Business News

INTENT Group’s Business Performance Accelerator (BPA) programme was chosen by Process Improvement at ETEL Transformers. Stuart Cumming, whose role is to promote Lean manufacturing processes and continuous improvement within ETEL Transformers, had previously worked with INTENT on another project and had been impressed with the understanding of Lean. Furthermore, the content of the BPA offered a great opportunity to help spread the principles of Lean manufacturing and continuous improvement within ETEL. Stuart was very keen to get a real mix of people on the BPA to spread understanding and integrate teams. ETEL has attended two BPA training cycles and attendees have been taken from a range of functions including sales, purchasing, quality management, production managers, supervisors and senior management. At ETEL the BPA has played a very important role in some excellent business improvements achieved over the last 12 months. This includes reducing the production cycle time from 16 days to 13. Waste has been reduced across the site and stocktaking improved. ETEL has made some great financial savings as a result. Stuart says  “the Business Performance Accelerator programme has been excellent for ETEL Transformers. We have achieved significant cost savings and have people across the business with a much better understanding of Lean manufacturing and continuous improvement is invaluable. “Every business needs to examine what it does on a regular basis and look for ways to do it better. I would recommend the BPA programme as an excellent way to develop a culture of continuous improvement.” Interested Businesses should contact Donald Bowie at INTENT Group for further information on 09 523 0366.

The month of May saw the manufacturing sector continue its march towards stronger expansion, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI). The seasonally adjusted PMI for May was 54.7, up from 52.0 in April and the highest value since June 2010 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). Four of the five indices were in expansion for May, the same as April. BusinessNZ’s executive director for manufacturing Catherine Beard said that the second consecutive month of improvement in activity is consistent with other positive indicators recently seen within the sector. “Although there have been some recent publicly announced layoffs in the sector, overall the manufacturing sector has shown signs of resilience, even in the face of a high dollar versus the US dollar. It is particularly pleasing to see such a positive result from Canterbury manufacturers, which have come back quite quickly into expansion mode after the February earthquake in a relatively short space of time.” “Official data has shown a lift in total manufacturing sales, while manufacturing sector exports have also been steadily rising. Add to that the latest PMI result showing a pick-up in production and new orders and the sector is showing encouraging signs after a turbulent time of late.Ó BNZ economist Doug Steel said the May PMI was further evidence of the economic recovery gathering momentum. “Within the rather diverse fortunes across the manufacturing sector at present, there are some rather strong pulses coming through. Surging commodity income is starting to filter through the economy, and appears to be one factor behind a lift in manufacturers’ new orders. There are also encouraging signs that domestic consumer demand is improving, which may amplify the inventory cycle and the economic recovery we foresee.” […]

Pic: Prime Minister John Key with Tru-Test Group CFO Ian Hadwin and HSBC CEO David Griffiths with the HSBC Best Importer or Exporter with China award. The Chinese dairy industry is about as different from New Zealand’s as you can get. Consider this: – Their average feedlot has 6,000 cows (compared to herds in NZ of 350) – Cows are virtually all feed-lot (compared to NZ’s grass fed) – Their cow-to-human ratio is 1:100 (compared with our 1:1.5) New Zealand’s global leader in animal weigh scales, milk metering and electric fence systems, Tru-Test Group, has just won a New Zealand China Trade Association (NZCTA) award for technology that is set to help revolutionise China’s dairy industry. The HSBC Best Exporter with China award reflects Tru-Test’s success in opening up the market for walk-over weighing and animal weight data management for the country’s 12 million-strong dairy cow industry. With vastly higher input costs than New Zealand (in addition to their feed-lot structure, they import lucerne hay from the US, for example) China needs a systematic means of measuring and managing cow performance. Tru-Test Group introduced the first walk-over weigh scales system to China just over a year ago, and now around 2% of cows in China are being weighed and the data captured. That means 98% are not  underlining the market’s potential. Tru Test Group’s Market Manager for Asia, Nick Howarth, says the likely uptake of the Chinese dairy farmers and the intensity of the Chinese dairy industry’s production is likely to provide valuable insights for the New Zealand industry and further opportunities for companies like us who can export unique kiwi technology. “Given the number of people in China and the size of their industry, their dairy industry will not be a competitor to New Zealand’s Ð instead it’s a […]

