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The Year in Review
Delivering more for Business less – achieving New confidence strong Zealand’s productivity for 2017 potential
Business is going into 2017 with a confident outlook, according to the most recent EMA Employers’ Survey. However, the skills shortage is a concern.
-Paul Conway The New Zealand economy is currently doing well in some important ways – our public finances are relatively healthy, the labour market has been one of the most successful in the OECD at creating jobs, and incomes have improved over recent years. But despite this optimistic view, New Zealand’s productivity performance continues to be weak. Achieving New Zealand’s productivity potential is the Productivity Commission’s commentary on New Zealand’s productivity performance. The paper draws on a large body of research and the Commission’s previous 10 inquiries. This shows that leading NZ firms do not achieve the same productivity growth as leading international firms in the same industry – our top firms are slow to adopt new technologies that enhance productivity. The pace at which new technology and ideas diffuse across firms in the domestic economy is also an important key to lifting productivity. But too few New Zealand firms implement and benefit from advances in technology and knowledge. Despite having relatively open borders, we are not
Most businesses expected business conditions to improve over the next six month (49%), while slightly fewer (47%) expected conditions to stay the same. Significantly, 68% of respondents expected their own business to grow in the next six months. This is a major increase on the same time a year ago - in November 2015 the response to the same question was 57%. “These results are most encouraging, especially with the uncertainty overseas,” says Kim Campbell, CEO, EMA.
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The majority of respondents said they had increased the number of employees in 2016, which would correlate with the positive outlook respondents have of their own business. However, on the downside, employers are still struggling to recruit, with 53% saying it is difficult or very difficult to attract suitable candidates for positions in general. While 72% saying it is difficult to recruit for skilled positions. Specifically, professionals, technicians and managers were the roles employers had the most difficulty recruiting. With machinery operators and labourers also featuring strongly as a growing area of skills shortage. This was backed up by the majority of respondents
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In December Issue: The Year in Review
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CONTENTS DEPARTMENTS 4 EDITORIAL
Self-satisfaction is not all we have, can do better.
5 BUSINESS NEWS
Is Director of Maintenance Transformations Ltd, an executive member of the Maintenance Engineering Societyand the Event Director of the NationalMaintenance Engineering Conference.
Accord Precision lead the way in Kiwi manufacturing revival.
6 THE YEAR IN REVIEW
The state of the sustainable nation. 2016- Engineering industry in review.
Is Executive Director of Export NZ and Manufacturing, divisions of Business NZ, NewZealand’s largest business advocacy group, representing businesses of all sizes.
Stocktake of Manufacturing in NZ – What’s really happening. What will 2017 bring? Australia today, China tomorrow. Year in Review. Dieter Adam, NZMEA. India is opening for business – but homework needed.
12 MANUFACTURING TECHNOLOGY FARO: Outlook 2017.
Artificial Intelligence deal biggest yet for University of Auckland and UniServices.
Chief Executive, New Zealand Manufacturers and Exporters Association has a Ph.D. in plant biotechnology, consulting and senior management roles in R&D, innovation and international business development.
Adopting disruptive technologies to boost competitiveness.
14 THE INTERVIEW Majid Dousti.
15 DEVELOPMENTS 16 ANALYSIS
How XPO drives business forward with trade shows.
Is Managing Director of Connection Technologies Ltd, Wellington and is passionate about industry supporting NZ based companies, which in turn builds local expertise and knowledge, and provides education and employment for future generations.
Automation is not the end of the world. Here’s why.
17 SMART MANUFACTURING
Dr Wolfgang Scholz
Film review: Death by Design.
The future according to Elon Musk Enabling employee productivity through technology.
Is HERA Director and a Fellow of the Institute of Professional Engineers NZ.
25 FOOD MANUFACTURING
Patties invests in Leader Products.
SUPPLY CHAIN Innovative hoist solutions. Report: NZPICS Supply Chain Conference.
29 BUSINESS NEWS Business books to read over Christmas.
CSIRO to improve flow of chemical manufacturing. University increases presence in China.
31 REAR VIEW
The least-skilled workers are the losers in globalisation.
Is EMA’s Executive Officer, Manufacturing & Industry Groups. He is a strong advocate for the manufacturing sector. In his 20-plus years with the organisation Garth has managed a range of sector groups, with manufacturing being a key focus.
Media Hawke’s Bay Ltd,1/121 Russell Street North, Hastings, New Zealand 4122.
Self-satisfaction is not all we have, can do better Time to take a breather and get the work/life balance in order. To stop stressing about the business and turn the cell phone off.
MANAGING EDITOR Doug Green T: +64 6 870 9029 E: email@example.com
Dieter Adam, Holly Green, Dieter Adam, Paul Conway, Dr. Wolfgang Scholz, Catherine Beard, Kim Campbell, Jocelyn Honour, Jane Cunliffe, Quah Beng Chieh, Majid Dousti, Jeff Borland www.mscnewswire.co.nz
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As 2016 becomes a distant memory, there is some decent wind in the sails of the NZ economy. On top of that, another unfortunate earthquake and Auckland’s development have guaranteed plenty of construction work for 2017. The challenge of course is to find enough skilled tradespeople to be part of all of this. This issue affects our national productivity overall and our export push into overseas markets.
DESIGN & PRODUCTION Kim Alves, KA Design T: + 64 6 870 8133 E: email@example.com
Productivity, as much as any other issue this year, is on everyone’s mind. From the Minister for Business Development, NZMEA, Manufacturing NZ, NZTE, the Productivity Commission, to the company bosses and the production manager on the factory floor.
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Lots is written about it. Analysis put forward. Suggestions made. And the grumpiness of under-performing companies is there for all to see.
MEDIA HAWKES BAY LTD T: +64 6 870 4506 F: +64 6 878 8150 E: firstname.lastname@example.org 1/121 Russell Street North, Hastings PO Box 1109, Hastings, NZ NZ Manufacturer ISSN 1179-4992
Vol.7 No.11 December 2016 Copyright: NZ Manufacturer is copyright and may not be reproduced in whole or in part without the written permission of the publisher. Neither editorial opinions expressed, nor facts stated in the advertisements, are necessarily agreed to by the editor or publisher of NZ Manufacturer and, whilst all efforts are made to ensure accuracy, no responsibility will be taken by the publishers for inaccurate information, or for any consequences of reliance on this information. NZ Manufacturer welcomes your contributions which may not necessarily be used because of the philosophy of the publication.
Some of what I have written about Productivity this year has included suggestions to make staff more inclusive in the decision-making processes, show them the plan and offer them incentives. Wages need to increase for the job well done and New Zealand cannot continue to be a low wage economy festering with resentment between the haves and the have nots. And there is my every year Christmas wish for a Minister for Manufacturing. We
NZ Manufacturer December 2016
diversification of activities that are truly bolstering our economy and the potential for a better way of life. If this financial boost cannot improve the livelihood of the population, then we need to think again. In all of this, we are embedded in isolation from the outside world – every day is Christmas on our islands - and in a mindset which is like theatre and politically orchestrated. If the government says we feel good, then it’s okay to feel good. But let’s feel good for the right reasons. Let’s get the rest of the roof on! You will find plenty to read in this issue including The Year in Review. Business leaders share their thoughts on 2016 and where the new year may take us. Next year I am introducing Excellence in Manufacturing Awards and encourage your company to come forward and share your success stories, challenges and dreams each month in NZ Manufacturer.
Success Through Innovation
Thank you for your support, suggestions, f r a n k conversations and dedication to a better future in 2016.
Merry Christmas! Doug Green
There are two ways of exerting oneâ&#x20AC;&#x2122;s strength: one is pushing down, the other is pulling up. -Brooker T Washington
Accord Precision lead the way In Kiwi manufacturing revival Arising from the pessimistic view of New Zealand manufacturing reverberating around industry in the past decade, a new era of unique Kiwi capability is starting to emerge. Boutique and bespoke operations are finding new and exciting markets and products suited to our unique position, capabilities and attitude.
machining, metal injection moulding using specialised CNC lathes and machine tools and a range of services including medical standard Assembly Clean Rooms.
The true picture of a modern New Zealand industry no longer dependant on that first refrigerated meat shipment is starting to emerge and this is no better illustrated than at Accord Precision.
The Kaeser Compressors Network Evenings are hosted to showcase local operations and provide networking opportunities for engineers across all regions of New Zealand. The evenings offer the opportunity to take a look at the host operation and discuss common issues and solutions in a relaxed after work environment.
Behind the humble footprint of their Pakuranga operation, Accord Precision have stretched their reach into the worlds markets, creating products for global suppliers in industries ranging from agricultural implements to medical equipment. Alec Mandis the Chief Executive of Accord Precision and his team recently opened their doors for an informative evening enjoyed by 40 engineers from throughout Auckland as part of the MESNZâ&#x20AC;&#x2122;s Kaeser Compressors Network Evening Series. Founded in 1980, Accord Precision has expanded into an engineering company offering exceptional service and innovation over a wide range of products The company specialises in titanium
Commercial & industrial growth
From John Deere to Fisher and Paykel Healthcare, Accord Precision is completely on top of their game when it comes to satisfying customer requirements.
Boutique and bespoke operations are finding new and exciting markets and products suited to our unique position, capabilities and attitude.
Open to interested members of the public, the nights are well patronised as proven at Accord Precision. As well as learning firsthand about the capabilities and achievements of the Accord team, the group enjoyed light refreshments and benefited from the opportunity to network with their peers, taking new connections and solutions back to their workplaces. The Maintenance Engineering Society is active across New Zealand, providing opportunities for maintenance engineers and manufacturing operations to network and share innovations and experiences; both at these regional events and at their annual national conference.
Crime rate East Tamaki is the largest industrial precinct in Auckland with 2000 businesses and a growth rate higher than the regional average.
Greater East Tamaki Business Association Inc.
NZ Manufacturer December 2016
THE YEAR IN REVIEW
When all else fails, take a vacation.
The State of the Sustainable The concept of “sustainable business” would be familiar to many managers these days, but what’s it like to work at the forefront of the industry, at the green coal-face so to speak? What are the challenges and where is New Zealand heading? We talk to Adele Rose, Chief Executive of Hastings-based 3R Group, about their work helping businesses and consumers operate more sustainably. NZM: 3R works in a pretty unique space. Tell us more about what you do. AR: Fundamentally we help businesses and industry create value and opportunity from addressing their waste issues. So often, products are put in the ‘too hard basket’ and simply dumped even though they can actually be recycled; everyday items like mattresses, tyres, paint, chemical containers, contaminated plastics, and so on.
reused. Both of these elements are currently being impacted by the third, which is a government that is lacking leadership in diverting resources from landfill. NZM: That’s putting a lot of responsibility on government, rather than business to lead the charge? AR: I’m strongly in favour of business acting to make lasting change, in fact I think it’s the only way things are going to move forward. But government needs to step up and support that. The biggest issue holding us back is that it is too easy, and too cheap, to landfill our resources. Cost - the single most compelling driver for engagement with industry and behaviour change for consumers simply does not exist in New Zealand and by all accounts, it is a long way off. I believe we will start to see change when our waste levy moves from $10 per tonne to over $130 per tonne as it is in Australia. That’s the stick and the carrot, all in one.
NZM: I can imagine many businesses thinking that it all sounds a bit hard and they just want to concentrate on their core business, rather than trying to save the planet.
NZM: So, without that how do you encourage businesses to get involved in resource recovery initiatives? There must be some positives that encourage you to keep working in this space?
AR: Sure, we hear that a lot. I think that’s part of the challenge that we face – helping businesses see the opportunity that lies at the heart of resource recovery. And there are so many benefits - you can save money from reduced waste charges, create a point of difference for customers, or open up a new market for example – these results are definitely core business.
AR: Absolutely! We’re involved with some forward thinking businesses and organisations which already recognise that sustainability is a top priority. Very much along the lines of how Health and Safety has moved in to the boardroom over the last decade. Where companies have successfully ‘baked sustainability into their brand’ (to borrow a phrase from one of our customers) they are seeing distinct advantages whether it be cost savings or attracting ‘sticky’ customers.
NZM: So, what are your views on the current state of product stewardship and resource recovery in New Zealand? AR: Well, there are three elements that contribute to the growth of stewardship and by default the effectiveness of resource recovery. The first is producers taking ownership for stewarding their products throughout the life cycle – whether the product is imported in NZ or manufactured here. The second is the provision of the infrastructure that’s needed to make resource recovery possible – those, including social enterprises, which can take the products we discard and recover the maximum resources from them, landfilling only what can’t be
NZM: And at the government level, do you see any hope there? AR: We’ve seen some impressive leadership shown by local government, particularly Waikato Regional Council, Environment Canterbury and Bay of Plenty Regional Council who have been working together to develop a national policy around the storage and movement of end of life tyres. I understand that this is one of the first times this has been attempted – a real achievement given that they have 67 territorial authorities and 11 regional
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NZ Manufacturer December 2016
There are better starters than me, but I’m a strong finisher. -Usane Bolt
THE YEAR IN REVIEW
Nation councils to collaborate with. Also, many local councils have recognised that they have a key role in educating consumers around the true cost of waste, and in capturing resources in their least contaminated state so that we don’t have to spend time, money, energy and often water, decontaminating them to recover the materials. For central government, in lieu of mandatory stewardship for key products and an increased waste levy, then my view is that they should at least support social enterprises to provide localised employment, job training, and the skills to dismantle products for recovery. Assisting those enterprises to develop end use markets for the materials and access to international markets would be a big help. NZM: There is obviously a myriad of stewardship and recycling schemes around the world. Are there any particular lessons we can learn from overseas?
