Productivity

At the coalface of technology adoption in manufacturing

By Jane Finlayson, Head of Advanced Manufacturing, EMA As the backbone of New Zealand’s economy our manufacturing sector contributes approximately 10% to GDP and employs more than over 240,000 people. Yet, despite its significance, the sector’s productivity has been stagnating, with labour productivity growing at a mere 0.92% annually over the past decade, well below the national average of 1.17%. This stagnation is not due to a lack of effort or ambition. Instead, it reflects a critical gap: the sector’s slow and fragmented adoption of technology. While many larger firms are beginning to modernise their operations, many small and medium-sized enterprises (SMEs) still rely on outdated systems, manual processes, and fragmented workflows. This digital inertia is limiting their global competitiveness and resilience. At the Employers and Manufacturers Association (EMA), we see firsthand how these challenges play out. Through our series ‘ASB Manufacturers Workshop: The Impact of Industry 4.0 on Your Business’, manufacturers consistently share a mix of enthusiasm and uncertainty about the path forward. While many are eager to innovate, they often feel overwhelmed by the scope of change and unclear about where to start. One of the most urgent barriers is the widening digital skills gap. In PwC’s 27th Annual CEO Survey, released last year, 83% of local business leaders report they have a skills shortage within their organisation and 76% specify a lack of technical capabilities as a barrier to transformation. This disconnect is deeply concerning, especially as technologies such as artificial intelligence (AI), collaborative robotics (cobots), the Internet of Things (IoT), and data analytics have moved from being future ambitions to current necessities. Feedback from manufacturers who have attended the workshops confirms this. There is growing demand for reskilling workers not only in technical areas, such as integrating Enterprise Resource Planning (ERP) with design tools, managing Supervisory […]

Reflections from Australian Manufacturing Week, looking forward to SouthMACH 2025

Adam Sharnan, CEO LMAC Group APAC Australian Manufacturing Week is an annual exhibition for the manufacturing industry, this year held in Melbourne between 6-9th May. Over the four days of the exhibition, the manufacturing industry comes together to share emerging technologies and services, share learnings and ideas and connect with partners across the industry. With this year’s event taking place within days of the Federal election and the Labour Party’s return to power, the focus of the event was on lifting productivity of Australia’s manufacturing sector and, in turn, its contribution to lifting national GDP. Not unlike, New Zealand’s manufacturing sector, Australian businesses are facing significant challenges. Louise McGrath, Head of Industry Development and Policy at the Australian Industry Group highlighted slowing investment, a restrictive workplace relations system, an uncompetitive tax system, a complex regulatory environment, ongoing skilled labour shortages, and uncertainty over energy affordability and reliability (gas prices having risen by 49% in the last 5 years, contributing to an increase of 31% across all manufacturing inputs) as being the key headwinds facing Australian Manufacturers. These issues are compounded by volatile international conditions and national security challenges, severely constraining the capacity and confidence to invest in business R&D, which is critical for innovation and productivity enhancement. In response to these challenges, industry groups used the Australian Manufacturing Week exhibition to advocate for an industry-wide approach to lifting productivity and viability of the manufacturing industry focused on Digitisation (acceleration of productivity through the adoption of Industry 4.0 technology), Diversification (in to new and growing markets such as defence and hydrogen production) and Decarbonisation (to reduce reliance on high-cost energy inputs). Prior to their election, the Albanese government outlined a federal industry support package focus around the National Reconstruction Fund (allocating $1 billion of its $15 billion budget to novel and […]

