices, including,

for example, the introduction of technologies to reduce physical stress;
transparent communication between managers and workers; inclusive
recruitment supported by appropriate training and support; and
apprenticeships and on-the-job skills development.
It is these commitments and practices that enable the enterprises in
this research to contribute to Goal 8 of the SDGs: Promote sustained,
inclusive and sustainable economic growth, full and productive
employment and decent work for all.
The findings of this report suggest five policy directions to help achieve
Goal 8. An underpinning policy support is to secure stable industrial
relations and fair labour laws.

Building a just manufacturing sector

Policy Support
1. Job progression and skills development
2. Considering the needs of part-time and
casual staff
3. Transparent and regular communication
between managers and workers
4. Considering the human impacts of
technological change
5. Entry-level opportunities and support for
people from diverse backgrounds

Policy Direction 1: Job progression and skills development

This research further affirms how manufacturing can provide secure and
long-term employment for a diverse range of workers, provided they are
given opportunities to develop their skills through externally accredited
training (e.g. apprenticeships) and internally-developed programs
(e.g. recognition of on-the-job cross-skilling, as happens in Sebel,
see Section 4.3). 66
See https://www.bcorporation.com.au/.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 83

 Also important are the building of links between educational providers
and manufacturers so young people (and their parents) recognise the
long-term career opportunities offered by the manufacturing sector in
Australia (see Policy Direction 4, above).
Relevant policies include:
• Developing a micro-skills approach that provides locally appropriate
training and skills development through collaboration between
secondary schools, training centres, employers, industry associations
and unions (with HunterNet Group Training Company being an
example of such an approach, see the Snapshot in 4.3).
• Developing partnerships between TAFE and employers to provide
training in emerging areas. For example, Federation TAFE in Victoria
has been running a pilot Global Wind Organisation Basic Technical
Training qualification course, with scholarships being funded by
Tilt Renewables, which is developing the $560 million Dundonnell
Wind Farm project near Mortlake.67 This partnership is attempting
to address the massive shortage of qualified wind turbine
technicians in Australia.

Policy Direction 2: Considering the needs of part-time and casual staff

Given fluctuations in production, part-time and casual work will
always be, to some extent, inevitable. However, firms in this study have
strategies that consider the needs of part-time and casual staff and,
where possible, seek to transition these employees into full-time and
permanent roles.
Examples of relevant policies include:
• Prioritising part-time and casual staff for full-time and permanent
positions (as Norco does, see Section 4.2).
• Considering options for diversification and expansion so more
full-time and permanent positions can be created (as OzGroup has
done by investing in carton erection machinery and putting together
cartons for its own use and for other firms in the area, see OzGroup
Company Profile).
• Providing timely information for part-time and casual staff so they can
plan ahead (as Varley Group does through their four-monthly State of
the Nation meetings, see Section 4.2, and Policy Direction 3 below).

Policy Direction 3: Transparent and regular communication between

managers and workers
Staff at two firms in this study (NCMC and Varley Group) specifically
highlighted the importance of transparent and regular face-to-face
meetings between managers and workers (see Section 4.2). These
meetings, during which all staff ‘down tools’, provide an opportunity for
communication about matters that affect working conditions such as
production timelines, fluctuations in demand and the changing nature
of work with technological developments. They also, in the words of
one worker, “stop the rumours.” There is no doubt that this type of
communication provides workers with a sense of security and helps to
build a motivated workforce.
A relevant policy is:
• Running regular and face-to-face meetings between managers and
workers at which all staff get to hear about the ‘current state of play’
in the business and likely trajectories.

67
See Smith 2019.

84 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

Policy Direction 4: Considering the human impacts of technological change
Contrary to the widely-held view that technological developments
such as automation will inevitably displace workers, there are ways of
incorporating technologies so that opportunities open up for existing
workers and for new workers. The way that firms in this study are
incorporating technologies is consistent with other research which also
finds that technological change can benefit workers (as discussed in the
Snapshot in Section 4.1 on automation and jobs).
Examples of policies that enable this to happen include:
• Prioritising the use of new technologies to reduce the physical stress
of repetitive jobs and ensure safe working conditions.
• Providing training when new technologies are introduced so that
workers can keep pace with changes.
• Finding openings within the firm or with other firms in the supply
chain for redeploying staff whose roles are made redundant because
of technological change.
• Developing protocols for using technology in a way that increases
worker participation and devolves decision-making.

