Productivity

Innovation in adversity: Transformative approaches to outsourcing

As the year winds down, businesses across New Zealand reflect on lessons learned and strategise for growth. For some, this year has been transformative, driven by innovative approaches to overcoming industry challenges. Director of Auckland public relations agency Impact PR Mark Devlin, discusses how selective outsourcing can be leveraged to expand capacity and access lucrative export markets. For many SME manufacturers, this is a frenetic time of year. Trying to pack in two months of production and administration along with plans for time with the family in the three weeks before Christmas can be exhausting. The public relations sector is no different. Media continue to churn out content, client crises and issues still arise (frequently when the CEO is at the beach for some reason) and we work with journalists looking for stories they can hold to publish over the summer season when the news cycle tends to quieten. That said, the end of the year is often the only time many of us will get to reflect back on lessons learned and look ahead to better more efficient ways of achieving business growth. Over the past 12 months, I have worked with two businesses in very different sectors that stood out in this regard. Both of these have developed new ways of overcoming the challenges associated with outsourcing to dramatically expand their capacity and develop new export markets. Wool carpet manufacturer Bremworth is a great example of how unanticipated adversity can be turned into an opportunity for growth. In the months following the extensive damage to their Napier facility caused by Cyclone Gabrielle, the company moved to develop a hybrid manufacturing model under which New Zealand wool is sent offshore to be spun into yarn and dyed – before being sent back here to be made into premium wool […]

New Zealand Manufacturing: A Year of Resilience and Transformation in 2024

Adam Sharman CEO LMAC-Group APAC The New Zealand manufacturing sector has navigated a complex landscape in 2024, with significant headwinds such as persistent inflation and increased operational costs, local and global supply chain complexities and global economic uncertainty; factors which led many to adopt the mantra of ‘survive to ‘25’ in order to navigate sales uncertainty and low market and consumer confidence. Whilst these realities are pervasive in the industry, economic indicators suggest a flat-lining of productivity rather than a significant decline and this year’s performance and the macro level is perhaps best understood through a detailed lens of economic indicators and sector-specific metrics. According to Statistics New Zealand’s latest manufacturing sector survey [1], the industry’s overall output experienced a modest growth of 2.3% in the 2023-2024 financial year, following a challenging period of contraction in previous years. This growth, while incremental, signals a gradual recovery and renewed resilience in the sector. Key economic indicators revealed: Manufacturing sector contribution to GDP: 11.5% (up from 10.9% in 2023) Total manufacturing sector revenue: NZ$55.3 billion Productivity growth: 1.8% year-on-year Labour productivity improved by 2.1%, demonstrating increased efficiency through technological adoption Export data from the Ministry of Foreign Affairs and Trade [2] painted a nuanced picture of New Zealand’s manufacturing capabilities: Total manufacturing exports: NZ$29.6 billion Top export sectors: Food and beverage manufacturing: NZ$12.4 billion (42% of manufacturing exports) Machinery and equipment: NZ$5.7 billion Chemical and associated products: NZ$3.9 billion Notably, the food and beverage sector continued to be the main breadwinner for GDP, with dairy-related manufactured products accounting for approximately 25% of total manufacturing exports. The sector saw a 3.5% increase in export value, driven by high-quality processing and global demand for New Zealand’s premium agricultural products. Whilst there is potentially some cause for optimism in these numbers, despite ongoing advancements in […]

A year to reflect and renew

From NZ Manufacturer magazine, December 2024. By EMA Head of Advanced Manufacturing, Jane Finlayson There’s no doubt that 2024 has been another challenging year for New Zealand’s manufacturing sector. Global uncertainties, local economic pressures, and significant supply chain disruptions have tested manufacturers across the country. Yet, despite these obstacles, the resilience, adaptability, and determination of our manufacturing community have shone through. However, the year also showed how much work remains to be done to turn the sector around and get productivity back on track. The latest BNZ-BusinessNZ Performance of Manufacturing Index (PMI) for November 2024 showed the 21st consecutive month of contraction for the sector, underscoring the ongoing pressures faced by many manufacturers. While some encouraging signs were visible midway through the year, with what looked like a gradual return towards the neutral 50.0 mark, October and November decreases highlighted the fragility of the recovery. The key sub-indices, such as production, employment and deliveries all registered below the neutral mark, with production activity in particular falling to its lowest point since July 2024. The general economic slowdown continues to weigh heavily on the sector, with many manufacturers grappling with high costs, reduced domestic demand, and external pressures such as the ongoing fallout from global inflationary trends and trade disruptions. These numbers don’t tell the full story. Beneath the surface, there’s a lot of good work happening. Many of you have been upskilling your teams, adopting new technologies, and finding smarter ways to operate. These efforts are setting the groundwork for a sector that’s not only resilient but ready to thrive when markets ease and new free trade agreements start to deliver better trading opportunities for some of our goods. Investing in People and Skills One area that stood out this year is the investment being made in people and their […]

