FOCUS on adapting to change Winter 2019

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u p d a t in g a n d in f o rmin g t h e Gre a t e r E a st Ta ma ki b usin e ss co mmu n it y

3 HELPING YOUR TEAM ADAPT TO CHANGE 4 FACTEON: A STORY OF TRANSFORMATION 6 COTTONSOFT: ON A ROLL 12 THE CHANGING FUTURE OF WORK 16 CHANGING INSURANCE LANDSCAPE 22 GOODMAN HELP KIWIHARVEST DELIVER

ON ADAPTING TO CHANGE

WINTER 2019


Editor: Jane Tongatule E gm@getba.org.nz Advertising: E comms@getba.org.nz

From the Chair

PO Box 58260 Botany Auckland 2163 P 09 273 6274

getba.org.nz

Welcome to the Winter issue of the GETBA magazine. The theme of this issue is Adapting to Change and there are signals in the market place telling us that there is change underway. But change is the new normal… so how do we prepare ourselves.

Upcoming events 10 July People Essentials: Communicating Effectively with your Team 16 July Small Business Owners Interest Group 23 July Business Owners Forum: Workplace Wellbeing 8 August St John: Mental Health First Aid

Business confidence remains steadily weak and we are hearing of businesses facing increased costs of transportation, premises and labour, generally without the opportunity to recover these costs without increasing prices. BNZ’s Tony Alexander, in his latest economic commentary, predicts continued market growth at 2% but indicated a slow-down in growth in inbound international tourism and softening of household spending may leave us with a flat economy through to the upcoming APEC and America’s Cup boosts in 2021. Bernard Hickey, Political Economist at Newsroom Pro, points to the China-US trade war as a potential destabiliser for all markets that trade with either country. He also draws attention to the US treasury bond yield curve falling below 0%. The last time that happened was 2008! GETBA is actively looking at many change issues. Changes in the property market, how you upsize or downsize your premises to deal with changes in business volume was one of the subjects covered in the recent Property Forum. Last month’s Business Owners Forum on Sustainability looked at the impacts of moving to a Carbon Zero environment on our businesses, and the opportunities it may bring. We recently ran a St John Mental Health First Aid course to help members identify, understand and respond to signs of mental health issues in the workplace. This was so well received that we’re running it again in August. As we all know, some things in business move fast and become very obvious quickly, like losing a major customer or the impact of disruptive technologies. While other change can be slow and imperceptible, catching us unaware and late to respond. For business leaders keeping abreast of, and adapting our businesses to change, is probably one of our biggest challenges. Happy reading. BRENDAN KELLY, CHAIRMAN, GETBA

14 August People Essentials: Engaging and Rewarding Your Team 20 August Small Business Owners Interest Group 11 September People Essentials: Dealing with Poor Performance 11 September St John: First Aid Level 1 3 October GETBA Annual General Meeting

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GETBA SPONSORS


Helping your team adapt to change Article by Sharn Rayner, Head of Business Consulting, AdviceFirst

It is human nature to lean towards what is comfortable and familiar. This state of comfort promotes feelings of ease, confidence and requires no extra effort. However, the reality is, change is a requirement for every business. Indeed, it is a necessity. Sitting still and never challenging the status quo can lead to stagnation. This in turn will not support growth, nor attract the people to our businesses that we want and need in order to flourish. Clients and customers want to know that the companies that they use to deliver a service or product are at the forefront of their industry; that they have current expertise; and, ideally are at the edge of new thinking. Similarly, high performing team members want to be with companies that are shaking things up and are known to be leaders in their field. Ultimately, without change, businesses will fade away as others move in to the forefront with innovation, passion, drive and ‘A Teams’ who are committed to realising a positive evolution in their arenas. Change happens every day within businesses. Examples may be from the way processes are undertaken, the systems we use, the teams we have on board, and/or the way we partner with customers/clients on their journey with us. Yet, even with the knowledge that incremental change and continuous improvement is a must to survive… employers are constantly challenged with how to bring their teams with them when change is required. Often business owners are perplexed by what may seem a logical and rationale decision for change, and the team’s inability to comprehend the need for change. Lack of understanding can of course have a negative impact on the culture of the team as politics play out and undermine the change process itself; and, the successful implementation and embedding of a change initiative. Getting the team on board is of course, a priority. Following are a few tips on how to bring your team with you on your path to change.

GIVE A COMPELLING REASON • Really think about why change is needed and what the benefits of making the change are versus remaining in the current position. The team need to understand the reason for change and see that things will be better in the future. • Undertake a risk audit and ensure that you have weighed up the pros and cons. CREATE A PICTURE OF THE CHANGE OUTCOMES • Spell it out: What does the future with the change look like? How will it better enable the company to realise the vision and goals that it is heading towards? How will it make a positive difference to the customers/clients, the team and the business itself? • To reduce worry and concern, remember to highlight what won’t change. • Be open, encourage your team to ask their questions without fear of retribution.

change champions, Employee Assistance Programme provider or family. ASSESS THE COMPANY’S CAPACITY FOR CHANGE • Be sure that your business can handle the change. Many businesses really do have a compelling reason for change but because they aren’t able to resource the change, it fails. Know who you need and ensure that they have the time to commit. DETERMINE THE STEPS TO ACHIEVE THE OUTCOME • Formulate your plan, itemise each step, assign who is accountable for each action, give clear timeframes and monitor the plan. Recognise that you may need to tweak the plan – so be prepared for this and communicate any revisions and the reason for these changes. CELEBRATE THE WINS

IDENTIFY YOUR CHANGE CHAMPIONS • Whilst it is easy to choose your greatest advocates to support others through the change, sometimes getting your detractors in to this role can be useful. If you can help a critic to understand and support the change, they will be better able to communicate these reasons to those who feel unease, as they will already have experienced and addressed the sources of resistance with you. • Make sure that affected team members have support – whether this is the

• Share the wins – however small – loudly. This will help show the positive outcomes of a change initiative. The art of change management comes down to really understanding how change will impact on your team and being considerate of their perspective – what it will mean to them. As a leader, demonstrate that you are aware of this and endeavour to keep your team in the loop throughout.  advicefirst.co.nz W I N T E R 2 0 1 9 FOCUS ON ADAPTING TO CHANGE

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FACTEON

A STORY OF

TRANSFORMATION A long-standing East Tamaki business, Facteon is a world leader in planning and building intelligent factories for the internet age.

The genesis Facteon’s story begins 40 years ago as the internal engineering divisional capability of Fisher & Paykel Appliances. At the time, New Zealand and manufacturing in general were in a very different place. Fisher & Paykel, by global standards, was a relatively small appliance provider and had a diverse range of markets which required small batch sizes and a wide variety of products. To achieve this, they needed a more flexible approach to manufacturing. The equipment and systems suited to this were not easily purchased then, so Fisher & Paykel Appliances decided to establish their own division of experts, Fisher & Paykel Production Machinery. Over the years, the company became very specialised in appliance lines as well as work in other industries. This work was varied and included such projects as alloy wheel production lines for Ford’s New Zealand factory, building materials and production lines for roof tiles, and even the machinery for pulp thermoforming which is used to make fruit trays and egg cartons. In 2012, Haier Group purchased Fisher & Paykel Appliances, acquiring the Facteon business in the process. During the initial years of the relationship, Facteon and Haier worked together to improve the performance of Haier’s manufacturing function, with a particular focus on automated welding and production lines. In 2018 Haier Group was looking to set up a much wider Industrial Intelligence Division and Facteon became a cornerstone of that group amongst other Haier robotics and software companies. This was the birth of the Facteon brand. The company wanted a name that signified automation and connectivity for Industry 4.0 and didn’t want any confusion 4

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with appliances. “We have been here for such a long time that it feels like with our new brand coming into the market we are an old friend with a new story” says Head of Marketing and New Ventures Nathan Soich.

Facteon today Facteon is fundamentally an automation company, a provider and integrator of automation, from robotics to custom machinery, giving people productivity and efficiency upgrades in their facilities. One of the real strengths of Facteon is its design heritage which gives the capability to build solutions not found on the shelf. They have a large machining centre in East Tamaki, focusing on high quality machining of components that are of interest to businesses in the area. Today, Facteon is focused on providing automation to a range of businesses, as well as being a key technology provider within the Haier group, which has more than 100 factories globally, including those of GE Appliances in the United States and Candy Group in Europe. Facteon is a key part of maintaining and upgrading the manufacturing capability across the Haier Group.