Policy Direction 5: Entry-level opportunities and support for people from

diverse backgrounds
In Australia, manufacturing has played an important historic role
providing entry-level employment for diverse groups of people (such as
new migrants in the post-war period). As this research has found, there
is considerable scope to combine this role of manufacturing with the
more recent development of for-purpose social enterprises, especially
those that provide appropriate training and employment for people who
face barriers in the labour market. These types of social enterprises play
a crucial role as “vocational universities” (in the words of WorkVentures’
CEO). They especially understand how patience is a crucial element in
appropriate training and employment (and this is evident in how staff
from the three social enterprise in this study talk about this dimension of
their work, see Section 4.3).
For social enterprises to be able to take this patient approach they
need partners, and particularly customers. There are opportunities for
other businesses to partner with social enterprises and to have social
enterprises as their suppliers. This also allows other businesses to act
on their concerns about opportunities for diverse groups.
Examples of policies that would build on the historic role of
manufacturing in an inclusive Australia, and help to realise the potential
of combining this with the more recent development of for-purpose
social enterprises include:
• Developing commercial partnerships with for-purpose social
enterprises that focus on appropriate training and employment of
people who face barriers in the labour market. An example is the
procurement relationship that Air New Zealand has had with Altus
Enterprises since 1986. Amongst other services, Altus refurbishes
and packages 20,000 headsets per day for the airline.68 Altus also
does work for manufacturers, including Marley NZ, a manufacturer of
pipes and guttering.
• Designing procurement policies that acknowledge: i) the role that
for-purpose social enterprises play in social and economic inclusion;
and ii) the role of commercial partnerships between social enterprises
and other types of enterprises that enable social enterprises to enact
a patient approach to training and employment. The success of
these types of procurement relationships often rests on the role of
See https://altusenterprises.co.nz/
68
intermediary organisations (see Box 6.1). getaquote/services/.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 85

 • Creating opportunities for recruiting people from diverse backgrounds
by cultivating relationships with organisations with specialist skills in
recruiting and supporting people from diverse backgrounds.
• Prioritising procurement from firms that either recruit people from
diverse backgrounds or that have partnerships with social enterprises
that have this focus. As discussed in Box 6.1, intermediary
organisations such as Supply Nation and Social Traders play a crucial
role connecting businesses and government with social enterprises
that focus on employing people from diverse backgrounds.

Box 6.1: Intermediaries in Social Procurement Relationships

Intermediary organisations play a critical role in social procurement in

Australia. Their verification processes provide surety and reduce risk
for the purchaser, and they promote the businesses they represent.
Since its establishment in 2009, Supply Nation has enabled
significant growth in procurement from Aboriginal and Torres
Strait Islander owned businesses by government departments and
corporate entities around Australia. Examples include a 2-year
contract for Muru Office Supplies to provide stationery and other
workplace supplies to KPMG; and the provision of corporate travel
services for ATCO by Inspire Travel Management.69 To facilitate
these types of business relationships, Supply Nation has a unique
5-step verification process for certifying and regularly auditing its
member businesses.
In 2018, the Victorian State government adopted a whole-of-
government Social Procurement Strategy and Social Procurement
Framework. This world-leading move recognises the significant
contribution social enterprises can make to a range of policy
objectives, including building a fair, inclusive and sustainable
Victoria. The success of the program is supported by the role
that the organisation Social Traders plays in certifying, brokering
procurement relationships, and supporting the capacity and
development of social enterprises.70

