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Decisive calls on Australian grocery sector bring New Zealand’s slow progress into the spotlight

Consumer NZ is urging our government to stand up and pay attention to the bold stance a Senate Select Committee has taken on supermarket activity in Australia. The Senate Select Committee on Supermarket Prices final report has recommended making price gouging illegal and introducing divestiture laws to create powers to break up Australia’s supermarket sector, if players misuse their market power. “We agree, price gouging should be illegal,” said Gemma Rasmussen, Consumer head of research and advocacy. “There’s no denying the supermarket sector in Australia has issues, but let’s face it, New Zealanders are facing a higher level of market concentration and our last robust study into the sector uncovered excessive profits. The question now is – has enough action been taken to address this historically problematic sector?” According to Consumer, the recommendation to give the Australian Federal Court the power to break up corporations if they abuse their market power or act unconscionably, is seriously worth considering in New Zealand too. “The big two in Australia have about a 65% market share, and here the duopoly enjoys about 90% market concentration.” On Monday a report released by the OECD recognised structural solutions, such as break-ups, could be warranted in New Zealand, given that market concentration in some sectors is so high that regulation will not be sufficient to improve competition enough. “There’s a reason this recommendation keeps cropping up, and it is because it’s going to take something drastic to create real change,” said Rasmussen. Consumer’s latest sentiment tracking confirmed that financial concerns relating to the cost of food and groceries have been steadily increasing over the past three years. Three-quarters of New Zealanders list this as their primary concern, trumping all other costs. A recent Consumer NZ grocery basket comparison between Australian and New Zealand […]

Information and operational technology a crucial strategy

From April issue of NZ Manufacturer www.nzmanufacturer.co.nz Adam Sharman, Senior Partner, Dsifer As manufacturers look to technology to support the productivity, efficiency and innovation of their operations, the convergence of Information Technology (IT) and Operational Technology (OT) stands out as a crucial strategy. As at 2024, the OT market is expected to expand at a CAGR of 8.69% and the solution options available to manufacturers to digitise their operations continues to grow. Whilst OT solutions provide significant benefit to manufacturers, it is the integration of OT and IT across the organisation that drives the highest value for these soluions. Historically, IT and OT have operated in silos, serving distinct functions within organisations. However, as Industry 4.0 reshapes manufacturing processes, the synergy between these two domains has become imperative for staying competitive and maximising efficiency. The integration of IT and OT involves breaking down the barriers between these two domains to create a unified ecosystem that leverages data from both operational and informational sources. This integration enables manufacturers to optimise production processes, enhance product quality, reduce downtime, and ultimately drive profitability. One of the primary benefits of integrating IT and OT is improved visibility and transparency across the manufacturing operations. By connecting OT devices to IT systems, manufacturers can gather real-time data on equipment performance, production rates, and resource utilisation. This comprehensive visibility enables better decision-making, as managers have access to timely and accurate information to identify bottlenecks, anticipate maintenance needs, and optimise workflows. Furthermore, the integration of IT and OT facilitates predictive decision making. For example, predictive maintenance, a proactive approach to equipment upkeep that relies on data analytics and machine learning algorithms to anticipate potential failures before they occur. In order to successfully integrate their IT and OT systems, organisations should consider the following key dimensions: Understand the Business […]

View from the top of the year: The picture for Christchurch Industrial Property in 2024

