ABM Advisor: The ABM Blog

  • Sep 23 2015


    Australian manufacturing industry remains stable in September

    A recent joint analysis from Westpac and the Australian Chamber of Commerce and Industry has revealed a period of relative stability for the manufacturing sector.

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  • Sep 10 2015


    Harsh economy affects business confidence

    Australian and New Zealand businesses alike have faced a number of setbacks in August, leading to a major drop in business confidence.

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  • Sep 9 2015


    NZ government reconsiders tax systems

    Over the past few months, the tax system in New Zealand has been in the spotlight, as the government re-considers the effect of the current schemes on businesses.

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  • Sep 2 2015


    Leveraging opportunities in food manufacturing

    As the manufacturing industry has seen a second straight quarter of growth, the food and beverage sector may be in a better position to advance new initiatives, possibly aided by business intelligence software. The Ai group performance ranking uses an index rating to determine growth in an industry, with any reading above 50 indicating expansion. The overall index rating for manufacturing rose by 1.3 points to 51.7 points.The food and beverage industry has been expanding for 15 consecutive months.Despite a 4.7-point drop, the food and beverage subsector had a positive index rating of 54.2, indicating an expansive period over August. This is the 15th consecutive month that this particular area has seen growth, which indicates that external factors have not dampened the overall prospects for firms. At the Crawford Fund's annual conference, VISY Industries Executive Chairman Anthony Pratt stated that the food industry is a significant contributor to the Australian economy and that it is "here to stay"."We must better communicate the fact that food is critical to Australia's future, just as wool and minerals have been in the past," he said, as quoted in an August 14 Farm Weekly article. How can this sector react to external forces?The cheese making sector offers a good example of how to implement your strategy when faced with challenges.Overall, IBISWorld has predicted that this specialisation will see a 0.7 per cent decline between 2015 and 2016. This was due to a number of external forces such as a drop in consumption trends, a rise in world dairy price and competition from overseas exports.However, two companies have defied the industry expectations. Murray Goulburn Co-operative and Bega Cheese Limited are expected to see growth rates of 2.5 per cent and 2.8 per cent respectively.Both of these firms have secured a positive outlook by improving their supply chain and securing deals. Murray Goulburn offered initiatives to their suppliers to ensure a steady flow of resources, while Bega Cheese gained a number of exclusive supply contracts. Australian consumers are buying more fresh cheeses, which presents an opportunity to explore niche strategies. For firms that do not have the resources to action these plans, there are still strategic measures you can action to take advantage of consumer trends.For example, IBISWorld stated that many customers were moving away from staple cheeses like cheddar in favour of fresh cheeses. This presents a perfect opportunity to move into a valuable niche and tap into a market that is not being met by your competitors.Trends apply to all food manufacturers and there are many opportunities to serve small, but increasingly valuable markets that haven't had their needs met. As the food industry continues to develop, a creative and adaptable strategy, amended with small business management software, will ensure the longevity of your firm in this growing area. 

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  • Aug 31 2015


    Is it time to cut out paper out of your accounting operations?

    For years, businesses used paper as the primary form of communication and documentation. However, the days of working through piles of sheets are coming to a close as digital systems, including business management software, emerge as the superior method of information transfer.The average cost of a traditional process order is $75 compared to $20 for the same action performed electronically.According to a recent report by Deloitte, using digital methods in business-to-business payments can accrue a number of significant benefits for companies in comparison to paper invoicing. The majority of firms (87 per cent) that switched to electronic accounts and card transfers found these systems offered them more spending control. A further 68 per cent found that administration tasks decreased and 82 per cent reported faster transaction times with electronic payments.In terms of receiving payments, 61 per cent suppliers found that card transactions lead to improved efficiency as they spent less time chasing up payments. Card transactions also improved client satisfaction, with 60 per cent of firms reported that electronic payment methods led to better relationships with customers.For both parties, the average cost of a traditional process order is $75, compared to $20 for the same action performed electronically. The private sector is not the only area that has seen the benefit of cutting out paper from their daily processes. The IRD in New Zealand recently switched customers to their online portal to receive correspondence online rather than through the mail. As well as passing on notable cost savings, the organisation is expected to save 16 million sheets of A4 paper a year, equivalent to 1,900 trees.Spurring change amongst small businessesDespite the quantifiable list of improvements electronic payments can bring, many companies are not catching on to the trend, according to Richard Miller, payments director at Deloitte."There is still considerable opportunity to improve take-up, with almost half of survey respondents (47 per cent) not using the available solutions and 100 per cent still having paper processes to support cheque payments," he stated. Reducing reliance on paper has both economic and environmental benefits. As well as cost saving and businesses benefits, there is a notable environmental aspect to reducing paper usage. Clean Up Australia estimates that citizens send 1.9 million tonnes of paper to landfill every year. The production process is also heavily reliant on natural resources, as 90,000 litres of water is used and 1.46 tonnes of greenhouse gas is emitted to make one tonne of paper.Switching to paperless systems, such as project invoicing, is a wise choice, both for your personal business growth and the wider environment. 

