Productivity

Smart Industry Readiness Index: Key Themes and Findings

From March issue NZ Manufacturer magazine. www.nzmanufacturer.co.nz NZ Manufacturer March 25 by Media Hawkes Bay Limited – Issuu Adam Sharman, CEO LMAC Group APAC The Smart Industry Readiness Index (SIRI) has emerged as a critical tool for manufacturing organisations seeking to navigate their digital transformation journeys. At LMAC Group we have supported over 200 business across New Zealand and the UK to define, start and optimise their Industry 4.0 journeys through our digital transformation approach using the Smart Industry Readiness Index. Reflecting on this experience, in this article we will discuss the key themes and insights into the current state of Industry 4.0 adoption and their implications for manufacturing business across the industry As New Zealand manufacturers seek to optimise and accelerate their productivity through Industry 4.0, they face several distinctive challenges: Scale and Investment Capacity: With most New Zealand manufacturers being SMEs, many face challenges in securing sufficient capital for comprehensive digital transformation initiatives. Talent Acquisition: The limited local talent pool for specialised digital skills creates a significant barrier, with many organisations struggling to attract and retain experts in areas like industrial IoT, data science, and automation engineering. Connectivity Infrastructure: Regional manufacturers sometimes contend with limited high-speed internet access, constraining their ability to implement cloud-based solutions or real-time monitoring systems. Integration with Legacy Systems: Many established New Zealand manufacturers operate with older equipment and systems that present integration challenges for newer digital technologies. New Zealand manufacturers exhibit a characteristically pragmatic approach to technology implementation. Rather than pursuing cutting-edge technologies for their own sake, Kiwi businesses tend to prioritise practical solutions with clear returns on investment. This approach serves many companies well but can sometimes limit exploration of more transformative technologies that might deliver longer-term competitive advantages. Most Commonly Identified Priority Dimensions for New Zealand Manufacturers SIRI assessments […]

A tale of two sectors

From March issue NZ Manufacturer magazine www.nzmanufacturer.co.nz NZ Manufacturer March 25 by Media Hawkes Bay Limited – Issuu Ian Walsh, Partner, Argon & Co NZ I was reminded last week of the level of complexity and difficulty to solve our productivity crisis. It’s clear to me that we have a multi-speed economy, with certain sectors having made great progress over the last 10 years with others still on the starting blocks. The dairy sector has been developing and implementing best practices, training leaders, building capability and employing appropriate technology for over 25 years. Fonterra has lead the charge and most other dairy companies have followed this lead, by developing and employing solutions to improve productivity, reduce waste, improve yield and reduce costs. It has led to fantastic outcomes, with the most recent payout reflecting both the great work on the farm and the much improved off-the-farm processing capability. It would be untenable to consider competing globally with the capability the sector had in 1999. The payout would have been significantly lower and dare I say many processors would have been seriously impacted. This is, of course, not to say the job is finished, because it isn’t, but the direction of travel for the sector looks good. In contrast, the global construction sector has seen little-to-no productivity growth over the last 50 years, and in New Zealand it’s no different. There is a unified view that productivity needs to improve, however little or no concerted action has been taken to adopt best practices. The tales of late delivery, cost overruns and underperformance on completion are now so common that these outcomes are expected. Indeed 94% of construction projects don’t achieve cost, time or quality objectives. When a job is costed at $2 billion, it’s no […]

Manufacturing a key player in our export story

From March issue NZ Manufacturer magazine www.nzmanufacturer.co.nz NZ Manufacturer March 25 by Media Hawkes Bay Limited – Issuu Chris Penk, Minister for Small Business and Manufacturing Starting 2025 by taking on the role of Minister for Small Business and Manufacturing has been an exciting time. As readers of NZ Manufacturer will be well aware, these areas lie at the heart of the New Zealand economic engine. Manufacturing is a key player in our export story and the vast majority of NZ businesses are “small” (with 97% having fewer than 20 FTE employees). So let me start by saying how grateful I am to everyone in the sector who is producing the goods, quite literally(!), to ensure New Zealand’s economic growth. My initial approach is to listen carefully to what manufacturers see as their challenges and opportunities. This will provide a countrywide perspective, on top of what I hear from constituent businesses within Kaipara ki Mahurangi. The area that I represent in northwest and the rural north of Auckland includes some significant industrial zones, so I appreciate manufacturing is a key enabler of employment and social cohesion in local communities. My “starter for 10” would be making sure that manufacturing businesses can navigate bureaucratic roadblocks and – wherever possible – removing those roadblocks. I have observed that the compliance burden is too high and doesn’t reflect a risk-based approach. Greater balance is needed, which is why smart regulation (as opposed to removing all regulation) is our watchword as a government. Trade is another key pillar to aid growth, and it’s our ambition to double the value of New Zealand exports within a decade. We’re getting on with signing new trade agreements across the globe – knowing the quality of our great […]

