Business News

Manufacturing activity experienced a sizeable lift in activity for February, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI). The seasonally adjusted PMI for February was 57.7 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was up from 50.8 in January and the highest monthly value since April 2010. The February 2012 result was also the highest February value for activity since the survey began in 2002. BusinessNZ’s executive director for manufacturing Catherine Beard said that the strong upturn in activity for February was welcome, but whether this indicates a true turn around in the fortunes of the manufacturing sector remains to be seen. “There’s no doubt that after four months of lacklustre results, February’s main value is a return to the levels of expansion consistently seen in the first three years the survey was running. Also, the fact that the key sub-indexes of production and new orders experienced a large lift is a good indicator for proper growth in the sector. “However, with the global market still flat at best, we would be cautious at this stage to think the sector has turned any corner in terms of sustained growth.” BNZ economist Doug Steel remarked, “February’s PMI result is one out of the box. A very strong reading with a lot to like in the details too. But it is only one month and in the context of a generally low level of manufacturing activity in recent years, we see it as early signs of growth off a low base.” Four of the five seasonally adjusted main diffusion indices were in expansion during February, led by new orders (63.1) and production (61.9) with both recording their highest results since 2004. Employment (51.3) was largely unchanged from […]

Auckland Council should not become involved any further with the strike actions at the port, the Employers and Manufacturers Association says. “Businesses are increasingly alarmed at efforts by our local politicians to involve themselves in the port disruption,” said Kim Campbell, EMA’s chief executive. “A report that Auckland councilor Richard Northey plans to use his position as chairman of a Council subcommittee to recommend that the Council overturn management decisions at the port is provocative. “A request by other councilors for the Mayor to call a special meeting to discuss the port is unhelpful. “We are concerned actions like these will only prolong what has been a difficult but highly proper process undertaken from the outset in good faith by the port management. “To many businesses the dispute has always been more about the survival of the union rather than the interests of the workers directly involved. “That many of those on strike are being offered jobs at the port at similar rates of pay to those they had previously is a testament to this.”  

Unless the Government finds its innovative mojo, moves to increase the efficiency of the public sector are likely to bear little fruit. In a just released White Paper Alastair Boult, National Director, Government Advisory Services for accounting firm Grant Thornton New Zealand, said that tinkering with mergers of government departments is not enough. “To achieve lasting efficiencies and long-term gains, the public sector as a whole needs to recapture its drive for innovative thinking, something not seen in this country since the ambitious reforms of the 1980s and 1990s. “Those reforms transformed the public sector, changing the structure, organisational capacity and performance of government. New Zealand was once a pioneer and led the world in modernising government. “To reform our present public sector we need to regain our innovation mojo from the last century. We need to change, not tinker,” he said. According to the White Paper, innovation in our private sector continues to grow while creative thinking in our public sector has fallen by the wayside. “The chronic lack of innovation in our public sector has led to declining efficiency, poorer services and a loss of value for taxpayers. Compared with other developed economies, our public sector is slower and less effective. Put simply, we are not being smart about the way we approach our public services.” How can we achieve this? “We need leadership from the top that recognises the significant role innovation plays within government. We need public sector management that creates and supports innovation processes and we also need a culture that tolerates failure, encourages creativity and embraces new ideas.” According to Alastair Boult, the Government’s rhetoric is not matching its own record of supporting innovation. “When measuring investment into research and innovation, New Zealand continues to place at worrying low levels. Both government and business […]

It doesn’t matter which way you look at it, manufacturers today need to stock themselves with the best equipment to compete in business. From a trade show, such as EMEX 2012, the opportunity exists to see firsthand the latest equipment available to suit your company’s needs. Companies exhibiting will show you the best in CNC equipment, plastics welding equipment, right through to CADCAM software for improved efficiencies. As tough as manufacturing conditions presently are there are always opportunities to take up, new clients to work with, new contracts to win. The right equipment is paramount to successfully winning the contracts and doing the job. My experience with trade shows is that they are ‘the connection’, the place to meet and discuss business, the opportunities and the gear. EMEX is by far the best trade show of its type in the country where you can also benefit from the workshops and talks designed specifically for manufacturers’ enhanced business intelligence. -Doug Green  