-Greg O’Brien and Mitchell Ryder, Associate Directors, Industrial and Business Services, Christchurch. Savills New Zealand. The current industrial property market in Christchurch is perhaps best described as a multi-layered beast. As a result of the Christchurch earthquakes and the need to complete structural strengthening, local vendors and landlords became some of the most experienced in the country when it came to understanding the performance of their asset. We are seeing this expertise play out as quality stock is sought and business cases for new builds wait for their moment. Against this backdrop, 2024 is already heralding good news. The market is buoyant, people are paying great money for land, and while demand is intense, we are steadily finding the stock to meet it. The state of the current warehousing market In the small to medium range – warehouses 250sqm to 1,500sqm – there is a steady flow of activity. Businesses are looking for opportunities to upsize and to consolidate multiple leased warehouse spaces, often located a few doors down from each other, or to split themselves across the city to service growing client bases. The lack of available stock across the city affects the amount tenants are being required to pay; this in turn drives the market rental evidence for valuers as they advise landlords as to the new rates when the time comes for the scheduled market review of rents. Some tenants have been encouraged to look for cheaper alternative warehouses as their existing landlords look to maximise their returns. Warehouse options in this range are tight, and properties listed on platforms such as TradeMe are often long spoken-for, as tenants find to their frustration. In the medium to large warehouse range – 1,500sqm to 3,000sqm – we are observing available stock being limited for a range of reasons, […]

“Unlocking Potential: The Role of Digital Skills Training in New Zealand’s Manufacturing Industry”

From March issue, NZ Manufacturer www.nzmanufacturer.co.nz -David O’Connor, Commercial Manager, The Learning Wave In the rapidly evolving landscape of global industry, the New Zealand manufacturing sector finds itself at a crucial juncture. As technological advancements redefine traditional paradigms, embracing digital transformation – and upskilling the digital capability of the workforce – becomes not merely a choice but an essential strategy for survival and growth. There has been much written about the significant need for our New Zealand businesses to prioritise investment in digital technologies. This investment isn’t just about staying afloat; it’s about thriving in an increasingly competitive landscape, and we totally agree that this ongoing investment is vital. Yet, while investing in cutting-edge hardware and software is crucial, it’s only part of the equation. At the core of this transformation lies the workforce – their ability to effectively utilise digital tools will define the sector’s competitiveness and resilience moving forward. Currently, the New Zealand manufacturing sector is grappling with a significant skills gap in digital capabilities. Our clients continue to affirm this and as more technology is introduced to their business, they are quickly identifying a broader range of workers who lack the digital mindset and digital skills required to operate advanced machinery, analyse data, or collaborate in digital environments. What is even more surprising is that according to KPMG’s 2023 CEO Outlook report, this gap impedes digital transformation for 78% of Kiwi CEOs, yet less than half are addressing it. We are seeing a growing interest from manufacturers for training programmes that focus on digital upskilling, and a focus on planning for skills training of their workforce alongside their technology investments. While many of our clients have already identified key work groups that need training, we are hearing from the sector that many are still unsure of where […]

Eight tips to get your sustainability strategy pumping in 2024

From February issue, NZ Manufacturer It’s February and you’ve eleven months to make your manufacturing business more sustainable in the year ahead. These eight tips will help you create (or review) your sustainability strategy – and take action. Becoming more sustainable adds value to your business Sustainable businesses are excellent businesses. They create value in the short and long terms. That’s because sustainability is about much more than the environment. It covers every aspect of your business. (See tip 2 below.) Becoming a more sustainable business will help you reduce costs and risk, strengthen relationships with your suppliers, enter markets and grow market share. You’ll attract talented employees and investment, keep onside with your regulator (if you have one) and build links with local communities. That’s a lot of good reasons to act! A strategy focuses your efforts A strategy helps you tackle the right things, in the right order, to make your business more sustainable. While it’s tempting to focus on activities that yield fast, visible results or to do ‘a bit of everything’, you need to prioritise. For example, if you manufacture a product, tackling your packaging may seem a great place to start. But if your packaging accounts for just 5% of your environmental footprint, there are better ways to use your limited resources. A strategy will help you identify them. Tips to create your strategy Make sustainability part of your business strategy – not an ‘add-on’ Weave sustainability into everything you do so that acting sustainably becomes ‘how you do business’. For example, work with your suppliers to source lower carbon materials and identify risks of modern slavery. Redesign your product to reduce the energy you use and the carbon you emit. Train your team to cut waste and look to your local community when you […]

Harnessing the Power of Biogas: A Sustainable Opportunity for Industrial Manufacturing