Editorial NZ Manufacturer December issue: Challenges and success hand in hand in 2024

In a year that has brought its challenges, there are success stories of businesses striving and finding new opportunities and markets. And we also have a balancing act, one where we retain staff or see them leave for overseas in their quest to try something different. It has been a year of central government keeping the treasure chest closed and seeing restraint as the best way forward (for now). Let us hope that the Minister for Manufacturing, Andrew Bayly, can, at some stage, soon, be allocated some funding to benefit our manufacturing industries. In this issue we include our annual Year in Review and Innovations 2024 to reflect on where we have been and where we are going to. On Page 1, Ian Walsh from Argon and Co, describes this year as “The year to survive”, with businesses focused on managing costs, avoiding unnecessary spending and looking to how they can improve their productivity to improve returns. In 2025, Ian wants to see an increased adoption of lean techniques and tools, AI and automation tools and a unified approach to leadership and team capability. Adam Sharman, LMAC, (Page 14) believes the New Zealand manufacturing sector has navigated a complex landscape this year, a flat-lining of productivity rather than a significant decline. The industry experienced 2.3% modest growth in 2023-24 which indicates a gradual recovery and renewed resilience. David O’Connor of The Learning Wave, (Page 15) believes there is a sense of optimism and energy for our manufacturing businesses. Dr Troy Coyle, CEO, HERA (Page 15) would like to see a bilaterally supported pipeline of national infrastructure projects, with a secured budget allocation, consciously timed to ensure stability of construction. On Page 16, Director of Auckland public relations agency Impact PR, Mark Devlin, discusses how selective outsourcing can be leveraged to […]

Manufacturing, Technology and Innovation Success at the Hutt Valley Business Excellence Awards 2024

Manufacturing, technology and Innovation were again at the centre of the Hutt Valley Chamber of Commerce’s annual business excellence awards. The gala dinner and awards ceremony for the 2degrees Wellington Regional Business Excellence Awards were held in the Hutt Valley on Friday 15th November and manufacturing, technology and innovation organisations were among the finalists and winners. ‘Our local manufacturing, technology and innovation organisations make up so much of our business sector and do so much for our community’ said Patrick McKibbin, CEO of the Hutt Valley Chamber of Commerce. ‘We had so much talent at the Gala Dinner tonight, and it was so good to see so many of our great businesses being recognised.’ The manufacturing, technology and innovation winners and finalists included: Excellence in Sustainable and Environmental Practices sponsored by CentrePort Ltd: Winner Pact Group Holdings Ltd 🌿- a leading Hut Valley manufacturer leading the recycle revolution and creating sustainable packaging solutions. Eli Barrington, Operations Manager from Pact Group receiving his award from Anthony Delaney from CentrePort. Best Small Business sponsored by Gallagher: Winner Prologic Skin Care 🛍️- a Wellington based manufacturing a unique corneotherapeutic range of skin care products and supplying to markets in New Zealand, Australia, and the UK. Excellence in Health, Safety, and Wellbeing Innovation sponsored by ACC New Zealand: Winner – MJH Engineering Ltd 🤲 – one of New Zealand’s leading structural steel fabricators and based in the Hutt valley Finalist – Whakatiki Engineering (1984) Ltd – an Upper Hutt Based structural steel fabrication company. Finalist – Sharesies – innovating to help people invest, save, insure and grow their future wealth with Kiwisaver. Excellence in Manufacturing sponsored by Woburn International: Winner – Whakatiki Engineering (1984) Ltd 🏭- an Upper Hutt Based structural steel fabrication company Finalist – Contemporary Korowai Designs – from Wainuiomata they hand […]