AR: I think the most pertinent statement I have heard recently, and it applies to us here in NZ, is that “overnight success takes 10 – 15 years!” courtesy of Bill Dibley who is National Operations Manager for Soft Landing, a mattress recycling programme in Australia. NZM: So what do you think needs to happen next year, and in the future to move things forward in New Zealand? Adele Rose. Picture Tim Whittaker Photography. AR: I believe we need to be really clear about what we expect from an incoming government in the area of sustainability. To that end, 3R have participated in the development of a pre-election briefing lead by the Sustainable Business Council; it clearly articulates what we expect our government to be doing in the next term. Among those issues are supporting business to transition to a low carbon economy and supporting New Zealand’s brand and reputation for safety and environmental quality. Another key piece of the puzzle is the concept of Valuing Natural Capital, a fancy title for a very simple concept. Basically, the land, air and water, our natural capital, all has a value. If we contaminate it, there is a cost; if we
waste it we don’t get it back. What we are contaminating today, we are stealing from our children and their children in the future. It’s as simple as that. To address this, there needs to be a financial value placed on natural capital in our balance sheets. This ties back to introducing a landfill fee that is reflective of the true cost of wasting our resources. NZM: Any initiative to reduce waste to landfill is to be applauded, but there is the view that recycling or recovery is just the ambulance at the bottom of the cliff. What are your thoughts on this? AR: That’s so true. It’s an issue that’s more prevalent in New Zealand than many other countries, as most products
we consume here are manufactured overseas. Our ability to affect change up the supply chain can be limited and in these cases, simply recovering that resource might be the only option (apart from making different purchasing choices of course!) So that’s why we’ve always taken a product stewardship approach where possible. It’s asking those responsible for creating the product to be responsible for what happens at the end – eventually the problem works its way back up the chain! Sometimes it just takes the courage of one industry or business to put a stake in the ground and say “let’s give this a crack”. Then we can build on that momentum and effect change.
NZ Manufacturer December 2016
THE YEAR IN REVIEW
The best startups usually come from someone needing to scratch an itch. -Michael Arrington
2016 – Engineering industry in review Dr Wolfgang Scholz, Director, Heavy Engineering Research Association (HERA) HERA is the resource centre for the metals-based heavy engineering industry, combining R&D, identifying opportunities, market research, exploration and development, consultation, certification, training and advocacy – generally filling in the gaps for many of our small-medium engineering companies. 2016 was an encouraging year, fuelled by an exceptional demand in steel construction in response to rebuild and immigration pressures. In June 2016, the reported New Zealand annual heavy steel consumption stood at 170,697 tonnes, exceeding FY2015 with a total annual growth of 8.4%. This reflects a healthy industry responding to strong market conditions, and returning to its previous highs of FY2008 (pre-Global Financial Crisis).
imports and diminishing exports pose challenges.
certainly becomes a challenge for all
Our steel fabrication members responded to demand pressures and invested heavily in state-of-the-art automated equipment, while minimising labour input, reducing the impact of high costs of NZ labour, and making capital-based fabrication cost-competitive. Also international steel price development has helped drop the value of landed heavy steel to as much as 25% this year. While this sells steel construction in general, profitability and thus sustainability
Additionally, the widely-published and dumping going on and/or substandard products are supplied, challenging in particular local and Australian steel manufacturers by displacing their otherwise
HERA has conducted a study which has shown that in the long-term big picture, locally produced steel offers much greater benefits than imported steelwork.
Source: Statistics NZ (year ending June)
Source: Statistics NZ and HERA (year ending June)
FOOD GRADE COMPLIANCE IS EASY WITH CHEMZ
NZ Manufacturer December 2016
highly-likely claim that there is unfair
Predominantly bolstered by steel construction demand, the industry has successfully increased order books, particularly in response to the Canterbury rebuild and Auckland’s housing crisis. However there is wariness of the long term sustainability of this upward trend as imports and diminishing exports pose challenges.
Predominantly bolstered by steel construction demand, the industry has successfully increased order books, particularly in response to the Canterbury rebuild and Auckland’s housing crisis. However there is wariness of the long term sustainability of this upward trend as
steel manufacturers (including in Asia).
During the year, the steel fabrication industry continued to invest heavily in its people and systems and showing an unparalleled commitment to conformance. Over 75% of the New Zealand steel fabrication capacity is now certified to the international best practice Steel Fabrication Certification (SFC) scheme, which providing assurance that products coming via this SFC supply chain meet specified requirements. Increasingly, specifications more detailed in terms of compliance requirements are being put in place, reducing the gap in costs between local and imported offerings. With the expressed confidence in an internationally competitive local industry and strong demand forecast until at least 2019, our metals industry is looking to be a strong player in next year’s economic performance.
THE YEAR IN REVIEW
If there’s something you want to build, but the tech isn’t there yet, just find the closest possible way to make it happen. -Dennis Crowley
Stocktake of Manufacturing in NZ – what’s really happening Catherine Beard I’ve long believed that manufacturing is the unsung hero of the economy, and this has been proven in the latest economic survey of manufacturing. Manufacturing for the construction sector grew 9.5 per cent, and meat and dairy product manufacturing grew by 8.6 per cent over the latest quarter. But one sector which is set to transform New Zealand – and overtake the dairy sector in terms of exports – is the tech sector. The twelfth annual TIN100 Report, produced by the Technology Investment Network (TIN), was launched in October, showing growth of over 1 billion dollars. In the context of New Zealand’s GDP, this is massive - and it’s up from around $600 million last year. High-tech manufacturing, biotechnology and information and communications technology (ICT) – the three major sectors covered by the TIN100 Report – are all on the rise across every region of the country, with total revenue up 12% to $9.42 billion. Manufacturing in general has actually been growing strongly in recent years, and New Zealand manufacturing is performing better than its peers in the Performance of Manufacturing Index
(PMI). We started off the year reporting that the January BNZ - BusinessNZ PMI showed its highest level of expansion since October 2014. Over two-thirds of manufacturers reported increased sales both domestically and internationally. The rest of the year showed healthy growth for manufacturing in New Zealand, with the PMI remaining in a state of expansion each month. There is no denying the fact that manufacturing is having a huge impact on how well the New Zealand economy fares. It employs quarter of a million New Zealanders, accounts for $22.6 billion (11%) of the economy, contributes $12 billion in wages, and earns billions in export revenue every year – non-food manufacturing contributing $12 billion of exports.
In today’s less regulated economy, manufacturing is stable and growing – as is proven by the PMI. Myth # 2: Food manufacturing isn’t real manufacturing There’s a common misconception that “hard” manufacturing is what matters (machinery, equipment, cars, metal-based products, engineered components, widgets) and “soft” manufacturing (bio-based, chemical, nutraceutical, food) isn’t really manufacturing. This belief is wrong, because manufacturing is a diverse activity that includes all those categories and more. Food manufacturing is real manufacturing and earns us billions every year. Myth # 3: It’s all made overseas anyway
Myth # 1: Manufacturing is a sunset industry
These days New Zealand firms often outsource parts of the manufacturing process to other countries where efficiencies in scale and labour costs can help their competitiveness. They also increasingly take part in global supply chains, and products may be made up of components from all over the world.
This is an outdated idea from before 1984 when manufacturing made up a heavily regulated 40% of the economy.
These trends reflect our more connected world. We’re making more from our creativity and design with the
Yet, despite all of these facts, there still remain a lot of misconceptions about manufacturing. Four myths in particular mean manufacturing doesn’t earn the credit it deserves.
use of new global efficiencies. Myth # 4: The future is in services, not manufacturing The service industry is growing all around the world, but this doesn’t mean the end of manufacturing. In fact, manufacturing and services are morphing into each other. It’s becoming harder to say whether software, a critical part of manufacturing, is even a product or a service. It’s truer to say that the future is in manufacturing and services. Examining these four myths reveals some important truths about New Zealand manufacturing. It is strategic, broad-based, well integrated in the global economy, based on the ingenuity NZ is famous for, and is bringing economic growth.
What will 2017 bring? By Kim Campbell The EMA team has had another industrious year working on initiatives to help manufacturing business prosper.
the specialised training to enable you to be ready for this new era, everyone in the EMA has been involved in bringing this legislation to life.
As we head into the Kiwi summer holiday break, and the traditional site shutdown, it’s a good time to reflect on the year that was and think about what lies ahead.
Another significant piece of work is reforming the resource management system. While there is still a long way to go, we have built a solid case with our partners that the status quo is not an option for a successful and sustainable New Zealand. The current resource management system is not working for manufacturers nor the environment and we must develop something which will better serve the future needs of New Zealand.
One of the most significant changes for manufacturers was the introduction of the new health and safety legislation earlier this year. It’s important to acknowledge that change was inevitable. After the early teething problems most businesses have done the training, accepted the new environment and everyone is safer accordingly. The aim was to advocate for practical solutions in every aspect of the new legislation and regulations. The EMA’s work in this area has been tireless. From our advocacy efforts through to
As we head into 2017, I am highly aware of what we can control and what we cannot. Currently, New Zealand’s economy continues to perform well with growth looking like it will be around three percent. However, there a number of issues which continue to plague
the global economy, including moves towards greater isolationist and protectionist policies. In the coming year we have to see how the President Trump administration, particularly for our manufacturing exporters, will unfold. As we know, preparation for future events and those risks posed to our manufacturing businesses is essential. Whether that’s ensuring the supply pipeline is secure or getting products to market, it’s vital every manufacturer can manage business continuity in spite of what disruption may be caused from natural disasters, such as earthquakes, through to political interventions. Looking forward, we will face ongoing challenges of exchange rates, technical barriers to trade and other challenges we are yet to see. However, New Zealand manufacturers have seen this before and risen to meet these. In 2017 they will need to do so again.
We continue to provide our manufacturing members with support via services such as our AdviceLine, EMA Legal and Consultancy offering. We know these services are highly valued as most of you rate them excellent or very good. Therefore, in the coming year our focus will be on how we build and maintain this crucial offering. We continue to offer courses such as Lean Manufacturing, along with a suite of training packages relevant to any employer.
NZ Manufacturer December 2016
THE YEAR IN REVIEW
It’s not that we need new ideas, but we need to stop having old ideas. -Joel Spolsky
Australia today, China tomorrow – lessons for export success in the Chinese Market By Jocelyn Honour, NZTE Business Development Manager based in Melbourne, This year we’ve seen more attention being place on the China market and the potential it offers for New Zealand exporters. The Prime Minister led a highly successful delegation of business people to strengthen the relationship and showcase New Zealand’s creativity, innovation, and high-tech credentials to the Chinese market. It’s our second-largest trading partner, as well as a major source of migrants, students and tourists. In 2008, New Zealand became the first and only OECD country to conclude a Free Trade Agreement (FTA) with China. There are some impressive growth going on there too. China’s eCommerce retail sales have grown 37% in the last year compared to 11.3% growth across standard retail sales. Mobile commerce sales have grown 123% (from a low base) and 50% of the population are yet to access the internet: China.(1) Add to these statistics the population size (1.4 billion), a rapidly increasing middle class (but still only 2% of the population), and growing recognition
NZ Manufacturer December 2016
and demand for western brands and the opportunities for New Zealand exporters would seem impressive. Why then would a business choose to export to Australia when the opportunity in China appears enormous? The answer lies with the proven formula of building your brand in closer, more accessible and less complex ‘local Chinese’ markets and then leveraging into mainland China. Livia Wang, director at Access CN, has highlighted that Australia has approximately one million residents of Chinese descent and welcomes more than 1 million travellers from China each year (2). This provides the opportunity to create products and brand advocates in Australia who support and then endorse your product back into mainland China. This is a proven strategy used by Bellamy’s, Swisse and Blackmores, with the latter only this year establishing direct channels in China. So taking the “Australia first, China next” approach can be a sensible strategy. Consider how to build your fan base
in Australia. Establishing a physical presence and/or online store in Australia targeting residents of Chinese descent and Chinese tourists is a great first step. Whilst still challenging, the risks are much less than jumping straight into the mainland markets. Chinese consumers typically conduct extensive research (approx 7-9 types) into new products and seek personal recommendations prior to any purchase. Holidays are planned six months in advance and feedback is shared socially with friends and family. This means that there is a longer lead time to achieve initial sales which can be better supported from Australia than placing someone in China or visiting that market. Draw on the expertise of the New Zealand Trade and Enterprise team. We are here to support you and your business succeed in your chosen export markets – please don’t hesitate to contact us for local insights and support. Test your products and value proposition on these consumers and learn the strategies of the larger suppliers to build your model for China.