No More Excuses: Manufacturers Need to Lead NZ Productivity Shift

From March issue NZ Manufacturer magazine www.nzmanufacturer.co.nz By David Altena and Rob Bull Podcast: https://www.linkedin.com/company/the-better-smb/ David Altena is Head of Growth & Partnerships | SmartSpace.ai Co-Founder | The Better SMB Podcast Rob Bull is Director & Principal Consultant at Plexus Consultant & Co-Founder & Host of The Better SMB Podcast New Zealand’s productivity crisis has dragged on for decades, waiting hasn’t worked. Our productivity lags other OECD nations, with clear consequences: stagnant wages, reduced competitiveness, declining living standards, weak business investment, an over-reliance on commodities and low-value industries. We work longer and harder, not smarter. The Treasury has called it our biggest economic challenge, yet we continue to treat it as an abstract problem rather than an urgent, business-led priority. The Numbers Don’t Lie To make any meaningful progress and catch our peers, businesses en masse must focus actively on performance improvement. Even with that level of action and momentum, it would still take three to five years before we begin seeing national productivity improvements. To achieve this, we’re not talking about “some manufacturing businesses” making incremental improvements. We need to redefine New Zealand’s economic landscape… According to Statistics NZ (2023) there are ~ 23,000 NZ manufacturing businesses. For meaningful change we need 15,000 manufacturers, or two-thirds, to make this their top priority for the next five years. Why Government Targets Won’t be Enough Our government has set ambitious targets spanning: Doubling exports Improving R&D Strengthening skills Reducing crime rates Improved healthcare Focusing on sustainability But these span every sector and shift with the political cycle. While government policy provides a foundation, it’s not enough. Business leaders must take charge. Without individual businesses improving their performance, national productivity will remain stagnant. What if prioritising productivity delivered more impact than today’s scattergun approach? Without productivity gains, even billions in […]

Q & A with Geoff Necklen of Roadside Supports

What does your company do? We are a steel product manufacturer. . How long have you been in business? 41 years this month. What products do you make? We manufacture our own Roadsign Supports brand range of highway sign pole systems for the NZ market primarily. This includes motorway signage, and urban signage on single post units called Monopoles which are our main products. We are also involved in special electronic poles for bus and congestion management. How are you finding business at present? We have been steady this year but sales volumes are a bit down. I am getting good enquiries, however, and am confident about next year. Where do you source your components? We source all our materials locally from merchants and utilise second-tier suppliers such as profile cutters and galvanisers. Suppliers such as profile cutters and galvanisers. We try to source NZ AUS material as much as possible. Where do you see growth for your company in the future? The roads of national significance and associated new highway projects announced by National mean we have a long-term future with the products we make. The electronics industry is also exciting, and we are right there with many new project solutions with our good client partner.

Building a comprehensive business case for factory technology investment – Beyond the numbers

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 […]

Manufacturing bottleneck: How Auckland’s land crunch threatens growth

From NZ Manufacturer magazine, February 2025 By Mark Devlin, Managing Director, Impact PR Auckland is the industrial heart of New Zealand, but an emerging scarcity of industrial-zoned land is poised to have far-reaching implications for the manufacturing sector. As businesses increasingly seek larger, purpose-built facilities to house state-of-the-art technology and automated processes, the land supply constraints could prevent growth and innovation in one of the country’s most essential industries. Manufacturing Under Pressure New Zealand’s manufacturing sector, which contributes over 10% to GDP and employs more than 240,000 people, is under increasing pressure to modernise and scale up. Global trends in automation, robotics, and smart logistics demand facilities that are capable of supporting high ceilings, expansive footprints, and advanced connectivity. Stephen Hughes, CEO of Drury South Crossing—New Zealand’s largest mixed-use property development—says that half of the second phase of their industrial development has already been sold. Manufacturing companies and industrial operators are vying for what remains of the land, recognising the unique advantages that sites like Drury offer. According to Hughes, “Large-scale manufacturing facilities require contiguous greenfield sites with close access to major transport arteries like motorways and rail. The diminishing availability of such land in Auckland is beginning to limit the options for industrial expansion.” Automation Driving Land Demand A major shift in the manufacturing sector is the adoption of Automated Storage and Retrieval Systems (ASRS) and other advanced technologies. These systems optimise operations by automating warehousing processes, reducing labour costs, and improving efficiency. However, the infrastructure for such systems cannot simply be retrofitted into existing warehouses; they demand purpose-built facilities with ceilings as high as 30 metres and footprints of two hectares or more. Ben Stewart, Associate Director of Property at Calder Stewart, explains that Auckland’s geography and regulatory landscape are significant obstacles. “The region is constrained by natural […]

How do we turbocharge manufacturing?