  For nationwide retail distributor, ITW Proline’s recent move to new premises in Albany gave the company scope to create a warehouse environment that better utilised the space and provided a more efficient distribution hub for its wide range of hardware products. By being resourceful with the site the company successfully managed to not only increase storage capacity by 25%, but also boost the amount of space dedicated to the packing area. “The additional space, as a result of the shift, was made more functional by configuring half the available area into narrower 2 metre aisles to accommodate the less bulky smaller units of stock such as screws, nuts, nails and chain,” says ITW Proline Operations Manager, Barry Warner. This was helped by using a Raymond Series 9000 Swing Reach Truck as a solution, in conjunction with the help of in-house software which enabled this forklift to meet the specific requirements demanded by the confined space. With its ability to handle pallets on racking up to 10 metres high, the Raymond Swing Reach Truck is used primarily in the ITW warehouse for inwards goods and replenishment work. The operators have been impressed with the sit/ stand option which has allowed them to be more productive. They are also impressed with the fingertip operation that helps them to simultaneously control all the functions of the truck as well as the increased visibility, a result of Raymond’s clear mast view. Ergonomically advanced systems like the Intelliguide wire guidance option relieve the operators of steering responsibilities in very narrow aisles, freeing the operator to concentrate on load handling tasks. RaymondÕs patented Intellispeed control system provides smooth coordination between travel speeds and load height and weight, and automatically governs the appropriate maximum speed.      

A New Zealand Manufacturers and Exporters Association (NZMEA) survey of manufacturers in the Canterbury region has identified business interruption as the biggest insurance problem for firms after the earthquakes. The survey was conducted between the 13th and 17th of February. The survey asked respondents to rank their insurers from ‘very good’ to ‘very poor’ on overall performance, rolling over policies, material damage and business interruption, as well as collecting comments. Business interruption claims received the worst rating with half of the respondents reporting their insurer had been ‘very poor’ and only 20 percent giving a positive rating. Insurers rated the best in rolling over policies with half of all respondents ranking them positively. NZMEA Chief Executive John Walley says, “The indemnity period for business interruption ran out on February 22nd for half of the firms surveyed so it is not surprising business interruption was the biggest issue.” “The comments centred on payments being too slow making it difficult for firms to meet costs, and fine print making it difficult to substantiate a claim. Delays in dealing with material damage mean that repairs, and the business lost while they occur, will occur outside the business interruption indemnity period for some firms. There is a view that the indemnity period should be extended in these cases and there is some talk of legal action if insurers do not comply.” “It is pleasing to see policies getting rolled over, even if premiums and excesses are increasing, and it is noticeable that where insurance companies have communicated the reasons for delays then they have tended to enjoy better ratings,” says Mr Walley. “It is important that this performance improves and insurers start to take on new risks so that firms can get back to focussing on their own activity rather than building and insurance […]

  How can you ‘add value’ to your customers? As a sales and marketing consultant, I advise my clients to do things that differentiate their business in a positive way from all their competitors. And a simple way to do this is with the strategy of ‘added value.’ Here are three examples of added value to get you thinking… 1: Warehouse reorganisation: In the book ‘How Champions Sell’ by Michael Baber there is the case study of Steve who was an industrial sales representative and sold hardware, nuts and bolts to industrial accounts. Steve dealt mainly with buyers in purchasing departments. His products were considered a commodity and he was under constant price pressure. Now Steve was an engineer, and became interested in warehouse operations. During some extended sales calls, and during some of his weekends, he worked with the warehouse manager of one of his accounts. Together they upgraded the accounts warehouse management system. This saved the customer hundreds of thousands of dollars. His customer was very grateful and gave Steve all his hardware business with little concern for price (as Steve was generally price-competitive). The owner of this company and the warehouse manager referred Steve to several other companies in the area. Steve helped install the cost-saving warehouse system at some of these companies. He picked up their hardware business, again with little concern about pricing. Soon Steve was calling on the owners of companies (not buyers) all over his territory. He offered the added value service of improved warehouse operations. This was accompanied of course by the purchase of his hardware line. Steve became the most successful sales person in his company. SteveÍs added value service of helping his clients improve the efficiency of their warehouse operations is a perfect example of adding value to his customers. […]

