Frank Phillips, Director, Fulcrum NZ

 The Tale of Two Manufacturers

Imagine two companies, both manufacturers here in New Zealand, standing on the brink of change. Company A embraced digital technology not just as a solution but as a stepping stone to reshape their operations. They invested in data analytics, IoT, and automation, with a clear vision to enhance their product offerings.

They didn’t see tech as a shiny new toy; they saw it as a tool to make existing processes more efficient, reliable, and insightful. As a result, they grew sustainably, adapting each new piece of tech to complement their strategy.

Company B, on the other hand, rushed into the world of digital with stars in their eyes and a sense of FOMO. They adopted everything from machine learning to augmented reality but hadn’t mapped out where these would fit into their overarching business vision.

Within two years, they were drowning in tech debt and bloated processes, with digital “solutions” that solved nothing but looked impressive in investor presentations.

The difference? Company A used tech as a supportive actor, not the main character. Company B? They gave tech top billing without considering how it fit into the wider story. The lesson here? Industry 4.0 should be the sidekick in your journey—not the destination.

Tech as a Strategy or a Sidekick?

It’s tempting to make Industry 4.0 your main strategy—after all, the tech is exciting! But if you’re all about tech and not about your business goals, you might end up with a whole lot of digital flash and little substance.

In manufacturing, the real heroes are efficiency, quality, and customer satisfaction. Industry 4.0 tech—be it sensors, AI, robotics, or data analytics—is just the toolkit to help us get there.

For New Zealand manufacturers, it’s about knowing that “the “cool factor” should come with a purpose. If the tech doesn’t directly improve how you serve customers, lower costs, or improve product quality, maybe it’s just noise.

When Tech “Is” the Strategy: The Product-to-Service Revolution

There’s one big exception to this rule, and it’s a fascinating one. If you’re looking to pivot your whole business model—from selling products to selling services based on those products—then, yes, technology might become more central.

This trend, known as “servitisation,” transforms manufacturers into service providers. Think about the shift from selling machines to selling “machining hours,” where clients pay for output rather than buying the equipment.

For instance, some global manufacturers are now selling hours of machine operation or even monitoring equipment to provide predictive maintenance. Instead of a one-off sale, they’ve created ongoing revenue streams.

Imagine New Zealand machinery companies transitioning to leasing out cutting-edge equipment with embedded IoT sensors that alert customers about potential failures before they happen. In these cases, the technology is integral to creating the new value proposition itself.

Digital But Not Dazed – Integrating Tech into Your Strategy

For most manufacturers, the goal should be a measured, thoughtful approach. Here’s how to make Industry 4.0 work with your strategy, not as your strategy:

1. Know Your Endgame: Start with the business goals, not the tech specs. What problem are you solving? Better throughput? Lower waste? Happier customers? Find out, then look at tech solutions that help achieve that.
2. Don’t Overcomplicate the Machine: The beauty of Industry 4.0 is its scalability. You can start small—say, with IoT sensors on a few critical pieces of equipment—before diving head-first into full automation. This lets you test ROI without betting the farm.
3. People Over Pixels: Digital transformation can bring as much disruption to your people as it does to your products. Make sure your team is on board, properly trained, and understands why the changes are happening.
4. Focus on Incremental Value: Tech that doesn’t add immediate value to the production line or improve your core offerings is probably best left to the shelf.

Building the Roadmap—Without the Road Rage

The trick is to set clear expectations with a tech roadmap aligned to your goals. Think of it as a map for growth, not just a showcase of what’s possible. Set timelines, assess which new technologies will fit seamlessly, and budget for iterative improvements.

You’ll avoid the “shiny object syndrome” that ensnared Company B and make tech an enabler for strategy, not the strategy itself.

Wrap Up: Picking the right sidekick

In the fast-paced world of Industry 4.0, tech has a crucial role, but it’s just that—a role. For New Zealand manufacturers, the path forward is about leveraging Industry 4.0 tech to align with your values and objectives, not as a one-size-fits-all solution.

So, don’t let tech take the wheel of your strategic vision; let it be the co-pilot, guiding you to higher efficiency, customer satisfaction, and growth.

If you start with the right mindset, you’ll find that technology will work for you—not the other way around.