6.3 Policy Directions for Building an

Environmentally Sustainable
Manufacturing Sector
This research suggests that a manufacturing culture that is beyond
business as usual is building an environmentally sustainable
manufacturing sector in Australia. It is establishing a smaller ecological
footprint by taking into account the quality of what is produced, the
resources that it draws on, and the waste that it generates. As discussed
in Section 5, this culture is informed by distinctive commitments to:
1. Product as high quality and durable
2. Efficiency as waste reduction
3. Product circularity.
69
For more examples, see https://supplynation.
org.au/stories-of-success/.
70
For more information, see https://buyingfor. These commitments are enacted through practices, including, for
vic.gov.au/social-procurement-victorian- example, fostering pride in the product across the workforce, being
government-approach; https://www.
socialtraders.com.au/. customer-focused, monitoring product use to refine product quality

86 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

and durability, using Lean manufacturing principles to streamline the
use of resources and materials, extending the product life cycle and
stewardship across the supply chain.

It is these commitments and practices that enable the enterprises in

this research to contribute to Goal 12 of the SDGs: Ensure sustainable
consumption and production patterns.

The findings of this report suggest four policy directions to help achieve
Goal 12.

Building an Environmentally Sustainable

Manufacturing Sector

Policy Directions
1. Product design, production processes
and accounting to lighten the
ecological footprint
2. Avoiding waste
3. Extending product life
4. Voluntary and industry-led
stewardship schemes

Policy Direction 1: Product design, production processes and accounting

to lighten the ecological footprint
Addressing the use of resources and materials, and the management
of waste and pollution generated during and after production means
developing standards that take into account environmental impacts.
The Jeans Redesign Guidelines is one example where manufacturers
are cooperating to establish minimum requirements for product design
and production (see Section 5.3). There are opportunities for this
collaborative industry-wide approach across any number of products.
The findings of this research highlight how high-quality products that are
durable and tailored to the customer’s requirements are longer lasting
and need to be replaced less often—thereby reducing demands on finite
resources and materials and the demand for waste management (see
Section 5.1). The development of guidelines and standards for product
design and production processes can build on what manufacturers are
already doing to produce high-quality and durable products.
The full costs associated with establishing minimum standards and
producing high-quality and durable products need to be acknowledged.
There is increasing awareness that the full cost of responsibly producing
products and managing what happens to them at end of life is rarely
acknowledged and not reflected in the price of goods. As there is more
awareness of environmental impacts there is a need to develop ‘full cost
accounting’ methods for application to all aspects of product design,
manufacture and end of life management, and there is a need to develop
methods to convincingly communicate this information to customers.
Examples of policies that would help to lighten the ecological footprint of
manufacturing include:
• Supporting manufacturers to collaboratively develop minimum
environmental standards for product design and production
processes, including quality and durability.
• Designing methods to appropriately account for the full cost
of manufacturing high-quality and durable products in an
environmentally responsible way (and the costs of not manufacturing
in this way).

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 87

 • Developing procurement policies that are based on full cost
accounting; that require minimum standards to be met; and that
reward manufacturers whose product design and production
processes exceed minimum standards.
• Engaging with customers to educate them on the benefits of durable,
high-quality and environmentally responsible products, and to explain
the basis of price differences.

Policy Direction 2: Avoiding waste

The research findings highlight that responsible manufacturers have
two strategies in place when it comes to waste. First, manufacturers
are reducing waste in the production process by incorporating Lean
principles (see Section 5.2). Second, manufacturers are taking products
and materials that were once considered waste and reframing them
as valuable resources. The three social enterprises, in particular, have
operations that are based on taking something once considered waste
and turning it into an opportunity for training and employing groups
who face barriers in the labour market (see the Company Profiles of Soft
Landing, The Social Outfit and WorkVentures).
With China having introduced its ‘National Sword’ policy in January 2018
and with countries such as Indonesia increasingly concerned about how
poor separation is making waste for recycling unusable, Australia is
having to confront what to do with the literal mountains of materials that
could be recycled. This is helping to drive innovation.
There are, however, obstacles that are impeding efforts to avoid
producing waste in the first place or to turn waste into a resource. In
particular, there is significant variation across Australian councils and
between State-based requirements when it comes to fees and levies for
waste. This has resulted in cases in which waste is trucked interstate
to landfill sites where dumping is cheaper. It is worth noting that Soft
Landing has been able to make inroads in those states where space in
landfill sites is at a premium, and this is reflected in the costs for using
these sites. When the cost of dumping exceeds the cost of recycling,
then there is a strong motivation to recycle.
Examples of policies that would help to avoid waste include:
• Promoting the link between ‘Lean and green’, including the financial
benefits (as highlighted by Interface’s Vice President, Operations Asia
Pacific, see Section 5.2), and encouraging manufacturers to build
on their Lean operations and take additional steps to deepen their
sustainability practices.
• Undertaking R&D into technologies for waste recycling, accompanied by
R&D into the niche and hands-on role that social enterprises can play.
• Harmonising waste levies across states and municipalities to help
drive the motivation to recycle.

