NZ Productivity Organisation

Why our car dependence is now a strategic liability

Timothy Welch, Senior Lecturer in Urban Planning, University of Auckland, Waipapa Taumata Rau The war in Iran and the effective closure of the Strait of Hormuz have sent oil prices past US$100 a barrel – and Kiwis flocking to fill up. Petrol just hit NZ$3 a litre and some stations have reported running dry. In response to about 20% of the world’s oil supply being shut off in just a few days, the International Energy Agency announced its largest-ever coordinated reserve release of 400 million barrels. But analysts warn oil could reach US$150 a barrel if the strait stays closed. For a country that imports every drop of its petrol, diesel and jet fuel, this is not only a problem, it’s a hard reminder New Zealand has failed to mitigate such strategic vulnerability. Since Marsden Point stopped refining oil in 2022, New Zealand has imported all its refined fuel, mostly from South Korea and Singapore. Those refineries rely on crude oil shipped through the waters now blocked by Iranian drones. The latest official fuel stocks update suggests roughly 52 days of total cover, with less than 33 days of petrol in the country. This buffer was only designed to smooth over short disruptions, not substitute for a prolonged supply crisis. Motorists are already starting to hoard supplies, with petrol stations in Auckland already selling out of fuel cans. Some drivers may well be regretting not having bought an electric vehicle earlier. Failure to electrify New Zealand generates more than 85% of its electricity from renewable sources – rising to a record 96.4% in the last quarter of 2025. It has one of the cleanest and most oil-independent electricity systems in the world. Yet transport, which consumes nearly 40% of all energy in the country, remains almost entirely chained to imported oil. Electricity provides just 0.5% of domestic transport energy. It didn’t have to be […]

Tech companies are blaming massive layoffs on AI

Uri Gal, Professor in Business Information Systems, University of Sydney In the past few months, a wave of tech corporations have announced significant staff cuts and attributed them to efficiency gains driven by artificial intelligence (AI). Companies such as Atlassian, Block and Amazon have announced they would lay off thousands of employees due to increased reliance on AI. The narrative these companies offer is consistent: AI is making human labour replaceable, and responsible management demands adjustment. The evidence, however, tells a more nuanced story. The automation story is partly true Genuine disruption is visible in specific corners of the labour market, though the scale of that disruption is commonly overstated. Research from Anthropic published earlier this month shows that although many work tasks are susceptible to automation, the vast majority are still performed primarily by humans rather than AI tools. Moreover, some occupations are more exposed to displacement than others: computer programmers sit at the top of the list, followed by customer service representatives and data entry workers. Yet even within the most exposed occupations, AI use is still limited. The aggregate economic data reflects this reality. A 2025 Goldman Sachs report estimated that if AI were used across the economy for all the things it could currently do, roughly 2.5% of US employment would be at risk of job loss. That’s not a trivial number. However, the report notes that workers in AI-exposed occupations are currently no more likely to lose their jobs, face reduced hours, or earn lower wages than anyone else. The report does note early signs of strain in specific industries. Goldman Sachs identifies sectors where employment growth has slowed that align with AI-related efficiency gains. Examples include marketing consulting, graphic design, office administration and call centres. In the tech sector, US workers in their 20s in AI-exposed occupations saw unemployment rise by almost 3% […]

