The NSW Government is continuing its commitment to rebuild the state’s manufacturing industry with the launch of an $800,000 pilot program aimed at boosting productivity, reducing costs and increasing competitiveness.

The Lean Manufacturing Pilot Program will provide small-to-medium-sized manufacturers across regional NSW with funding to undertake audits by professional consultants that will identify ways to re-organise their manufacturing operations.

Lean manufacturing is an internationally recognised business management process that revolves around the principles of continuous improvement, waste elimination, and a customer-centric approach.

It focuses on creating products more efficiently by eliminating unnecessary steps, saving time and using fewer materials in the production process. This approach helps businesses produce goods with fewer resources, without compromising on quality.

More efficient processes mean production lines manufacture fewer products with defects, which in turn reduces operating costs related to providing returns and waste disposal.

For example, a regional food manufacturer might reorganise production lines to improve efficiency, implement preventative maintenance to reduce equipment breakdowns and implement just-in-time inventory management to reduce excess stock and waste.

The audits, undertaken as part of the program, will offer tailored recommendations to help businesses identify inefficiencies, streamline operations, reduce waste and increase productivity, while also highlighting training opportunities for staff.

Several major companies have successfully implemented lean manufacturing to improve efficiency, reduce waste, and enhance productivity over the past decades including Toyota, Ford Motor Company, Boeing, General Electric and Nike.

Many regional NSW companies such as the Bega Group in Bega, Donaldson Australia on the Central Coast, Belmore Engineering at Tamworth, Flavourtech in Griffith and Tyree Transformers at Braemar have also successfully used lean manufacturing principles.

Manufacturing is a key driver of the NSW economy, contributing nearly 30 per cent of Australia’s total manufacturing output.

In regional NSW, the sector generates $32 billion in sales and employs 84,000 workers, reinforcing the need for continued support to strengthen and future-proof the industry.

Industry research by Binder Dijker Otte (BDO) suggests that adopting lean manufacturing can boost small-to-medium-sized businesses’ profit margins by up to three times, depending on their size and turnover.

The NSW Department of Primary Industries and Regional Development designed the pilot program following in-depth industry consultation, which highlighted the need for more support in adopting lean manufacturing principles to ensure regional manufacturers remain globally competitive.

The Lean Manufacturing Pilot Program is part of the NSW Government’s ongoing commitment to supporting manufacturing industries across the state as they navigate rising costs and market challenges.

Expressions of interest for the audits are now open to eligible manufacturers and will close at 4pm on Monday 31 March 2025, with funding allocated on a first-come, first-served basis.

For more information about the program, including guidelines and Expression of Interest details, go to www.nsw.gov.au/LMPP or email economic.programs@dpird.nsw.gov.au.

Minister for Regional NSW and Western NSW Tara Moriarty, said:

“The Lean Manufacturing Pilot Program is an important part of our ongoing support for regional manufacturers across the state, helping them overcome the challenges posed by rising supply chain, energy and labour costs.

“This program is an important step towards ensuring the long-term success of our regional manufacturers.

“We know that by supporting regional businesses to improve their operations, we’re strengthening the entire economy of regional NSW, creating more local jobs and enhancing the long-term sustainability of our regions.”

Minister for Industry and Trade, Anoulack Chanthivong said:

“NSW manufacturing fell in nine out of 12 years under the previous Liberal-National Government, and the Lean Manufacturing Pilot Program is a prime example of how the Minns Labor Government is working to rebuild local manufacturing right across the state.

“Support for local manufacturing is also an integral part of the Minns Labor Government’s recently released Industry Policy.

“Central to the Industry Policy are three new local manufacturing targets, which demonstrate a real commitment to supporting local manufacturing to promote a dynamic, sustainable, and diversified economy.”

HunterNet Chief Executive Officer Ivan Waterfield said:

“Lean manufacturing plays a crucial role in the future of the NSW manufacturing sector. By focusing on eliminating waste and improving efficiency, it helps manufacturers reduce costs and enhance productivity.

“In a time of scarce resources, a strong Lean culture helps manufacturing companies improve their efficiency and their P&L.

“The Lean Manufacturing Pilot Program by the NSW Government is a significant step towards supporting regional manufacturers in becoming more competitive on a global scale and is something that HunterNet fully supports and endorses.”