How manufacturers can prepare for the ESPR

www.thinkstep-anz.com Image by Dinh Khoi Nguyen from Pixabay. As global sustainability regulations evolve, New Zealand manufacturers must stay ahead of the curve to maintain their competitive edge, especially with upcoming policies like the European Union’s Ecodesign for Sustainable Products Regulation (ESPR). But what is the ESPR, and how can manufacturers in New Zealand prepare for it? What is the ESPR? The ESPR is a new EU policy aimed at making products more sustainable and circular throughout their lifecycle, supporting the EU’s 2050 climate goals. The ESPR applies to products sold within the EU, setting specific sustainability requirements for design, use and disposal. It applies to most products sold in the EU, except for some like food and medicines. Non-compliant products may face fines or bans. Although it took effect in July 2024, the detailed rules will be developed over the next year. The regulation aims to make products more durable, reusable, repairable, and recyclable, while banning the destruction of unsold goods like electronics and textiles. A digital product passport will also be required, giving consumers direct access to sustainability data and exposing brands to greenwashing claims under the Green Claims Directive. Why should New Zealand manufacturers pay attention to ESPR? For manufacturers exporting to the EU or intend to: Failure to prepare for the regulations could result in loss of market access, fines, or even prosecution. Your products will face stricter comparisons on sustainability and circularity, which could impact your market share positively or negatively. Even if your business doesn’t currently export to the EU, the trends set by the ESPR are likely to influence regulations and purchasing decisions in other markets. As supply chains globalise, multinational corporations may enforce ESPR-style standards on all their suppliers, no matter where they are located. With more sustainability and […]

Tech isn’t the Hero, it’s the plucky sidekick

Frank Phillips, Director, Fulcrum NZ The Tale of Two Manufacturers Imagine two companies, both manufacturers here in New Zealand, standing on the brink of change. Company A embraced digital technology not just as a solution but as a stepping stone to reshape their operations. They invested in data analytics, IoT, and automation, with a clear vision to enhance their product offerings. They didn’t see tech as a shiny new toy; they saw it as a tool to make existing processes more efficient, reliable, and insightful. As a result, they grew sustainably, adapting each new piece of tech to complement their strategy. Company B, on the other hand, rushed into the world of digital with stars in their eyes and a sense of FOMO. They adopted everything from machine learning to augmented reality but hadn’t mapped out where these would fit into their overarching business vision. Within two years, they were drowning in tech debt and bloated processes, with digital “solutions” that solved nothing but looked impressive in investor presentations. The difference? Company A used tech as a supportive actor, not the main character. Company B? They gave tech top billing without considering how it fit into the wider story. The lesson here? Industry 4.0 should be the sidekick in your journey—not the destination. Tech as a Strategy or a Sidekick? It’s tempting to make Industry 4.0 your main strategy—after all, the tech is exciting! But if you’re all about tech and not about your business goals, you might end up with a whole lot of digital flash and little substance. In manufacturing, the real heroes are efficiency, quality, and customer satisfaction. Industry 4.0 tech—be it sensors, AI, robotics, or data analytics—is just the toolkit to help us get there. For New Zealand manufacturers, it’s about knowing that “the “cool factor” […]

Finding Your True Competitive Edge: A Guide for Manufacturers

Adam Sharman, CEO LMAC Group, APAC Throughout 2024 we have heard the mantra ‘survive to ‘25’ across a number of businesses and sub-sectors of our industry. In challenging economic times, manufacturing businesses face unique pressures from all directions – supply chain disruptions, decreased demand, and tightening credit markets. However, history shows that companies taking decisive action during downturns often emerge stronger when the economy recovers. In these times, organisation must be clear on what it is that sets them apart, in order to prioritise investment of time and resources in those activities that will accelerate their competitive advantage as markets recover. But how many truly understand what sets them apart? A genuine competitive advantage isn’t just about being better—it’s about being different in ways that matter to customers and are difficult for competitors to replicate. Looking Beyond the Obvious Traditional thinking often leads manufacturers to focus on standard metrics like price, quality, or delivery times. While these factors matter, they rarely constitute a sustainable competitive advantage. Every serious player in manufacturing strives to optimise these elements, making them table stakes rather than differentiators. The key lies in identifying unique combinations of capabilities that create lasting value. Consider Toyota’s revolutionary production system—it wasn’t just about efficiency, but rather a holistic approach combining worker empowerment, continuous improvement, and waste reduction that took decades for competitors to understand, let alone replicate. The Three-Step Analysis Framework Customer Value Mapping Start by mapping your customers’ entire value chain, not just their immediate needs. What challenges do they face upstream and downstream? A manufacturer of industrial fasteners discovered their true advantage wasn’t in the products themselves, but in their ability to provide engineering support that helped customers optimise their entire assembly process. Document every customer touchpoint and gather data on: Problems customers face that they haven’t […]