Industry 4.0 and IOT These terms are new language to a lot of businesses. Explaining the difference, Nathan says “The general rule of thumb that we operate to is that Industry 4.0 is the overarching principle and way of operating. It deals with the wider ecosystem and both the application of technologies as well as ways of working. When people talk about IoT or IIoT which is the Industrial Internet of Things, that is primarily about the technology you use to provide the connectivity of the sensors of the robotics, of the software you are using. Intelligent manufacturing is like Industry 4.0 but is specific to manufacturers and talks about data/intelligence driven manufacturing”. According to Nathan, many companies are implementing pilot

programmes around IIoT and Industry 4.0, and there are increasing numbers of businesses discussing a 4.0 strategy – whether they need one, the relevance to their business and what their competitors are doing in this space. Having first-hand experience, Facteon can bring a significant amount of clarity to these businesses.

The digital factory and SaaS: Software As A Service An area of increasing demand from businesses is data and analytics; what Facteon calls the Digital Factory. Using their Cosmoline software product, Facteon takes data generated from a production line and turns it into easily read and accessible information, enabling people to form business decisions. For example, instead of having to pull information from a control system and look at it on a little screen on the machine, all machines can be connected, and show various data such as their production rates, status, and any parts that may be malfunctioning, to anyone with an internet capable device. The larger the data set, whether it’s on machine state and running condition, through to product count and quality, the more can be sent to cloud computing infrastructure for analysis. The software can then start to make calculations and


One customer with a considerable bottling operation across New Zealand, have over 1000 machines connected to the software which is primarily used to manage maintenance. Soon, however, edge computing units will be attached to enable tracking of resource usage. These are computers attached to the production line to communicate with the cloud. By monitoring their power, water usage and other metrics, Facteon can look at predictive maintenance rather than just following a schedule. This machine can notify when something is likely to fail, avoiding downtime which, as Nathan says, is the enemy of the factory.

World-class automation for New Zealand manufacturers

decisions about how that equipment runs and the type of information it can produce. Nathan explains, “It’s all about bringing clarity to the digital layer of the factory, giving people good information to make good business decisions.” The key difference is that for many years, machines have had data, but it’s been siloed in each machine, the amount of data you can generate is also now significantly larger. What you can do with it has expanded and enabled machine to machine connectivity. Until now, a human has always had to make a decision about what action to take. “Now, we are starting to talk about CyberPhysical Systems which are ultimately machines communicating with other machines via the internet and a decision being made by AI to do something in the factory. This is intelligent manufacturing, or Industry 4.0.”

The company is undergoing changes as it scales up for growth both in New Zealand and offshore. “We’re making a significant investment into both our New Zealand and Chinabased operations currently” Nathan explains. “Whilst we are always a strategic capability for our parent company, providing them with technology and automation, we are going out to the wider market and looking to grow there too.”

The digital factory in action Facteon’s IIoT technologies can be applied to a range of businesses and their operations. Internally within the Haier Group, there are several factories in China that are connected via this software – providing information about how the production lines are running, if targets are being met, and complete visibility on the maintenance. Facteon uses the system to schedule maintenance, show that it’s being completed and allow the customer to raise requests for service and maintenance as well.

For Facteon this means taking an increasingly close look at the potential for automation and Industry 4.0 to be applied here in New Zealand. “We are talking to a number of companies about how they can begin their Industry 4.0 journeys. Businesses are constantly looking at ways to improve productivity and improve a range functions within their operation. We see Facteon as being able to play an important role in taking what we’ve been exposed to in global manufacturers’ operations, translating this and applying it into the New Zealand context.”  facteon.global

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COTTONSOFT

By embracing change, New Zealand’s leading tissue products company Cottonsoft has experienced a record 65% volume growth over the last seven years, and seen topline sales revenues increase 66%. Established 31 years ago, Cottonsoft markets, manufactures and distributes a range of tissue and hygiene products throughout New Zealand, including toilet tissue, kitchen towel and facial tissue, in both brand and private label products. Cottonsoft is responsible for over 40% of toilet tissue and kitchen towel rolls sold from supermarket shelves. Some growth is organic and can be attributed to the rise in population which is naturally expanding the market. After all, toilet paper is a product that everyone needs, and New Zealand has seen an increase of approximately 500,000 people in five years. The market, however, is only growing at the speed of population growth, and Cottonsoft’s growth far exceeds this. Cottonsoft’s Country Manager Kim Calvert admits that while some growth is due to acquisitions, he explains the development of new products and premiumisation are major drivers of the company’s success. From a base in 2010 with three main product ranges (Kiwisoft, CottonSofts and Tuffy Towel) they have since changed 6

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substantially, adding the Paseo Premium toilet tissue, along with several private label brands. They reached number one in 2011 and continued to grow from there. Over time they have developed and refined their range and now have an offering for all consumers.

Premiumisation

the market,” says Kim. This has moved Cottonsoft from operating only in economy and mid-range markets into the business of premium toilet paper.

Sustainable & Innovative product development

“Premiumisation,” he says, “is a global trend and it’s true of toilet paper.” Their kitchen towel range has essentially stayed much the same as “people want their kitchen towel to be strong and absorbent, so don’t see a benefit in a softer kitchen towel as much as they do with toilet tissue,” says Kim.

“Sustainable sourcing has long been a significant part of our business,” says Kim. The company received their PEFC Chain of Custody certification in 2009 and their Environmental Choice licence in 2014. They also earned the ECNZ innovator of the year for their approach to promoting the ecolabel together with their brands.

Recognising the growing demand from consumers for premium tissue products, Paseo was launched in 2011 and by 2017 had become the number one toilet tissue brand in the market.“ We developed the Paseo brand with thick, luxury threeply tissue, sustainable sourcing, and a premium look and feel that we believe was not matched by any other product in

Cottonsoft has also moved into other products and is no longer solely working in tissue products. Three years ago, they looked at flushable hygiene wipes, a product at the higher end of the premium market and decided they could make them better. They created a wipe that was more dispersible than what was on offer. Previously competitors were


selling wipes that were flushable, but they wouldn’t break down as well afterwards. Cottonsoft developed a wipe that was more dispersible, tested in New Zealand to local conditions, ensuring they are soft on skin, but tear easily to help them break down faster in wastewater systems. Kim explains that since bringing this product to the market and competing against global brands, their competitors’ products have fundamentally changed. “Everyone was talking about a product that was flushable, but we developed a product that was dispersible. We lead the market.” It is this change in approach to product development that keeps Cottonsoft ahead. Kim remains tight-lipped about new lines in development but is excited as he explains that they like to reinvent products with higher quality and a kinder impact on the environment as seen with the dispersible wipes. He says these other products in the works are challenging traditional designs in a similar way. This approach also reflects the changing needs and values of the market and consumers today. There has been a change in the way people view plastics, and biodegradability is important to consumers today, which gives Cottonsoft inspiration for other products as well. While being a foundation sponsor of the Soft Plastic Recycling Scheme, they are also focusing on reduce & re-use initiatives, plus local development of alternatives to plastic so have consumer ideals in mind while developing new products.

Emerging technologies Helping Cottonsoft meet consumer demand is a recent investment in new machinery which allows for greater efficiency. As the product range developed, one of their older machines was unable to make the higher quality products, ran slower and used a bespoke sized raw material. Their faster machine made 55 of 60 products, meaning that they could only make them once every four to five weeks, not ideal in a fast-moving consumer product. Now with the two faster machines, Cottonsoft can manufacture new pack sizes, product formats, and produce different brands simultaneously at a much faster rate. Increasing automation has made changeovers between brands much faster and eliminating unnecessary tasks have made the workplace much safer too. Furthermore, several products needed to be hand packed such as large packs of toilet tissue or single rolls of kitchen towel as they could not be packed on the old machines. This meant using up to six employees, depending on the product, and hand stacking onto pallets. Eliminating this

manual work improves both efficiency and safety as team members are no longer bending and lifting product regularly.

Upgrading premises Cottonsoft’s growth as a company is further evident as they have moved and expanded premises numerous times. In 2007, Cottonsoft moved much of their production from Dunedin to Auckland, leading the first step of their expansion. The business quickly outgrew that new Auckland space and had to expand it in 2009. By 2011, when Kim joined the small support team – then about 12 people – they started using external storage space and by mid-2017 they were using up to seven off-site storage locations. The team now comprises around 30 people, so after converting all meeting rooms into offices and still needing more, it was definitely time to move. The transition into their current site on Business Parade North started in June 2018 by moving all their warehousing operation first, followed by the office in August, recently completing the factory move in May 2019. The transition was slowed due to the late arrival of their newest machine. “We didn’t want to move the existing plant until the new plant was here, it was Italian and arrived on Italian time, five months late,” laughs Kim, “so we extended our stay at Kerwyn Ave by four months.” This meant they had both sites for six months, one of the challenges of a transition.