Be decisive Once you have done some of this work and testing, you may find the best decision is not to proceed. IAG Company Chair, Elizabeth Bryan, recently announced that while IAG has been looking for a long time at the rising incomes in Asia, the fragmented insurance industries and the desire for people to protect their assets, the Board had decided not to invest further due to the risk involved. “But the problem is always in the detail, which many Australian service companies have found out,” she said. (3) So take your time, consider your strategy and make informed decisions based on the potential reward as well as the risk you are prepared to take. And if you’re a business wanting to head directly to China the NZTE team can help guide and advise you too. 1. Mark Skinner, China Skinny, China Digital Conference presentation, April 2016. 2. Livia Wang, Access CN, China Digital Conference presentation, April 2016 3. “China expansion too risky and expensive for insurance giant IAG”, Australian Financial Review, 26 October 2016
You have to learn the rules of the game. And then you have to play better than anyone else. -Albert Einstein
THE YEAR IN REVIEW
Steady year for manufacturing Dieter Adam, Chief Executive, New Zealand Manufacturers and Exporters Association This year has been relativity steady for manufacturing in New Zealand, even though, more recently, the Kaikoura earthquakes have thrown some challenges into the mix. First, I want to start by looking at the trends within manufacturing in our own survey of business conditions. Domestic sales have had a steady trend of year on year improvements throughout 2016, and then a further uptick in the latter part of the year. This may well be some to the uplift in construction activities starting to hit downstream manufacturers that make up supply chains. Export sales experienced a significant bump upwards early in the year. Since March, however, we have seen a downward trend and export sales have been particularly weak in the last months, seeing significant-year on-year decreases in sales for the months of July, September and October. This slowdown of manufacturing exports is reflected in Statistics New Zealand’s overseas merchandise trade numbers. October export values for mechanical machinery and equipment decreased 7% on the previous month, and saw a decrease of 15.62% compared to October 2015. Electrical machinery and equipment exports improved 2.8% on the previous month, but felt a decrease of 13.59% on the same month last year. In the
last three months, exports sales for both these categories have been well below the average felt in the previous year. When we look for an explanation for this trend, we cannot ignore a number of complex political and economic developments that have created a climate of uncertainty in the global economy. Many of our elaborately transformed goods from the manufacturing sector come in the form of components for capital goods, and there is a reluctance to invest in machinery and equipment in our key export markets. Where we are still seeing significant growth, such as in the USA and Germany, for example, it’s largely driven by consumer spending. The exchange rate remained an issue through 2016, adding pressure on exporters. We saw some of the expected decline closer at the end of 2015, however since, the currency has trended upwards throughout 2016 on the TWI measure. At the current level, this will continue to be an issue for exporters and import competing manufacturers into 2017. The currency fell back against the Australian dollar earlier in the year, but has since regained much of its strength, now sitting at a level far above historical averages. This is a major concern for many manufacturers
and we need to see the correction restart. In terms of factors that could impact the New Zealand economy in 2016, perhaps the biggest has been the continuation of rapid house price inflation, most notable in Auckland, but throughout the year this has spread out further to other regions. Not only does this make it hard for people to afford to buy homes and increase the cost of living, putting pressure on wages, but it presents a significant financial stability risk, through high private debt, especially if interest rates rise as expected and make debt servicing unaffordable. Just recently, the Reserve Bank of New Zealand (RBNZ) highlighted this risk of private debt, both in housing and the dairy sector, which has had to face the challenge of very low milk prices. This will be something to watch in 2017 – as we all know, any financial instability has far reaching effects, and the tradable sector in particular can be severely damaged during a crash. The RBNZ has asked to add Debt to Income Ratios to its potential tool-kit, and we encourage the Minister to accept this and for the RBNZ to work on implementing these soon. Also looking to 2017, global events and conditions will again play a big part in shaping the environment that our manufacturing exporters
operate in. Global politics appears more unpredictable going forward, particularly with the election of Trump in the U.S., which has already lead to the likely defeat of the TPPA. Discussions around trade will be something to watch going forward, but hopefully New Zealand exporters will not be effected. Locally, this will be spurred by the next election later in the year. We want to see some real quality discussion on the issues that matter to manufacturers and exporters, with some tangible policy set out to really improve outcomes and support growth in these high value areas. The NZMEA is going into 2017 with a focus on how to help our manufacturer’s future proof their businesses in areas such as 3D printing and Industry 4.0, and working with Government on a plan to reduce the skill shortages we often see.
India is opening for business – but homework needed - Jane Cunliffe India is the world’s fastest growing emerging economy and is a country rapidly changing. And with the Indian Government serious about opening the economy and making it easier to do business, now is a great time to investigate what India has to offer, says New Zealand’s Trade Commissioner Jane Cunliffe. “From where I stand, it is clear that the Indian government is committed to building the competitiveness of the economy and increasing investment and productivity in the manufacturing sector,” she said. “It is intent on introducing GST, and is opening up the economy to foreign direct investment across a number of strategic sectors.” says Cunliffe. The Government has recently introduced an initiative to crack down on the black economy through removing two high value banknotes from circulation and replacing them. “The India Government continues on a trajectory to open up its economy at a moment when some other economic powerhouses such as the UK and the
US now seem to be closing in. “These developments, while they will take time, provide an increasingly promising environment for New Zealand business in India.” Opportunities for New Zealand companies India is currently New Zealand’s 10th largest two-way trading partner in goods and services, with trade worth $2.5 billion in the year to June 2016. Services have rapidly increased in export value and are now worth over $1 billion, with rising numbers of Indian students in New Zealand. Goods exports are still below what they were in 2011 at $656 million, but have grown 14 percent ($82 million) in the last year. Cunliffe sees potential in a range of areas for Kiwi companies. “With the Government looking to modernise so many sectors there are opportunities to provide efficient solutions to India’s rapid modernisation and infrastructure development. These range from clean tech and other smart approaches for India’s ‘smart cities’, to expertise for
modern horticulture, to solutions for modernising manufacturing in India.” The recent visit by New Zealand’s Prime Minister to India highlighted the diversity of local companies who are doing business in India. “NZTE is aware of around 140 Kiwi companies currently exporting to India, and the growth is across the board,” says Cunliffe. “For example demand for airports and airport infrastructure is expected to continue, with the handling capacity of airports predicted to grow to 370 million users in the next 10 years, representing a significant opportunity for New Zealand airport infrastructure companies, as well as service companies like pilot training and airport design. “Healthcare and health IT are strong areas of growth in India. State and private groups provide services on a large scale, and there is real interest in reduction of health provider costs through the use of IT and technology. “The recent demonetisation policy enacted by the Government of India to withdraw all 500 and 1000 rupee
notes reminded us about the growth opportunity in the digital space. There is huge scope for moving to digital payments, cyber security applications to protect digital payments, and speeding up digital infrastructure. “It is exciting to see New Zealand companies positioning themselves as innovative and agile suppliers of smart ideas in India. We’re seeing clever Kiwi companies in hotel booking
continued on page 28 www.nzmanufacturer.co.nz
NZ Manufacturer December 2016
The road to success is always under construction. -Lily Tomlin
FARO: Outlook 2017 QUAH Beng Chieh, Head of Marketing, Asia Pacific, FARO Technologies How does FARO see the current business climate?
now have access to different solutions that cater to their specific needs, rather than generic ones. We have received very positive feedback from the market and the sales of our new products have been steadily growing since their launch.
The global business climate is expected to remain bearish in the months ahead, but we are optimistic about growth across Asia. In the past year, FARO has been expanding its capabilities and enhancing its product solutions through acquisitions of new companies and technologies – like BuildIT Software & Solutions Ltd. and Laser Projection Technologies. Inc.
How does FARO see the market changing? In the last decade, we have observed a shift in demand among our customers – from contact to non-contact measurement methods. Factors such as the popularity of additive manufacturing, the rise of automated in-line inspections, and the general change in preference for more ergonomic designs (as opposed to ‘boxy’ designs primarily formed with straight lines) played a part in this change.
This growth strategy has worked for us and we will continue to explore relevant industries to expand into, such as Public Safety Forensics, Factory Automation, and more. What have been the highlights of 2016 for FARO? Is business strong for the company? 2016 has been a good year for FARO all round. Earlier in March, FARO restructured its business into 5 vertically focused teams – namely, factory metrology, product design, construction BIM-CIM, public safety forensics, and 3D solutions and services applications.
We expect to see more advanced scanning solutions that cater to new measurement demands. As the economy continues to grow in Asia, manufacturers are expected to expand their operations, optimise their businesses to reduce cost, and develop their capabilities to capture new markets. These business activities translate to a rise in demand for measurement and imaging solutions, and we expect a corresponding increase in manufacturers’ interest for our products.
This restructuring exercise was motivated by our desire to develop and deliver industry and application specific solutions to our customers. In line with the restructure, the company launched a record number of new solutions for users from the 5 industry verticals, including the FARO BIM Scan Localizer, FARO Design ScanArm, FARO Laser Scanner Focus, FARO Cobalt Multi-Array Imager, FARO VectorR, FARO Tracer Laser Projector, and the FARO Laser Tracker Vantage.
The FARO team has been actively promoting its solutions to the Asia market, by educating the users on how our 3D measurement solutions can benefit their businesses. The company is committed to supporting manufacturers in all their measurement needs. Where
With this new direction, our customers
LOOKING LOOKING TO TO TRAIN TRAIN YOUR YOUR EMPLOYEES EMPLOYEES IN IN 2017? 2017?
NZ Manufacturer December 2016
manufacturing? As products become more complex in design, both in form and functionality, the demand for advanced measurement solutions that can handle such requirements become more commonplace. Increasingly, non-contact measurement devices such as the FARO Edge ScanArm are fast becoming standard equipment for manufacturers. The Edge ScanArm not only obtains up to half a million points per second, but also scans dark, shiny objects, capturing every contour and crevice on an object in high precision. The spatial data can be easily presented in a 3-dimensional point cloud output for analysis, measurement, inspection, and reporting. Furthermore, with the addition of the FARO Cobalt Robo-Imager, manufacturers can automate quality control processes that used to require an operator, which greatly enhances productivity, effectiveness, and efficiency. More importantly, automation improves accuracy as human error is taken out of the equation.
How important is R&D for the company? FARO is attuned to the manufacturing industry’s trends and demands, and we make continued investment to develop new 3D measurement technology to cater to our customers’ needs. We are committed to R&D and we recognise the importance of customers’ feedback in our R&D activities. FARO enjoys strong and close relationships with our customers – we have an open channel for customers to provide their feedback to us. This allows us to identify areas in which we can improve upon and to affirm the direction of our earlier initiatives. Our R&D team applies the latest advances in technology to improve and augment our portfolio of solutions – we strive not just to enhance the features of our products but also on the user experience. This way, we ensure that FARO meets market needs today and anticipate new ones tomorrow, securing the company’s leading position in the measurement industry.
Marketing is enthusiasm transferred to the customer. -Gregory Ciotti
AI deal biggest yet for University of Auckland/UniServices Intelligent computers that look, think and react like humans are the latest technology being developed at the University of Auckland to become a commercial venture. Artificial Intelligence company Soul Machines was officially launched this week after it attracted US $7.5 million in its initial financing round from Hong Kong-based venture capital firm Horizons Ventures, making it the University’s biggest Series A fund raising deal to date. The company is developing a completely new user interface between humans and their machines, based on technology created by Dr Mark Sagar and his team at the Auckland Bioengineering Institute (ABI) at the University of Auckland. Dr Sagar won two academy awards for his work on the Avatar blockbuster. He becomes the CEO of Soul Machines.
He also heads the Bioengineering Institute’s Lab for Animate Technologies. “Our engineering team will focus on bringing human life to technology that is intelligent, emotive and adaptive. Our goal is to define the user experience for Artificial Intelligence systems and platforms,” Dr Sagar says. Auckland UniServices CEO Andy Shenk says Soul Machines demonstrates the phenomenal power that comes from the unique combination of art, science and creative insights that Mark Sagar and his team have produced. “In the same way, we at UniServices believe that Soul Machines also demonstrates the unique power that comes from the combination of world-class research at the University of Auckland and the commercialisation expertise that we have built over almost 30 years,” Dr Shenk says.
Soul Machines will develop technology in the rapidly accelerating artificial intelligence sector. Its lifelike, emotionally responsive avatars will have the potential to become the interfaces between humans and machines across a variety of platforms. The new company is backed by Horizons Ventures, which were early
investors in Siri, acquired by Apple, and Deep Mind, acquired by Google. Phil Chen from Horizons Ventures will join the Soul Machines board. Experienced New Zealand-based technology entrepreneur Greg Cross has also joined Soul Machines to launch the new company and accelerate commercialisation.
TRUMPF and Siemens driving industrialisation of additive manufacturing Laser system manufacturer TRUMPF and engineering technology leader Siemens have announced a new partnership to help industrialise laser metal fusion technology and make the additive manufacturing process for metal parts an integral part of the production process. The two companies – who announced their partnership at the formnext trade fair in Frankfurt – are pooling their strengths and working together to develop a software solution for the design and preparation of 3D printed metal parts. The aim is to integrate and streamline the entire powder-bed-based laser metal fusion (LMF) process for TRUMPF
printing machines into Siemens NX™ software. The comprehensive offering will address part design and engineering for additive manufacturing as well as 3D print preparation with integrated TRUMPF build processor technology. “Our combined solution will offer customers a high degree of process reliability thanks to its use of smart product models through all phases of the process,” said Tony Hemmelgarn, CEO and President, Siemens PLM Software. “There will be no need for data conversion because the tools for design, simulation, 3D printing and NC programming of metal parts are integrated into one system.”
“These are decisive factors in making additive manufacturing a realistic proposition for industrial applications,” adds Peter Leibinger, Head of the TRUMPF Laser Technology/ Electronics Division. “Our partnership will result in an optimum interaction between machine and software so customers can move forward with designs optimized for additive manufacturing.”
Streamlined workflow from design to finished 3D printed part
This new software package, TruTops Print with NX, brings all the necessary functions together into one new solution for the additive manufacturing of laser metal fusion parts with TRUMPF printing machines.