  The launch of up to 10 new products and the opportunity for aviation companies to close millions in sales are the two main outcomes expected at a Waikato-based aviation showcase planned for October.  NZ Flair 2011, to be held at Te Kowhai Airfield near Hamilton from October 13 to 15, will showcase a wide range of New Zealand products and services and innovation within the burgeoning aviation sector.  Waikato Aviation Industry Cluster and NZ Flair 2011 organiser Shaun Mitchell, said the event will bring New Zealand’s “under the radar” aviation industry into the international spotlight.  “NZ Flair 2011 will leverage off the extra profile of New Zealand during the Rugby World Cup and is a real opportunity for growth, development and innovation of our industry,” Shaun said.  A New Zealand Trade and Enterprise report from June 2010 showed the New Zealand aviation sector brought an estimated $9.7 billion into the economy in 2009, with $5.9 billion from domestic activities and $3.8 billion from export activities.  The New Horizons report shows the industry is expected to grow to $12.6 billion by 2015 with experts predicting Waikato will net a “significant slice” of the growth.  Waikato economic development leader Sandra Perry, of Opportunity Hamilton, said NZ Flair 2011 was a “coming out” for New Zealand’s multi-billion dollar aviation industry.  “This will attract thousands of visitors and key aviation business people and potential investors from around the world. It’s a real chance for these businesses to get global attention,” Sandra said.  NZ Flair 2011 is modelled on AirVenture Oshkosh, a United States aviation event attracting 500,000 visitors from more than 60 countries.  “It is a combination of exhibitors, demonstrations and air displays. It will incorporate everything aviation, from manufacturing and design to space exploration and pilot training,” Shaun said.  More than 70 […]

BusinessNZ supports the general direction of proposals outlined in the ACC discussion document released today. BusinessNZ Chief Executive Phil O’Reilly said the principles underlying the scheme were unchanged and 24-hour no-fault coverage would remain. “Providing choice and competition in the work account will allow insurance and rehabilitation packages to better meet the needs of workplaces and employees. “The government does not have to be a monopoly service provider to meet its social and economic objectives,” Mr O’Reilly said. “The ability for the private sector to take part in the workplace accident insurance market will help bring more resources and innovation to the sector, to the benefit of employees.” BusinessNZ also welcomes the extension of the accredited employer scheme. “This scheme allows firms to manage their claims and achieve better safety outcomes.” Mr O’Reilly said with ACC competing against private sector insurers, it was important to ensure a level playing field for them all. “It will be important for ACC premiums to be set in a transparent manner without political interference. “BusinessNZ looks forward to working with Government in the consultation over policy detail.”

Organisations that offer their employees higher levels of trust, cooperation, fairness and economic benefits are rewarded with increased productivity, according to research by a Victoria University Economics Professor.   “We’ve all heard of the Golden Rule ‘do unto others as you would have them do unto you’—this works in economics as it does in life. If people are treated well they will work harder,” says Professor Morris Altman, who specialises in behavioural economics.   “So a Golden Rule for sustainable wealth creation is building more trusting and cooperative economic organisations.”   He cites Toyota as an example of a successful, competitive company with an employee-centred philosophy, including offering high wages, giving employees more say in the day-to-day operations of the company, offering more transparency about the company’s finances and avoiding heavy-handed monitoring of employees.   He also says in North America, department store Costco does just as well as Walmart, despite paying its workers approximately double the wages and offering better health benefits.   “The rate of return is just as good because Costco’s workers respond to being treated well by being more productive—it’s that simple.”   However, Professor Altman’s research shows that along with the success of the Golden Rule approach, it is possible for both highly self-serving as well as ‘trusting’ firms to survive in highly competitive environments. Although research indicates it is largely the trusting firms that are more productive in the long run, he believes it is not enough just to depend on the goodwill of employers to deliver a Golden Rule economy.   “As libertarian economist Friedrich Hayek argued, ‘we need institutions or circumstances that induce evil people to do good things’. This is happening increasingly in the world economy as tighter labour markets, often coupled with democratic rights, motivate employers to adopt and develop […]