Having learned from such challenges, and as both moves were due to running out of converting capacity, Cottonsoft has moved to a site that can accommodate growth for the future. There are not many sites big enough for Cottonsoft who deal in a large, bulky material that becomes even bulkier once converted into the final product, requiring a lot of storage space. Kim was relieved to find premises within Highbrook Business Park in East Tamaki explaining that if they couldn’t find an adequate space for them, leaving the area would have proved extremely challenging for a multitude of reasons. East Tamaki is a transport hub which is crucial for product distribution. Furthermore, having arrived in East Tamaki in 2007, the majority of the team live in the area. Kim explains, “Moving a long way from here could have resulted in a change of personnel and it’s taken a long time to get the right team together. The capability of our people, getting to know the machines, and understanding how paper works is quite important.” After three decades in the business, Cottonsoft has navigated challenges and changes in both consumer attitudes and production methods. By embracing change, investing in emerging technologies and driving innovative product development, Cottonsoft is a leader in its field and continues to grow.  cottonsoft.co.nz W I N T E R 2 0 1 9 FOCUS ON ADAPTING TO CHANGE

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MANUKAU INSTITUTE OF TECHNOLOGY Talking with MIT CEO

GUS GILMORE As the Chief Executive of the Manukau Institute of Technology, Gus Gilmore is at the forefront of adapting to change: from the government’s recently proposed reforms of vocational education, to preparing students for a rapidly evolving workplace.

THE GOVERNMENT RECENTLY ANNOUNCED WIDE-RANGING PROPOSALS TO REFORM THE VOCATIONAL EDUCATION SECTOR. WHAT IS MIT’S POSITION? Broadly we’re supportive of the changes, but it’s not unconditional support. Change of this scale can bring about unintended consequences and one of the last things we want to do is to deliver a poorer result to students and communities. One of the things government needs to do is listen and reflect the voice of South Auckland with its diversity, richness and creativity into a national system. It might look quite homogenous if it’s allowed to, which could be its failure. The challenge will be to bring together what is a fairly fractured system, targeting 8

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the apprentice, the in-work learner and classroom-based applied learning in a more systematic and innovative way. It’s about pulling together Industry Training Organisations and Institutes of Technology and Polytechnics (such as MIT) so the system is joined up to give a much better education and product to students. If this comes together well, we’ll see a lot more students in vocational education and we’ll see them much better prepared for work. WHAT ARE THE BIGGEST CHANGES TO THE DELIVERY OF TERTIARY EDUCATION IN RECENT YEARS? One of the biggest changes over the past five to ten years has been around moving to what I would call a ‘marketisation model’, whereby the Crown has become

the purchaser of education on behalf of its shareholders, or the taxpayer, with a particular target and focus on the areas of skills shortages. A good example is the Government’s focus around engineering with an emphasis on mid-level technologists and technicians in particular. We also saw a targeted investment in apprenticeships from 2014 -2016 with employers being offered a top up as an incentive. The other area of change is an increased focus on improving the educational achievement of Māori and Pasifika students. We all share responsibility for this and there have been numerous investments over the years to try and lift academic achievement and to better engage Māori and Pasifika in tertiary education but it’s barely shifted the dial.


WHAT HAS MIT DONE IN THIS AREA? We’re an exception in this space and we’ve had more success than others. In some areas of our institute such as Nursing and Health Sciences, and Creative Arts, we’ve been very close to reaching educational parity, whereas the system has been a long way off. Over 50% of our students are Māori and Pasifika. We’ve begun teaching Samoan, Tongan and Māori and, we’ve developed cultural intelligence courses. We’ve also increased the availability of learning support for these students. There’s a well-known saying that 80% of life is turning up. One of the key initiatives that we have is around encouraging Māori and Pasifika students not to miss classes and to be punctual. Once they’re in our workshops and classrooms they do much better, they’re more actively engaged and we work to provide them with additional academic support if it’s needed. MIT RUNS AN ALTERNATIVE HIGH SCHOOL MODEL, KNOWN AS THE SCHOOL OF SECONDARY-TERTIARY STUDIES (SSTS). HOW DID THIS COME ABOUT? The school is unique for New Zealand and represents a change in the way we engage

with learners who might struggle in a traditional classroom environment. It’s a result of the extensive research MIT’s Dr Stuart Middleton has done around disengagement. There’s different types of disengagement. At one end is truancy, where kids just don’t come to school and at the other end it’s more of an intellectual disengagement, where they come to school but they are switched off and just eating their lunch. Dr Middleton identified that a way to engage with these students is not through academia but through applied, hands-on learning that contextualises the curriculum. For example, in mathematics you’ll go and do some carpentry and have to use fractions to cut the timber up, you’ll also have to understand how angles work. It re-engages students in an applied way. It’s been running for six or seven years now and is hugely successful. We have a roll of about 180 students who achieve at above the national average for NCEA. Just under 50% of the students leave in years 12 or 13 and generally go into the trades and learn to become plumbers, builders, mechanics, etc. A smaller percentage go onto degree programmes and such as the Bachelor of Nursing for example.

We’ve got plans to roll this out over Auckland in the next few years. HOW DO YOU ENGAGE WITH INDUSTRY TO ENSURE THAT YOU PRODUCE GRADUATES EMPLOYERS WANT? We have industry and employer advisory groups who have oversight on the things we are teaching so that we can change and adjust to changes in the workplace. We also go out to employers and make placements for students, which often turn into jobs and help to inform what we teach. There are commonalties across industries, so what all our students learn are the soft skills that employers really want. Things like being able to work in teams, being able to stand up and present, being able to network across different groups of people. Most importantly, what sets us apart is our cultural intelligence. We probably have the most diverse student cohort in the country. Our students get to live, work and play every day with a huge range of nationalities and that sets them up brilliantly for a superdiverse city like Auckland.

 manukau.ac.nz

YOUR PLAYING FIELD KEEPS CHANGING Have you noticed that the business climate you are in keeps changing? You need expert financial advice to help you navigate those changes and grow your business. We can help.

Contact us to find out more!

09 273 3682 | www.mc2ca.co.nz administrator@mc2ca.co.nz


SEW-EURODRIVE

MARKET DEMAND AND ENABLING TECH DRIVE EXPANSION SEW-Eurodrive, a global market leader in drive technology, the technology of transforming energy into motion, recently expanded its services and product range in New Zealand with the opening of its new purpose-built Service Centre and Warehouse at Nandina Avenue, East Tamaki, adjacent to their existing premises. An owner-operated international company formed in 1931 with a footprint in 50 countries, SEW-Eurodrive employs over 17,000 staff globally and turns over 3 billion Euro annually. New Zealand accounts for 48 of those staff numbers; eight in the Christchurch sales and assembly plant and 40 in the East Tamaki head office, working in sales, support, administration and production. 10

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Electric motors formed the beginnings of the company but the SEW-Eurodrive name now stands for much more and their product range includes geared motors, gear units, industrial gear units, motors, components for decentralised installation, electronically controlled drives, mechanical variable-speed gear units as well as drive solutions that involve complex engineering, not to mention

a comprehensive range of services and maintenance. Managing Director, John Hainsworth explains, “Everything needs to be moved and we provide the means to move it. Ours is a big industry and everything is affected. For example, the process of picking fruit to it being on your table, it’s got to get there and there are many motion processes in between. That’s our business, getting product from point A to point B through those processes.” SEWEurodrive supplies a large sector of the New Zealand domestic industry, and work closely with OEM (original equipment manufacturers) and big brand end users alike to provide cost effective solutions. SEW-Eurodrive entered the New Zealand market in 1988 and purchased a building in East Tamaki. In 1996, the neighbouring section was purchased, and a new building was constructed specifically for their needs with the original being leased. When the tenants recently moved out, SEW-Eurodrive took the opportunity to reclaim the space and put it to good use. Aspec Construction together with DLM Architects were contracted to complete the new build expansion. The original building was demolished and the site levelled to enable access between the two buildings. One of the drivers behind the expansion was to help SEW-Eurodrive grow the service and repair business within New Zealand by having a dedicated service centre that caters and delivers to their customers’ requirements. The expansion has given them an additional 1800m² high bay factory and 300 m² in office space allowing for future growth. They now have a completely new service


centre which has allowed them to expand their product range to provide service and repair to their products as well as others. The additional bulk store space will provide for increased inventory as well as existing stock from the current assembly plant. The improved store layout allows for smarter assembly processes in the manufacturing plant and it will now be possible to implement Kanban and Supermarket-type picking for lean manufacturing. It is more efficient and requires less time and energy spent moving stock around. The changes will improve efficiency and reduce build and dispatch times and allow SEW a more flexible and smarter workflow with intelligent production processes. John explains that Industry 4.0 has had a lot of influence over his industry which is moving towards humanless factories. The direction his customers are taking means everything needs to be connected with constant feedback and communication. Already some of the SEW production cells are paperless and scan the products as they go through the production process collecting masses of data. This process is cleaner and more consistent. The data collection makes it easy to answer any client’s questions about what is happening with their product as

it is clearly visible which stage a product is at and what work remains to be done. SEW products have the controls necessary to make a higher level of communication possible. John says, “I could be sitting in my bach in the Coromandel, look at my factory and figure out all that is happening, because everything is communicating from several points and I have access to that data.”

