-Adan Sharman, Senior Partner, Dsifer

The EMEX Exhibition happens every other year at the Auckland Showgrounds and is both a chance for vendors to showcase the latest in manufacturing technology, systems and services, but also an opportunity for the industry to comes together to share perspectives on the challenges facing the industry, and the opportunities available through evolutions in approaches, technologies and markets.

The 2024 edition of the EMEX Exhibition was no exception. Following on from the highly attended 2022 edition as the industry came together for the first time since the COVID pandemic, this year’s event had a more grounded feel to it as vendors and manufacturers alike seek to balance innovation and growth for the long term with capital and market constraints in the short term.

One notable change since 2022 was the presence of New Zealand’s first minister for manufacturing, Andrew Bayly. Whilst it is still early days in the establishment of the portfolio, the fact that the industry now has ministerial representation is seen as a positive development as New Zealand struggles to keep pace with the investment in the industry that is being demonstrated overseas.

Whilst there may have been little directly for manufacturers to shout about in the May budget (announced on the final day of the exhibition), Minister Bayly has indicated some positive moves already, notably an extension of the Smart Industry Readiness Assessment funding to support manufacturers identify opportunities for acceleration through the adoption of industry 4.0 technologies.

This visibility of the industry at the ministerial level was welcomed by the exhibitors and visitors to EMEX this year. However, in speaking with attendees, the focus remains on navigating through a challenging economic environment, whilst not limiting potential future growth and agility for the long term.

Whilst every business has its own context, three key challenges were repeatedly identified across industry players.

Quality Talent Shortages

The challenge of labour capacity availability in 2022, during which, the problem was one of finding the right number of people, appears to have largely dissipated. However, it has been replace by the challenge of quality talent availability.

Organisations are repeatedly reporting that they have enough people, however, labour remains a constraint through higher rates of absenteeism, lower levels of engagement and productivity and lower levels of relevant skills to support future strategic ambitions.

As a result of these constraint, organisations are, in some cases, accelerating their automation strategies to reduce dependence on humans in order to focus on developing their key talent on those higher value, strategic tasks that require skills and capabilities that are harder to automate.

Economic Indicators

Whilst there are some positive indicators for New Zealand manufacturers, for example an increase in exports to the US market, most organisations are still working within a paradigm of a constrained economic environment, resulting from high inflation and interest rates, supply chain challenges and labour quality constraints.

As a result, most organisations reported a conservative approach to capital outlay, growth targets and investment in R&D and new product development. On the positive side, a significant number of organisations, recognise the need to use this time to review their operational efficiency, process discipline and strategic priorities to establish a stronger foundation from which to accelerate as the market returns.

Cyber security

With the increasing propagation of connected systems, machines and HMIs, impact of increasing potential frailty points in IT and OT networks is being recognised as a high priority across the industry. This comes at a time when there increasing examples of IT/OT integration being exploited.

This concern was also reflected the recent State of the Industry report from Rockwell Automation that showed cybersecurity in the top 5 external obstacles for manufactures for the first time.

The prevalence of IoT connected robots and co-bots on display at EMEX this year shows that device and system integration is a fundamental part of the future of manufacturing.

However, as organisations scale up their adoption of IoT connected devices, protecting organisation data and mitigating the cyber security threat resulting from multiple frailty points will only increase in priority.

Whilst these challenges remain a concern for many, there were many opportunities evident through the presenters, exhibitors and attendees that provide grounds for optimism.

Data-driven transformation

More and more organisations are placing data at the centre of the enterprise and operational strategies. As the quality and volume of data increases, and the sophistication of organisations to  use it to drive insight develops, many are seeing exponential gains through a data-driven approach to prioritisation, optimisation and strategic advantage.

With the wide-spread adoption of AI, this data is now being put to work to solve optimisation problems previously put in the too hard basket.

The potential use cases and benefits of AI are continuing to emerge. However, the priority for organisations should remain on ensuring that AI tools are being adopted on top of high-quality data. Unfortunately, poor quality data continues to hold back many from reaping these benefits.

Lower cost, modular automation

Walking round the halls of EMEX this year showcased the variety of lower-cost, modular options for automation. The availability of agile, lightweight co-bots demonstrates an increasing trend in organisations taking a modularised approach to automation, one in which a co-bot is able to perform multiple functions to remove bottlenecks, address skills gaps and/or increase through-put for a manufacturing line.

For New Zealand’s SME business landscape, these tools provide a logical fit for organisations for whom the ROI full automation of a line does not stack up.

Using a modularised approach allows for line efficiency and flexibility with a lower payback period; an attractive proposition in capital constrained times.

Market differentiation

A notable change from EMEX 2022 to this year’s exhibition was the presence of representatives from, what have been lesser served markets, for New Zealand businesses. This was particularly true of the defence industry, for example with presence from AUKUS.

New Zealand’s reputation as a highly trustworthy and secure country makes our businesses well positioned to support markets for whom security is a priority.

This has been a trend recognised over the last few years and is now accelerating with New Zealand businesses winning work away from cheaper labour economies due their ability to ensure security and privacy, for example in automotive electronics and defence.

It will always be hard for New Zealand businesses to compete on price alone. However, through a focus on process efficiency, quality, flexibility and security we are able to find an alterative competitive advantage.

There is no doubt that, for most organisations, the short-term economic conditions will be challenging.

However, through a focus mitigating the challenges and exploiting the opportunities described above, there is reason to be optimistic about the medium to long term, so we will wait with interest to see where we are as an industry for EMEX in 2026.