Workplace literacy: The hidden lever of performance

Adam Harvey, Business Performance Partner – Manufacturing, The Learning Wave We all know the story: New Zealand productivity lags behind much of the OECD. For years, it’s been in reports, debated at conferences and written in board packs. You feel it when the same issues resurface, rework creeps back in, downtime conversations repeat, and new kit doesn’t deliver what it promised. Travelling the country and visiting Kiwi manufacturers, one thing is clear: there’s ambition everywhere. New systems being introduced, digital dashboards going up, automation projects underway, and capital being committed. There’s no shortage of intent. That’s progress. It’s the right direction. But there’s an uncomfortable truth that needs to be addressed. New systems, processes and tools don’t create better performance on their own. If the people closest to the work aren’t confident reacting to change, interpreting data, using the tools, and actively improving waste, quality and efficiency, productivity and performance rarely changes. Not because your team doesn’t care. But because the capability required to unlock that next performance level hasn’t kept pace. The real constraint holding us back In many cases, that capability gap traces back to something we don’t talk nearly enough about in manufacturing: low workplace literacy and numeracy. Not school maths. Not essay writing. Workplace skills. Reading a job sheet and understanding what it needs. Identifying problems and asking the right questions. Speaking up and asking questions when they aren’t sure. Across Kiwi manufacturing, the data is confronting. At least half of all frontline workers don’t have the skills to thrive in increasingly complex plants. When those skills aren’t strong, performance leaks. The silence when you ask for questions? The issues noticed but not raised? The instruction acknowledged but not followed? All likely literacy challenges. And as new tools, systems and processes roll in, those gaps […]

In God we trust: All others bring data

David Altena is Head of Growth & Partnerships at SmartSpace.ai & Co-Founder & Host of The Better SMB Podcast. david@altena.solutions Rob Bull is Director of the New Zealand Lean Academy. rob@nzla.nz Edwards Deming’s line has been quoted so often it risks becoming wallpaper. But for New Zealand manufacturers facing reducing margins, skills shortages and relentless competition, it’s not a slogan; it must be a standard. You know the feeling. Every day’s busy, the team hustle, the shop floor hums, yet profitability wobbles, lead times slip and projects that looked promising last quarter are still stuck in first gear. The gap isn’t effort. It’s information. Not a shortage of activity, but a shortage of clarity. Do you know what “good”, let alone “great”, looks like? Information-led businesses win Let’s be blunt: gut feel gets you started, but data helps you sustain quality, hit targets and scale. Information led businesses don’t drown in dashboards – they know which information actually matters, they measure, share with the team and act on it. Manufacturers need a clear view of flow, quality, throughput, commercial health and capability. Most businesses already measure far more than they need – but far less of what matters. These aren’t “nice-to-haves.” They’re the instrumentation panel telling you if your workshop is flying straight or drifting off course. Without this, you risk over-investing in the wrong places, repeating the same mistakes and confusing activity for progress. Insights, not just indicators But watch out, simply measuring more is not learning more. Too many leaders implement software, install sensors and create dashboards using yesterday’s processes and call it transformation. What’s missing are the insights – turning the raw numbers into a real narrative. Trends vs. snapshots: Is OEE improving, or did we just have a “good week”? Causes vs. symptoms: […]

Uncertainty and opportunity for Kiwi exporters

By EMA Head of Membership and Export, Simon Devoy With the global trading environment shifting rapidly, uncertainty is the new normal for Kiwi exporters. The latest developments around tariffs from the Trump Administration show just how quickly the rules can change, and how vulnerable small, open trading economies like New Zealand can be when the rules-based global system begins to fray. In late February, the United States Supreme Court ruled 6–3 that President Trump had exceeded his authority by imposing broad “emergency” global tariffs under the International Emergency Economic Powers Act (IEEPA). The Court reaffirmed that under the US Constitution, only Congress has the authority to set tariffs. At first glance, that might have seemed like good news for exporters around the world. The ruling removed the legal basis for the 15% “reciprocal tariff” that had been applied to most imports, including New Zealand goods. But within hours, the Trump Administration moved quickly to reinstate tariffs under a different legal mechanism: Section 122 of the US Trade Act of 1974. This allows the President to impose temporary tariffs of up to 15% for 150 days. Initially announced at 10%, the tariff was soon raised to 15% and took effect on 24 February. In practical terms, that means many New Zealand exports to the United States continue to face a 15% tariff, essentially restoring the same rate exporters had already been dealing with. Some agricultural products are expected to remain exempt under earlier announcements. But exporters still need to confirm classifications carefully at the HS-code level. Meanwhile, other tariffs remain untouched by the Supreme Court decision, including Section 232 tariffs on products such as steel, aluminium and copper, as well as potential investigations into sectors like pharmaceuticals. Given the highest court in the US just ruled the gathering of these […]