John believes they need to work smarter within their own factories before they start promoting that equipment to everyone else. John explains, “The expansion has given us the ability to make changes and improve efficiencies. It leaves us well placed to grow within our market segment.”  sew-eurodrive.co.nz

I see business insurance the way you see it. Through a business owner’s eyes. I know what really matters – making sure everything is covered and your risk is minimised. The lessons and the learnings from taking care of my own business I’m ready to share with you. Let Northcrest provide a tailored insurance package, put together by drawing from the best the market has to offer. As you would expect, it will be as competitive as it is comprehensive.

Good business insurance is a meeting of minds

Rely on Northcrest to do the business – so you can get on with yours. Gerard Tilleyshort Northcrest Insurance Brokers, Director

09 271 3963 gerard@northcrest.co.nz

northcrest.co.nz


CHANDLER MACLEOD

PREPARING FOR THE CHANGING FUTURE OF WORK With the tech arena in a period of transition, significant change is coming to the world of work as we know it. OCG Group General Manager, Greg McAllister, shares some of the key findings from our recent whitepaper.

Today we find the world of work in a period of rapid transition: the fourth industrial revolution – an age of automation, connectivity, artificial intelligence and robotics. We’re seeing entire industries vanishing, as new industries and careers emerge. This is driving changes to the way we engage with the world of work – how we work and the type of work we undertake. In our recently released whitepaper Preparing for the Future of Work, we surveyed almost 600 people across 16 different industries, to investigate the skills people were looking for in their workforce, their strategies to overcome current skill shortages and the projected changes they were looking to implement around recruitment and talent acquisition.

The extent of that, and the impact of AI (artificial intelligence) and automation is still up in the air. History is on the side of jobs being created, with technological breakthroughs almost always leading to more jobs. However, large scale AI and automation provide their own challenges, targeting both blue and white-collar roles, as well as the fact that their ability to disrupt will increase as technology continues to develop.

Whilst this is certainly interesting, when broken down it isn’t particularly surprising that employees have a less favourable view than employers. After all, they’ll naturally have more fear about automation, with some jobs certain to be replaced at some point.

EMPLOYEES IN THE FOLLOWING INDUSTRIES GAVE THE STRONGEST RESPONSE TO BEING EXTREMELY WELL PREPARED FOR THE FUTURE

Infrastructure

100%

Architecture

100%

Outsourcing

100%

Education Financial Services

87%

82%

Energy

80%

Retail

74%

Manufacturing

72%

Spotlight on automation EMPLOYEES IN THE FOLLOWING INDUSTRIES GAVE THE STRONGEST RESPONSE TO BEING UNPREPARED FOR THE FUTURE

One of the questions we asked around automation was whether or not more jobs would be created through automation and digitisation by 2025? It came as a bit of a surprise that the answers were split. Employers leaned towards the more optimistic side, whilst employees sided slightly in the other direction. 12

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Media & Entertainment

50%

Security

50%

Travel

50%

Business & Professional Services

45%

Agriculture, Horticulture & Forestry

43%

Information & Communication Technology

43%

Government & Public Sector

43%


WHAT ARE THE MOST IMPORTANT INTERPERSONAL SKILLS TO MAINTAIN EMPLOYABILITY 70

% of respondents

60 50 40 30 20 10 0 Written Cross-cultural and verbal skills communication

Negotiation and conflict resolution

Social capital skills

Leadership

Service Orientation

Other

WHAT ARE THE MOST IMPORTANT COGNITIVE SKILLS TO MAINTAIN EMPLOYABILITY 60

% of respondents

50 40 30 20 10 0 Creativity

Critical thinking

Problem identification

Complex problem solving

Learning agility Employers

Other

Employees

Strengthening the future workforce

Key skills for future success

The pace of change is at an all-time high and by all accounts, it’s only going to continue. With that in mind, organisations are going to need to be mindful around the talent that they employ. Engaging those with the right skills and attributes not just for now, but also for the future, is critical. From the survey, we uncovered a few key things that employers expect to do more of over the next five years to strengthen their future workforce. These include:

Respondents were asked to list the skills they saw as most important both for the present and in the future.

• Hire those with transferable skills • Hire for potential rather than proven knowledge and experience • Hire more part-time or fixed-term employees • Outsource non-core functions or utilise contractors • Hire more women in leadership roles Overall, we’re seeing employers responding to skills shortages. April’s NZIER Quarterly Survey of Business Opinion showed that 49% of businesses are having trouble finding skilled labour. By embracing diversity and more flexible working options, employers are widening their talent pools. Likewise, employers targeting high-potential individuals is also not surprising. Hard skills can always be taught on the job, and many organisations are happy to provide this training to someone who can grow and develop in new ways.

Both audiences identified very similar skills as the key to staying relevant and employable. On the technical side of things, computer literacy and project management were seen as most important to maintain employability in the next five years. As more and more facets of working life become digitised, it’s clear that computer literacy becomes less of a choice, essentially continuing the trend of the last two decades. However, while technical skills have always been important, it now appears interpersonal and cognitive skills have come to the forefront. Social capital skills were seen as the most important interpersonal skills for the future, alongside written and verbal communication skills. This shows the emphasis that organisations are placing on hiring people who can help improve communication in the workplace. Similarly, complex problem solving and critical thinking emerged as key cognitive skills needed for future employment, with learning agility not far behind. With these skills emerging as key priorities for organisations, all of the above will be important in identifying people who are going to continue contributing to businesses throughout an ongoing period of change.

Education & development We explored the opinions of people based upon the level of attained education with those who completed post-graduate qualifications making up the majority of respondents. What is interesting about this, is that an employee’s level of education had no effect on whether they considered themselves ready for the future of work. When asked if they felt prepared for tomorrow’s employment opportunities, around 70% of employees indicated that they were extremely well prepared and highly employable. Employers also noted the importance of developing people. Providing training and development opportunities was the thing that employers were doing most to retain experienced staff, with almost 90% stating that they had put more of an emphasis on this. With such a demand for effective learning programmes, it was somewhat surprising that strategic partnerships with education providers were not seen as any more important than they were five years ago. In fact, when ranking their importance, responses were skewed towards the lower end of the scale. On top of that, almost a third of employers were not working with education providers at all to create development pathways for employees.

Closing Thoughts The workplace changes we’re experiencing today are driven by new digital technologies, globalisation, environmental pressures, changing workforce demographics and new forms of social interaction and organisation. What is clear is that these forces will have a growing impact on the structure of employment and the nature of work. Workplaces will be forced to reconsider old practices used to manage and motivate employees. Despite the improvements that technology can deliver, employers, managers and workers alike will need to adapt to new methods to help connect, learn, grow and socialise with their work and colleagues. No amount of technological advancement will ever replace these human fundamentals.  chandlermacleod.com Contact Deanne Grzelka for more information or a copy of the white paper on 09 601 8001

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FACTEON SHOWCASE

QUEST AND WAIPUNA CONFERENCE SUITES HIGHBROOK SHOWCASE

EAST AUCKLAND HYUNDAI SHOWCASE

Photographs by Grant Southam, grant@southam.co.nz

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BUSINESS OWNER FORUM: SUSTAINABILITY