Policy Direction 3: Extending product life

One of the findings of this research is that product life is being extended
through strategies such as repair, refurbishment, redeployment, reuse
and repurposing. In this research, the social enterprises The Social Outfit
and WorkVentures, play a pivotal role in making this happen (see Section
5.3). As part of this research, interviews and visits were also conducted
with KOMOSIE (Koepel van Milieuondernemers in de Sociale Economie)
in Belgium. This example helped to extend the research findings, and an
overview of their activities related to reuse are included below (see Box 6.2).

88 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

Examples of policies that would help to extend product life include:
• Undertaking R&D into ways that products or components of products
can be reused for the original purpose or repurposed for a new use,
accompanied by R&D into the niche and hands-on role that social
enterprises can play.
• Developing labelling approaches that identify how products or
components of products have been extended beyond their first life.
• Designing procurement policies to prioritise products which are
based on an extended life of either the product in full or components
of the product.

Box 6.2: KOMOSIE

KOMOSIE is a not-for-profit social enterprise based in the Flanders

region of Belgium. It is a membership-based enterprise and its
members are 31 reuse centres located across the region. In turn,
these members own and manage 120 reuse shops that operate
under the collective De Kringwinkel brand. In 2014, the network of
reuse centres and shops employed over 5,000 people (and over 80
per cent were previously long-term unemployed); diverted almost
66,000 tonnes of reusable material from landfill; had over five million
customers who purchased reuse items; and turned over in excess
of €45 million.71 KOMOSIE deals in the reuse of household products
including electrical goods, whitegoods, furniture and toys.
There are four inter-related policy ‘levers’ that underpin the success
of the KOMOSIE network. First, each Centre has been allocated a
designated and exclusive zone of operation, so they don’t compete
with each other for inventory. Instead, they are encouraged to
share knowledge to constantly improve their operations. Second,
each centre uses a bespoke accreditation system to monitor their
performance against social and environmental objectives. This
system is now required for reporting to the relevant (environmental
and social) government departments. Third, each Local Authority
is required by the Flanders government to enter into an agreement
with the accredited reuse centre in its area. This encourages reuse as
the centres provide services such as free pick-up of household items.
Fourth, only a six per cent sales tax applies to goods sold through the
De Kringwinkel shops. This is the rate for basic needs goods; whereas
a twenty-one per cent rate applies to everything else.

Policy Direction 4: Voluntary and industry-led stewardship schemes

Supply chain stewardship schemes extend product responsibility. This
means that manufacturers, retailers and recyclers share responsibility
for reducing the negative environmental impacts of products. A voluntary
and industry-led approach is important to foster cooperation and
ownership across the supply chain. There are also opportunities in these
schemes for social enterprises, as found in the example of the Soft
Landing Mattress Product Stewardship Scheme (see Section 5.3). Here
the social enterprise plays two crucial roles. First, it is the recycler that
does the labour-intensive work of mattress disassembly. Second, through
its parent body, Community Resources Ltd, it is the administrator of the
scheme, accepted and trusted by participating firms as a neutral body.
It is also important that nationally-based product stewardship
schemes, which invariably add additional costs to the product, are
not disadvantaged by lower-cost overseas imports in which the
manufacturers take no responsibility for their product at end of life.
A 2019 briefing paper on mandatory product stewardship schemes The information on KOMOSIE incorporates
71

material from McNeill 2017.