The solution will integrate the recently announced NX software technology for additive manufacturing with the TRUMPF build processor and be sold with TRUMPF TruPrint Laser Metal
The new software offers a standardised user interface across the end-to-end additive manufacturing process. It addresses the entire digital process chain in a single, integrated associative software environment, eliminating the need to use separate standalone applications for part design and data preparation.
Survey finds manufacturers to adopt disruptive technologies to boost competitiveness NTT Communications Corporation (NTT Com), the ICT solutions and international communications business within the NTT Group have announced the results of a new survey revealing how Asian retailers, manufacturers and wholesalers are investing in disruptive technologies and the challenges they face. The survey, “The Digital Silk Road to Success”, found that nearly 80 percent of business and IT decision-makers at large corporations based in China, Hong Kong and Singapore are generally positive about the business outlook in the next 12 months, in spite of the challenges including talent shortages, rising wages, price pressure, increasing costs and competition they
face. They believe new technologies hold the key to transforming their growth model despite an uncertain economic climate. IoT and big data analytics changing supply chain ecosystem To overcome business challenges, 94% of organisations surveyed said plans were already in place to deploy two or more disruptive technologies to accelerate digital transformation and boost competitiveness. IoT (60%) and big data analytics (58%) are the most widely adopted technologies among those surveyed. Although organisations have been slower to adopt AI, smart robotics and 3D printing, over 60% of responding
companies indicated they planned to deploy one or more of these technologies in the next 12 months. “The success of retail, manufacturing and wholesale industries relies heavily on an efficient supply chain ecosystem where companies’ ability to trace and visualize the bilateral flow of goods, information and cash throughout the value chain at a given moment has become ever more critical,” said Raymond Ng, Vice President, Vertical Solutions, NTT Com Asia. “Asian companies have extensively applied IoT and big data to capture real-time business intelligence from all the touchpoints, and overcome business blind spots in the ecosystem. Though combining IoT and big data is
far from new, it is the recent extensive application of these disruptive technologies that is proving to be a game changer for the supply chain,” Ng added. The proliferation of “connected things” creates security, compliance and compatibility issues Although corporations appreciate the enormous value these disruptive technologies potentially deliver to transform their business model, various challenges are holding them back. 50% of organisations surveyed rated stringent data security and compliance regulations, legacy IT and the complexity involved in sourcing suitable technologies and supplier for the job the top three stumbling blocks.
NZ Manufacturer December 2016
People don’t care about your business. They care about their problems. Be the solution that they’re looking for. -Melonie Dodaro
The Interview: Majid Dousti Majid Dousti has 30 years of engineering experience. He moved to New Zealand 8 years ago to give his daughters a better opportunity at education. What do you do in engineering? As an Engineer, I focus on the design and implementation of engineering technology and concentrate on the development of advanced critical thinking and problem solving activities for effective troubleshooting. When you lived in Iran what were the kind of projects you worked on? I worked in Iran as a civil engineer for 20 years. My role was leading multi-million dollars project such as: hotels, commercial building, residential buildings and concrete factories. projects you have worked on?
My duties as a Project Manager involved:
As a Distribution Designer, I developed an intricate knowledge of distribution networks and the standards and specifications expected by the company.
Monitoring the site operation, H&S of several sites, sub-contractor management, communication with clients and stakeholders, monitoring the quality of work on site, financial improvement and regular inspections.
I have extensive experience with tendering, programming, development of methodologies and attributes, managing construction contracts, ensuring contract performances meet customer requirements in terms of quality and timeframes and that the margin on the various contracts are achieved according to tender.
My duty as a factory manager & production planner at precast & concrete factory: Managing the 100 staff, installing the production lines, improving and monitoring the leadership in leading hands, Following the H&S target, skill analysis, organising the daily and monthly plans, issuing the SOP, implementing the Lean and 5S in the process of production, preparing the reports.
I am held in high regard for achieving a superior level of safety performance, ensuring that appropriate quality assurance systems were in place, as well as identifying and minimising business risks and compliance issues.
Why did you move to New Zealand?
I am working on conversion of pole mount transformers to ground mounted, pole replacement, new subdivision supply and network development.
Our family is the first priority, we thought with moving to New Zealand we are able to make a brighter future for our daughters, so we did and are really happy with the result.
You have been working and studying at the same time. I understand that your qualifications in New Zealand were not recognised. Why was that?
Are there different challenges as an engineer in New Zealand and Iran? The responsibility of an engineer would be the same everywhere but different in regulation and standards.
Engineer’s decisions are very critical, when they want to do something they must be 100% sure and confident about their decisions.
What are examples of some
NZ Manufacturer December 2016
It would not be achieved without broad knowledge of regulations and standards. My qualification was recognised by NZQA and the only requirement was two year experience in NZ, but because of my lack of knowledge of NZ regulations and standards I decided to start a new major from the base to build up my knowledge. Studying electrical engineering was my passion too so I thought it is time. Why did you choose engineering as a profession? Learning is my passion, I love challenging jobs and problem solving. I like creation and Engineering give me the satisfaction and pride. Who is your inspiration? When we arrived in NZ we faced lots of problems and many times we were disappointed but at each time many people helped us to overcome the problems. It is not easy to choose from all these people but the more important of them are: Dick Crush, his personality, manners and calmness gave us hops in hard times. Stuart Allan, his skills, knowledge and tidiness always supported me in my study. Scot Jefferies, his management, experience and friendly manners helped me in my work place. My education and training includes:
Bachelor of Civil Engineering (IR) Higher Diploma in Construction General Works (IR) Bachelor of Electrical Engineering (NZ just finished this year) NZ Diploma in Electrical Engineering (NZ) Certificate in Building Rules to Save Energy in Construction (IR) Certificate in Electrical Technology (NZ) Certificate in Small Management (NZ)
CAD 2D Essential (NZ) CATAN Software (NZ) Pole’n’Wires Software (NZ) QUT- Overhead Line Design (NZ) Microsoft Office (Word, Outlook, PowerPoint)
I like creation and Engineering give me the satisfaction and pride.
Every time you spend money, you’re casting a vote for the kind of world you want. -Anna Lappe
Driving business forward with Trade Shows How Trade Shows can thrive when combined with Digital Marketing
adopters of your product, utlilise testimonials and speak with them face-to-face.
For millennia, traders have showcased their products face to face in market squares around the world. Trade Shows were the cornerstone of the business calendar.
People do business with those they like and trust. Great content online is ideal for building a following of subscribers receptive to your pitch. Marketing your product online can be pretty cost-effective, but getting it the recognition it deserves is what trade shows were designed for.
In more modern times, before the days of Google, Skype and in fact e-mail, trade shows were a hub for industry professionals to network and for businesses to launch initiatives which they hoped would keep consumers and competitors talking for months to come. What made trade shows so special is seemingly being surpassed and made irrelevant in the digital age. However, despite this trend, trade shows for pretty much every industry imaginable continue year on year and hundreds of thousands of people annually clear a space on their calendar to attend. So why do trade shows remain popular? The answer is to get people talking and not just the industry professionals and journalists, but the businesses and consumers who they really want to target.
Compliment your Trade Show presence with online interaction When supported by online activity trade shows can provide an opportunity to put your service or new product into the spotlight. This means putting it right under the noses of the important figures who can help your idea, as well as your content, to go viral. Bloggers, vloggers and opinion leaders are often only a click away online. Touch base with advocates and early
The development of trust is most effective when done in person by face to face interaction at Trade Shows, informing and educating people of the full and varied nature of your business.
Building a database to future proof your business Trade show investment is now much more measurable than in the past with cutting edge technology to electronically collect data and follow-up actions and orders. The XPO Leads App is an example of new technology allowing you to capture details from prospective buyers at the touch of a button simply by scanning their visitor badge. Build your very own database, record follow up-notes, survey your prospects / customers, take orders and view all records instantly from your phone, tablet or online.
Trade Shows provide a physical opportunity Written content and even video content are both very useful, but there is nothing quite like actually meeting the teams who help other businesses to function and having a frank discussion about what their service or product can do for your business.
We’ve seen how this worked for an EMEX 2016 exhibitor who sold a $1.2m machine because the prospect saw the video content on the trade show website and organised a face to face meeting with the exhibitor. This is where there is value in using trade shows to enhance your digital marketing and trade show organisers as XPO Exhibitions assist you with this! Furthermore, trade shows provide the space for feedback and to find out first-hand which aspects of your strategy are successful and which are simply unnecessary. Being able to speak privately and openly with critics as opposed to online blogs that can cause lasting damage, it is this kind of feedback which is valuable when looking to grow your brand. An opportunity to learn and interact Many who attend trade shows will never have any intention of exhibiting themselves, but there is still value to be found in attending. If the event is industry specific, then
it provides the chance for you to look around at the activity of competitors and industry leaders. An Exhibitors ultimate objective is to sell and generate leads, which is why their strategies are plain to see. This provides fantastic insight into how the industry is developing and the trends which it is shifting towards. Trade shows and digital marketing may sit on two very different realms and while it is simple to argue that the former is becoming increasingly dependent on the latter, there is still a huge amount of potential within exhibition halls. While online we can gain access to a huge audience, the difficulty has always been to turn that click into a buyer or a subscriber. Trust is what has made trade shows such a key event on the calendar because businesses and consumers can interact face-to-face. It is this aura of trustworthiness which digital marketing can often struggle to recreate.
24-25 MAY 2017 Horncastle Arena, Christchurch
The South Island’s premier technology trade show for the Engineering, Manufacturing and Electronics industries.
THE HEARTLAND OF NZ MANUFACTURING Christchurch is the second largest manufacturing centre in NZ employing around 22,750 people and contributing approximately $2.2billion to Christchurch GDP Combine this with the wider South Island economy and SouthMACH has the opportunity to deliver your business a targeted and qualiﬁed audience like no other marketing platform.
EXHIBIT NOW CONTACT OUR TEAM email@example.com +64 (9) 976 8350 or +64 (21) 314 199
Showcase. Educate. Sell.
NZ Manufacturer December 2016
If someone offers you an amazing opportunity and you’re not sure you can do it, say yes - then learn how to do it later.
Automation is not the end of the world. Here’s why
Robots probably will take our jobs. That doesn’t have to be bad news.
For many people worldwide, the answer is unemployment. Work is not just what allows us to sustain ourselves and our families: it expands our possibilities to be and do what we aspire to; it gives meaning and rhythm to our endeavours as part of a broader social contract. This is why in times of “polycrisis” and broader economic transformations, we dread losing what we hold so dear to a presumed automation apocalypse.
accessibility. It is as much about finding employment as being entrepreneurial. The future of work is about new ways to better preserve, share, spread and generate economic and social value. Advances in knowledge and technology have already empowered us with novel skills and solutions. They come down to three “Cs”: circular, collaborative and connective. A look into the future of work
time, making apartments s m a r t e r b r i n g s construction workers – who were hard hit by the 2008 financial crisis – back into the labour market, and equips them with new technical skills.
Thanks to connectivity, drones can be activated with one click to deliver medicines to rural areas, saving lives that an ambulance would have never reached. The most expensive part of that drone – which can be built in 15 minutes – was probably the result of a worldwide hackathon that made it openly accessible and brought its cost down to $8.
In the same way, projects like Last Mile Works turn inmates – who are generally considered economically passive members of society – into digital entrepreneurs, making them economically active while they are incarcerated and preparing them for reintegration when they are out.
Connectivity also means that we can invite more talent – all talent – into the future workplace. Initiatives like Stevens use virtual exchanges to build cross-cultural skills and facilitate the integration of today’s immigrant children into tomorrow’s ever more diverse workforce.
Preserving and uncovering value is not enough. It must be shared and accessible. This is ever more possible in an increasingly collaborative economy. Communities in Brooklyn, New York are creating a shared economy for peer-to-peer energy exchange to be more resilient and take neighbours out of energy poverty. So if a house’s solar panels produce excess electricity that would generally go to waste, that surplus can be transferred to another, immediately and at a locally determined price. Similarly, as cars are on average parked 92% of the time, why not share them with those who face obstacles to mobility and maximise everyone’s benefits? Finally, circular and collaborative innovations would not run as efficiently – if at all – had we not entered the connective economy.
Trends in Routine and Non-Routine Tasks in Occupations, United States Image: OECD Skills Outlook 2013, OECD
It is true: if a routine task can be performed cheaper, faster and better by a robot, there is a chance it will be. What is also true – and even more certain – is that machines push us to specialize in our competitive advantages: more “human” work, creative and social intelligence, interpersonal and non-routine tasks are what makes us resilient and adaptive to change.
In the 21st century, progress is about circling the economic and social square. As we reach planetary boundaries and unemployment tops our hierarchy of concerns, we can no longer afford to waste our capital – whether natural or human. A circular economy can help put an end to that.
The future of work is about much more than automation. It is about equitable access to opportunities and
Investing to make buildings more sustainable, for example, means more energy-efficient houses that curb pollution and help families save more on their energy bill. At the same
NZ Manufacturer December 2016
Image: European Commission
Connectivity has extended our imagination, allowing us to engineer solutions to seemingly unsolvable problems, and invent new professions that not long ago only belonged to science fiction.
The elderly and people with disabilities can overcome physical limits and enter digital workplaces. Women can tear down the last barriers of gender discrimination. When we look at the future of work with circular, collaborative and connective lenses, it stops looking like the automation apocalypse. These “three Cs” are not just attributes of an economy that may well yield minimum waste and maximum benefits for a larger number of people. They are qualities of a networked society in which we become individually stronger when we act collectively. They are critical skills that allow us to turn specific problems into systemic possibilities, and shape the future of work we want. They are the demonstration that, in the 21st century, solidarity is not just an ethical quality, but it makes social and economic sense. A robot cannot see and seize that.