PROPERTY FORUM

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The ever-changing environment and its effect on the New Zealand insurance landscape In March of 2011 at around 3pm local time, a 9.1 magnitude earthquake struck off the coast of Japan. Within half an hour, and while the aftermath of the initial earthquakes destruction was still being felt across the country, 40 metre waves began hurtling towards coastal Japan at alarming speeds. As the waves made their way inland, they took with them the lives of over 15,000 people in the process and caused immense destruction in their wake. Damages for the 2011 earthquake in Japan was estimated at USD 210 billion, however only USD 35 billion was insured and was ultimately paid out. Needless to say, this remains the most expensive insurance pay-out in world history. Closer to home in February 2011, a magnitude 6.3 earthquake hit the city of Christchurch. Coming in at a very low depth of 5km, the earthquake violently shook the region to its core, taking the lives of 185 people, injuring several thousand, and causing widespread damage across the city. These damages were the result of intense horizontal and vertical movements, and insurance settlements totalled NZD 23 billion. The

COST OF NATURAL DISASTERS IN 2018

USD

USD

225 billion

billion

Economic cost

Insured cost

90

4th costliest year on record

COST OF WEATHER DISASTERS IN 2018

USD

16

USD

215 billion

billion

Economic cost

Insured cost

89

4th costliest year on record

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2011 Christchurch earthquake shaped the insurance landscape we see today. When we examine the figures above, it is clear to see why insurers around the world are getting increasingly anxious; the frequency of occurrences in the past decade is growing at an alarming rate. When insurance companies experience huge loss, they compensate for the loss with increased insurance rates. You might ask why a hurricane in North America or a tsunami in Japan affects insurance rates in New Zealand? The answer is Reinsurance and a Global Insurance Market. The cost of recent world events has resulted in reinsurers re-examining where they are willing to offer capacity, to which ceding companies (insurers) and at what levels they are willing to do so. This is having a major flow on effect to New Zealand-based insurers and is causing major changes within the market, such as substantial job loss, capacity reductions and ultimately, rate increases. We have seen major increases in premiums as insurers move to a riskbased pricing model. Risk-based pricing effectively takes away from the traditional

shared risk, which is generated from a community pool of insurance funds and rates each risk on its individual profile. If someone was to purchase a building constructed with sandwich panel and with limited sprinkler protection, they would take on the entire risk for the property themselves; risk is no longer shared, and the increased premium will illustrate this. In the event of a fire, firefighters protocol means they would not be able to enter the building and only attempt to contain the fire – this means there would more than likely be a total loss. Increases to premiums and changes to policies have been a long time coming in New Zealand; reason being that because insurance in New Zealand has always been available and was comparably low-cost in comparison to the rest of the world, not much notice was taken. Some New Zealand businesses haven’t acclimatised to the change yet. Previously they didn’t need to do the required research, implement risk mitigation programmes or provide the required comprehensive information such as building valuations, engineering and geotechnical reports (depending on location), council data or NBS ratings – all of which are now vital. This is where a broker can add huge value. Part of the required research is looking into the financial stability of a business’s


current insurance company. Lessons can be learnt from the Canterbury earthquakes, around the importance of using a financially stable market. Best practice would be using trusted insurance companies that have shown their resilience within the New Zealand market over time, and to be aware of the difference between an insurance company and a managing general agent (MGA). Businesses also need to take note of where the backing of an insurance company’s liabilities lies. For example, some overseas insurance companies will prioritise their domestic policyholders before responding to New Zealand policyholders. To better describe this, imagine a business is insured through an Australian insurance company when a natural disaster in the form of a huge flood event in Queensland or hailstorms in Sydney or Melbourne. These events cause widespread damage and because of the sheer number of claims, the insurers ability to pay further claims is exhausted and as a result, the business’s insurance company is wound up. There is a possibility that some insurers will have overseas policyholder preference, putting the New Zealand policyholder at risk of being exposed.

THE WEATHER’S BEEN GREAT, BUT ELECTRICITY COST IS RISING Article by David Parkinson, an independent electricity broker for Powerswap Limited.

If you have been commenting about how great the weather has been, you are right! We have had an extended summer coming into this winter with slow-moving high-pressure systems, clear warm days, no wind and no rain. However, this is not good news for electricity consumers. Low rainfall equates to low lake storage for hydro generation. No wind equates to low wind generation, and a warmer climate equates to low snow storage which is our stockpile for next season hydro generation. As this situation worsens, generators must seek alternative sources for electricity generation such as gas and coal. This type of generation is very expensive, and directly reflects in spot market pricing, but is necessary to secure on-going supply. Over the last nine months, the cost of electricity has been climbing dramatically and forward contracts are reflecting high prices through to Q1 2020. In late 2018 we experienced an increase of almost 300% on previous 2017 year. For 2019 we are seeing spot pricing almost double compared with the same period in 2018. ELECTRICITY SPOT PRICE 400 350

Jake Bailey from New Zealand’s leading insurance broker Aon, has a message to business owners – that is to “sit down with an insurance broker as soon as possible. As a purchaser of business insurance, it is beneficial and vital to be proactive when it comes to adequately protecting your business. By providing as much relevant and quality risk information as possible, your broker will be able to provide the best solutions for you. Be sure to provide your broker with ample time pre-renewal, so that they can approach markets and obtain an advantageous result at renewal. Also, be aware of the importance in obtaining cover from financially stable markets. Question your broker on the insurance company or MGA. Who knows when the next big event may hit – when it does, you’ll want adequate cover.”  aon.co.nz

300

$/MWhr

Recently, we have seen the demise of AMI and Western Pacific following the earthquakes. Unfortunately, clients of Western Pacific were lucky if they received half of what their settlements should have been six years past the event. This was due to the fact that Western Pacific had insufficient reinsurance in place to deal with the extent of losses. AMI collapsed under similar circumstances and was later purchased by insurer IAG.

250 200 150 100 50 0 6-Jan

6-Feb

6-Mar

6-Apr

6-May

6-Jun

2019

Key factors driving these prices: • September 2018: South Island generators reports extreme dry winter in the South Island. NIWA forecasts long dry summer. • October 2018: Pohokura Gas platform suffered technical issues which in-turn affected thermal generation. Genesis reported importing coal to alleviate gas shortage to support their thermal generation.

6-Jul

6-Aug

2018

6-Sep

6-Oct

6-Nov

6-Dec

2017

2019/20 year with these rates then dropping back for 2020/21 period. However, if your business operates smaller commercial meters, our recommendation is to lock these contracts in now, or break existing contracts at little cost and secure long term before the next tariff review.  Offer for GETBA members

• March 2019: Pohokura gas platform had ongoing technical issues. North Island hydro remained dry. • April 2019: South Island had some reprieve with high rainfall incident, but North Island still remained dry. As a result, large electricity users are facing increases of up to 80% for the

GETBA Members Freecall

0800 536 000

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WASTE MINIMISATION One GETBA member that has taken advantage of our free waste advice is Subaru New Zealand. The Subaru facility in Lady Ruby Drive had good recycling systems in place but following our visit they made some easy changes and are now diverting an extra 34 tonnes a year from landfill. Peter Douglas-Bell, National After Sales Manager at Subaru, says, “The waste minimisation review identified that there was a significant opportunity to separate wooden pallets and recycle them. It is estimated that this will increase the amount of recycled materials by 34 tonnes per annum. “We now have separation and recycling of wooden pallets, cardboard, clear plastic, polystyrene, electronic goods, office paper, metals, plastics, glass and tins. “Subaru of New Zealand’s warehouse staff have been instrumental in helping reduce waste by making changes to procedures and taking the time to carefully sort different materials so they can be recycled.” Douglas-Bell says, “We’d like to thank Cushla from Wilkinson Environmental and Karen from GETBA for helping us to review and further improve our environmental footprint. We would definitely recommend the Free Waste Advisory Service offered by GETBA to companies that are looking for better ways to create a better planet.”

WASTE ADVISORY SERVICE UPDATE The GETBA Waste Advisory Service has been running for three months now, and waste is already being diverted from landfill as a result of our visits. With funding from Auckland Council’s Waste Minimisation and Innovation Fund, Wilkinson Environmental Ltd provides free onsite advice to member companies on how to minimise the waste currently sent to landfill. The advisory service can help reduce your environmental footprint and, in some cases, save you money. So far we have visited nine companies to help them review their waste practices. Those nine companies combined currently send around 316 tonnes of waste to landfill a year, and we have identified that 52 tonnes, or 17%, of that can be easily diverted for recycling. SOME OF THE SIMPLER OPPORTUNITIES WE HAVE FOUND:

WOOD Wood can take up a lot of room in rubbish bins. Pallets, packaging and timber offcuts are bulky and awkwardly shaped, filling your bin quickly and paying more for bin collections. There are companies that will collect and recycle timber. If it is clean, untreated wood (which most pallets are), the material can be chipped up and used for playgrounds and landscaping. If the wood is treated, it will be processed into fuel for cement kilns. There is a cost for wood recycling services, but this is almost always cheaper than for a mixed rubbish skip.