Looking forward to SouthMACH 2025

-Adam Sharman, CEO LMAC,APAC As we look ahead to SouthMach 2025, it is hard to avoid the national and global context in which this year’s event is set. Global volatility and uncertainty, combined with a slow domestic economy are providing significant headwinds for New Zealand’s manufacturing industry. With the country’s industry coming together in Christchurch, we are provided with an opportunity to learn from each other, share ideas and collaborate for the benefit of the industry and country as a whole. Having recently attended the Australian Manufacturing Week exhibition in Melbourne and hearing the themes of digitisation, diversification and decarbonisation as priorities for Australia’s manufacturers, we will be paying close attention to see if these themes are replicated in the attendees, speakers and visitors to SouthMach. With the shift in the support landscape occurring in the last 6 months e.g. the disbanding of Callaghan Innovation and, with it, the Industry 4.0 Demonstration Network, at LMAC we are proud to be playing an active role in the continuing awareness and capability development of the industry. With this goal front and centre, we are pleased to be collaborating with the EMA, ASB and AspectPT to bring the Smart Manufacturers Workshop to SouthMach on both days. I will be presenting, as part of the seminar series on ‘Getting Started with Digital Transformation’, providing a practical guide to the first steps of a digital transformation in manufacturing and how this can be achieved in cost-effective way. The new addition of the Minister for Manufacturing Awards is a fantastic initiative and we congratulate all the nominees and finalists who have been recognised so far across all categories. The announcing of the award winners at SouthMach is sure to be a highlight as we celebrate the amazing people and organisations working across our industry. LMAC have […]

Own It: Leadership is a Personal Responsibility, Not a Title

In the picture: David Altana is head of Growth & Partnerships at Smartspace.ai & Co-Founder & Host of The Better SMB Podcast. You can’t change your business without changing how you lead. In the picture: Rob Bull, Director & Principal Consultant at Plexus Consultant & Co-Founder & Host of The Better Business SMB Podcast We’ve made the case. New Zealand’s productivity crisis is real, and it won’t be solved by waiting on government policy, new funding mechanisms, or the perfect hire. Now we come to the heart of the matter. If we want better-performing businesses, change needs to happen to avoid the status quo and repeat the conversations of the past 30 years. If you’re the owner, GM or leader of a manufacturing business, the next leap isn’t strategic. It’s personal. The next frontier is you. The Mirror Test Think back to last week. Were you the calm in the chaos, or part of it? Were your conversations clear, or rushed? Did your team get direction, or distraction? Did you put aside any time to improve your leadership skills or knowledge? This might have been as simple as being curious and watching a couple of YouTube videos. Learn what is happening in leading businesses, it doesn’t take too long to find a couple of case studies and pick up a few pointers, then think about how this can be applied in your business. Leadership isn’t just visible in the big decisions. It’s in the energy you bring to the day-to-day. And your team mirrors it back, whether you realise it or not. Many of us rose through the ranks by being the fixer, the hard worker, the one who showed up when others didn’t. But that mindset, the hustle, the constant firefighting, the 14-hour days, doesn’t scale. It […]

Hutt Valley’s focus on manufacturing’s future

Just released is strategic report 35 BY 35, the ten-year roadmap for Hutt Valley business growth, with a strong focus on manufacturing. The ambitious 10-year plan is to grow the Hutt Valley’s GDP by 35%, increase productivity by 16%, and increase highly skilled jobs by 18% – putting our region at the heart of New Zealand’s manufacturing, research, science and innovation industries; delivering business and community prosperity. There are over 15,000 businesses in the Hutt Valley contributing $10 billion to the New Zealand economy and employing more than 70,000 people. In the picture:Patrick McKibbin, Chief Executive, The Hutt Valley Chamber of Commerce. The plan wants to see: Productivity increase by 18.3% Increase highly skilled jobs by 16.5% GDP increase by 35% Higher average wages More jobs Greater wellbeing Better infrastructure Based on the past five years’ performance alone, linear growth for Hutt Valley is predicted at 30.7% by 2035 (44.1% in Upper Hutt and 26.4% in Lower Hutt). The ambition is to exceed linear growth. Higher productivity than the national average In the financial year to March 2022, the Hutt Valley exhibited a robust productivity level, with GDP per filled job amounting to $138,345. This figure surpassed the national average of $132,815, indicating the region’s higher productivity levels. Productivity growth Productivity in the Hutt Valley in March 2022 demonstrated steady growth, increasing by 2.8% compared to the previous year, outpacing the national increase of 2.3%. This growth trend is indicative of a region that values efficiency and innovation. The Hutt Valley is the engine room of the Wellington region – a vibrant hub of manufacturing, innovation, science and research, and many outstanding support businesses, which together form the thriving business community that we take immense pride in. The region has existing and future plans to invest significantly in construction […]

Digital transformation on a shoestring: Auckland’s innovative approach to manufacturing