Busy Isn’t Productive: The Hidden Cost of Broken Flow

A practical reset for factories stuck in firefighting, batching and workarounds. By Neil Robinson, a Senior Business Consultant with Argon & Co (Auckland) specialising in productivity improvement, Lean systems and capability building. A Six Sigma Black Belt and experienced facilitator, he helps manufacturing teams make flow visible, stabilise performance and embed practical continuous improvement routines from frontline to leadership. Busy isn’t productive. Most manufacturing leaders have seen it up close: people are flat out, machines are running, forklifts are moving — and yet output, delivery and margin are unacceptable. The hidden cost isn’t laziness or lack of commitment. It’s broken flow. If you’ve ever launched a “transformation initiative” that looked perfect in the boardroom but lost momentum on the shop floor, you’re in good company. Programmes rarely stall because people don’t care. They stall because the one thing everyone needs to understand — how work actually flows — was never made visible in a way that sticks. Flow is the backbone of every World Class operation. When product moves smoothly from one step to the next, everything improves: quality, productivity, lead time, DIFOT, cost and morale. But when flow is interrupted, busyness increases, work piles up, frustration grows and improvement stalls — even with good people trying hard. Why flow matters — and why it’s hard to teach Every operation wants work to move smoothly from start to finish. When flow is strong, performance becomes predictable. When flow breaks down, the system pays — in delays, rework, expediting, excess WIP, stressed teams and missed delivery. The enemies of flow often look “normal” in day-to-day work: batching, long changeovers, unclear priorities, waiting for information or materials, bottlenecks, and the classic workaround — “just put it anywhere for now.” These interruptions are easy to tolerate individually, but together they quietly drain […]

Q & A Stephanie Fry, General Manager, Stratmore

Stratmore is proud to be a 100% New Zealand owned and operated, family business, with over 71 years expertise in building and construction products supply. Stratmore manufactures and distributes premium, high-performance products for construction and repair and provides comprehensive consulting for the New Zealand construction industry. Stratmore is also the long standing, exclusive master distributor for the US-based Forta range of synthetic fibres for reinforcement (www.fortacorp.com) and the Canadian-based Kryton range of Waterproofing Solutions (www.kryton.com). How are you finding current business conditions? We are seeing a strong uptick in customer/product demand and have enjoyed increased revenue in the past 12 months – no mean feat in what has been a tough 2 years in the industry sector. We recently secured a national partnership opportunity and have grown our nationwide supply with a long-established customer. We have confidence the sector is bouncing back and we have a solid and positive pipeline in front of us. Is there one thing that would benefit your company at present? There are a few things that could benefit us, including: Tech that makes work easier (not more complex) Clear, real‑world value from AI & Automation Marketing capability that reaches customers, without big budgets And I would say probably the one that stands out right now for us is receiving robust forecasts from key customers. What are your plans for 2026? With increased customer demand for some key products in our range, which have traditionally seen less demand, we have re-focused part of our strategy to ensure we are servicing customer demand in locations which have previously been less engaged. We are also building momentum and shining a spotlight on ‘concrete for roading’ in Aotearoa. We have exclusive rights to the internationally recognised ‘Optipave’ system (https://fortacorp.com/solutions/concrete-solutions/optipave/) which creates cost effective, stronger, longer-lasting roads and pavements (with […]

Power Politics: How high electricity prices are squeezing NZ Manufacturers in an Election Year

By Sean Doherty,Manufacturing Commentator | NZ Industry Trends New Zealand’s electricity market is producing two parallel realities. For the country’s four major generator-retailers, business has never been better. For manufacturers, the same market is steadily destroying the economics of making things in this country. If the balance is not corrected soon, the closures already under way will accelerate – and some of the damage will be permanent. Generators cash in while industry burns out In the six months to December 2025, New Zealand’s four major gentailers – are forecast to deliver a combined operating profit of approximately $1.86 billion, an increase of around 45% on the same period a year earlier. These are not one-off results. In 2023, the same four companies posted combined operating profits of $2.7 billion – roughly $7.4 million in profit every single day. The Electricity Authority’s own energy margin dashboard shows big generators regularly earning weekly gross margins in excess of $70 million, peaking at around $119 million in some high-price weeks. Consumer NZ chief executive Jon Duffy has put the problem plainly: “We hear the same lines every year. Big profits are needed to fund investment. But the investment is always coming, never here in sufficient quantity“. The numbers back him up. Analysis by the NZCTU and 350 Aotearoa found that over the past decade, the four gentailers paid $10.8 billion in dividends to the government and shareholders while investing only $4.5 billion into plant, property and equipment. Transpower data showed that as of late 2025, only around 986 MW of new generation had been committed and financed – far short of the 1,500 GWh of new capacity needed every year until 2031. The system, in other words, is structured to reward generators most when supply is tight and prices are high – […]