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  • Aug 30 2015


    How will the GST reform affect your business?

    Hopes are high that a change to the GST will help level the playing field for Australian business in the online market.

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  • Aug 26 2015


    How can small businesses in NZ stay innovative?

    Small enterprise is at the heart of our business environment in New Zealand. However, when it comes to innovation, many companies struggle to turn investment into commercial products. Firms need to be clever at absorbing ideas and knowledge from their environment. According to the Productivity Commission, NZ invests a fair amount into research and development (R&D) compared to the rest of the OECD (holding the number 20 spot overall), the payoff from this investment is not being fully realised. "While there has been a general shift towards more firms engaging in R&D activity, fewer firms are introducing new goods and services," said Paul Conway, director of economics and research at the Productivity Commission."This suggests the innovation process hasn't been working as well as it could." The government has aimed to increase R&D spending until it comprises 1 per cent of total GDP but this is only part of the solution to raise innovation amongst small enterprises. Conway believes that businesses will need to harness their own methods to develop new processes and products. "Firms need to be clever at absorbing ideas and knowledge from their environment - including customers, suppliers, and even competitors - and at connecting the products they generate with the needs of others," he said.How can information collection help?In order to spur innovation, it can be useful to view the process as a problem-solving exercise . This is the core of data-driven innovation (DDI) which generated $NZ2.4 billion of value in 2014, according to a report from The Innovation Partnership.DDI involves harnessing information collection, storage, processing and analysis to determine the potential areas where improvements can be made. It is important for this process to be shared throughout the company and that individual parties are able to contribute. The final outcome in this process is better decision making, allowing firms to develop new services or products and make smarter investments.Not only does this process lead to better economic outcomes, it can also bring social benefit. Government departments can use DDI to improve public services, as illustrated in the case of hospitals. For example, the report suggests that DDI can bring more effective identification of those in acute danger of hospital admission, leading to better preventative action. Data collection during production is able to pick up on where improvements can be made. Even in day to day operations, data collection can contribute a lot towards innovation. A report by PricewaterhouseCoopers (PwC) described how collecting data through monitoring technology such as Business Intelligence Software can increase cost efficiency and market agility. By keeping track of how your business operates, you can more easily find where the weaknesses lie in your production process. This method also makes it easy to test processes and find areas where performance can be optimised.

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  • Aug 17 2015


    How can your business reduce food waste?