ADVISORS Mike Shatford is an expert in the field of technology development and commercialisation. His company Design Energy Limited has completed over 100 significant projects in this vein by consulting for and partnering with some of New Zealandâ&#x20AC;&#x2122;s leading producers. Among Mike and his teamâ&#x20AC;&#x2122;s strengths are industrial robotics and automated production where the company puts much of its focus.
Sandra Lukey is the founder of Shine Group, a consultancy that helps science and technology companies accelerate growth. She is a keen observer of the tech sector and how new developments create opportunity for future business. She has over 20 yearsâ&#x20AC;&#x2122; experience working with companies to boost profile and build influential connections.
Phillip Wilson Chris Whittington
Senior Lecturer at AUT, Chris Whittington is a versatile Engineer, Educator and Researcher. Chris has had many years experience in senior engineering and product management. Chris has a strong background in computational modelling, 3-D scanning and printing, and a strong interest in engineering education.
Phillip Wilson of Nautech Electronics has over 25 years of experienced in the development, commercialisation and implementation of advanced manufacturing technology, robotics, automation and materials. Serving companies operating within the aerospace, automotive, offshore, defence, medical and scientific industries on a global basis. More recently specialising in change management and business re-alignment for a range of commercial entities
NZ Manufacturer December 2016
It’s not your salary that makes you rich, it’s your spending habits. -Charles A Jaffe
Review: Death by Design The digital revolution is great, until it’s time to upgrade. A ringing phone on the peak hour train ride home may be an annoyance to be ignored, and hopefully turned to silent, but these familiar chimes are signs of a digital revolution all around us. These are the personal electronic products we engage with to help organise, connect, entertain, and inform us in an ever faster cycle. Now they’re ubiquitous. But where do they come from, who makes them, and where do they end up when discarded? Death by Design, a documentary directed by Sue Williams screening at Environmental Film Festival Australia in Melbourne, confronts these questions.
The human cost of the digital revolution The film begins with the development of the semiconductor industry in California, exploring the human and ecological impacts in those formative Silicon Valley years. The film shows the Silicon Valley Toxics Coalition and its successful activism to drive remediation of contamination; and the personal stories of material toxicity, and associated devastation. Throughout the film toxicity is revisited, and the film paints a fairly bleak picture of labour rights in China. We turn to Ma Jun, the 2015 Skoll Award winner (an award for social entrepreneurship) for creating a national picture of water pollution with data that is now publicly available. Jun laments the potential human costs across China’s water infrastructure, which begs the question: why haven’t organisations expanding to these new manufacturing regions learnt the lesson from the US industry , or applied
Europe’s hazardous waste standards? What is equally troubling are issues with even stringent auditing processes. Linda Greer, a toxicologist from the Natural Resources Defence Council put it simply: “it’s all about the questions you ask”. A firm’s audit checklist may be thorough in some respects, yet miss key points in others.
challenging the notion of updatable, upgradable, and reusable computers. Both business models require the breaking down of secrecy shrouding internal access to such products. Batteries are harder to replace now and screens harder to repair, as repairs become part of manufacturer’s business models.
As such, manufacturing may be considered adequate, yet not address the pertinent problems. Jun’s work has already resulted in supply chain actions in this regard.
As Ifixit look to disrupt that disposable model for consumers, the film follows the company to China as they source their own electronic parts, and come full circle.
Who’s to blame? All of us
With such throughput of electronics, e-waste is accepted as a major and growing issue. Darrin Magee, Environment Geographer from Hobart and Williams Smith Colleges estimates that the US generates 3 million tonnes of e-waste alone, with a much smaller amount actually repurposed and recycled. Chinese volumes of e-waste and the human cost of handling are also major problems to address.
The film directs us to the main driver of the large industrial expansions Jun monitors, our daily consumption habits in the west. As Lancaster University professor Elizabeth Shove has portrayed so vividly, the devices of convenience and the rituals they connect to drive consumption, both conspicuous (such as a phone) and inconspicuous (such as the energy it uses). Consumption implicates us all, and the figures the film lists are breathtaking: from 376,000 Apple Ipod sales in 2002 to 51.6 million in 2007, and 10 million Apple Iphone 5s made in a week. Purchases are only exacerbated by constant upgrading, and consumer inability to repair or refurbish their devices as the US firm recycling firm Ifixit explains. They’ve built a business that enables consumers to circumvent “prescribed obsolescence”, to fix their own electronic products by using their own parts, tools and how-to guides. Irish firm iameco take this even further,
Where to from here? Death by Design suggests that the digital revolution has rewarded us with so many benefits, something that is reasonably clear. Certainly with all of that success, manufacturers of electronic goods must take responsibility for how products are designed for longevity by extending life cycles, and in managing the toxic issues throughout the entire supply chain. Part of the solution could include models that build recycling into the design such as the circular economy and cradle-to-cradle models, coupled
Simon Lockrey Research Fellow, RMIT University
with an increase in stewardship schemes, some of which are emerging at present. The final sequence in the film suggests that we, the people, could use our buying power or behaviour to change the system in demands for labour safety, human health and ecological preservation. This is an interesting perspective, and could be linked to new patterns of “enlightened” consumer purchasing. I wonder though, could it be a sharing economy opportunity? What about maker culture with new democratised technologies to help build what we need to retrofit upgrades? Others have gone further in calling for moral outrage and collective action on related issues, such as pollution leading to climate change. In any case, Death by Design is a thought-provoking look at an industry that we interact with every time we swipe, tap or lol. As innocuous as those actions are, substantial sustainability issues remain that we need to face as a society.
2017 New Zealand Manufacturer Excellence in Manufacturing For an Entry Form and further information contact: Doug Green, Publisher, NZ Manufacturer P: 0064 6 870 9029 E: firstname.lastname@example.org
NZ Manufacturer September 2016
You don’t have to see the whole staircase, just take the first step. -Martin Luther King
The future according to Elon Musk Anurag Harsh,SVP Ziff Davis, Author of Going Digital Elon Musk is often labelled a dreamer, the closest we could get to a real-life Tony Stark. He is an innovative and motivational leader that uses his passion for technology to repeatedly deliver breathtaking results. Now, he is coalescing the various articulations of his business empire to create comprehensive solutions to climate issues and beyond.
The Frontline Against Climate Change Upon completing a $2.6 billion acquisition of SolarCity, Musk secured a future where he can sell electric cars and solar roofs to customers under the Tesla brand. Although a few skeptics deemed this a risky move, his ‘dream big or go home’ attitude quickly silenced critics by unveiling an entire island run by solar power. The island of Ta’u in American Samoa is more than 4,000 miles from the United States. Power outages are a regular occurrence in this remote location that heavily relies on diesel generators. It’s the perfect example of technology stepping in to improve the old way of doing things. “Would you like a roof that looks better than a normal roof, last twice
as long, cost less and by the way generates electricity?” - Elon Musk Tesla’s microgrid of solar panels will supply nearly 100 percent of the Ta’u’s 600 residents’ energy requirements. The 5,300 solar panels along with 60 Tesla Powerpack batteries illustrate how the future is already here. These technological advancements will particularly have a positive impact in the developing world. We have already seen this happen with nations skipping telephones and computers by going straight to smartphones. This is another huge reason that mobile browsing has officially overtaken desktop recently. Renewable energy is an economical solution that could transform developing nations from no power to solar micro-grids within a few years. Removing the dreaded expense that surrounds our current energy infrastructure seems to be where the biggest leap forward has been made. Sure, Ta’u is an easy test case, with its perfect weather and relatively uncomplicated energy needs. But, it is undeniably a shining example of what is possible. For those who reject the science of
climate change, Elon Musk presents an alternative incentive: money. This is a cheaper option that concurrently benefits the planet and consequently its people. How can you argue with savings, high-quality products, interest?
Let’s Charge Forward Why are so many people still doubtful of Musk’s ideas? I don’t understand the pushback. Yes, he is radical, but he consistently proves naysayers wrong. There is something objectively exciting about lowering the carbon footprint on an island where the residents have experienced global warming first hand. And there is something admirable about tackling a problem that the future administration of one of the world’s most powerful nations deems a fiction. He needs our support to continue his good work. Those of you who believe in the urgency of climate change should support him as one of the few companies championing this
cause. The reality is that harkening to the past is good only for inspiration rather than re-creation. We cannot go back in time. We can build a brighter and better future by learning from our mistakes and continuing to evolve together with the public good in mind. If history has taught us anything at all, it’s that those who dare to throw caution to the wind to change the world are usually the ones who do. After proving that Tesla can power an island for three days without sunlight, it appears that Elon Musk has given us yet another reason to believe.
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Hire people that are better than you and then leave them to get on with it. -David Ogilvy
Enabling employee productivity through technology Employee productivity, or how effectively employee time is managed, is key to ensuring a business can execute its overall strategy. In the competitive manufacturing industry, a sustained increase in employee productivity can give the business a competitive advantage. Manufacturing businesses that implement workforce management technology can achieve a significant increase in employee productivity and improvement in their bottom line. Manufacturers are often at the forefront of automation technology. However, many still rely on old-fashioned time sheets and scheduling systems that require manual input from both the business and its employees. Automating workforce management systems can help to improve communication and save time and resources that could be better spent on strategic priorities. Automation technology lets companies minimise the costs of processes such as absence management. Automated absence tracking, for example, can reduce the time HR managers spend on manual absence-related tasks. Top-performing organisations are increasingly integrating automated absence management tools to relieve managers of the burdens of handling short- and long-term employee absences. There are three key ways that manufacturing businesses can enable
employee productivity through technology: 1. Improving engagement and satisfaction Boosting employee engagement has a direct impact on productivity. However, almost half (49.5 per cent) of employees are not engaged and 16.5 per cent are actively disengaged. Workforce management technology can give employees self-service tools for tracking time-off balances and requesting leave. This means they have greater control and insight over their own shifts and holiday time, helping to create an engaged, productive and Charlie Camphin, WorkForce Software Vice President of Sales, APJ loyal workforce. 2. Analyse performance Information on employeesâ&#x20AC;&#x2122; activities and performance is essential to how well a business can harness its true value. The data provided by workforce management systems can provide greater insight than traditional methods of worker observation. Manufacturing businesses with robust workforce analytics and reporting can gain a deep understanding of employee productivity, market trends and customer preferences. This lets managers develop data-informed strategies to improve productivity based on current and expected trends.
Organisations with variable demand need robust scheduling capabilities that can incorporate and analyse customer traffic and point-of-sale data to produced optimised schedules. Demand-based scheduling can improve productivity by scheduling workers where they are needed most. 3. Track skills and certifications Automated tracking of employee skills and certification can help businesses fill open shifts by instantly contacting qualified, eligible workers via their preferred mode of communication. This means the business achieves the
optimum balance between staff skills, productivity goals and labour costs. Businesses with automated workforce management systems can identify roadblocks to employee productivity and develop data-informed employee management programs to help them execute their overall business strategy. With the insight necessary to change processes and attitudes that can hinder overall productivity levels, the technology can give the business a competitive advantage and support its growth.
Laser-based composite manufacturing LAP Composite Pro includes perfectly harmonised components to simplify and accelerate manual composite lay-up: LAP CAD-Pro laser projectors and LAP Pro-Soft laser projection software have been designed to meet the requirements of corporations from the aerospace industry, wind energy industry, automotive industry and shipbuilding industry in order to ensure the high quality of the products.
manufacturing, LAP has expanded its successful product family of CAD-Pro laser projectors to include new models with a green laser diode: The CAD-PRO LD green has a laser source with a service life of up to 30,000 hours - three times the service life of conventional DPSS laser modules.
Even at large distances, high-precision CAD-Pro laser projectors enable true-to-size display of laser outlines on 3D objects.
The package is complemented by the user-friendly LAP Pro-Soft software. The software manages, visualises and documents the projection steps and can be simply and intuitively operated via keyboard, tablet PC or remote control.
Laser lines are generated based upon existing CAD design data. Objects may be precisely aligned and positioned. This is much faster, more flexible and reliable than using physical templates or measurement techniques. For
In addition, the unit features optimal visibility of the projected laser lines especially on dark surfaces.
For large objects like rotor blades, the multitasking version Pro-Soft MT allows several teams to work simultaneously on the same tool.
Furthermore, the software supports a variety of CAD file formats as well as the direct export of LAP laser projection data from leading composite programs. The easy import and export of data without additional conversion help users to save valuable time and costs. LAP Composite Pro allows for a consistent workflow from design to industrial production. The solution supports companies to make their layup processes faster, simpler and more cost-effective, and to ensure the high quality of their products.
Laser projector LAP CAD-PRO LD green with laser source with a service life of up to 30,000 hours
NZ Manufacturer September 2016
If you’re not embarrassed by the first version of your product, you’ve launched too late. -Reid Hoffman, co-founder, Linked In.