Fixing manufacturing’s billion-dollar harm problem

Jane Finlayson, EMA Head of Manufacturing Harm in New Zealand manufacturing is unacceptably high and urgent action is needed. The good news is that through a recent partnership between the Accident Compensation Corporation (ACC) and the Employers and Manufacturers Association (EMA), help is on the way. ACC claims costs for the manufacturing sector have skyrocketed, exceeding $165 million annually, with weekly compensation costs doubling from $51 million to $109 million between 2015 and 2024. Health and safety regulator WorkSafe estimates that chronic harm results in a staggering loss of 5,000 disability-adjusted life years each year, contributing to an economic burden of approximately $1.23 billion. The breakdown of this burden is alarming: 27% of injuries stem from musculoskeletal disorders, 17% from mental health issues, 16% from cancers, and 15% from respiratory problems. In a significant stride towards addressing this harm, ACC appointed the EMA to lead a by industry for industry project to create a harm reduction action plan. The EMA stood up Project Whakahaumaru, which translates to ‘safeguard’ or ‘protect’, and gathered the perspectives of around 200 stakeholders from the manufacturing sector, health and safety professionals, and WorkSafe via focus groups, one-to-one interviews, co-designed workshops and surveys. EMA Head of Manufacturing Jane Finlayson says the recently released results of this discovery phase have been sobering. “We embarked on this journey to safeguard our industry, and the findings highlight a pressing need for change,” Finlayson says. “Injuries are not just numbers; they represent lives affected, families impacted, and potential futures altered. “We cannot ignore the implications of these injuries – not only for the workers but for businesses and the economy as a whole. “These figures are a call to action.” Over the past year, the EMA has worked with stakeholders across the sector to develop the Project Whakahaumaru Harm Reduction […]

Aotearoa’s Industry 4.0 journey

From November issue, NZ Manufacturer magazine (below) Sean Doherty, Product Manager, Callaghan Innovation The advent of Industry 4.0 has been a game-changer for the manufacturing sector and can deliver real returns for New Zealand businesses, through increased efficiency, productivity, and innovation. However, many manufacturers remain hesitant to embrace these technologies. This reluctance often stems from persistent myths that cast doubt on the practicality and benefits of Industry 4.0. Based on Callaghan Innovation’s experience working with New Zealand manufacturers who are on their Industry 4.0 journey, we’re keen to dispel some of these common myths and provide some evidence-based solutions to encourage Kiwi manufacturers to confidently step into the future with Industry 4.0. … Myth 1: Industry 4.0 is only for large manufacturing operations. The Reality: Industry 4.0 is not exclusive to large manufacturers. Small and medium-sized enterprises (SMEs) can also leverage these technologies to enhance their operations. Indeed, as a nation of SMEs, this is where Industry 4.0 technologies arguably have the most potential to boost this country’s productivity and economic output. Companies like Nautech Electronics, Gyro Plastics and Oasis Engineering, are all great examples of SMEs deploying Industry 4.0 technologies to good effect. The key is to start small and scale up. For instance, SMEs can begin by implementing IoT sensors and use data analytics to optimise their existing processes. Retrofitting new hardware systems to older equipment can be a cost-effective way to integrate Industry 4.0 technologies without the need for significant upfront investment in new machinery. Myth 2: Exorbitant costs outweigh the benefits The Reality: While initial investments may seem daunting, the long-term benefits of Industry 4.0 technologies can lead to substantial cost savings and increased efficiency. Several McKinsey and Company case studies show manufacturers gaining a 10-20% increase in efficiency, between 10-15% improvement in quality and […]

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