    Wasted stock is a huge burden to businesses, especially for firms who must sell, transport or store perishable goods such as food. This particular area is a sensitive issue as the amount of usable food disposed of continues to grow globally while resources become more scarce. However, there are a number of solutions that can alleviate this problem, saving money and improving the supply chain for these important products.Australia discards huge amounts of foodAccording to Foodwise, Australians consumers as a whole have a tenancy to waste food, with approximately 4 million tonnes going to the landfill per year by their estimates.Organic, non packaged food accounts for 23.9 per cent of overall disposed goods.State authorities have also reported high levels of food waste, with a garbage bag audit in NSW reporting this as the most frequently occurring material in commercial and industrial disposals. Organic, non packaged food accounted for 23.9 per cent of overall disposed goods, outranking the next material (plastic packaging) by a full 12.5 per cent. In regional areas, the proportion of disposed food was even greater. Considering that the Australian population is increasing year by year, the consequences of wasting food will put a major strain on resources in the future, as supply struggles to keep up with demand. Do you need a better stock management system?Brian Walker, CEO of retail consulting company, Retail Doctor Group, recently expressed how digital technology can improve stock management, in an August 11 article for SmartCompany. By his calculations, 25 per cent of stock on the shelves will be written off for many retailers. Using a system that will monitor the level of goods on premises, such as structured stock software, can limit over- or under-purchasing, reducing the amount of excess stock that is discarded. For retailers , Walker recommends keeping track of expiry dates and continually lowering prices as food reaches expiration. Having digital displays rather than traditional paper price tags can ensure prices are adjusted automatically. This sophisticated clearance method can be offered through online and physical channels and may even raise customer loyalty, according to Walker. Handling post-consumer waste While proper inventory management can directly reduce food wasted by businesses, there is still an issue regarding what happens to products post-purchase. As Australian consumers continue to dispose of edible food, there is an opportunity for businesses to take an ethical initiative and give back to the community.Donating usable food to organisations such as Give Food and city missions can do a lot for your business reputation and strengthens the relationship with the community. While it may take a little effort to save, store and deliver goods to these organisations, the benefits of doing so for brand reputation and waste reduction outweigh the costs of time and effort. Shellfish by-products have the potential to be refined into useful materials. Not only can useable food be recycled, by-products that would usually be disposed of can be repurposed in surprising ways. For example, seafood shells - which contribute to over 6 million tonnes of waste a year - are a source of many useful materials, such as protein, chitin and calcium-carbonate, according to researchers at the National University of Singapore. The raw value of these goods is very little (around $100 per tonne for shrimp shells), but through refinement and processing, they can be applied to any number of further situations . Calcium-carbonate can be used for the production of plastics and pharmaceuticals, nitrogen-rich chitin has a huge role in household products and protein is a perfect additive to animal feed and fertiliser. However, further developments and study is needed to make the bio-refinement process sustainable. This could be a promising area for those in the manufacturing industry to focus on in the future.

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  • Aug 6 2015


    Current challenges for construction and mining

    Over the past few years, the construction and mining industries have faced tough economic conditions and unforgiving changes to their operating environment. With both sectors facing a gradual recovery, companies will need to develop and implement a calculated growth strategy to overcome various obstacles.Regaining project momentumAccording to the Investment Monitor June 2015 report complied by Deloitte, there has been a 13 per cent drop in the level of private construction work since last year. A number of projects in the development stage have been scrapped and Deloitte believes the number of abandoned plans will grow faster than the pipeline for new projects.There has been a 13 per cent drop in the level of private construction work since last year.While conditions are currently favourable for the commencement of infrastructure initiatives, with low interest rates, accessible lending and a low Australian dollar all providing a good base for investment, this isn't spurring enough activity. Building approvals data from the Australian Bureau of Statistics shows that dwelling approval rates have fallen for four consecutive months. In June, the most recent figures available, the seasonally adjusted rate dropped by 8.2 per cent in just one month. Project managers in the construction industry clearly need support to move schemes past the development phase. Business management software can be a good option, although managers may need additional support to help developments past the approval stage. Addressing competition and productivity in miningAlthough confidence is slowly returning to the mining industry in Australia, according to Newport Consulting, there a a number of obstacles to future growth. The most common concerns were productivity and remaining competitive, both locally and globally. Respectively, 36 per cent and 17 per cent of mining leaders in Newport Consulting's survey named these as significant obstacles to a full recovery. David Hand, manager of Newport Consulting, said that many companies had already taken measures to address these challenges."Mine operators are fighting back to remain competitive. Some are reducing the number of mines operating as they focus on becoming more efficient and productive while they wage war against the tough economics of doing business in Australia," he said. Many mining firms in Australia are struggling to remain competitive While these methods can be effective in the short-run, mining firms will also need to focus on more sustainable solutions to help them deal with the global market. Finding innovative solutions to increase productivity will be the key to keeping pace with competitors in the future.

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  • Jul 29 2015


    How will automation affect Australian businesses in the future?

    Striking the balance between human and capital resources has always been hard, but recent findings indicate that Australian businesses are moving towards more capital-intensive production.As innovations in automation become more widespread, many workers may be left out of a job, according to the Committee for Economic Development of Australia (CEDA). In the Australia's Future Workforce report released last month, 39.6 per cent of jobs have a high probability of becoming automated in the next five to ten years.

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