Goodyear Eagle-360 concept tyre one of “Best Inventions of the Year 2016” Each year, Time magazine’s technology editors list the year’s “best inventions that are making the world better, smarter and—in some cases—a little more fun.” This year’s list includes 25 inventions, which in addition to Goodyear’s Eagle-360 concept, includes a virtual reality headset, shoes that lace themselves, a solar roof collaboration
between Tesla and SolarCity, and the Chevy Bolt electric vehicle. “By steadily reducing the driver interaction and intervention in self-driving vehicles, tires will play an even more important role as the primary link to the road,” said Goodyear’s Chief Technical Officer Joe Zekoski. “Goodyear’s concept tires play a dual
role in that future both as creative platforms to push the boundaries of conventional thinking and testbeds for next-generation technologies.” The Goodyear Eagle-360 is a spherical-shaped design concept tire that would provide self-driving cars ultimate maneuverability, connectivity and biomimicry to increase safety. An in-depth description of the
concept’s technology can be viewed online at https://www.youtube.com/ watch?v=oSFYwDDVgac.
GE tests 35% additive manufactured turboprop engine
855 conventionally manufactured parts will be reduced to 12 additive parts on the Advanced Turboprop
the turboprop’s parts built via additive manufacturing. 855 conventionally manufactured parts will be reduced to 12 additive parts on the ATP, including: sumps, bearing housings, frames, exhaust case, combustor liner, heat exchangers and stationary flowpath components. In July, GE Aviation introduced into airline service its first additive jet engine component – complex fuel nozzle interiors – with the LEAP engine. The LEAP engine is the new, best-selling engine from CFM International, a 50/50 joint company of GE and Safran Aircraft Engines of France. The same team of eight engineers responsible for designing the LEAP fuel nozzle interiors led the design effort for the 16 additive parts tested in the a-CT7. In the coming months, GE will run a second a-CT7 test with even more additive parts to expand the technology to additional structures and assemblies. The additive components for a-CT7 and ATP tests are built at GE Aviation’s Additive Development Center (ADC) in Cincinnati, Ohio. The a-CT7 tests are conducted at GE Aviation’s facility in Lynn, Massachusetts. GE expects to run
GE Aviation has completed testing a 35% additive manufactured demonstrator engine to validate 12 additive parts in its Advanced Turboprop (ATP) engine, which will power the new Cessna Denali single-engine turboprop aircraft. Additive components reduce the ATP’s weight by 5% while contributing a 1% improvement in specific fuel consumption (SFC). An additive CT7 technology demonstrator engine dubbed the “a-CT7” was designed, built, and tested in 18 months, reducing more than 900 conventionally manufactured parts to 16 additive manufactured parts. The ATP engine architecture is derived from the in-service CT7 engine, allowing for additive part commonality between the two engine programs. The ATP will include more printed components than any production engine in aviation history with 35% of
NZ Manufacturer September 2016
its first full ATP engine test by the end of 2017 in Europe. A d d i t i v e manufacturing (3D printing) involves taking digital designs from computer aided design (CAD) software, and laying horizontal cross-sections to manufacture the part. A d d i t i v e components are typically lighter and more durable than traditionally-manufactured parts because they require less welding and machining. Additive manufacturing allows GE to build parts at lower weight with better performance and durability. “With subtractive manufactured parts and assemblies, you traditionally use bolts, welds, or other interfaces to attach the parts together, which adds weight to the engine,” said Gordon Follin, ATP Engineering GM at GE Aviation. “On the ATP, additive reduces weight by eliminating those attaching features while also optimising design of the parts.” Because additive parts are essentially grown from the ground up, they generate far less scrap material. Freed of traditional manufacturing restrictions, additive manufacturing dramatically expands the design possibilities for engineers. For the in-development ATP program, additive also allows for an expedited engine certification program. GE recently completed ATP combustor rig tests six months ahead of schedule. The ATP combustor liners were printed in two days. “A huge benefit of additive is
expedited test schedules,” said Follin. “For a program like ATP, one of our big philosophical points of emphasis is getting hardware to test faster instead of spending too much time with models on a computer. By putting real hardware on test as quickly as we can, we can use the resultant data to help us design the next iteration for a better product, and we get that product much faster than if we were to use conventional manufacturing methods.” GE has invested approximately $1.5 billion in manufacturing and additive technologies since 2010. The investment has enabled the company to develop additive applications across six GE businesses, create new services applications across the company, and earn 346 patents in powder metals alone. In addition, the additive manufacturing equipment will leverage Predix and be a part of our Brilliant Factory initiative. The new 1,240shp-rated ATP is the first entry in GE’s new family of turboprop engines aimed at business and general aviation aircraft in the 1,000shp to 1,600shp range. The ATP features a 16:1 overall pressure ratio (OPR), enabling the engine to achieve as much as 20% lower fuel burn and 10% higher cruise power compared to competitor offerings in the same size class with 4,000- to 6,000-hour maintenance time between overhauls (MTBO). The Cessna Denali is expected to have a range of 1,600nm and speeds higher than 28kts. Key features of GE’s new ATP engine include: - Ruggedised, modular architecture based on the CT7 turboshaft - All-titanium, 3D aerodynamic compressor for light-weight and efficient power generation - Cooled turbine blades enabling higher thrust and fuel efficiency - Integrated electronic propulsion control for optimised single-lever engine and propeller control
You can’t have a million-dollar dream with a minimum-wage work ethic. -Stephen C Hogan
Phoenix Contact releases highly compact DIN Rail Mount AC-UPS Leading global electrical engineering manufacturer and innovator, Phoenix Contact, has released a new, space saving DIN Rail Mount AC-UPS solution to deliver uninterruptible AC power to critical loads in automation and shipping environments. The Phoenix Contact TRIO2G AC-UPS is state-of-the-art. The industry leading compact design incorporates a UPS module and battery in the one housing to help save on space. At just 210 wide by 170 high, the device can be installed quickly and easily. It can be latched onto the DIN rail with maximum ease thanks to its low installation depth or wall mounted. Plus, the device comes with hassle-free push-in connectors. For user flexibility, Phoenix Contact’s industrial-grade TRIO2G AC-UPS is
available in two versions Ð 120V AC and 230V AC. Both devices provide a highly reliable and smooth ride-through during power outages to prevent work interruptions and data loss. The pure sine curve at the output enables a seamless transition as the battery operation runs in sync with the mains previously used for the supply. The built-in 3.4 Ah battery offers a maximum of 600 W for 1.5 minutes. If required, additional capacity can be mounted onto the DIN rail to increase the time to four minutes at full load. Plus, the power storage device features maintenance-free VRLA technology. Further, as a special feature, Phoenix Contact’s TRIO2G AC-UPS devices also allow remote start up directly from the power storage, and without mains input.
The TRIO2G AC-UPS can be operated at temperatures ranging from 0¼C to 40¼C. The devices also provide comprehensive signalling. To ensure the TRIO2G AC-UPS units are always up and running, they have LED status indicators for signalling and function monitoring. Three digital outputs provide remote monitoring, and two digital inputs provide visual indication for remote shutdown and start-up. Wired into the control cabinet, the three signal contacts can be read by a programmable logic controller. Apart from signal contacts, the Phoenix Contact TRIO2G AC-UPS models come with a mini USB port. This can be used to configure the UPS and to command a controlled shut down of an industrial PC following a defined period of time to avoid data loss, corruption or downtime. For permanent connection
to an industrial PC or higher-level controller, Phoenix Contact offers a USB cable with a knurled screw connection suitable for continuous connection to the UPS. Designed for demanding automation applications, the devices have all necessary certifications, are rugged and robust, and can be relied upon to delivery uninterrupted power as well as peace of mind. .
ExportNZ welcomes upgrade of China-NZ FTA ExportNZ says the announcement by the Prime Minister and his Chinese counterpart to upgrade the China New Zealand FTA is good news. “The FTA with China has been hugely successful and has contributed greatly to the massive expansion in trade between China and New Zealand since it came into force in 2008,” says Catherine Beard, ExportNZ Executive Director. “The FTA is a good one, but since it was negotiated, China and New Zealand have negotiated other agreements.
Opinion Manufacturing Profiles Letters to the Editor Politics of Manufacturing Trade Fair World Diary of Events World Market Report Q/A Export News Machine Tools Business Opportunities Commentary As I See It Business News Appointments Around New Zealand Australian Report New to the Market Lean Manufacturing Equipment for Sale Recruitment Environmental Technology Manufacturing Processes
The negotiation on the upgrade offers the opportunity to ensure that the China - New Zealand FTA remains as up-to-date as possible and remains one of the highest standard FTAs ever negotiated.
technical barriers and trade and services barriers that still cause difficulties for New Zealand exporters. Likewise, since the original FTA was signed, e-commerce has grown in importance for bilateral trade.
“While the existing FTA has largely removed tariff barriers between China and New Zealand, areas that could be improved include dairy volumes, chilled meat exports, processed wood products and SPS agreements for horticultural access.
“It is important that the regulations around e-commerce facilitate the expansion of this trade.
“The other focus is a number of
“Export NZ congratulates the Prime Minister and Trade Minister Todd McClay for the announcement of this important achievement. We look forward to working closely
with Ministers and officials in the development of New Zealand’s negotiating position.”
The FTA is a good one, but since it was negotiated, China and New Zealand have negotiated other agreements.
NZ MANUFACTURER • February 2017 Issue • Features
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NZ Manufacturer Features 2017. FEBRUARY
Manufacturing Technology Additive Manufacturing New products for Manufacturers SPECIAL: Environmental Technology Workshop Tools (including injection moulding and CNC machines)
Supply Chain SPECIAL: Manufacturing Technology (Process and Fibre Industries) Food Manufacturing Rural Manufacturing Production Management
Manufacturing Technology (including robotics) Production and Distribution Disruptive and Future Technologies Export Success SHOW PREVIEW: SouthMACH 2017 Production Management SPECIAL: Workplace Development/Industry Training
Disruptive Technologies SPECIAL: Manufacturing Technology (including CAD/CAM) (Including robotics) 3D and 4D Developments (additive manufacturing) Project Management Food Manufacturing
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MAY 3D and 4D Developments (additive manufacturing) SPECIAL: Manufacturing Technology (Digitisation) New Products for Manufacturers Environmental Technology National Safety Show 2017 Preview SHOW PREVIEW: buildnz
JUNE SPECIAL: Food Manufacturing Rural Manufacturing Manufacturing Technology (including CAD/CAM) Automation SPECIAL: Production and Distribution
SEPTEMBER Manufacturing Technology Food Manufacturing Disruptive Technologies Rural Manufacturing SPECIAL: Energy Management
EACH ISSUE INCLUDES NZ Manufacturer is rich with the latest news and developments from New Zealand manufacturers which can be read about in the following Departments: Business News Developments Analysis Rear View The Interview Export Success Opinion Health and Safety New products for manufacturers Regular sections provide assistance for: The Future of Manufacturing
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DECEMBER SPECIAL: The Year in Review
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NZ Manufacturer December 2016
The essential question is not, “How busy are you?” but “What are you busy at?” -Oprah Winfrey
Patties invests in Leader Products And creates a market-leading food manufacturing group across Australia and New Zealand. Patties Foods Limited (“Patties”), an iconic Australian food manufacturer, has announced the acquisition of Leader Products (“Leader”), a manufacturer of quick, easy, delicious frozen convenience food products based in New Zealand. Leader was established by Tony Peterson and Richard Crabb in 1998 and over the last 18 years the business has emerged as the market leader in New Zealand in addition to exporting to Australia and Asia. The company is growing strongly and has doubled revenue in the past five years. Mr. Peterson will continue to drive the company’s growth strategy in his role as Managing Director and will maintain a stake in the combined business. Leader’s product range includes meatballs, burger patties, toppas, finger foods and meal solutions under the brands Leader, Tony’s Tucka and Kauri Coast. Leader supplies grocery retailers, distributors, sporting stadiums, convenience stores, cafes, hotels, restaurants and caterers in New Zealand, Australia and Asia. The company is the market leader in innovation and new product development in the frozen food product sector. Paul Hitchcock, CEO of Patties, said that Patties and Leader were natural partners – both focused on manufacturing high quality frozen foods known and loved by customers. Iconic brands in the Patties portfolio include Four’n Twenty, Patties, Herbert Adams, Nanna’s and Chef’s Pride. Mr. Hitchcock said: “We are delighted to be joining forces with the Leader team. We believe the combination of Patties and Leader will provide significant growth opportunities for both companies given our complementary savoury meals and snack products, manufacturing operations and sales footprints. This deal will create a market-leading food business across Australia and New Zealand. “Leader is a great New Zealand success story and we are very keen to support the team in their continued growth. For example, we see immediate opportunities to leverage the Patties sales force in Australia to bring more of Leader’s great product range to Australian customers.” Mr. Peterson, Managing Director of Leader, said: “Patties will be a great long term partner for Leader, with capital to invest in our local manufacturing capacity and our continued growth and expansion into Australasia. “Like Leader, Patties is a family-founded
local business with a culture of innovation and operational excellence. I am excited about the opportunities for us to continue to grow and invest in Leader’s products, people and key customer relationships together.” The transaction is expected to complete in early 2017 following receipt of regulatory approval. Patties was acquired by Pacific Equity Partners alongside existing shareholders, including the Rijs family, via Scheme of Arrangement in September 2016.