From February issue of NZ Manufacturer -By Insa Errey While renewable energy has been making strides in various sectors, the potential of biogas in revolutionising industrial manufacturing remains largely untapped in New Zealand. This article explores the opportunities and benefits of exploring the opportunities of biogas in industrial processes. Biogas production involves the anaerobic digestion of organic materials such as agricultural residues, food waste, and wastewater. This process utilises microorganisms to degrade the organic material into methane. A byproduct from anaerobic digestion is digestate which can be utilised as biofertilisers. Reduction of Greenhouse Gas Emissions: Biogas utilisation has multiple advantage in reducing a site’s greenhouse gas emission. First, anaerobic digestion prevents the release of methane—a potent greenhouse gas—into the atmosphere. By capturing and utilising methane as biogas, greenhouse gas emissions from waste decomposition can be reduced. Secondly, biogas can be cleaned, known as green gas or biomethane. It can be used directly in on-site as process heat, reducing the need to purchase the required gas for heating from external parties and offering a cleaner alternative with lower carbon emissions. Waste Valorisation: The industrial sector generates substantial amounts of organic waste from processing residues that can end up in landfills or council wastewater treatment facilities. Biogas production provides a valuable solution by converting these waste materials into valuable energy and fertiliser resources. This waste valorisation not only reduces the environmental impact but also promotes a circular economy approach within the manufacturing process. Producing certified biofertiliser can contribute to increasing food production. Cost-Effective Energy Source: Biogas can serve as a cost-effective energy source for industrial manufacturing. By harnessing locally available organic waste, sites can create a steady and reliable source of useable energy, reducing dependence on traditional fossil fuels. Energy Independence: Most manufacturing sites rely heavily on external energy sources, making them […]

Transforming Supply Chain Planning: How to create resilience, efficiency and agility

From February issue of NZ Manufacturer -Chris Foord, Partner, Argon, New Zealand Post Pandemic we are seeing an essential change in how businesses review their supply chain strategy with a focus on integration and forward-looking planning. Advanced Planning Systems (APS) are at the heart of digital transformation when looking to improve operations management. Companies in Australia and New Zealand have traditionally lagged in investment in this area. However, with the market maturing and good options available for small to large organisations, it is worth considering the opportunity. The benefits of implementation that we usually observe are: 20% reduction in working capital 3% reduction in COGS 6% reduction in Logistics costs 10-20% improvement in forecast accuracy Improved customer service What necessitated companies to modify their supply chain planning? The global pandemic has fundamentally altered the landscape of supply chain planning. Prior to the pandemic, supply chains were focused on creating efficiencies based on a just-in-time model, with inventories kept intentionally low. Businesses relied on backwards looking data to evaluate decisions, and adjusted plans on most recent events. However, the global pandemic caused businesses to reconsider this approach, with inventories now seen as a buffer to unexpected disruptions, leading companies to consider moving to a just-in-case model. The result has led to a recalibration of how businesses consider suppliers, capacity, and inventory, with the focus now centred on resilience, efficiency and agility through the supply chain. How are companies refining their strategies and approaches? The key change has been businesses embracing sales and operations planning (S&OP). S&OP is an integrated planning process that aligns demand, supply, and financial planning, and is managed as part of a company’s master planning. Rather than just a supply chain process, embracing S&OP results in planning coming to the forefront of the business as the business planning […]

