Faced with a growing shortage of workers, many business owners in New Zealand are looking towards automation, something of an irony after years of concern about the risks of structural unemployment. 

The national labour shortage looms as the most significant risk to our booming manufacturing sector. The latest Bank of New Zealand Performance Manufacturing Index (PMI) for July increased to 62.6, the second highest recorded, but also cited labour issues as the primary concern to industry players.

Caleb Nicolson, General Manager of TMX New Zealand – Asia-Pacific’s leading business transformation consultancy – says the combination of a local worker shortage, an inability to bring in seasonal migrants during peak season, and increasing labour costs in New Zealand were making the business case for supply chain automation more attractive to a broader group of businesses.

“These types of facilities are common-place overseas, in the US for example approximately 70% of new major warehouses are automated. New Zealand has been relatively slow to take up these smart technologies, until now. The labour shortages are challenging businesses to look differently at their supply chains and we’re now seeing even smaller companies starting to investigate automation, despite the relatively high upfront investment cost.”

Many local businesses are looking at automating operations to create high speed, low-cost and higher capacity operations. COVID has undoubtably amplified the requirement to deliver operations with less human contact, automation provides a logical way to reduce this risk to your business model says Nicolson.

To ensure businesses move with the times, Nicolson urges them to consider getting independent advice in relation to automation and make it a priority to consider the different software solutions and automation options that are available. Similarly, seeking advice on the procurement and implementation process can make a huge difference to business productivity.

TMX has been operating in the New Zealand market successfully for more than 5 years with a client roster that includes New Zealand Post, Kathmandu, Kmart, and a number of the countries largest retail and FMCG companies.

In September 2019 it established a team in New Zealand and how has offices in Auckland and Christchurch supporting clients with engagements across supply chain, industrial project delivery and industrial property transactions.

The warehouse automation sector is a rapidly growing market, with Reports and Data last year reporting that the global logistics automation market will reach USD$120 billion by 2026. While there are automation suppliers across Europe, North America and Asia, the range of suppliers is not endless and the size of projects in New Zealand means we are often near the bottom of their list.

“The specialised expertise required to design, cost and execute automation systems means that the major automation suppliers around the world have been incredibly busy for the last five years”.

TMX, formerly TM Insight and XAct Solutions, is a  leading business transformation consultancy across Asia-Pacific.