How can Advanced Manufacturing take NZ forward?
Advanced manufacturing involves the use of technology to supercharge the manufacturing sector. Already an incredibly pivotal part of our nation’s economy and operations, there is real value to be found in unlocking the full potential of our manufacturers.
The implementation of smart products and processes such as artificial intelligence, robotics and 3D printing are just some of the key ways we can look to automate, digitise and further develop operations.
New Zealand hopes to reach the level of manufacturing represented by Industry 4.0 – a blueprint made up of a series of government initiatives from around the world. As a nation, reaching this goal would propel the nation forward in several critical ways.
Manufacturers can harness new technologies to revolutionise their products and processes, effectively increasing their quality of output, and driving productivity forward.
Economically, this creates an increase in profitability, enhances market competitiveness, and helps to generate higher-value jobs by automating lower-level tasks. Fostering innovation, this strengthens our supply chain resilience, and reduces our dependence on foreign sources.
We can also work towards realising our full potential as a ‘clean, green New Zealand’, by encouraging resource-efficient, environmentally friendly practices.
We are not a country rich with natural resources, except for dairy, horticulture and agriculture. We once made cars and TV sets. When that stopped it couldn’t be started again.
So where can Advanced Manufacturing help to turn things around?
Market demand, competition, global economic conditions and access to raw materials play crucial roles in the ability for a country to operate in a highly competitive industry – which is largely why dairy, horticulture and agriculture are particular strengths for New Zealand.
However, advanced manufacturing holds endless possibilities for improvement. As we increase our capabilities, this certainly creates new opportunities for growth in a variety of industries – most notably in sectors such as agritech or health technology, where we have demonstrated proficiency in the past.
Already, there is a number of high-tech manufacturers that should be acknowledged as key to diversifying New Zealand’s economy, such as Fisher & Paykel Healthcare, LIC, TOMRA Food, Scott Technology, Temperzone and Rakon, who are all $150 million dollar businesses and experts in their respective fields.
Playing to our strengths is key. Therefore, given our most successful business players are in niche markets, we don’t see the mass manufacturing of automotives or consumer electronics as something that will return any time soon.
Land-based industries are big players in export earnings – how can technology help the manufacturing workshops catch up?
Already, manufacturing is a key player in exports, with MBIE finding that 60 percent of New Zealand’s total exports are accounted for by the manufacturing sector annually. This is because in New Zealand, manufacturing is largely interconnected with our strong land-based industries – creating processes and equipment for land-based operations, as well as enhancing the raw materials they produce to make them fit for sale.
Therefore, where land-based industries are performing well (in export earnings or otherwise) this is positive for the manufacturing sector too.
However, as we enter the fourth industrial revolution, technology creates the opportunity for continual improvement, evolution and growth. Currently, we are ranked 27th out of 63 countries overall for our digital competitiveness, with vast potential to improve.
Where the productivity of processes can be increased by implementing smart technologies, this allows for higher production volumes and the ability to meet international demand. For example, automation, robotics and the Internet of Things can optimise production processes by reducing labour costs and minimising errors.
Enhanced quality control and data analytics can also ensure that products meet international standards, increasing customer satisfaction and driving repeat business. These increases in output efficiency and quality of delivery are just two ways in which technologies could accelerate manufacturing profitability through export earnings.
Are companies prepared to take the financial risks investing in technology without confirmed contract manufacturing contracts on a large enough scale to make it worthwhile?
Research and development is essential for future-proofing the sustainability of a company. Data and new business models are unlocking hidden value and disrupting the world, and you don’t have to look very far or very hard to see it.
Take Uber’s disruption of the traditionally dominant taxis, or Netflix and YouTube changing the way we watch content. Typically, we may not set aside the time and monetary resources for implementing smarter products and processes until a pain point arises. However, an investment in manufacturing technologies really needs to be viewed in its simplest form – as an investment.
In this fourth industrial revolution, the manufacturing landscape is changing significantly, with the potential to significantly boost productivity, output and quality of operations.
As supply chains become more resilient and new players enter the New Zealand market from offshore, we have to ask, are we globally competitive? Companies failing to uptake new technologies as they arise risk being left behind, and will struggle to remain market competitive.
Often part of the fear indeed is understanding what the technology can do , and in most cases its cheaper than people think. The industry 4.0 demonstration network is a great place to start get an understanding of how it might fit into their business to unlock productivity.