  The Budget gave business little to sing and dance about. It was a ‘holding’ Budget, delivered in an election year with promises of things to come (ie, growth). The usual deficits apply and every commentator I have read in the past week does not see things changing much. With serious issues to face like growth in manufacturing I wonder where the imputus is going to come from to move the country ahead. I wonder where the vision is to develop a more dynamic economy. As I have said before, we do need a Minister of Manufacturing who can help move the country ahead. Not with promises of matching Australia by 2025 but with a more realistic aim. A Minister who can use the allocated $m36 for a boat race for manufacturing development instead. In the end, tourism is not going to do it for us.We need to make and export our own goods instead of relying on masses of Australian and Asian visitors to be a major revenue source. What do you think? What is your company doing to succeed? Let us know how it is for you. What are your impressions of the Budget?

In the picture: Industry Cluster (WAIC) chairman John Jones, left, and advisory board member John Cook sign the paperwork, with Opportunity Hamilton chief executive Sandra Perry and WAIC general manager Shaun Mitchell. It’s an exciting time in Waikato’s aviation history with the regionally-based Aviation Industry Cluster spreading its wings to become a business entity and charitable trust in its own right. The sign-over comes at a time the cluster is leading New Zealand aviation in numerous achievements, including the construction of a specialist aircraft paint facility near Hamilton International Airport. Opportunity Hamilton, the city’s economic development agency, has managed the aviation cluster contract since 2009 when it took over from the Katolyst Group. Opportunity Hamilton chief executive Sandra Perry, AIC chairman John Jones, AIC general manager Shaun Mitchell and board member John Cook, of Stainless Design, recently met to sign papers allowing the cluster to become its own entity. Sandra said the cluster stepping out of its own was the next step in recognising its vision to be the centre of light aircraft manufacture, maintenance and pilot training in Australasia.  “Upon setting up the cluster in three years ago, the goal was always for it to become self-sufficient so the signing has been a real achievement for everybody involved. It shows how there is huge potential for aviation in our region and in New Zealand,” Sandra said. Construction of the paint facility is a major accomplishment to the cluster’s achievements, including manufacturing more than 1000 aircraft, establishing an aluminium heat treatment plant and sealing a 650m grass runway. Aviation Industry Cluster Chairman, John Jones says the clusters’ milestones had the world taking notice of the region’s aviation sector. “Our counterparts throughout Australasia now really see aviation in the Waikato and in New Zealand as taking off, whereas in the past […]

The Electricity Authority’s proposed conclusion that an undesirable trading situation (UTS) took place on 26 March, sends a clear signal to the market about expectations of appropriate trading behaviour, says BusinessNZ Chief Executive Phil O’Reilly. “The Electricity Authority is an independent body, designed for making fair decisions in instances of this nature. It has produced a lengthy report on the investigation into this incident, and the proposed decision to reset prices is a finely balanced judgement based around participantsÕ expectations about prices. \”The fact that the Authority is inviting submissions on its proposed decision is welcomed by BusinessNZ. “The key issue now is what this means for NZ Inc. The proposed decision should provide significant comfort to those businesses caught by the events on 26 March. It should also be reassuring to those who may have perceived the New Zealand electricity market to be so inherently risky that they wouldn’t want to participate in it. “We hope that it doesn’t have an unintended effect of deterring investors in new generation, or unnecessarily hastening the retirement of existing capacity. Likewise, electricity customers buying from the wholesale market should not get complacent. Risk management is still of crucial importance.  “Focus now needs to be paid to ensuring a vibrant, competitive electricity market exists and that businesses can have confidence in its operation. “BusinessNZ welcomes the fact that the Electricity Authority has reforms underway to improve performance in both the spot and hedge markets in order to increase competition in the electricity industry. This increase in competition should serve to drive out the risk of excessive prices.”