proposed an additional cost of $14.50 to $16.50 on a standard double
sized mattress; $3.50 to $4.00 on a standard passenger tyre; and $1.55 72
Equilibrium 2019.
to $1.85 per 0.75 kg of electronic equipment.72

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 89

 Examples of policies that would help to generate and support voluntary
and industry-led stewardship schemes include:
• Introducing fees and levies on products (whether manufactured
within Australia or imported) to cover the cost of responsible waste
management at the product’s end of life (including through product
stewardship schemes).
• Providing incentives for voluntary and industry-led supply chain
stewardship schemes, especially those that include social enterprises
in the process.
• Designing procurement policies to prioritise products around which
there are voluntary and industry-led stewardship schemes that
promote responsible end of life care of the product.
• Incorporating new technologies to facilitate the tracking of products
throughout their life cycle, including what happens at end of life (for
example, building on the sophisticated techniques that WorkVentures
has developed to track electronic and IT equipment. See Section 5.3).

90 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

6.4 Conclusion
This report presents an appreciative account of what some of the quiet
achievers of Australia’s manufacturing sector are doing to ensure that
there is a future for ‘making’ in this country. Its publication coincides with
a time when business as usual has become associated with disrespect
for people and environments, and confidence in business leaders is
at an all-time low. In such a context, this report paints a very different
picture of manufacturers with commitment, integrity, problem-solving
capabilities and future orientation.
The research sought out cases where manufacturers were ‘doing
something interesting’ with respect to major challenges that face
contemporary society: 1) increasing inequality and social dislocation;
and 2) climate change and environmental degradation. The
findings provide evidence of a productive and responsible culture of
manufacturing that goes beyond business as usual. This culture is
not without its challenges and setbacks. But the manufacturers and
workers who participated in this study present a vigorous, intelligent and
thoughtful cadre in whose capable hands a just and sustainable future
for 21st century manufacturing rests.
The research deepens understandings of manufacturing in Australia
and demonstrates that shifts are taking place. Key elements of
manufacturing culture are being redefined.
• Manufacturing for the 21st century involves not just making, but
unmaking and remaking. It relies on close and ongoing relationships
with clients as products are sold along with services such as
maintenance and end of life care.
• The manufacturing enterprise is reconfigured as an entity whose
licence to exist involves responsibilities to multiple stakeholders.
• In place of the lone manufacturer, there are collaborative relationships
with other businesses (including competitors) that are enabling
the development of new initiatives that might address social and
economic justice and environmental sustainability.
• Efficiency is linked to waste reduction and increasingly waste avoidance.
• Manufacturing jobs involve educational advancement and
participation in problem solving.
• Overall, there is a concern with the direction of individual businesses,
but there is also a deep concern for the bigger picture, and to the
contribution that manufacturing might make to the type of future
envisioned by initiatives such as the Sustainable Development Goals.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 91

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Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 97
Appendix 1: A Public Declaration
Just and Sustainable Manufacturing in Australia
A Public Declaration
December, 2018

Preamble
A new culture of manufacturing for the 21st century is currently being shaped by a group of medium-sized
firms in Australia. Building on the wisdom of almost 500 years of operations combined, they are showing what
the contribution of manufacturing can be to a vital, productive, inclusive and ecologically responsible society.
These companies are charting a direction for how Australian manufacturing might meet two of the Sustainable
Development Goals - Decent Work and Economic Growth (Goal 8), and Responsible Consumption and Production
(Goal 12).i In their own quiet way, they are getting on with manufacturing a just and sustainable future.
This declaration is based on discussions between researchers and manufacturers about the findings of
the Australian Research Council funded Discovery Project Reconfiguring the Enterprise: New Cultures of
Manufacturing in Australia.ii The manufacturers who are signatory to this declaration are:
A.H. Beard mattress manufacturing
Interface modular carpet manufacturing
Norco dairy processing
OzGroup blueberry processing
Soft Landing mattress recycling
Varley Group engineering manufacturing
WorkVentures e-waste repair, reuse and recycling
More information on these manufacturers in Appendix.