From NZ Manufacturer magazine February 2025 By EMA Head of Advanced Manufacturing Jane Finlayson Economic growth appears to be the focus for 2025 following a tough year of recession and rising unemployment. One of the key drivers of national growth, our manufacturing sector, has been struggling due to high operational costs, increasing global competition, outdated technology, skills shortages and a lack of R&D to drive innovation. The BNZ-Business New Zealand Performance of Manufacturing Index (PMI), a monthly survey providing insight into levels of activity in the sector, has been in contraction for 22 consecutive months. This signals declining production, low new orders, and falling profits across the manufacturing landscape. Recent government efforts to fast-track infrastructure development, stop wasteful spending, push through RMA reforms, sign new trade deals, and make foreign investment easier have laid the foundation for a more competitive future, but that’s peripheral to the direct challenge facing manufacturers. A key task facing incoming Manufacturing Minister Chris Penk is to assess how the government can help the sector stay competitive with our global peers and drive productivity. For many New Zealand manufacturers, the path forward is clear: investment in technology, particularly software and hardware, is essential. As we progress deeper into the Fourth Industrial Revolution (Industry 4.0), the convergence of artificial intelligence, cloud connectivity, and real-time data analytics will prove crucial in shifting New Zealand’s manufacturing sector from lagging to leading in the global market. Yet, many manufacturers are struggling to keep up with international standards and this particularly, but not exclusively, affects our smaller companies. New Zealand’s manufacturing sector includes some very advanced manufacturers, but many small and medium-sized businesses have fallen behind our Asian and European counterparts. As a result, despite the government’s aspiration to double the value of exports in the next decade, manufacturers are at […]

Funding growth?

From NZ Manufacturer magazine February 2025 Ian Walsh, Partner, Argon & Co NZ I have been considering the approach to drive growth in NZ as we move into 2025. Overall, this is a positive direction, and business needs growth to fund investment, to improve its product and service and create a virtual cycle. This is very much what Dr Edwards Deming laid out to Japan in the 1950’s. However, he described this as a quality circle with the start being to focus on improving your product or service, leading to happier customers, better product, lower cost, then more sales and the cycle is virtuous and repeats. Expecting growth for growth’s sake by encouraging investors, without improving your product or service, or a clear strategy (Ireland or Singapore for example) is a recipe for failure. This investment is only one part of the puzzle. The other parts are aligning your businesses and universities and research capabilities with the areas in which the nation can win. The restructure of Callaghan and research institutes goes some way to this, but aligning universities and business and research, I would suggest is still a work in progress. This of course is common practice in Japan, America and other “successful” countries with major corporates invested in universities and research in a synergistic manner. As Doug Green outlined in his article, our top 10 exports accounted for over three-quarters (76.4%) of the overall value to global markets: Dairy, eggs, honey: US$12.2 billion (30.7% of total exports) Meat: $5.4 billion (13.6%) Wood: $2.9 billion (7.2%) Fruits, nuts: $2.2 billion (5.4%) Beverages, spirits, vinegar: $1.53 billion (3.9%) Cereal/milk preparations: $1.52 billion (3.8%) Modified starches, glues, enzymes: $1.4 billion (3.4%) Machinery including computers: $1.19 billion (3%) Fish: $1.19 billion (3%) Aluminium: $949.8 million (2.4%) These would seem to be a […]

Talk fests do not help the bottom line

Editorial NZ Manufacturer February 2025 We are not short of commentators in New Zealand telling us what is wrong. Some even prefer ideas on how we can fix things. These commentators appear in our newspapers and whatever they say – does it matter? – does not bring about change. They do not affect policy. They keep their Profile and allowance – the newspapers keep their commentators as added value for the paper they write for, seemingly to satisfy the subscriber. If they believe they can make a difference to our way of life, they need to talk less about (say) real estate, where so much money is invested that does not go into the productive sector. People buying up property are, generally, not the creative class, innovators, developers, forward- thinking in their view on the nation’s future. This is where a cloud hangs over our prime minister; he owns properties and whatever he says for the direction the country does not affect his back pocket. He is in a regal position where decisions made will not lessen his financial situation. We have Chris Plenk, the new Minister for Small Business and Manufacturing who does not have a budget, A minister outside cabinet who answers to Judith Collins. We have the disassembling of Callaghan Innovation and its functions moved to other entities. We need to come to grips with where the country is heading and how we are going to get there. Is it more overseas investment, hopefully in businesses and not real estate. Is it public sector and private sector investment – and what will the investment focus on? We continually discuss the rail, road and sea transport systems as to help make the economy stronger. But just what is around the corner? We know agriculture and land-based enterprises continue […]

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