University programme expands to help manufacturers go digital

New funding will enable a University initiative to help more small manufacturers access affordable digital technology and improve productivity. Key facts The Government has committed up to $475,000 per year for three years from 1 April 2026 to expand the University of Auckland-led Digital Manufacturing Light programme. Digital Manufacturing Light is delivered by researchers from the University’s Laboratory for Industry 4.0 Smart Manufacturing Systems and supports SMEs to adopt practical, low-cost digital technologies. The programme was first piloted in 2022 in partnership with Auckland Council. A University of Auckland initiative that helps manufacturers adopt low-cost digital technologies is set to expand under a new three-year Government funding commitment. From 1 April 2026, funding of up to $475,000 per year will support the expansion of the University-led Digital Manufacturing Light programme, enabling more small and medium-sized enterprises (SMEs) to increase digitalisation in their operations. The programme will continue in Auckland and expand into parts of Waikato, Northland and the Bay of Plenty, reaching around 55 percent of New Zealand’s manufacturing businesses. Digital Manufacturing Light is led by Dr Jan Polzer and Professor Xun Xu from the Faculty of Engineering and Design’s Laboratory for Industry 4.0 Smart Manufacturing Systems (LISMS). It builds on the Digital Manufacturing on a Shoestring framework developed by the team led by Professor Duncan McFarlane from the Institute for Manufacturing at the University of Cambridge. Between 2022 and 2025, LISMS worked in partnership with Auckland Council to test and adapt the Shoestring programme for the New Zealand market, launching a 12-month Digital Manufacturing Light pilot on 1 July 2025 with 12 Auckland companies. The programme development has also involved Advanced Manufacturing Aotearoa and the Employers and Manufacturers Association. The work drew the attention of Small Business and Manufacturing Minister Hon Chris Penk, who visited the Faculty of Engineering […]

NZ’s economy to take three decades to double without intervention – OECD Data

New OECD data shows NZ’s economy will take more than 30 years to double in size unless major structural and cultural changes are made to how organisations operate. The modelling shows New Zealand’s real GDP, currently at US$216 billion, is not expected to double until 2055.[1] While the nation’s economy is projected to grow by nearly 48% by 2040, this expansion is largely driven by population growth and increased labour input, rather than meaningful improvements in productivity. New Zealand’s GDP per hour worked, once comparable to Scandinavian countries like Denmark, Finland, and Sweden, is now on average 40% lower than those economies. This long-term underperformance highlights the depth of NZ’s productivity challenge and signals a widening gap not just in economic output, but in living standards, wage potential and long-term competitiveness.[2] Experts say that the rapid adoption of AI will not be enough on its own to reverse this trend and significantly boost productivity. Despite the transformative potential of AI and automation, they say that without a simultaneous shift in how organisations lead, structure and empower their people, the implementation of new technology risks amplifying the structural inefficiencies holding back productivity gains. Craig Steel, a workplace performance expert from Vantaset and author of Transforming New Zealand’s Productivity, says the country has overestimated what technology alone can deliver without first building the leadership capability and workplace culture needed to make those tools effective. “There’s a misguided belief that AI will close the gap for any organisation that applies it. But what we’ve seen is that when organisations adopt technology without modernising their leadership and culture, the gains they were seeking rarely occur “If AI is layered on top of disconnected leadership models and compliance-based systems, it won’t lift people, it will marginalise them,” he says. Steel warns that New Zealand is at […]

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