A new insights paper from Tātaki Auckland Unlimited reveals how small manufacturers can embrace digital technologies without breaking the bank or risking disrupting their processes. Manufacturing remains a cornerstone of Tāmaki Makaurau Auckland’s economy, contributing more than $11 billion to the region’s GDP and employing approximately 85,000 people. Despite this significant economic footprint, New Zealand’s manufacturing sector faces persistent productivity challenges compared to other advanced economies. A pioneering initiative called Digital Manufacturing Light aims to change this by helping small and medium-sized enterprises (SMEs) in the manufacturing sector take their first steps toward digital transformation. This month, Tātaki Auckland Unlimited (the region’s economic development and cultural agency delivering on behalf of Auckland Council) is releasing an insights paper that introduces the Digital Manufacturing Light concept and shares findings from a successful pilot programme. The Digital Manufacturing Light pilot, which began in April 2022, was led by the University of Auckland in collaboration with Tātaki Auckland Unlimited. Around 20 Auckland-based organisations participated in the pilot, which included workshops and trial deployments of digital solutions. Pam Ford, Director of Economic Development at Tātaki Auckland Unlimited says, “Digital transformation doesn’t have to be expensive or disruptive. By adopting a phased approach using readily available technologies, manufacturing SMEs can create affordable and low-risk digital solutions that provide immediate benefits.” The Digital Manufacturing Light concept draws inspiration from the United Kingdom’s ‘Digital Manufacturing on a Shoestring’ programme developed by the Institute for Manufacturing (IfM) at the University of Cambridge, and is being developed in collaboration with IfM and partners across Australia and New Zealand. It follows similar principles but has been adjusted to suit the New Zealand business environment. This approach is particularly relevant for New Zealand’s manufacturing sector, which is predominantly composed of small businesses. Of the country’s 24,000 manufacturing businesses, only 1.6% employ […]

Upskilling your workforce: the secret weapon to staying ahead in tough economies

Convex, an innovative New Zealand plastic packaging company, sees staff training not just as a strategy, but as a vital driver of success. During the Covid-19 pandemic, the company actively invested in upskilling its people to stay agile through the crisis. Now, with New Zealand businesses facing fresh economic challenges, Convex continues to lead by example — showing how ongoing training builds a stronger, more resilient workforce. Convex Operations Manager Aaron Collett says agility and adaptability have been the key to thriving in an industry as competitive as plastics packaging. “Upskilling is a necessity to being and staying competitive, and for us competition is not just local, it’s global,” says Aaron. “Manufacturing is under pressure in New Zealand from imports and staying competitive in the packaging business is tough. A lot of what we do is highly specialised, capital intensive, and relies heavily on skilled trained staff.” He says while training is a non-negotiable at Convex, it must also be scalable through tough times. “Investment in training changes depending on the need, but for us it has always been important to continue upskilling our people, it’s just ‘the where’ and ‘the how’ that changes,” says Aaron. “As a business we certainly have been tested, firstly during Covid and more so recently with the economic downturn. In recent years we’ve had to navigate a new landscape in reduced demand so all areas of the business have been reviewed and training has been reduced in some non-core areas to reduce costs – but apprenticeships and appliance training maintains status quo and we’ve boosted training around HR, mental health and resilience as well as group training utilising the expertise of key suppliers.” One clear benefit of this sustained investment is agility. Trained employees can maximise production efficiency, adapt to new technologies, and take […]

Article 2: The Crucial Role of System Integrators in Industry 4.0 and Automation

-Frank Phillips, Director, Fulcrum Welcome to the next part of our Industry 4.0 series for SME manufacturers. We’re exploring various companies that can help you embrace advanced technologies and optimise your operations. Today’s focus: System Integrators. Let’s dive in and see how they can drive your business success. System Integrators: The Orchestrators of Connectivity In the realm of Industry 4.0 and automation, system integrators are the maestros who ensure that all the pieces of your technological puzzle work seamlessly together. These companies specialise in connecting various automated systems, ensuring smooth communication and integration between hardware and software components. They act as the bridge that links different technologies, creating a harmonious and efficient manufacturing environment. Maximising Efficiency: How System Integrators Add Value Engaging a system integrator can significantly enhance your manufacturing operations by ensuring that all automated systems and technologies work in unison. Manufacturers facing challenges like disjointed processes, data silos, and inefficiencies can benefit greatly from the expertise of system integrators. By creating a unified system, these professionals help optimise workflows, reduce downtime, and improve overall productivity. System Integrators tend to have significant cyber security knowledge. When establishing a wider Operational Technology (OT) environment they can be key partners to keep your business secure. Journey to Integration: Typical Engagement and Resource Requirements The process of working with a system integrator typically begins with an assessment of your existing systems and a thorough understanding of your integration goals. This phase involves site visits, technical evaluations, and collaborative discussions to identify integration opportunities and challenges. The system integrator then designs a customized integration plan tailored to your specific needs. Expect to allocate internal resources, including IT personnel, operations managers, and system administrators, to collaborate with the system integrator. The engagement can range from a few weeks to several months, depending on the […]