FOOD WASTE When food waste breaks down in a landfill it produces the harmful greenhouse gas, methane. It is simple to divert food waste 18

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away from your bins. If you have waste from food manufacturing, a café operation, or if you just want to collect the scraps in your staff canteen, there are easy, low-cost food waste collection services. These collectors will turn your food scraps into commercial compost, which is valuable for soil and plant health. They provide different sized bins with compostable liners and will pick up as regularly as you need to avoid smells. You can also put paper hand towels with these food scraps. These get turned into compost along with the food waste.

PLASTIC Plastic can be complicated when it comes to recycling. Particularly since China stopped allowing imports of recyclable material. However, there are still good opportunities to recycle some plastics here in New Zealand. If you have lots of good, clean shrinkwrap it is easy to set up a recycling bin for this. Plastics recyclers in the country, like local operator Astron, want this type of material.

METALS If you produce metal scrap of any type you probably already have a metals recycling bin. Metal is valuable and scrap metal companies will pay you for it. If you do have a metal bin, keep your eye on your general bin to make sure staff aren’t being lazy and putting metals in with general rubbish. This has a double whammy effect – it costs you in rubbish disposal, and you lose the scrap revenue.

PAPER/CARDBOARD Cardboard can make up a significant component of waste. Many businesses now have a separate cardboard recycling


bin. In recent times recyclers have had to start charging for these bins, but they are still cheaper than disposing of waste in the general skip. As with metals, if you have a cardboard recycling bin, watch for staff putting recyclable cardboard boxes into the general waste. Boxes take up lots of space, meaning more rubbish bin lifts and more cost.

END-OF-LINE/ EXCESS STOCK As well as diverting waste for recycling, the service also looks at connecting companies with charities who may be able to reuse end-of-line products or excess stock. Some charities can collect at no charge and redistribute to those in need within New Zealand or overseas. You can save on your landfill costs as well as making a valuable contribution to charity. Prior to getting one of our waste assessments, Bathroom Direct in East Tamaki could not find a way to dispose of a shipping container full of surplus products. Despite their best efforts, they had begun to think the only option was to send them to landfill. Instead, we put them in contact with the Trow Group, who specialise in deconstruction and reuse of materials in community building projects in Auckland and the Pacific Islands. Thanks to Trow Group, 10 tonnes of bathroom products were exported for use in community building projects in Tonga, rather than going to New Zealand landfills.  If you are interested in a waste assessment, do get in touch. This will only take 30-45 minutes of your time and may result in a cost saving and a lower carbon footprint for your business. Contact Karen Hadley on 09 273 6274 or email operations@getba.org.nz

OTARA WATERWAYS AND LAKE:

Restoration poised to enter new phase Less than four years after it was established, the Otara Waterways and Lake Trust has advised GETBA that it is now working on a long term restoration plan intended to attract substantial support to be added to local community efforts. Trust Chairman Richard Myhre said the Trust has been informally discussing the huge challenges it faces with organisations and people who can bring more energy to the long-term restoration. “We are encouraged that these conversations are leading to the start of a concerted, long-term effort of restoration,” said Richard. “Nobody is starry eyed about the job ahead. It will take many years but it will be done.” “I am especially encouraged by talks we’ve had but which, for the next few months, must remain confidential until we know the outcome of investigations being undertaken by experts in engineering, resource management issues and the ecological challenges we face,” he said. “I am confident that the Trust will have a vital long-term role and this means we need to prepare our own project planning which meets the original vision of our strategic plan.” Richard said the Trust has gained the consent of some experienced and influential people to advise in the development of the Trust’s plan. This will include means of raising funds over future years. He is

hopeful of releasing more detail in the Spring of this year. “Otara Papatoetoe Local Board started this journey over five years ago,” said Richard. “This led to the Trust’s formation in 2016 and since then, literally thousands of hours have been invested by local people in removing debris, planting new trees and helping with scientific monitoring. It will be gratifying to finally see efforts by our Patron, Jim Sinclair, and so many others finally attract the extra support they need. “At one of our most recent volunteer days, when we planted another 2000-plus manuka and other natives, I was moved when I heard a comment from Pastor Paul of the Otara Baptist Church. While he was on his knees planting in the wet and windy conditions he recalled how, as a younger man, he used to finish his football training at Ngati Otara Park and run into the lake for a refreshing swim and cooling off. “I’d like to think we can restore this lake so his children can once again enjoy that experience.”  otarawaterways.org.nz

Judith Speight, Trustee of the Otara Waterways and Lake Trust, plans the Trust’s most recent day of planting of nearly 2000 native shrubs along a riparian section of the waterways, with Otara sisters (from left), Jahnah, Reggae and Paige Cameron. “These girls are playing a critical role in the youth leadership of this work; after all it’s a great opportunity to learn new skills and be active in protecting local spaces for future generations,” said Judith. “Not only are they developing knowledge of the role plants play in protecting the ecology, they are involved in scientific monitoring of water quality and researching ways we can deal with the intrusive koi carp species of fish along the length of the waterways.”

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CRIME PREVENTION

NEW ERA POLICING

GETBA’s Karen Hadley sat down with NZ Police Counties Manukau East Area Commander, Inspector Wendy Spiller shapes, sizes, backgrounds and most have changed careers, including a number from the defence forces who have come to the police with valuable skills and maturity. WHAT HAVE BEEN THE CHANGES IN OFFENDING IN RECENT YEARS?

Photo: Fairfax Media NZ / Eastern Courier

HOW LONG HAVE YOU BEEN IN THE POLICE WENDY AND WHAT ARE SOME OF THE CHANGES YOU HAVE SEEN IN THAT TIME? 31 years – my whole adult life, I joined when I was about 12 – just kidding! So much has changed in that time but two things stand out. Our force is significantly more diverse now than when I joined. For example, when I joined in 1987 just 5% of the total workforce was female, only a similar percentage of Pacific Islanders and Maori and other ethnicities were not even represented. There was also a height restriction – removed in 1992 – which if it was in place today would affect half of my front line team, particularly female officers. The second biggest change, or influencer, is the power of social media which can’t be underestimated. The availability of technology has changed policing significantly – information and communication is more available. WHAT DOES THE MAKEUP OF THE POLICE FORCE LOOK LIKE NOW? Our latest recruits come from all walks of life. They have previously worked in retail, as physios, nurses, teachers, truck drivers and even have forensic and criminology degrees – the whole gamut really. Our existing team have equally diverse backgrounds, our front line has changed so much. When I joined most of the recruits were under 23 and were white males that played rugby, but that group would be in the minority now. We have all 20

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On the positive side, the biggest reduction has probably been in credit card and cheque theft and fraud which was once very de rigueur. Gone are the days of people stealing cheque books and credit cards. Credit card fraud still exists but mostly online. On the downside, vehicle crime has definitely increased along with the population. Most people have a car and households have multiple vehicles. In fact we are third in the world for the highest number of vehicles per capita. Then add in that we have an aged vehicle fleet which unfortunately is not always kept as secure as it could be. Family harm numbers are higher but I feel this is largely because it is reported more than it used it be and the Police as an organisation are better at handling these issues than we were 30 years ago. The introduction of methamphetamine around 17 years ago, has had a big influence, particularly related to violent crime because of the psychotic effect. Alcohol, however, remains the biggest contributor to harm in our community, across all areas like family harm and violence, increased robberies and drink driving. WHAT CAN OUR BUSINESS COMMUNITY DO TO IMPROVE THEIR SAFETY AND HELP THE POLICE? Realising that their safety is their responsibility in the first place, having good processes in place from the start including the layout of their buildings, cafes etc, using a CPTED (Crime Prevention Through Environmental Design) consultant as they are experts and think differently. If you have been a victim of crime the chance of it recurring, if no changes are made, is tenfold. Why? Because we don’t learn from our mistakes. A highly committed offender will get in anywhere, but we need to stop the opportunists. Using health as an analogy, most people don’t

think about getting sick but if they don’t look after themselves, they will be unwell so if businesses don’t take preventative measures to safeguard their premises and other belongings, they will undoubtedly be victims of crime. Business owners and their employees should always be taking steps to keep themselves safe and report suspicious people and behaviour. I would like to see more businesses working with Police and partner agencies to get our young people employed and valued. We have young people who have made a mistake and sometimes that tarnishes them for a long time. There are opportunities in our patch to forgive and give local people – particularly our young men – a second chance. Some of our young men have never had role models and don’t know how to behave. They don’t have it at home and get caught up with gangs. As a community we should be looking at opportunities to provide good role models. We work with teachers in the schools, but a lot of kids get excluded from school – often because of their behaviour – so they don’t receive guidance or a work ethic. Our Challenge to Change programme, in conjunction with the Salvation Army, takes young offenders through a programme in an attempt to prevent reoffending. To date we have had a high success rate and business support for the participants of the programme via employment opportunities is vital. IS THERE A PARTICULAR ISSUE THAT CONCERNS YOU AT PRESENT? There certainly is! I can’t highlight enough, the need for parents to be mindful of the phone and internet use of their teenagers. As the parent of a teenager myself, I have to ask why a 13 or 16 year old needs to take their devices to their bedroom at night. Nothing good gets messaged after 10 at night, especially during the week. Parents need to own this issue and be aware of their teenager’s communications. We are growing a nation of young people not able to make decisions by themselves because everyone is so contactable. This, along with the unnecessarily high number of children that are driven to school, does not help our kids grow their independence.