These companies provide an image of the manufacturing culture that will be capable of adapting to the
challenges of the 21st century. We invite other manufacturers to endorse, and governments to support, this Public
Declaration for Just and Sustainable Manufacturing in Australia.

Australian manufacturing at a crossroads

In post-war Australia, the manufacturing sector saw tremendous growth that improved living standards. For vast
numbers of returned soldiers and post-war new arrivals manufacturing provided a first job and a way to settle
into an increasingly multicultural society. The economic base of manufacturing expanded and industrial know-
how deepened. As the economy grew and opened to globalization, manufacturing’s share of employment has
declined and yet remains significant (and ABS data from September 2018 shows that manufacturing employment
over the past 12 months increased by 86,000, the largest increase in employment of any sector)iii.
But manufacturing in Australia is at a crossroads. Many citizens have little connection to manufacturing and
are willing to be persuaded that it is no longer a vital component of the Australian economy. The distribution
and sharing of wealth from the 1950s to 80s has stalled and inequality is growing. At the same time there is
increasing awareness of the detrimental environmental effects of industrial growth and a lack of vision for how a
manufacturing sector can be part of a global solution.
Australia is among the 193 countries that endorsed the United Nation’s 17 Sustainable Development Goals
(SDGs),iv which means that we have signed up to a vision that demands change. The SDG targets are conceived
in relation to a 15-year timeline—to 2030, or roughly half a generation from now. Reaching them will require
a dramatic shift in how the national economy works. From research and discussions with a small group of
innovative NSW-based manufacturing firms we are convinced that there is a trajectory of change, already
underway, that points the way forward. We call this a new culture of manufacturing that practices, to various
degrees and in diverse ways, ‘just sustainability’.

98 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

What is just and sustainable manufacturing?
The term ‘just sustainability’ was coined by Julian Agyeman and colleagues in 2003 to refer to forms of
development that create “a better quality of life for all, now and into the future in a just and equitable manner
whilst living within the limits of supporting ecosystems”.v Central to the idea of a just and sustainable
manufacturing sector is the proposition that what is manufactured is not just a tangible product for sale,
but a series of social, economic and ecological relationships that can make an invaluable contribution to
wellbeing now and into the future. Below are some of the ways that these manufacturers are proceeding in a
just and sustainable way, and demonstrating how manufacturing can be oriented to make contributions to the
achievement of at least two of the SDGs: inclusive forms of growth (Goal 8) and responsible consumption and
production (Goal 12).

Socially responsible manufacturing

• Providing safe and well-paid working conditions.
• Providing on-the-job training opportunities to ensure that workers’ skills remain up-to-date in a changing
technological environment.
• Supporting workers’ personal job satisfaction, through providing rewarding work environments.
• Providing education and support for workers interested in advancing to positions with greater responsibility.
• Providing employment for workers from multiple generations of the same families.
• Providing employment pathways for those at a distance to the labour market, e.g. unskilled young people,
long-term unemployed, Indigenous people, refugees and migrants, previously incarcerated persons and those
living with mental health issues.
• Forming partnerships and entering into stable procurement relationships with social enterprises to develop
employment pathways for those at a distance to the labour market.
• Demonstrating leadership by acting on commitments to the well-being and vitality of place-based
communities, especially in regional areas.

Environmentally responsible manufacturing

• Designing products to be durable.
• Minimising waste in the production process.
• Using renewable energy sources.
• Building-in end-of-life reuse and recycling.
• Using procurement relationships up and down the supply chain to spread practices of reduction,
reuse and recycling.
• Investing in technologies and skilling people for closed-loop and circular economy production systems.
• Educating clients and customers of the value of responsible production and products.

In the context of current social and ecological challenges, manufacturing is at the centre of the ‘critical zone’
where futures for humanity, other species and ecologies are being forged. Decisions today to manufacture
in socially and environmentally responsible ways will help to build a new culture of manufacturing that will
reverberate down the generations.