Navigating the tariff maze: How NZ manufacturers can thrive amid trade tensions

Adam Sharman, CEO LMAC Group APAC Tariff turbulence: Understanding the impact on kiwi manufacturers. As trade tensions escalate globally, through the introduction of heavy tariff from the U.S. New Zealand manufacturers find themselves navigating increasingly complex waters. The United States is one of New Zealand’s key export markets worth approximately NZ$9 billion annually, and New Zealand products provide key components in other countries’ supply chains into the USA. The ripple effects of U.S. tariff changes extend far beyond simple price adjustments. When tariffs increase, manufacturers face immediate margin pressure, but also longer-term strategic questions about market positioning and investment priorities. For New Zealand’s primary sector, dairy processors, which have developed specialised ingredients for U.S. food manufacturers, tariff increases could undermine carefully cultivated market positions. Similarly, premium meat exporters who have invested heavily in sustainability certifications and farm-to-table traceability to command premium pricing, could see their value propositions challenged. The impact extends beyond agricultural processing. New Zealand’s high-tech manufacturing sector, including medical device manufacturers and precision agricultural equipment producers, faces similar challenges. For organisations that have established niches in specialised global supply chains where even modest tariff increases could significantly alter competitive dynamics, a focus on IP protection and maintaining certifications required for market access, for example in aerospace, pharmaceuticals and defence help protect market position, and reduce price sensitivity. Strategic pivot: Capitalising on trade war opportunities While tariff increases present challenges, they also create strategic opportunities. As tensions escalate between the United States and other major trading blocs, particularly Europe and China, New Zealand manufacturers could benefit from “tariff arbitrage” – situations where Kiwi products become relatively more competitive due to higher tariffs on competitor nations. Exporting organisations are required to think differently about their global market positioning, both in terms of direct market tariffs and the relative position […]

From Automation to Augmentation: How Industry 5.0 is Redefining Manufacturing

The landscape of manufacturing is undergoing a significant transformation as we transition from the principles of Industry 4.0 to the emerging focus of Industry 5.0. While Industry 4.0 emphasised automation and the integration of digital technologies into manufacturing processes, Industry 5.0 shifts the spotlight towards augmentation, fostering a harmonious collaboration between humans and machines. Evolution from Industry 4.0 to 5.0 Industry 4.0 brought a revolution by embedding automation and data exchange into manufacturing through cyber-physical systems, the Internet of Things, and cloud computing. The central aim was to streamline operations, reduce human intervention, and enhance efficiency. However, as we pivot to Industry 5.0, the emphasis broadens to include the critical role humans play alongside machines, leveraging the unique capabilities of both to drive innovation and adaptability. Key Differences: Automation vs Augmentation The shift from automation to augmentation marks a fundamental change. Automation focuses on machines performing tasks independently, effectively reducing human involvement in repetitive and labour-intensive activities. In contrast, augmentation enhances human capabilities. It is about empowering workers with intelligent systems, using machines to support and elevate human decision-making and creativity rather than replace it. Benefits of Human-Machine Collaboration The synergy between humans and machines in Industry 5.0 offers numerous benefits. It enhances problem-solving capabilities by combining human intuition with machine precision and data processing power. This partnership can lead to more innovative solutions and a more flexible production environment. Moreover, it increases operational efficiency as machines handle repetitive tasks, allowing human workers to focus on more strategic roles that require creativity and complex decision-making. Examples of Successful Augmentation Real-world examples of successful augmentation in manufacturing often involve collaborative robots, known as cobots, working alongside human workers on production lines. These cobots are designed to assist with precision tasks, reducing the physical strain on workers and lowering the risk of human error. […]

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Productivity