SECURITY CONTROL AT YOUR FINGERTIPS New technology and the introduction of fibre has revolutionised alarm monitoring

There’s been a big shift in the way people want to secure their premises as video surveillance, and IP (Internet Protocol) monitoring and reporting have become integral components in security technology, both commercially and residentially. Monitored alarms have traditionally communicated using copper landlines but new technology and the introduction of fibre has revolutionised alarm monitoring. As more people opt to remove landlines, communication units have been developed to enable alarms to communicate via internet and cellular networks. Due to the sophistication of cameras and technology, security systems can now be monitored from the palm of your hand with apps for your alarm systems. Anyone with an IP enabled alarm can access their security systems via an internet browser from anywhere, check the status of their home or business, open building access and arm/disarm different zones. Push notifications to smartphones alert them if something has activated on their alarm or if there is a fault. They can log in and see if it’s a false activation or an actual break-in. “It’s a lot quicker than the old technology of dial up reporting,” David Robertson of Matrix Security explains. Real-time video allows clients to manage problems quickly without having to go to the office to review tapes. Having this control and access at your fingertips can avoid unnecessary callouts as it is easy to verify if there is a legitimate cause for the alarm and need for intervention by security

personnel. In commercial cases, the cameras are more technical and are useful for health and safety as well. “It’s more about the client having that control when they want it and instant notifications. We still need professional monitoring and the patrol response, but clients want that visibility of their own and it’s not costing anything extra,” says David. Five years ago, cameras were a rarity in people’s homes and now they are almost an on-par request with alarm systems. David says, “While there’s always something new and improved coming out, it is still focussed around video. With

new technologies, cameras are getting less clunky as people don’t like big things hanging on the ceilings and they are being built into the motion sensors, so they are quite discrete and gaining in popularity.” “Matrix Security is big on keeping upto-date with the latest gadgets; we do vigorous testing ourselves and our technicians are well trained before we recommend new products to clients.” Call Matrix Security today for a free security appraisal on 09 579 1567 or email service@matrixsecurity.co.nz  matrixsecurity.co.nz

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PROPERTY UPDATE

GOODMAN HELPING KIWIHARVEST DELIVER 100,000 tonnes of food goes to waste every year but an effective corporate responsibility programme is helping to redirect it to where it is needed. In a textbook example of corporate social responsibility, Goodman is collaborating with KiwiHarvest to deliver millions of kilograms of unwanted food to disadvantaged families. It’s a perfect concept and a perfect fit. KiwiHarvest rescues fresh food and diverts it to the plates of those in need. Goodman manages a $2.6 billion portfolio of properties which provide, as the company puts it, “logistics space for the world’s greatest ambitions”. There is probably no greater ambition than wishing to feed the world’s hungry people. KiwiHarvest founder Deborah Manning, who began the food service in 2012 as a one-person effort from the back of her car in Dunedin, says Goodman is more than helping with that. Goodman manages the NZX-listed Goodman Property Trust and uses its charitable Goodman Foundation to sponsor KiwiHarvest, providing the premises for headquarters and a launch pad for delivery trucks – with room to grow.

“Three years ago, Goodman said to us that we should come up to Auckland and that they would help us with headquarters, a refrigerated truck and ongoing support,” says Manning. “But we have now completely outgrown those premises in Ellerslie to the extent that we were turning down perfectly good food because we simply couldn’t handle it.”

reaches 103,000 tonnes annually, and $872 million from domestic sources.

The new premises, in Goodman’s stateof-the-art Highbrook Business Park in South Auckland, are three times as big and will allow the food charity to expand its operations.

KiwiHarvest works with food producers and retailers to intercept this process, collecting fresh food and delivering it to communities in need, usually on the same day. Since 2012, they have rescued over 2.4 million kilograms of surplus food. That’s the equivalent of seven million meals or 80,000-100,000kgs of perfectly good food rescued every month.

Before exploring that further though, there are some sobering statistics. Globally, the production of food and delivery to those who need it is so imperfect that an estimated third of all food (1.3 billion tonnes a year) is wasted. In New Zealand, it’s estimated that food waste from commercial sources

60% of food going to landfill is edible, enough to feed 50,000 to 80,000 people for a year.

Manning points out that one in five New Zealand children live in households without enough food or healthy food. That’s an estimated 270,000 children. Meanwhile 3.4% of households report never being able to afford sufficient nutritious, safe food; while a further 16.4 per cent can only sometimes afford adequate food. About 20 per cent of Kiwi households are sometimes or always at risk. KiwiHarvest began when Manning, a lawyer, was moved by media reports on poverty and stories of children going to school hungry and people retrieving food from skips.

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She started KiwiHarvest as a one-person operation until one day she realised she needed help. Her car was so full of bread that she could not see out the back of it. And when she was offered a tonne of onions she realised that she could no longer work from home. Now KiwiHarvest has bases in Queenstown and Hawke’s Bay as well as Auckland and Dunedin. ‘’You can’t underestimate the feeling you get when you do something for someone else,” says Manning describing the feeling she had realising that KiwiHarvest was going to make a difference. “You get hooked on it – it’s very, very, satisfying. Access to nourishing food improves physical and mental health and well-being. It empowers people by contributing to their self-confidence, improved livelihoods and ultimately creates stronger communities.” Manning is getting that feeling all over again with the impending move to Highbrook. She says the move will allow the charity to expand. “It’s a place where a truck can pull up, 20 tonnes of food can be unloaded, recorded, re-packed and be heading out within an hour for someone’s dinner table. “The new HQ will also allow us to rescue more bulk food. By that I mean food from higher up the value chain – not just food from supermarkets, for example, which is food nearing the end of its journey. It’s mostly fruit and vegetables from growers and manufacturers.”

Auckland industrial market at capacity Goodman has refined its investment strategy over the last five years focusing on the supply-constrained Auckland industrial market. The strategy recognises the emerging trends and unique drivers that have helped make the Auckland industrial sector New Zealand’s strongest performing real estate market. Demographic changes, economic growth, and the rapid expansion of online retailing are creating an unprecedented level of demand for well-located and operationally efficient warehouse space across the city. Director Investment Management for Goodman, James Spence says, “Businesses are at capacity and need additional space to facilitate their growth. We’re undertaking a record level of development to accommodate this customer demand.” With a substantial $2.6 billion property portfolio, and around $160 million of new development projects confirmed over the last twelve months, Goodman is well established as the country’s leading industrial property provider. The positive dynamics of the Auckland industrial market, with a shortage of highquality space available for lease, is supporting Goodman’s development programme and delivering essential business infrastructure to a rapidly growing city. Existing customers make up a significant proportion of the work in progress with Big Chill Distribution, OfficeMax, Panasonic and Quest the latest customers to take advantage of expansion rights to extend their facilities at Highbrook Business Park in Auckland’s East Tamaki. “These are four contrasting companies, but all require additional space to facilitate their business growth. It’s a positive story across the portfolio with our customers success being reflected in the strong leasing results we’re achieving,”says James. The four developments add to the work in progress which now includes 14 projects at a total cost of $195 million. The majority of this activity is at Highbrook in East Tamaki, with this world-class business park now over 90% developed.

“Things can go wrong in manufacturing. It could be that food is prepared but with the wrong sauce. It’s a perfectly good sauce but the label says the food contains a different sauce. It often costs them more to re-package or re-label than dumping it, so they dump it. That’s where we come in – and that’s what Goodman and Highbrook will allow us to do more of.”

“We expect to undertake similar volumes of development activity over the next few years with demand from within the portfolio indicating a further 50,000 sqm of industrial space will be required.”

