NZ Productivity Organisation

Stephanie Pretorius, Argon & Co In today’s fast-paced world, businesses and individuals often chase productivity, believing it to be the hallmark of success. However, the relentless pursuit of productivity—defined as the sheer volume of tasks completed—can overshadow a more crucial metric: efficiency. Efficiency, which emphasises the optimal use of resources to achieve desired outcomes, offers a more sustainable and effective path to long-term success. The Lure of Productivity Improving productivity is a common catch cry for many organisations heard from Governments to Boards and CEO’s. Productivity measures how much work is done in a given period. It’s a quantity-focused metric, often leading to a “more is better” mentality. It’s also an internally focussed metric ultimately linked to the sales growth aspirations of most organisations. Productivity growth leads to more output, therefore more sales, therefore more revenue. Who wouldn’t want to grow and improve productivity? However the caveat is: Does productivity lead to higher profitability, financial sustainability and adequate margin? Does it lead higher customer satisfaction that will create a long-term success? In contrast, efficiency measures the quality of the work done – including how well resources, such as time, money, and effort, are utilised to achieve desired outcomes. As a quality-focused metric it prioritises doing things right rather than merely doing more. There are some pitfalls of prioritising productivity alone. Productivity-driven models often ignore process optimisation, resource optimisation and right first time considerations which can inadvertently create higher cost. For example, using overtime to achieve an increase in output can harm profitability but tick the productivity box, or perhaps the production or planning process has not been optimised so more output results in more defects, wasted material or other inefficiencies that already existed. Producing more without regard for optimisation can lead to higher cost and increased waste ultimately harming the […]

Martin Brook, Associate Professor of Applied Geology, University of Auckland, Waipapa Taumata Rau When Resources Minister Shane Jones recently unveiled his draft strategy for mineral mining, it was quickly criticised by the Labour opposition as “taking New Zealand backwards”. One environmental group even called it a “love letter to mining companies”. But the government’s ambition to double the sector’s export value to NZ$2 billion by 2035, with flow-on effects for local employment and regional economies, deserves a broader debate. In particular, New Zealanders opposed to mineral mining must ask whether it is ethically fair and reasonable to effectively outsource the risks of mining to other countries, while benefiting from the modern technologies those minerals make possible. The government’s mining strategy aims to produce a list of “critical minerals” for exploration. The International Energy Agency identifies minerals such as copper, lithium, nickel, cobalt and rare earth elements as essential components in many of today’s rapidly growing clean energy technologies – from wind turbines and electricity networks to electric vehicles. Indeed, according to the United Nations Environment Programme, these critical minerals are increasingly necessary for decarbonising energy systems. One of the three pillars of the draft minerals strategy is the delivery of minerals “for a clean energy transition”. How we source those minerals is an important question. Mount Aspiring National Park: many New Zealanders resist the idea of mining in pristine wilderness areas. Getty Images Environmental impacts of mining New Zealand has a rich mining history, with a wide variety of resources still extracted from underground and opencast mines. There is also a long history of opposition to mining, especially in national parks and on conservation land, as well as on privately owned hill country. And there are legitimate concerns about the environmental, social and governance implications of mining. First, it can have devastating environmental effects, especially the extraction of high-value critical minerals that often require enormous “strip […]

From May issue NZ Manufacturer -Ian Walsh, Argon &  Co It’s great to see the recent upsurge in discussions regarding the need for New Zealand to be more productive. This discussion is long overdue. The problems with New Zealand’s productivity have been masked by employees working harder for longer hours, and a surge in immigration providing excess labour, rather than working smarter. This has kicked the productivity problem down the road, and masked the reality that almost all other countries in the OECD are more productive per labour hour than we are. It is a shame that we’ve waited until we’ve run out of levers to pull, the platform to burn, and for our economy to be in arguably its worst shape ever for us to confront this brutal reality. As ever in these situations there are many peddling solutions looking for a problem. They offer silver bullets with IT and digital solutions, which look great in demonstrative environments but often don’t deliver fully when implemented. With that said, this does identify a further problem – that we are behind in digital adoption, investment in R&D and technology. However, to suggest that by addressing the digital adoption gap we will also address the productivity gap is somewhat erroneous. Digital solutions aim to automate or improve the efficiency of existing processes and ways of working, and these tools can enhance productivity when successfully implemented with careful planning, training, and change management. However, to be effective these tools need efficient, consistent physical practices and operational processes to work alongside and model. This is where these solutions aren’t replicating the success of the demo environments they’re sold on – the real operations of our businesses aren’t the tidy and optimally-structured brainchildren of software developers. They’re chaotic factories, reactive back offices, haphazard warehouses, and […]

From March issue, NZ Manufacturer www.nzmanufacturer.co.nz   -Scott Adams, Managing Principal, Argon & Co Many Kiwis have good instincts, or just good common sense, for our decision making. We might not be experts in all fields but we’re good enough to get by, and with a bit of focus we can adapt. We are, for example, certainly quite expert at managing rugby games from our couch: what combinations work, how to play against the opposition, and how much the interference of the TMO is destroying the game. But it would also be generally true that we are not so good with facts and data, where we often have high levels of distrust combined with a generally low level of competency in creating and utilising data. Whenever my consulting firm, Argon & Co, is asked to help a company to improve operational performance we always ask for data: how many projects and what scale, how many different services and products, how much waste, and how much margin. Then we ask for more data, and we will keep asking for more data until we have a clear idea of how much work is ahead of us because it usually does not take long before the well of data dries up and this is especially so with operational performance data. This lack of collecting and utilising data is one of the direct causes of our very low position on the OECD productivity (GDP per hour worked) list. If I am asked by a manufacturing company what is the best digital solution for them, my response is that the first step is to use digital, or automated, methods to collect and manage operational performance data to pick up process throughput, waste, and speed to deliver. Though the world of digital is more exciting if […]

 From April issue NZ Manufacturer magazine www.nzmanufacturer.co.nz  Andrew Bayly, Minister for Manufacturing In my February article, I announced the first meeting of my Manufacturing Productivity Advisory Group, a forum for business leaders keen to enable a brighter future for New Zealand’s manufacturing sector. I am pleased to say this group has already met again. Chaired very capably by Sarah Ramsay, chief executive of United Machinists and chair of the Advanced Manufacturing Aotearoa council, there are key themes emerging, which most people in the industry will already be well aware of. That education is needed to change the perception of the industry in people’s minds, especially those of parents with children who are contemplating their future careers and who think ‘manufacturing’ is still a dirty world. That our research centres focus on novel innovation without considering the manufacturing capabilities needed to produce them. That procurement for infrastructure is skewed towards lowest-cost international providers, thereby discouraging domestic suppliers from ramping up their manufacturing capability. And, of course, that investment is required in automation and Industry 4.0 technologies which will help drive productivity improvements. We are now in the process of finalising the finer elements of these initiatives that will help inform future policy announcements, which you will hear about in due course. In late March, I spent a week in Australia, during which I met with four ministers in the Australian Federal Government, including Senator Hon Tim Ayres, the Assistant Minister for Manufacturing and Assistant Minister for Trade. At the University of Wollongong Facility for Intelligent Fabrication. This was the second time I had met with Tim and I was keen to ask him how the Australian manufacturing sector organises and funds itself and its activities. We also discussed how the Australian Government has managed to secure successful partnerships with the country’s […]