NZ Manufacturer, November issue

 

Ian Walsh, Partner, Argon & Co

Over the last 30 years, the productivity landscape has undergone a dramatic transformation. Like many revolutions, its roots stretch back decades—indeed, to the 1900’s.

The publication of “The Machine That Changed The World” in the late 1980s marked a turning point, crystallising the profound impact and untapped potential of innovative methodologies in manufacturing and, more broadly, organisational transformation.

What followed was a period I call “buzzword bingo,” as terms such as TQC, TQM, Zero Defects, SQC, TPM, TOC, SPC, Lean, Six Sigma, and Lean Six Sigma emerged in rapid succession over 20 years.

Each brought unique insights and some overlapping “nuggets,” yet amidst the flurry, the core principles of continuous improvement began to take root.

Over the last 10–15 years, this wave of methodologies has stabilised, with businesses refining their approaches. However, the reality remains that few have unlocked the full promise of integrated continuous improvement.

While many have seen notable performance gains, in New Zealand the adoption rate lags significantly behind other countries—a primary contributor to our national productivity deficit.

As we step into 2025, we find ourselves on the cusp of the AI age. The dawn of Industry 5.0 promises a seamless partnership between humans and technology, delivering smarter systems, streamlined processes, real-time insights, comprehensive end-to-end visibility, and dramatic improvements in efficiency and capability.

The vision is enticing, but it is crucial to remember: there are no silver bullets. As Deming wisely put it, “if you can’t describe what you are doing as a process, you don’t know what you are doing.”

Mastery begins with clarity—being able to define and articulate your processes. But it goes deeper: everyone in your organisation who touches a process must understand it for true mastery to occur.

This demands more than a scattered collection of SOPs or occasional policy refreshes. Processes are the lifeblood of an organisation. Without clear understanding and active management, they are vulnerable to creeping variation and unexpected, inefficient adaptations.

A tell-tale sign of weak or unmanaged processes is “people dependence.” Ask yourself: if a couple of key individuals left, would operations grind to a halt?

If so, your business is relying on individuals rather than robust, scalable processes—a fragile position that stifles growth.

Unfortunately, many New Zealand businesses have not yet embraced a culture of process optimisation or even documentation.

Processes remain unenhanced, unreviewed, and all too often, unwritten.

Into this landscape arrives the potential of AI. The allure of fully automated, optimised, and “human error-free” processes is strong. Yet, if you lack a clear understanding of your current processes, automating them risks amplifying existing inefficiencies.

In mapping out their workflows, most organisations discover not only duplication and waste, but also surprising detours—hidden inefficiencies that, if automated, could alienate customers rather than deliver the competitive advantages AI promises.

The path to meaningful improvement begins with a frank assessment: know your process, identify the waste, and set clear metrics. Only then should automation follow. Metrics will not only reveal your progress—they will signal if you have truly moved forward.

The most significant benefits come when automation liberates your people from repetitive, mundane tasks or empowers them with data and insights that were once out of reach. This creates new capacity for creative, value-added work and allows AI to further refine outcomes and enhance decision-making.

Success in the AI age requires a deliberate, phased approach: invest in understanding your processes, engage your team, build a roadmap grounded in efficiency and effectiveness, develop practical use cases, run a proof of concept, and only then, scale what works.

This proven model has yielded thousands of success stories in operations—and it is the right way to begin your productivity journey with AI.

Key Recommendations

• Document and Review: Ensure every process is mapped, documented, and regularly reviewed—not just by leaders but by all who interact with it.
• Engage Your Team: Involve staff at every level to build shared understanding and ownership of process improvements.
• Start Small, Scale Wisely: Pilot AI solutions with focused use cases and clear metrics before broad deployment.
• Focus on Metrics: Track outcomes to confirm that automation is delivering the promised gains in efficiency and quality.
• Foster a Culture of Continuous Improvement: Make process thinking and optimisation an ongoing habit, not a one-time project.

Conclusion

New Zealand businesses stand on the threshold of a new era. By blending a foundational understanding of their processes with the power of AI, they can unlock sustainable growth and genuine competitive advantage.

The journey starts not with technology, but with clarity, discipline, and a commitment to mastering the basics.

If you would like to embark on this journey, or simply discuss where to begin, I invite you to get in touch. Together, we can turn potential into performance. ian.walsh@argonandco.com