From NZ Manufacturer magazine, February 2025.

Adam Sharman, CEO LMAC Group, APAC

As the imperative for technology adoption in manufacturing increase, investment decisions are becoming increasingly complex. Gone are the days when a simple ROI calculation could justify major capital expenditure. Forward-thinking manufacturers are now developing comprehensive business cases that look beyond immediate financial returns to consider broader strategic implications, particularly around workforce sustainability and competitive positioning.

The Demographic Imperative

One of the most compelling arguments for technology investment lies in addressing the looming demographic crisis facing manufacturing. Across developed economies, the manufacturing workforce is aging rapidly, with experienced workers retiring faster than they can be replaced. This isn’t just a temporary staffing challenge – it represents a fundamental shift in labour market dynamics that will persist for decades.

Modern automation and digital technologies offer a powerful response to this demographic challenge. Rather than viewing technology merely as a cost-saving measure, manufacturers should consider how it helps future-proof their operations against workforce scarcity.

Advanced robotics and automation systems can maintain productivity even as skilled labor becomes harder to find. More importantly, they can make manufacturing more attractive to a new generation of workers who expect to work with cutting-edge technology.

Transforming Work, Not Eliminating It

When building a business case for technology adoption, it’s crucial to move beyond the simplistic narrative of automation replacing workers. Instead, focus on how technology transforms and elevates human roles. Modern manufacturing technologies create opportunities for workers to develop new skills and take on more engaging responsibilities.

Repetitive, physically demanding tasks can be automated, allowing workers to focus on higher-value activities that require human judgment and creativity.

This transformation has important implications for workforce development and retention. Younger workers are often more attracted to workplaces that offer opportunities to work with advanced technology.

By investing in modern systems, manufacturers can position themselves as employers of choice in an increasingly competitive labor market.

The Financial Picture

While workforce considerations are crucial, financial analysis remains at the heart of any business case. However, this analysis needs to be comprehensive, looking beyond simple cost reduction metrics.

Consider how technology investments can drive revenue growth through increased capacity and flexibility. Factor in how improved quality and consistency can strengthen customer relationships and open new market opportunities.

The cost analysis should also be thorough, incorporating all aspects of ownership. This includes not just the initial purchase price, but also installation, training, maintenance, and eventual decommissioning costs.

However, it’s equally important to consider cost avoidance – how technology investments can help sidestep future expenses related to workforce shortages, quality issues, or competitive disadvantage.

Implementation and Risk Management

A compelling business case must address how new technology will be implemented successfully. This means developing detailed plans for integration with existing systems, training programs for current workers, and strategies for maintaining production during the transition period.

It’s particularly important to consider how implementation timing aligns with workforce demographics – phasing in new technology as experienced workers retire can create natural opportunities for transition.

Risk assessment should go beyond technical considerations to examine workforce and organisational impacts. How will existing workers adapt to new technologies? What new skills will be required?

How can knowledge be effectively transferred from experienced workers to automated systems? These human factors often determine the success or failure of technology implementations.

Competitive Positioning

No technology investment decision exists in isolation. A thorough business case must consider industry trends and competitive dynamics. Are competitors making similar investments? How will technology adoption affect your market position?

What are the risks of falling behind industry standards? These strategic considerations often provide compelling justification for technology investments beyond pure financial returns.

Looking to the Future

Perhaps most importantly, a comprehensive business case should paint a picture of how technology investment positions the organization for future success. This means considering not just current challenges, but emerging trends in manufacturing technology, workforce demographics, and market demands.

How will the investment support long-term strategic objectives? How does it help build a sustainable competitive advantage?

Successful technology adoption in manufacturing requires more than just buying new equipment – it demands a thoughtful approach to transformation that considers both technical and human factors.

By developing business cases that address the full scope of benefits and challenges, manufacturers can make better investment decisions and increase their chances of successful implementation.

In an era of demographic change and increasing competition, the ability to effectively evaluate and implement new technologies may well determine which manufacturers thrive and which struggle to survive.