At The Cutting Edge: the State of New Zealand Manufacturing in 2017

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Manufacturing is big business in New Zealand. Manufactured goods make up approximately 85% of our merchandise exports, with the manufacturing sector contributing over $23 billion of real GDP into the New Zealand economy in 2016. The New Zealand manufacturing sector is also on the rise; over the last several years, New Zealand’s manufacturing sector has grown faster than manufacturing in Australia, the EU, the United States and Japan. This growth is largely driven by increasing specialisation, integration with global supply chains and a continued shift to producing higher value manufactured goods. Let’s look at some of the key trends for the sector in 2017.

Embracing Digital For Better Inventory Control

For a long time, manufacturers have sought to automate inefficient manual processes, creating small efficiencies that enable those manufacturers to compete for market share. Manufacturers are embracing automated systems for production, inventory control and many other business functions. As a small, isolated market, New Zealand manufacturers are increasingly finding that staying at the cutting edge of innovative automation is critical to remaining competitive.

That said, manufacturers in some industries in New Zealand are struggling in the face of strong overseas competition and many have been too constrained to take advantage of the latest technology. Many older factories are still using older plant and equipment and have only modernised where required to do so for compliance purposes. If your business is capital constrained, failing to automate is likely to result in you falling further behind. Although upgrading an entire factory is an ambitious step, automation in areas such as packaging or inventory control can be a cost effective way to realise efficiency gains. For example, subscription inventory management software involves a small operating expense but can help a business optimise the stock it keeps on hand and better manage production and sales.

Niche Markets are Critical

In the face of strong competition at the bottom end of the manufacturing sector, New Zealand manufacturers have found that refocusing on innovative, high value products is essential for survival. Simply producing value- added products is not enough, however. The fastest growing New Zealand manufacturers are those which have developed products for currently unsolved problems, often in small areas where competition is likely to be less significant.

Finding Reliable Partners is a Priority

In addition to efficient processes and an innovative product, manufacturers are finding that finding reliable partners in the supply chain, transportation and marketing spaces is critical. Many suppliers are unreliable – either delivering late or failing to sufficiently insulate their supply chain from critical risks. This can have a major impact on manufacturers’ inventory control. New Zealand manufacturers are increasingly reluctant to work with suppliers that fail to take on time performance and reliability seriously.

The Need for Traceability

Globally and at home, food safety has become a hot issue. Many New Zealand food manufacturers trade on their reputation for producing quality food products, so the risk of a food safety scare is one of the key concerns keeping local business leaders up at night. Manufacturers are more alive than ever to the need for visibility over the food production chain; while this largely comes down to partnering with reliable suppliers, businesses also need to take ownership of inventory control. This means meticulously recording traceability and batch information, making it easy to monitor compliance with regulatory standards and to respond quickly to any food safety concerns.

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Melanie - Unleashed Software

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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