Through the Goodman Foundation, Jonathan Simpson, Goodman’s Head of Corporate Affairs, says around $400,000 in financial support was provided to charities last year with KiwiHarvest being a key partner. “Highbrook is especially desirable as it positions KiwiHarvest closer to South Auckland, where the need is greatest. The greater warehouse space and ability to rack goods will significantly improve their distribution capability; the flexibility of the space will help continued growth.”

DHL Supply Chain leased the largest of the new Gateway Warehouses at Highbrook, meaning this global logistics specialist now occupies three facilities in the portfolio, encompassing more than 45,000 sqm of rentable area.

Manning says the relationship with Goodman is one of family. “They don’t just provide money and headquarters. They don’t just talk about it, they walk the talk as well. They have become like family for us – we go to them for advice, for contacts, for their views on how we might best tackle problems.”  kiwiharvest.org.nz

Along with these design-build commitments the current workbook also includes build-to-lease projects. It’s been a successful approach for Goodman with the 15 warehouses, developed on an uncommitted basis last year, leased either before completion or shortly after. These projects have attracted a range of new businesses, including FDM Warehousing, Premium Apparel, Heartland Bank and Jost NZ

Historically low vacancy levels and limited new supply means businesses have very few options should they need to move, and these facilities are keenly sought-after. Goodman has ten new build-to-lease warehouses currently under construction ranging in size from 1,000 sqm up to 10,000 sqm. It includes multiunit projects at both Highbrook Business Park and at Savill Link in Otahuhu, giving smaller business operators flexible options to suit their requirements. “The rapid progression of the development programme means we are now looking for additional sites to facilitate future projects,” James explains. “With very limited industrial zoned greenfield land remaining in Auckland, the focus is on securing strategic properties that offer future opportunity through intensification of use or redevelopment.” The acquisition of the Foodstuffs Distribution Centre in Mt Roskill and three adjoining properties on Favona Road in Mangere during the year are examples of this strategy. James concludes, “Retaining a development capability is critical to our own business growth and both these locations are ideal sites for fulfilment and logistics companies.”  goodmanproperty.co.nz W I N T E R 2 0 1 9 FOCUS ON ADAPTING TO CHANGE

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It’s not enough to wish for greatness. Greatness is not a singular pursuit, nor is it one that is easy to reach. At Goodman our vision is to make it possible for everyone by making space for it, in everything we do. We give our customers the space they need to succeed, by providing high-quality property solutions in strategic locations.

El kobar Units Highbrook, East Tamaki

Underwood 2,600 Highbrook, East Tamaki

3 high profile units in Highbrook

Brand new and high profile

Available now Available Nov 2019

H ig Subject to final design

hb r ook

b El Ko

ar D

rive

offices

de

rw oo

dS

Driv e

t Subject to final design

1,340–1,500 sqm 350–370 sqm 417–440 sqm warehouses

Un

yards

2,630 sqm warehouse

360 sqm office

590 sqm

yard (excluding canopy)

This document has been prepared by Goodman Property Services (NZ) Limited and has been prepared for general information purposes. Whilst every care has been taken in relation to its accuracy, no warranty is given or implied. Further, you should obtain your own independent advice before making any decisions about any of the products and/or properties referred to in this documents. All values are expressed in New Zealand currency unless stated otherwise.


goodmanproperty.co.nz

highbrook.co.nz

There’s space for you here.

Video

0800 375 6060 Bruno Warren

William Main

DEVELOPMENT MANAGER

021 506 010

bruno.warren@goodman.com

Business Parade Nth 3,100 Highbrook, East Tamaki

DEVELOPMENT DIRECTOR

021 583 887

william.main@goodman.com

Underwood 1,000 Highbrook, East Tamaki

High profile and close to amenity Contemporary design and space Available now Available Dec 2019

Bu

s in

es s

Pa ra

de

3,130 sqm warehouse

Nth

Available Nov 2019

Subject to final design

400 sqm office

930 sqm yard

o d St Underwo

Subject to final design

826 sqm warehouse

197sqm office

198 sqm yard


PROPERTY UPDATE

to buy and you can negotiate terms which allow you to commit to timeframes which best suits your business outlook.

Premises options for a growing business Arthur Chung, Partner at Wynyard Wood summarises the key considerations before deciding your next move.

Staying put If you like your current premises and location, then explore whether it’s possible to optimise how you use your current space before looking elsewhere. For offices, this might involve converting internal offices to open plan and/or adopting hot desking, activity-based working or flexible working initiatives. Storage space can be reduced by going paperless. For industrial premises, you may achieve use optimisation by reconfiguring your manufacturing processes, storage solutions and supply chain arrangements. You may also be able to divide business functions and operate these from different locations. If you are leasing, consider what alterations and additions may be required and the approvals you might need from the landlord. If there will be major works involved, it would be a good time to revisit the lease terms, the schedule of landlord’s fixtures and fittings, premises condition report and document any changes required to the maintenance, make good and reinstatement provisions.

Owning or leasing If you are looking to move, one immediate question you may have is whether to own or lease.

From the tenant’s perspective, the key points to focus on when leasing (and particularly during lease negotiations) are: • Location including proximity to suppliers, customers, key transport routes, key logistics hubs (such as ports, airports, trains etc) and amenities for staff

Ownership Ownership may be a good option if your business is stable, well established and you have the capital to invest in property. If your business is growing, you should only consider property that can accommodate your projected growth in the medium to long term. This might involve looking for property with expansion land to build on or an existing building with surplus space.

• Size, age and configuration of the premises

Ownership typically means you lock up capital that you could otherwise use for other parts of your business. However if you have sufficient equity, you could use your premises to secure bank funding. Ownership may also reduce flexibility to grow, shrink and adapt to changing business needs. Depending on location, you may find there are less options for premises to buy than there are premises to lease.

• Rent and rent review mechanisms

Finally, if you own your premises, you will be solely responsible for all maintenance, capital replacement and regulatory compliance. If you don’t have property management expertise, you may need to engage someone that does to ensure that you are meeting your obligations as a property owner as well as an employer (bearing in mind your obligations under the Building Act 2004 and the Health and Safety at Work Act 2015). Leasing Leasing may be the better option if your business is growing and you have little capital or prefer to invest your capital in other parts of your business. There will generally be more options to lease than

• Structural condition of the premises and whether it contains asbestos or other hazardous materials • Permitted use under the lease and under the district plan • Availability of carparks, loading zones and other necessary amenities on site (whether exclusive or shared) • Initial term and rights of renewal • Outgoings • The scope and cost of landlord’s works and tenant’s works • Leasing incentives • Maintenance, reinstatement and make good obligations • Exclusivity, branding and signage • Restrictions on assignment and subletting • Break provisions (such as early termination or relocation rights) • Guarantees • Schedule of landlord’s fixtures and fittings • Premises condition report I recommend engaging a good agent and lawyer to assist you to identify premises to lease, carry out due diligence and assist with lease negotiations.If you are leasing a new build, ensure you have a robust Agreement to Lease which deals with the design, build and completion of the premises (including associated timing and who is responsible for what).  Navigate the legal issues with wynyardwood.co.nz

SUPPORTING BUSINESS AND PRIVATE NEEDS

Contact our friendly team at Wynyard Wood for expert and practical legal advice to assist you in your business and personal affairs. We specialise in different areas of law including: + Commercial + Property + Construction

+ Employment + Litigation + Trusts

+ Asset Management + Wills & Estates + Family

09 969 0126 manager@wynyard.co.nz

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FOCUS ON ADAPTING TO CHANGE W I N T E R 2 0 1 9


FOR LEASE

FOR SALE

49 Sir William Avenue

46 Greenmount Drive

Warehouse 2,432sqm | Office 346sqm

Warehouse 2,282sqm

bayleys.co.nz/1902101

bayleys.co.nz/1902049

FOR LEASE

FOR LEASE

Waiouru Road Hardstand

88H Harris Road

Hardstand 7,030sqm

Warehouse 1,191sqm | Office 95sqm

bayleys.co.nz/1902106

bayleys.co.nz/1682751

For the best results, work with the best real estate agency. Contact us today 0800 BAYLEYS or manukau@bayleys.co.nz 2018 Industrial Agency Team of the Year

2018 Large Commercial & Industrial Agency of the Year

bayleys.co.nz BAYLEYS REAL ESTATE LTD, MANUKAU LICENSED UNDER THE REA ACT 2008

W I N T E R 2 0 1 9 FOCUS ON ADAPTING TO CHANGE

27


EAST TAMAKI A great place to do business

PO Box 58 260 Botany Auckland 2163 P 09 273 6274 E gm@getba.org.nz

getba.org.nz