April 2017
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MANUFACTURING TECHNOLOGY
SOUTHMACH 2017
The industry game changer.
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COMMENT The Genesis of Kiwi Ingenuity.
Manufacturers to embark on Industry 4.0 study tour to Germany Improving productivity on the factory floor and keeping on top of technology developments is a core part of staying competitive for manufacturers. Increasing use of digital technologies will only strengthen the need for relentless innovation in the future. This remains true whether your business is an early adopter of new technology, or you simply need to know what your international competitors are doing to find your own ways to stay competitive. This is why the NZMEA, over the last year has focused on providing members with a better picture of developments in Industry 4.0, otherwise known as the Industrial Internet of Things or Networked Manufacturing – essentially the increasing use of digital connectivity in manufacturing processes and product
and service design. These technologies come with the promise of big increases in productivity, especially for small manufacturers – all the more important given the sluggish growth in productivity we have seen over the past 20 years or so.
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Together with Callaghan Innovation, NZMEA have held a number of workshops, such as a recent factory tour of Fisher & Paykel Production Machinery Ltd and even brought a German expert in the field, Dr Frank Wagner, to New Zealand to share his knowledge on where the technology is going and where the opportunities for New Zealand manufacturers might lie.
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As part of this ongoing effort, NZMEA and Callaghan Innovation, have jointly organised a study tour to
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Beyond the gloomy headlines, global index suggests manufacturing is in good shape Economic data released this week has provided some good news for the global economy. The Purchasing Manager Indexes (PMI) from around the world show manufacturing is at above long term averages or at multi-year highs.
order raw materials Lee Smales, Associate Professor, and other supplies Finance, Curtin Graduate School of for their firms, and Business, Curtin University so have insight on output and corporate performance in the short term.
The data suggests that economic growth will follow. Buoyed by low interest rates, and the prospects of government stimulus, firms are benefiting from a surge in new orders.
The PMI is an index where 50 is the key level. When readings are above 50 it indicates an increase in business activity, while a figure below 50 indicates contraction. Australia shows good signs with a PMI of 58, as do Canada and the United States.
The Australian PMI report includes comments from manufacturers that suggest current demand is driven by higher commodity prices, infrastructure projects, the continued NBN rollout, and higher defence spending. But it also highlights concerns surrounding energy prices and security.
In addition to the headline number, PMI reports also provide information on matters such as business conditions, new orders, employment, and prices. Looking at these components allows for a more nuanced view of how businesses are faring.
What is PMI?
Manufacturing in good health almost everywhere
The PMI is an important indicator for the health of the manufacturing sector, and is correlated with overall economic growth. The PMI is compiled from a survey of purchasing managers. These are executives who
Across the globe, the manufacturing sector appears to be in good shape. Of the recently released PMI surveys, 46 are above 50, signalling expansion. Three more are very close to that important benchmark. Even the UK,
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in the midst of Brexit negotiations, has a positive outlook with a PMI of 54.2. Of the sub-50 countries, Brazil and Greece are recovering from severe recessions and the survey results are improving. South Korea is in the midst of a political crisis following the impeachment of President Park Geun-hye, and so it is of little surprise that firms are holding back on new investment decisions. Closer consideration of the PMI survey reveals why the outlook is generally positive. Increasing levels of new orders are the key driver of this expansion. This
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