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Why the Need for inSight™? inSight™ takes product assurances into the 21st century inSight™ is a new brand developed by New Zealand Government owned AsureQuality, global experts in food safety and quality. We know how important food safety and quality is to you. We wanted a way that you could get independently verified information about a product, that would give you confidence in it before paying for it. inSight™ makes sense because: • You want to know more about the food you are eating
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NZ Manufacturer December 2016
When Henry Ford made cheap, reliable cars people said, ‘Nah, what’s wrong with a horse?’ That was a huge bet he made, and it worked. -Elon Musk
Innovative hoist solutions Materials handling specialist J D Neuhaus can provide a whole host of innovative hoist solutions for working environments that demand high levels of cleanliness and hygiene. Industries such as food, beverage, pharmaceutical and chemical must all conform to strict regulations when it comes to clean working practices. Utilising the appropriate materials handling equipment, therefore, is a paramount requirement and to meet this, JDN has created a nickel-plated hoist to ensure the highest level of cleanliness. Designed specifically for clean operating environments, this hygienically robust hoist can be configured in their standard Profi TI series for 0.5 to 1 tonne, or big bag handling unit and low headroom trolley hoist for 1 tonne. All of these feature outer surfaces plated in 25 µm
thick nickel. Where Profi hoists are required to run on overhead rails, both manually operated and motorised trolleys can be provided with nickel-plating features on the gearbox/motor and body. For applications, such as commercial kitchens, JDN Profi hoists offer a number of useful standard features including, high corrosion and humidity resistance, ease-of-cleaning and suitability for lube-free operation. JDN also has a number of stainless steel options including the chain, load hook and sleeve and top hook. JDN’s nickel-plated big bag handling air hoist is part of a range of products designed for applications that need to process powdered, granulated or other free-flowing materials which need regular, high volume top-ups in order to maintain the high levels of production.
These hoists are suitable for handling food products such as salt, sugar, flour and starch, as well as chemical and pharmaceutical products. All these air operated JDN products provide explosion protection features for safe operation when being used in potentially explosive work environments. Big bag handling air hoists are available at carrying capacities of 1100 and 2200kg (with 6 bar air pressure). They can be supplied in two configurations of single or twin lift/load hooks. The single hook unit is designed for operation with a standard cruciform lifting beam. The large distance between the hook and the chain box advantageously eliminates potential collisions between the load and the chain box. Twin load hook models operate with more complex multi-point crossbeam
designs, or for standard lifting beams featuring twin suspension points. In addition, they can be operated with synchronised lifting operation.
Report: NZPICS Supply Chain Conference Supply chain management is becoming one of the most critical aspects of running a business and keeping it competitive. Whether it is the commodity, manufacturing or service industry and be it domestic or global, businesses are experiencing growing competition at every stage. This is all the more evident to businesses in New Zealand due to our unique position in world markets. CEO of APICS, Abe Ashkenazi, came from Chicago, US to give the keynote address at the conference in November. Joining him were four more distinguished speakers, namely Jonti Rhodes (GM – F&P Healthcare), Rod De Spong (COO – Douglas Pharmaceuticals), Catherine Beard (CEO – Business NZ & Export NZ) and Chris Foord (GM – Fonterra).
objectives of the organisation and improve economy across the globe. • APICS is the largest certification association in the world, but has only 5% market penetration. • Supply chain management is predominantly cross-functional. Practitioners must have solid technical expertise, international exposure and organisational support. • There is a talent gap and shortage of skilled supply chain practitioners. Skills do not match competencies, especially in analytical area and real world experiences.
Abe’s presentation focussed on the importance of supply chain management. Following are the salient points: • APCIS started 60 years ago when supply chain management careers did not exist. They started emerging only in the mid 90s. • The certified course of CPIM (Certified in Production & Inventory Management) was created with the intention of having a solid foundational body of knowledge (BOK) for supply chain practitioners just like the engineering BOK is for engineers. • APICS objective is to develop people at all levels of the organisation. The BOK intends to improve individual’s efficiency in a company, satisfy
NZ Manufacturer December 2016
• Ongoing investment is needed in training people and creating knowledge workers since people are the number one asset of an organisation. • Data will be the differentiating factor and tool in emerging markets – giving organisations new and highly valuable ways to use information across operations. • There is an initiative to take supply chain education to kindergarten levels using the lemonade supply chain example. • We are looking for a ‘super human’ combination of people who will
have technical depth, business depth as well as soft skills to be a leader, influencer and a diplomat.
When everything seems to be going against you, remember that the airplane takes off against the wind, not with it. -Henry Ford
Olympus at AOG 2017 to showcase innovative industrial instrumentation The 2017 Australasian Oil and Gas Exhibition and Conference (AOG) will feature some of the extensive range of Inspection and Measurement Systems from Olympus. AOG is Australia’s largest oil and gas exhibition and will be held at the Perth Conference and Exhibition Centre from the 22nd to the 24th of February. The experienced Olympus staff at AOG 2017 will be sharing their knowledge with delegates. Engineers, technicians, facility managers and asset owners will have the opportunity to learn more about the types of instrumentation available to the industry and the applications of Non-Destructive Testing (NDT), Remote Visual Inspection (RVI) and Handheld XRF. NDT is any analysis technique used to evaluate the properties of materials or components without causing damage nor permanently alter the article being inspected. NDT can save both money and time in product evaluation, troubleshooting and research.
Olympus’ Richard Nowak, Product Specialist – NDT, be one of demonstrating mapping at the NDT workshop, which is part of 2017 Knowledge Forum.
National will also corrosion practical the AOG
The latest dual linear array probes that Nowak and his colleagues will be demonstrating have been found to be as accurate as the commonly used manual high frequency probes. The manual location and measurement process is streamlined when combined with good motorised or manual scanners, allowing large areas to be scanned and analysed quickly. All data is electronically stored for future review or comparison. As part of the trade exhibition, Olympus will demonstrate a new era of precision for RVI with a videoscope that has the greatest measurement accuracy on the market allowing the detection of the smallest defects. Videoscopes are invaluable tools for
inspectors looking for superb image reproduction. The latest portable, compact designs provide rugged durability for operation in harsh environments. The videoscope combines an industry-leading high-pixel CCD chip, an ultra-bright laser diode light system delivered through the tip of the probe, and Olympus’ unique PulsarPic processor. The iPlex NX also offers a unique multi Spot-Ranging function that enables real-time measurement of the distance from the scope tip to multiple points on the inspection surface. This provides real-time surface shape information with no pause or break in the inspection. Another highlight of the Olympus offering will be the recently introduced Vanta hand-held XRF analysers. The Vanta is the most cost-effective, feature-rich, hand-held XRF analyser produced by the company to date and brings the latest XRF capabilities to a wide and diverse range of industries.
The Vanta has been developed to work in the harshest environments and incorporates upgraded electronics, enhanced signal processing and increased incoming X-Ray count rate. The new models utilise Olympus’ new Axon technology that yields enhanced XRF signal processing for accurate, repeatable test results by using proprietary ultra-low-noise electronics to enhance X-ray detector performance, resulting in higher X-ray counts per second and faster, more precise results and instrument-to-instrument repeatability. The new models include features such as two optional cameras, integrated GPS, and an automatic time/date stamp that make it easy to customise, capture, and export comprehensive shot data for efficient record keeping and traceability.
A helping hand in a tough spot Dormer Pramet has developed a new range of tools for drilling spot welds and sheet metal. The new spot weld drills have been specifically designed for drilling out spot welds to release steel panels and sheets. A number of standard sizes are available to suit common spot welds found in the automotive and trailer repair industry. Manufactured from high speed cobalt (HSS-E), the A723 drill, which has a bronze surface finish, offers high hot hardness to retain a sharp cutting edge under extreme conditions. A special lip and spur point geometry provides positive centering, while the sharp outer-corners cut the softer material around the spot weld. The drills feature a strong web for
additional strength and improved penetration in tough conditions. Their short flute also gives stability when hand held drilling thin panels and sheet. Dormer’s High Speed Steel (HSS) sheet metal drills are available in a number of standard sizes to suit common rivets, screws and bolts. Suitable for drilling thin sheet steel and panels, the A123 range features a 120° point geometry with a short flute to provide easy penetration and rigidity in portable applications. No body clearance further increases stability during drilling and breakthrough to give superior hole quality.
improves performance and reduces the chance of built-up edge. A double ended version (A119) is also available. As part of the launch, several new sets have been added. This includes a ‘compact drill’ set (A087) featuring 19 popular sizes of its TiN coated A002 jobber drill for general purpose drilling, as well as a 19 and 25 piece set containing the A108 HSS quick spiral jobber drill for stainless steel (A188). Meanwhile, to complement its existing range of center drills, Dormer Pramet has introduced several designs to further expand the applications
covered. These include a HSS-E range of center drills for tougher materials and environments, a flatted shank version for improved clamping, a long series option for increased reach and a line of solid carbide center drills for hard and abrasive materials. The new Dormer assortment has been manufactured with a flatted shank for use in custom centering heads specifically to support machining the ends of shafts. Their radius form increases cross sectional strength and therefore reduces the risk of breakage.
Its thin web at the point provides excellent self-centering properties, while its steam tempered surface
NZ Manufacturer December 2016
You can’t use up creativity. The more you use, the more you have. -Maya Angelou
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Delivering more for less – achieving New Zealand’s productivity potential well connected internationally. New Zealand firms have not been strong investors offshore, they don’t tend to be well connected to global value chains, and our stock of foreign direct investment as a share of GDP is growing more slowly than the OECD average. This lack of international connection means that competition is weak and that NZ firms have limited opportunities to learn from leading international firms at the top of their game. We also have onshore challenges – our small and insular domestic markets mean that small firms struggle to achieve economies of scale and specialisation. Our productive firms have limited scope to grow and expand within these
markets and, with limited competition, our unproductive firms survive for longer than they ideally would. This results in valuable resources being locked up in less productive firms.
This entails investing in the assets necessary to fully benefit from the important changes taking place in the global economy, including skills, innovation and managerial capability.
Encouragingly, new opportunities for international engagement are opening up as technology lowers the cost of distance and expands markets in some areas of economic activity.
For example, New Zealand firms that invest more in research and development and managerial capability are better placed to commercialise new ideas and absorb technology created elsewhere.
With more knowledge-intensive products being traded down fibre-optic cables, New Zealand’s growing high tech sector is indicative of important new opportunities for New Zealand firms to connect internationally.
It’s not just up to New Zealand firms to improve productivity. Enhancing flexibility, openness and receptiveness to new technology also carry important implications for policy.
But to make the most of these opportunities, we need to build comparative advantage to compete successfully in international markets.
The Commission proposes fresh thinking in a range of policy areas international connectedness; innovation and science; housing; skills; migration; lifting competitive
intensity and policy capability - to help New Zealand firms make the most of new opportunities and improve their performance. Getting this right would see the economy shift from a development model based on working more hours per capita to lift incomes to one in which productivity growth plays a more important role. With low productivity so entrenched in New Zealand, this presents a monumental challenge for policymakers, business owners and workers. However, with the right mix of coordinated regulatory and institutional reforms, New Zealand can achieve its productivity potential.
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India is opening for business – but homework needed management software; wealth management software working with financial companies; travel and expenditure management software, on-line ticketing technology, and an online cricket administration and information tool, to name just a few. “There’s still work to be done to ensure New Zealand is more well-known for its innovation and ingenuity. Strong brand recognition in these areas would really benefit our manufacturing and tech companies.” Tips for overcoming challenges There are still challenges when doing business in India says Cunliffe. For example, things can take longer than in other markets and so patience and setting realistic time-frames are important. “There are cultural differences and it’s important that company representatives visiting India take time to understand a few of the
key behaviours that drive business etiquette and decision making.” Logistics like cool chain distribution is not as developed as in many other markets and skilled labour is harder to find across certain industries. For consumer products, smaller packaging sizes and adaptation for local tastes need to be considered. Typically, there are high import duties across most product categories. Cunliffe’s top tips success in India:
- Keep up communication
relationships, at both a personal and business level - Be patient and have realistic time
Jane Cunliffe is NZTE’s Trade Commissioner for North and East India based at the New Zealand High Commission in New Delhi.
- Visit the market regularly - Do due diligence and background research - Develop and maintain
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Business confidence strong for 2017 (65%) saying there is currently, or there soon will be, a skills shortage in their sector. Not surprisingly, one of the key themes that came out of the survey
NZ Manufacturer December 2016
was looking for ways to resolve this. In particular, employers are looking at how they upskill current staff, but are also looking to use immigrants to fill their staff shortage along with other mechanisms such as apprenticeships.
“These results reinforce the need for employers to take good care of the staff they have,” says Mr Campbell. The survey was conducted in mid-November and went to EMA
members. Respondents were from a cross-section of businesses across the EMA region, from Taupo to Kaitaia.
Forget past mistakes. Forget failures. Forget everything except what you’re going to do now and do it. -William C Durant
Books for the holidays Apart from planning your budgets, why not go the library or book store and find a book to read. The list below offers some suggestions.