What is enabling just and sustainable manufacturing in Australia?

The research findings identify a number of key factors that have enabled companies to develop just and
sustainable development pathways. They include:
A clear business purpose, beyond the manufacture of a tangible product, that incorporates a social and
environmental mission and results in the types of responsible manufacturing practices outlined above. This
purpose guides business decisions and investment strategies and provides a compass for when the inevitable
and constant challenges of business-life arise.
A long-term perspective which acknowledges and honours the role and contributions of earlier generations
while also keeping the prospects for future generations firmly in view. This perspective mitigates against
rash and short-term decision-making while provoking a willingness to anticipate and even lead long-term
investment and innovation.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 99

 Strategic capitalisation that allows for an arms-length relationship to the rent-seeking actions of corporate
financiers, asset strippers and unengaged shareholders. Depending on the company structure, this is achieved
by private family-based ownership and investment (e.g. A.H. Beard, Varley Group), co-operative ownership
and governance (e.g. Norco), philanthropic investment (Soft Landing), reinvesting earned income in the social
enterprise (WorkVentures), or engaging shareholders in ethical leadership (Interface).
Building up an “ecosystem” of mutual benefit that allows these manufacturers to have influence up and down
their supply chains, including working in cooperation with others who might usually be their competitors and
prioritising customer communication and education.
Strategic application of smart manufacturing approaches and technologies that allow this group of
manufacturers to remain viable - including lean principles, niche production, and a strong customer focus.vi

What’s needed to promote just sustainability in manufacturing?

The signatories to this document are demonstrating leadership in how manufacturing can be fashioned to
meet SDGs 8 and 12. Their experiences will help establish the framework for a new culture of manufacturing
in Australia that will achieve greater progress towards these goals. This Public Declaration is the first step
towards articulating a vision for other manufacturers to follow, for policy-makers to support, and for clients and
customers to endorse. A just and sustainable manufacturing future for Australia will be achieved by commitment
to the following issues and contributing elements:
Issue 1: A clearly stated just and sustainable business purpose
• Metrics that demonstrate the expanded understanding of what the manufacturing product is, i.e. all the
values (beyond financial returns) that manufacturing creates.
• Regular tracking of the social impacts, community benefits, regional cohesion and environmental care
produced by manufacturers.
• Promotion of a just and sustainable business purpose through the education sector, including secondary
schools and business schools.

Issue 2: A long-term perspective

• Industry policy and a general business environment that looks to the 2030 time-frame of the SDGs and beyond.
• A thirty-, sixty-, and ninety-year vision of what manufacturing might be - which both sets a direction while
allowing for the unexpected and disruptive.
• Procurement practices that support a future for high quality, durable, resource responsible
Australian manufacturing.

Issue 3: A valued and educated manufacturing workforce

• Inclusive employment policies.
• Creating career pathways for staff.
• Balancing the cyclical need for casual workers with commitment to full time employment opportunities.
• Enrolling the workforce in making long term plans and achieving visions.
• Commitment to supporting TAFE and on-the-job training opportunities.

Issue 4: Strategic application of technological advancements

• Development and adoption of technological advancements in service of the full breadth of the business
purpose, including its social and environmental goals.

Issue 5: Strategic capitalisation

• Access to patient capital and ethical investment, including the forms of long term research and
development investment that government can provide.
• Removing disincentives that block superannuation funds investing in responsibly innovative manufacturing.
• Diverse ownership structures that allow for diversification of capital sources.

Issue 6: Circular economy principles

• Materials reduction at all stages of production.
• Voluntary product stewardship agreements led by independent social enterprise intermediaries.
• A regulatory and accounting environment that recognises the true costs of waste and dumping.