RegenerationHQ Perspective – Unpacking Productivity in New Zealand

From February issue, NZ Manufacturer – A view by John Luxton Productivity has long been a buzzword in political and economic discussions in New Zealand, often presented as a simple solution to complex problems. However, I am deeply unimpressed with people who rattle off the word “productivity” with no more thought behind what it actually means than “woke”. I believe it’s crucial to understand that productivity encompasses far more than what surface-level conversations suggest. Simplistic, bumper-sticker answers do not suffice when it comes to a topic as nuanced and multifaceted as productivity. Understanding Productivity – Productivity, in essence, is about maximising outputs while minimising inputs. It’s a measure of how efficiently resources like labour, capital, and technology are used to generate goods and services. A look at the world’s most productive countries – Switzerland, Luxembourg, Germany, Singapore, Netherlands, Norway, Denmark, Sweden and Hong Kong reveals a variety of approaches to achieving high productivity levels. The USA is in that mix, but with the size and scale of their economy, there is less for us to learn from their example. Myths and Realities – Common rhetoric blames unproductive workers, excessive taxation, and bureaucratic inefficiencies for low productivity levels. However, a closer look at the top productive countries shows a different story. These nations excel in areas like macroeconomic stability, resource utilisation, open trade, and advanced economic structures. Key Factors Driving Productivity – Several factors are critical to driving productivity in a national economy: Macroeconomic Stability – Low inflation and realistic interest rates create a stable environment for business planning. Natural Resources – Efficiently utilised resources significantly contribute to productivity. Open Trade – Free trade enhances productivity through diverse product/service offerings. Economic Structure – Moving away from agriculture toward a more diverse economy. Access to Capital – Essential for business growth and […]

Developing the manufacturing sector

By Jane Finlayson; Head of Advanced Manufacturing; EMA A lot has changed in recent months. Not only have we had a change of government, and with it a change in policy direction, but we have also seen the establishment of Advanced Manufacturing Aotearoa (AMA). Led by Catherine Lye, AMA is tasked with working with key sector partners - including unions, researchers, educational institutions, industry organisations, and Māori and Pacific manufacturers – to gather information and supply feedback on the practical steps that can be taken to further develop the manufacturing sector. The AMA is an important initiative that we hope will be supported by the new government. It is industry-driven and independent, representing manufacturers across Aotearoa New Zealand. This positions it to deliver enormous benefit to the manufacturing sector at a scale not realised previously. The EMA is proud to support the AMA, alongside our other partners across the country. As the newly appointed Head of Advanced Manufacturing at the EMA I am looking forward to working closely with Catherine and the AMA to advance the interests of the manufacturing sector. Since taking up my new role, I have enjoyed the opportunity to attend regional manufacturing action group meetings, in Waikato, Northland, Bay of Plenty and Auckland and I’ve met with a wide range of innovative manufacturers who have adopted technology to enhance their businesses and improve productivity. Clearly the past year has been challenging for many manufacturers. The global economic slowdown, rising costs, supply chain constraints and critical skills shortages have all combined to create a difficult environment for the sector. This has been reflected in the steady decline of the BNZ – BusinessNZ Performance of Manufacturing Index (PMI), which has sat below 50 since March. This indicates manufacturing activity in New Zealand has been contracting throughout much of […]

Systems thinking and sustainable manufacturing

Remember the moment your flatpack furniture finally took shape (with no pieces missing and your relationships intact)? The last piece slotted in because you got the ‘system’ right. Assorted pieces came together, in the right way, to make a useful item of furniture that was ‘more than the sum of its parts’. Sustainability is about systems too. Understanding the relationships between a strong bottom line, a flourishing environment and thriving people and communities will help you make your manufacturing business more sustainable. In fact, you can’t have a healthy business if you don’t attend to all parts of the system. In this article, we look at systems in your manufacturing business. Drawing on examples from our 2023 articles, we show the opportunities these systems offer to become more sustainable. But first, some background. Systems in sustainability The United Nations’ 17 Sustainable Development Goals are a good place to start. They highlight the social, economic and environmental systems that make up our world, plus the links between them. These systems reinforce one another. Some systems are virtuous. Get one thing right and we fix others too. For example, if we consume and produce responsibly (SDG12), we reduce carbon emissions (SDG 13) and modern slavery (positive impacts on social SDGs 1, 5 and 8). Vicious cycles are possible too. If we plant soybeans to create renewable bio-diesel (SDG 7), we risk crowding out native plants (SDG15). Systems in manufacturing As a manufacturer you’re familiar with ‘systems thinking’, even if you don’t call it this. That’s because your business is a system. For example, when raw materials are unavailable, your production line slows down. You have to re-plan your team’s rosters, your production run, marketing schedule, deliveries and cashflow. Everything’s linked. Here are some other examples of systems in your business and what […]

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