—Kevin Kelly (Viking Books, 2016; nonfiction) Between the World and Me —Ta-Nehisi Coates (Spiegel & Grau, 2015; nonfiction)
The Sleep Revolution: Transforming Your Life, One Night at a Time —Arianna Huffington (Harmony, 2016; nonfiction)
China’s Mobile Economy: Opportunities in the Largest and Fastest Information Consumption Boom
Enter Helen: The Invention of Helen Gurley Brown and the Rise of the Modern Single Woman
—Winston Ma (John Wiley & Sons, 2016; nonfiction)
—Brooke Hauser (HarperCollins Publishers, 2016; nonfiction)
The Seventh Sense: Power, Fortune, and Survival in the Age of Networks
The Inner Lives of Markets: How People Shape Them—And They Shape Us
—Nelson Mandela (Back Bay Books, 1995; nonfiction)
—Joshua Cooper Ramo (Little, Brown and Company, 2016; nonfiction)
—Ray Fisman and Tim Sullivan (PublicAffairs, 2016; nonfiction)
The Seventh Sense: Power, Fortune, and Survival in the Age of Networks
The Politicians and the Egalitarians: The Hidden History of American Politics
—William Kent Krueger (Atria Books, 2014; fiction)
—Joshua Cooper Ramo (Little, Brown & Company, 2016; nonfiction)
Fundamentals of Press Brake Tooling —Ben Rapien (Hanser, 2010; nonfiction)
The Intelligent Investor: The Definitive Book on Value Investing
Success and Luck: Good Fortune and the Myth of Meritocracy
—Benjamin Graham (Harper Business, 2006; nonfiction)
—Robert H. Frank (Princeton University Press, 2016; nonfiction) Shoe Dog: A Memoir by the Creator of Nike —Phil Knight nonfiction)
The Inevitable: Understanding the 12 Technological Forces that Will Shape Our Future
Long Walk to Freedom: The Autobiography of Nelson Mandela
—Sean Wilentz (W.W. Norton & Company, 2016; nonfiction)
New Economics of Matchmaking
Tattoos on the Heart: The Power of Boundless Compassion
—Gregory Boyle (Free Press, 2011; nonfiction)
and Market Design E.
Australia’s Second Chance
Dealing with China: An Insider Unmasks the New Economic Superpower
—George Megalogenis (Penguin Books Australia, 2015; nonfiction)
—Henry M. Paulson (Twelve, 2015; nonfiction)
The Art of Woo: Using Strategic Persuasion to Sell Your Ideas
Superintelligence: Paths, Dangers, Strategies
—G. Richard Shell and Mario Moussa (Penguin Books, 2008; nonfiction)
Houghton Mifflin Harcourt, 2015;
—Neal Stephenson (Avon Books, 2002;
—Nick Bostrom (Oxford University Press, 2014; nonfiction)
Global Energy Interconnection —Zhenya Liu (Academic Press, 2015; nonfiction)
Who Gets What—and Why: The
CSIRO to improve flow of chemical manufacturing CSIRO has launched its “FloWorks” Centre for Industrial Flow Chemistry in Clayton, Victoria.
Centre for Industrial Flow Chemistry will improve chemical manufacturing processes in Australia
FloWorks will provide cutting-edge research into flow chemistry capability, making it more accessible to the chemical manufacturing industry.
Contrary to traditional batch chemistry methods, starting materials are fed into a reactor where the chemical reaction takes place in a continuous stream, a method that in many cases has proven to be a more efficient and cost effective way of producing chemicals.
Senior research scientist with CSIRO’s manufacturing sector and director of the new centre, Dr Christian Hornung, said flow chemistry offers a cleaner, smarter and more efficient way of making chemicals. “The benefits of using the flow process include reduced reaction times and plant space, which equate to less energy cost, more efficient processes, reduced waste and a much safer environment,” Dr Hornung said. In the picture: CSIRO’s new FloWorks
Multi-stage processing, which eliminates the need for manual handling of chemicals in between steps, greatly improves safety, while in-line purification makes the system more streamlined. Smart monitoring and on-line analysis is used to automate the manufacturing process.
Industry partner, Zoran Manev from Boron Molecular, uses flow chemistry at his Noble Park plant to manufacture fine chemicals for Australian and international pharmaceutical and materials science clients.
than we would otherwise,” he said.
“CSIRO helped us integrate flow chemistry into our operations,” Mr Manev said.
A purpose-built 410m2 facility will be housed at CSIRO’s Clayton site in Melbourne’s south east.
“We use our unit to develop a number of processes or convert them from batch to flow.
Incorporating all of CSIRO’s flow chemistry equipment, its capabilities will range from small-scale discovery tools to large-scale industrial reactors.
“Flow chemistry enables us to make purer molecules, so we have fewer side products and fewer issues when we scale up to manufacture from small scale to larger tonne lots. “With flow we’re using far less solvents and energy and discarding far less waste material into the environment
FloWorks offers a unique, package all the way development; from early stages to industrial scale-up transfer.
complete through discovery and tech
Dr Hornung said the new collaborative space would generate greater engagement with industry and other research bodies. “I see flow technology eventually being taken up by chemical manufacturers in all areas,” he said.
NZ Manufacturer December 2016
If you genuinely want something, don’t wait for it – teach yourself to be impatient. -GURBASKSH CHAHALGUR
Blockchain rules: regulating a game-changing new technology Blockchain - the technology powering Bitcoin and other cryptocurrencies - is poised to transform the way we buy things, do business, and many other areas of everyday life. As banks and governments around the world grapple with how to harness this rising disruptive force, a team of legal and banking experts is taking the first step toward developing a framework for regulating them in New Zealand and Australia. At the moment, cryptocurrencies are highly volatile and speculative, mostly operating on the economy’s fringe. But rapid technological developments mean they are set to go mainstream. Their disruptive power arises partly from the way they allow people and businesses to transact value directly from payer to payee, either locally or across the globe, bypassing banks and other traditional third parties. “We’re on the cusp of radical and disruptive change, and this poses challenges for lawmakers and regulators around the world,” says Associate Professor Alex Sims from the University of Auckland, who is leading the team tasked with developing the Trans-Tasman framework thanks to a Law Foundation grant. “With major companies such as Microsoft now accepting virtual
currency payments, it’s feasible that blockchain technology will become ubiquitous within the next decade.
also allows for “smart contracts”, which could be game-changing in many areas of life.
“Currently, there is no law regulating cryptocurrencies in New Zealand, however people have had their bank accounts closed because their bank suspected them of dealing in cryptocurrencies,” she says.
Associate Professor Sims, who is head of Commercial Law at the University of Business School, says banks and credit card companies realise their role as gate-keepers and middle-people in financial transactions is under threat.
A core element of these digital currencies – called “cryptocurrencies” because they rely on extremely strong cryptography - is the blockchain. Invented in 2008 with the birth of Bitcoin, a blockchain is a list or digital ledger that records transactions and stores them in secure “blocks”.
“If cryptocurrencies become widespread, it could slash banks’ profits. Banks are trying to use the new technology between themselves because the benefits are massive, but they are going to try to limit how others use it. There is a real danger that if the banks get their way, the benefits of cryptocurrencies may be reduced or even lost,” she says.
Each block is then “chained” to the next with a cryptographic signature. The names of parties who make the transactions never appear on the blockchain, instead public keys are used, allowing for confidentiality. Copies of blockchains are stored across thousands of computers within a network. This makes them more secure than conventional bank accounts, as a hacker would have to hack into thousands of computers at the same time to change more than 50 percent of the copies, and anomalous transactions not replicated throughout the majority of the network would be ignored or effectively rejected. The blockchain
“There are, though, risks associated with cryptocurrencies, some not yet known, which is why this work is important. Currently, cryptocurrency transactions cannot be reversed and most new transaction technology relates to small sums. What happens when a consumer’s life savings are sent to the wrong person by accident or a person’s private key is compromised? Then there are issues of privacy. How are a person’s financial details kept private when the information is accessible by those that have access to a particular blockchain?”
Associate Professor Sims and her co-researchers, Professor of Banking and Finance David Mayes from the Business School, and Dr Kanchana Kariyawasam of Australia’s Griffith University Business School, are focussed on striking the best balance between the interests of blockchain stakeholders – consumers, businesses, other parties – and the interests of regulators. Associate Professor Sims: “This is a critical first step towards streamlining the regulatory framework in the Asia-Pacific region, as well as globally.”
University increases presence in China The University of Auckland’s new Innovation Institute China (UAIIC) will provide unprecedented access to an extensive range of networks, research and funding opportunities in China. The University of Auckland’s knowledge transfer company, UniServices, has established the institute in the Chinese city of Hangzhou. It is due to formally open in the first quarter of 2017 and will focus on collaboration. The Innovation Institute will allow the University of Auckland, UniServices and its partners to: • Develop stronger local relationships in China with local and central government, Chinese universities and research institutes, Chinese companies and international companies with a presence in China. • Provide access to a wider range of public and private good funding opportunities in China to support research at the University of Auckland. • Improve market knowledge and market access, allowing the
NZ Manufacturer December 2016
University to undertake a wider scope of projects across China.
we will do together,” says UniServices CEO Andy Shenk.
“By developing a wholly foreign owned entity in Hangzhou, China, we are enhancing our position in the world innovation ecosystem,” says Dr Lisbeth Jacobs, General ManagerInternational Auckland UniServices.
“The University of Auckland and Auckland UniServices support economic growth locally and internationally through innovation and entrepreneurship, creating quality jobs and high-value businesses, producing graduates and spin-out companies that contribute to and strengthen our economy and society, to the benefit of all. The establishment of the University of Auckland Innovation Institute, China is an example of our commitment to
“It will enable a safe pathway for international clients who have a desire to undertake research in China with the University of Auckland.” University of Auckland researchers will have access to the facilities when the building is completed enabling closer collaborations with Chinese universities, government agencies and commercial partners. “Both Auckland UniServices and the University of Auckland have extensive relationships and collaborations in China, and we look forward to the outstanding research and commercialisation work
achieving these goals.” Footnote: Many University of Auckland academics are also inventors and entrepreneurs. According to The Reuters Top 75 list of Asia’s most innovative universities in 2016, the University of Auckland ranks as the most innovative university in Australasia. It has also been recognised by the MIT Skoltech Initiative as one of the five emerging world-leading universities in entrepreneurship.
Time is the scarcest resource and unless it is managed nothing else can be managed. -Peter Drucker
The least-skilled workers are the losers in globalisation Jeff Borland Jeff Borland is a Friend of The Conversation. Professor of Economics, University of Melbourne Since the 1990s a shift has occurred in manufacturing from developed to developing countries like China.
(especially goods such as textiles and footwear, motor vehicles, electronic consumer goods).
Most experts say globalisation spreads wealth, bringing people out of poverty and nations closer together. But right now some politicians and their supporters are arguing it simply increases inequality.
Developing countries, where wages paid to low-skill labour are much lower than in developed countries, are able to produce these manufactured goods more cheaply. As developing countries such as China have increased their engagement with international trade this has caused a large-scale switch in the location of production of manufactured goods – from developed to developing countries.
Concern over the employment consequences of globalisation is again driving political debate. Look no further than the United Kingdom’s exit from the European Union and the rise of protectionism in American and Australian politics to see the disenfranchisement of low-skill workers with the effects of international trade. Judging by the dramatic change that has occurred in the global distribution of manufacturing output in the past 25 years it’s easy to see why these workers should be so concerned. In the early 1990s the United States accounted for 30% of manufacturing output, retaining the position as the world’s leading industrial producer that it had held for almost a hundred years. At that time China produced only 5% of global manufacturing output. Today that position has completely reversed. China produces 25% of manufacturing output and the US only 15%. Differences in labour costs between the US and China explain much of this transition. Many types of manufactured goods mainly require relatively low-skill labour to produce
Many types of manufactured goods mainly require relatively low-skill labour to produce. Recent research has found that low-skill workers in the US have been made significantly worse off by the transfer of manufacturing activity to China. The research estimates that, without the rise in Chinese imports, there would be 560,000 extra manufacturing jobs in the US today. As well, workers in industries most exposed to competition from Chinese imports are found to have experienced an average income decline of over $500 per annum against annual earnings of $40,000. This negative effect on annual earnings has been largest for workers with the
lowest earnings. Another important finding is the role of location in explaining the impact on the US labour market of increased imports from China. Manufacturing industries facing competition from China are concentrated in particular locations in the US (mid-west and south-east). It is in these regions that the impact on low-skill workers has been largest. The geographic concentration also explains why it is taking workers who have been adversely affected so long to get back into work. A larger number of job seekers chasing the available job vacancies in a region means longer average times spent out of employment. Manufacturing workers in the US may have been made worse off by globalisation, but economic theory predicts that there should also have been winners in the US. With increased international trade, the US can produce and export to China more of the goods where it has a comparative advantage as a supplier – such as professional services that require high-skill labour to produce. In other words, China uses the extra income it earns by selling manufactured goods to the US to buy other goods and services from the US. However, so far there is not much evidence that this has happened. Instead of using its extra income gained from selling manufactured goods to buy more imports from the US, throughout the 2000s China saved that income, maintaining a large trade
surplus. The benefits to US workers from globalisation, therefore, have been muted compared to the prediction of economic theory. The experience of a rapid rise in imports of manufactured goods from China is, of course, not unique to the US. While much less is known about the impacts on those other countries, what is known is consistent with the US experience. Other research finds that in the UK in the 2000s, workers in sectors most affected by growth in imports from China spent more time out of employment and experienced a drop in earnings. Again, these effects were most pronounced for low-skill workers. Australia has shared the experience of rising exposure to international trade with the US and UK. From 1960 to the mid-1970s in Australia the share of international trade (exports plus imports) in GDP was constant at about 25%. Since then the role of international trade in economic activity has increased steadily, now being above 40%. While there has not been much research on the topic for Australia, it seems that the recent rise in China’s manufacturing output has had less impact than in the US or UK. There had already been substantial declines in the share of workers in the Australian manufacturing industry in the 1970s and 1980s, so there was less scope for a negative effect. What Australia has shared with other developed countries is a commitment to being increasingly open to international trade. To a large degree this policy stance has been motivated by economic theory, which predicts that the gains to the winners from growth in international trade more than offset the costs to the losers. A lack of evidence about the winners from international trade challenges this orthodoxy – or at least suggests that it cannot be taken as an article of faith. -Feedback on this article is welcomed. firstname.lastname@example.org
NZ Manufacturer December 2016
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