100 | Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia

Signatories
Garry Beard, Chairman, A.H. Beard Michael Gabadou, Managing Director, Interface
Mark Myers, Co-operative Secretary, Norco Brett Kelly, CEO, OzGroup
Janelle Wallace, Manager, Soft Landing Product Stewardship Scheme
Jeff Phillips, Managing Director, Varley Group Scott Dibb, Client Relationship Manager, WorkVentures
Professor Katherine Gibson, Dr Stephen Healy, Dr Joanne McNeill – University of Western Sydney; Associate
Professor Jenny Cameron – University of Newcastle

Appendix
• A.H. Beard, established in 1899 and one of Australia’s leading mattress manufacturers with operations in
Australia and New Zealand. It is mover and shaker in establishing the Soft Landing Product Stewardship
Scheme that is tackling waste reduction through voluntary regulation.
• Interface, the world’s largest manufacturer of modular carpet that has been on a visionary environmental
journey since 1994 to have zero negative environmental impact by 2020. With this Mission Zero® goal soon to
be achieved, Interface has launched an even more ambitious Climate Take Back™ campaign.
• Norco, established in 1895, is a dairy co-operative owned by more than 200 farmers that employs a workforce
of nearly 800 across processing plants in Northern New South Wales and South East Queensland. Norco
has used their commitment to cooperative principles to thrive in a global industry while developing a deep
connection to communities in regional Australia.
• OzGroup, is a producer co-operative, based in Coffs Harbour, that processes blueberries (and other berries).
It is Australia’s biggest blueberry supplier producing 37 million punnets of blueberries in the 2017/2018
financial year. OzGroup contributes to the vitality of a regional community by supporting its more than 150
grower-members and employing a diverse permanent and seasonal workforce.
• Soft Landing is a “de-manufacturing” social enterprise operating throughout Australia that recovers valuable
materials from the more than 1.6 million mattresses discarded each year nationally. It applies a waste to wages
model that generates employment opportunities for people at a distance to the labour market. It is the principle
recycling partner and was a key driver for the establishment of the Soft Landing Mattress Product Stewardship
Scheme. The scheme is administered by Soft Landing’s parent organisation Community Resources.
• Varley, established in 1886, is a privately-owned engineering firm based in the Hunter Valley that operates in
Australia and internationally across six divisions. Its activities include building high quality bespoke vehicles
critical to Australia’s emergency preparedness. Varley connects with learning institutions understanding that
long term viability is bound to intergenerational learning.
• WorkVentures is a social enterprise of 30 years standing involved in the repair and refurbishment of
electronics and data-secure approaches to decommissioning and recycling. Work Ventures is a key supplier
of these de- and re-manufacturing services to businesses operating in the financial and telecom sector. It has
developed extensive training and apprenticeship programs and encourages intergenerational learning around
complex problem solving.

i
See https://www.un.org/sustainabledevelopment/; https://dfat.gov.au/aid/topics/development-issues/2030-agenda/Pages/sustainable-development-goals.aspx.

https://www.westernsydney.edu.au/ics/projects/reconfiguring_the_enterprise_shifting_manufacturing_culture_in_australia Australian Research Council Discovery

ii

Program #160101674.This declaration will be followed by a full research report in the first half of 2019.
iii
See https://www.businessinsider.com.au/australia-unemployment-manufacturing-jobs-growth-2018-9.
iv
See https://www.un.org/sustainabledevelopment/blog/2015/09/historic-new-sustainable-development-agenda-unanimously-adopted-by-193-un-members/
v
Agyeman, J., Bullard, R., and Evans, B., eds. 2003. Just sustainability: Development in an Unequal World. Cambridge, MA: MIT Press.
vi
These types of strategies are recognised in recent reports on manufacturing in Australia, for example: CSIRO. 2016. Advanced manufacturing: A roadmap for
unlocking future growth opportunities for Australia. Sydney, Australia: Advanced Manufacturing Growth Centre Ltd.; 2016. Advanced Manufacturing Growth Centre
Ltd. 2016 Sector competitiveness plan 2017: Taking Australian ingenuity to the world. Sydney, Australia: Advanced Manufacturing Growth Centre Ltd.

Beyond Business as Usual: A 21st Century Culture of Manufacturing in Australia | 101

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