TMA 2018 conference: Embrace disruption but proceed with caution

Charles Darwin once said that it is not the strongest of the species that survives, nor the most intelligent, but the one that is most adaptable to change.

Quoted by Hutcheon & Pearce HR rep, Sarah Johnson, to underpin the company’s daily operations, it also served as the overarching message to all attendees present at the Tractor and Machinery Association of Australia (TMA) conference, held in Sydney last week.

The theme of the conference was “Thriving in the Face of Disruption” where speakers discussed challenges currently facing the agricultural industry and how the sector has evolved over the years in terms of technological advances, employment, dealership structures, business models and more.

In his opening speech, TMA Chairman, Paul Barry, offered several classic examples of disruptors in the public space, such as Apple, Netflix and Uber to illustrate how quickly industries can change and people’s demands can shift.

“Disrupt, or be disrupted” is a line often spoken in recent times, but the question beckons: is it really that straightforward?

According to guest speaker, Jesse Reader from BOSCH, there might only have been three companies offering tech-related services such as apps, robotics and automation for the agricultural industry in Australia about four years ago, but currently there are over 25 companies with products that are either in testing stages or are ready for market.

“We’re getting a lot of interest from outside of ag, so we’re seeing a lot of people where ag is not their domain coming in to claim they can fix our problems,” he said.

“At the moment, we are employing people from the video game industry in BOSCH. I think the potential to shift the needle with automation and robotics is massive.”

Reader said while it is essential for the agricultural industry to embrace disruptive technologies, everyone should proceed with caution.

“Are we ready for automation, yes, but there are so much to consider,” he said.

Legal consequences, costs, service support, OHS, integration and insurance are among the key ‘roadblocks’ to full implementation of advanced technologies, according to Reader.

“Partner or perish… I think it’s all about partnering and deepening your partnerships with customers, providers, and a diverse array of companies beyond your core industry.”

David Chuter from Innovative Manufacturing CRC echoed Reader’s sentiments.

“If you apply digital to a broken thing, but haven’t thought through your business model and still have clunky business processes, you’re going to end up with a digital broken thing,” he said.

Chuter discussed the evolution of manufacturing in Australia and said that, contrary to popular belief, manufacturing is not dead. Instead, it has evolutionised to be more bespoke and instant where and when it is needed.

“We are seeing in the medical space, manufacturing going into hospital theatres, such as the 3D printing of parts. That is not a traditional factory, but a localisation of manufacturing where it needs to be.”

He urged attendees to start thinking outside the box, which underpins the whole concept of ‘disruption’.

“It’s not what the technology is there for; it’s what you can use it for. What is the business case, what is the rationale?”

Chuter added change is not just about accepting new technologies, but also taking necessary steps to change the way one does business, however small they are. It could be reviewing internal processes, renewing business strategies and/or see what others are doing.

“Be troubled by disruption, but also be excited. The opportunities are there for those who want to be early adopters and fast followers,” he said.

Alongside the fast-moving digital landscape, job seeking and employment trends are also changing with the times, delegates were told.

According to Hayley Achurch from the Regional Australia Institute, 22 per cent of agricultural and rural jobs are at risk of automation by 2030. However, this does not spell doom and gloom.

“This just means a change in the jobs that currently exist, moving from labour intensive to being more high-tech such as coding and engineering,” she said.

Nigel Crawley from Rimfire Resources said the number of job ads are increasing and, understandably, shifting away from traditional mediums like newspapers.

With the rise of automation, robotics and increasingly advanced precision agriculture tools, there will be plenty of opportunities for tech advisors to explain these emerging technologies to farmers and get them adopted, Crawley added.

Hutcheon and Pearce’s Sarah Johnson emphasised the importance of understanding individual employee’s needs and expectations as they differ based on age group, gender and religion.

As more millennials enter the workforce, employers need to wrap their heads around the needs of this specific age group and treat them differently than how one would a member of Generation X, Johnson said.

“Change is inevitable. No change is easy, however if we always do what we’ve always done we will never keep up,” she said.

Another area of disruption, as pointed out by speakers including Chuter and Alan Kirsten from agricultural research firm, Agriview, is the way businesses are conducted.

According to Chuter, customers are now shifting towards a pay-per-outcome model instead of pay-per-product.

“Take Rolls-Royce, for example. It doesn’t sell jet engines anymore but gives them away for free.  Someone has to disrupt the thinking!” he said.

“Instead, it now tracks all its jet engines through telemetry, maintains them, renews them, designs them, and sells power by the hour. So it’s essentially a service contract.”

“What is it the consumer wants is how you should think about selling your products,” Chuter added.

“Do people pay for a pot of paint, or do they pay for vibrancy and longevity? Do people pay for an amount of seeds or are they paying for the yield they would get from the seeds?”

“It’s beyond the sale of the product, it is about the outcome and services you provide.”

Alan Kirsten of Agriview raised the example of Toyota New Zealand ditching the dealership model in return for cheaper prices on cars.

“The dealers don’t have any stock, but what they do have is demonstrator models,” he said.

“If a client wants to buy a new Toyota, they’ll go the dealership and do business with them, but the dealer will then pass the order on to Toyota who will then prepare the car and deliver it to the client.

“So how do the dealers get their commission?  They get it from the customer satisfaction survey that the client fills out. By eliminating the middle man, prices of the cars have effectively dropped by 10 per cent.”

He further urged attendees to think about how business should be conducted with the rise of disruptive technologies.

“A question I had when I see all these new technology emerging is: who’s going to sell them? These people in that space are thinking differently. Can we handle all that new technology?

“Your competition could be quite different moving forward, purely based on the fact that these companies are looking for different ways to do business than how we currently do ours.”