Carl Lunt (left) with Grant Pedersen and some of Dotmar’s manufactured products. Dotmar Engineering Plastics in Auckland’s Mt Wellington industrial area – with other branches in Christchurch and Palmerston North — is part of a privately-held company which is truly a global giant in the supply and manufacture of game-changing thermoplastics. They don’t need to boast, because they are already the biggest in North America; second- biggest in Europe; and Australasia’s biggest. Then you add the ability to buy the best European plastics and hand them to highly-skilled and experienced, long-term employees like technical manager, Grant Pedersen, and the rest equals sustained success. Customers seek them out for their product-knowledge, design skills, collaborative working relationships, the quality and precision of their manufacturing, and the knowledge they have the highest quality raw-materials Ð-sheet, rod and tube, almost exclusively of European origin – when they start. The results include uncontaminated – either on or in the thermoplastic — componentry for the local food and dairy industry; hard-wearing conveyor systems; specialist bearings and fittings for super yachts; seals for petro-chemical pipelines and PTFE, graphite-filled compressor-grade seals for compressors, amongst a zillion others. The New Zealand operation also has a significant export trade in machined components to Australia, Mexico, the USA and India. Which brings us to the headline. After supplying indirectly initially, Dotmar is now providing Swedish headquartered, Atlas Copco, directly with high-spec, compressor piston rings for their now-55-year-old Indian operation. Carl Lunt, the local business manager explains: “Their compressors are part of a growing industry worldwide, the use of tankers to deliver gas to homes and factories, rather than by pipelines, which have a propensity to fail, when not properly maintained, and are sometimes subject to vandalism too. “It goes without saying that compressors operate under extreme pressures and in this application […]

  Any NZ business currently exporting, looking to grow its export markets or enter new markets, can’t afford to miss the unique insights on offer from the Indian, Australasian and European market experts at this year’s Go Global conference. Organised by ExportNZ, Go Global will bring together exporters from around the country and around the world at the Sky City Convention Centre in downtown Auckland on 22 March. The conference aims to answer some of the big questions exporters grapple with – such as how to research a market, how to promote their goods or services there, and how to use intellectual property and research and development to best effect. ExportNZ executive director Catherine Beard says there are always new technologies and new tips to help deal with these challenges. “With the line-up of international speakers, including NZ Trade and Enterprise’s chief executive Peter Chrisp and the agency’s Beachhead Advisors who are highly successful business people in markets around the world, anyone attending is going to get some priceless insights. “Go Global presents a rare opportunity to have all these experts together at one time, at one event. Be there or miss out on what could be the key ingredient your business needs to succeed in that highly lucrative overseas market you’ve been trying to crack!” As well as the in-market Beachhead Advisory Board experts from North America and India, tips for success will also be shared from Kiwi exporters making good around the world: • Simon McDonald, CEO of Triodent, winner of Exporter of the Year at the BNZ Partners ExportNZ Bay of Plenty Export Awards • Michael Stedman, CEO of Natural History New Zealand; and • Neil Cowie, CEO of Pumpkin Patch, winner of the NZTE International Business Awards supreme award in 2010. As well as learning from […]

Manufacturing activity remained in expansion but clear division lines are drawn, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI). The seasonally adjusted PMI for January was 50.5 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was down from 51.6 in December but up from 46.5 in November. The January 2012 result was also the third lowest January value for activity since the survey began in 2002. BusinessNZ’s executive director for manufacturing Catherine Beard said that the positive and negative comments from manufacturers outlined similar issues and influences, but with contrasting outcomes. “For those experiencing positive influences to the start of 2012, seasonal effects combined with a pick-up in offshore orders, particularly from Australia, dominated headlines. At the other end, negative comments also picked up seasonal impacts as businesses closed over the holiday period, while there has been a drop off in orders from the European region.” BNZ Economist Doug Steel said “It is good to see the January PMI hold onto the majority of its bounce in December. Sure it is not yet strong, but it is still positive and indicative of some forward momentum.” Three of the five seasonally adjusted main diffusion indices were in expansion during January, led by production (51.7) and followed by employment (51.2). New orders (50.4) fell 1.8 points from December, while finished stocks (49.9) was generally unchanged in January. Deliveries (49.5) slipped back into contraction after a slight improvement the previous month. Unadjusted results by region showed that activity was stronger the further one travelled south. The Northern region (43.0) fell back to its lowest level of activity since June 2009, while the Central region (45.9) improved 3.2 points from December but still in contraction for the third consecutive month. […]