NZ Manufacturer November 2016

November 2016

www.nzmanufacturer.co.nz

6

10 COMMENT Chinese business

BUSINESS NEWS What is competitiveness?

Need High Quantities of Prototypes Fast? direct3dprinting.com.au

30 FOCUS Internet of Things

evolves from imitation to innovation.

revolutionising the electronics industry.

Great products made here Top-notch, Made in New Zealand, sold in many markets around the world. In this issue we focus on three companies.

business going from strength to strength as they proceed in doubling the size of their business on the back of moving into more markets.

Take for example PGE Injection Moulding whose products are being used in marine safety applications in the US.

Fraser Engineering already manufactures about 90 percent of the New Zealand Fire Service fleet as well as trucks for Australia, Pacific Islands, Fiji, Cook Islands, Papua New Guinea and Asia.

Established only three years ago, PGE specialises in titanium injection moulding – a complex method with few competitors in the global market. Titanium is very light but also very strong, making titanium alloys ideal metals for many manufacturing projects.

Advertise in Manufacturers Marketplace for $30 a month Or on our website from $60 per month.

Plan ahead. Economically viable.

A sensible solution.

Then there is Streetscape of Tauranga, a New Zealand street furniture manufacturer. Locally owned, the company has extensive knowledge and expertise in design and manufacturing, specialising in the fabrication and design of street furniture ranging from lighting, bollards, fencing, shelters, bike racks and customised decorative features for the enhancement of urban landscapes.

Contact publisher@xtra.co.nz to find out more or Phone 06 870 9029 We keep on reading about Stabicraft, the Invercargill company manufacturing and exporting recreational and commercial trailerable aluminium boats for the world.

Key export markets are Australia, USA and the Pacific Islands. Boats are also sold as far away as Zambia.

Sean Creswell, Manager, Design Office, Streetscape Limited.

The company is very positive about the future with the company’s main challenge to differentiate and disrupt – something that Stabicraft have been doing since inception.

Then there is Fraser Engineering the Lower Hutt based company with their fire engine manufacturing

Paul Adams, Managing Director,Stabicraft.

In December Issue: The Year in Review

Christmas Special for smart and wise designers 15% off all new licenses, now $3417.00 Includes first year of Annual Maintenance.

A saving of $603.00

No lapsed license charge on maintenance

Renew your expired Annual Maintenance for $686.67

A saving of $168.67

Best value-for-money 3D CAD. Save me and money. Be more producve in 2017.

Product and industrial design.

Mechanical and sheet metal design.

Buy Annual Maintenance, update to the latest version. Get access to user forum and support.

Install on mulple computers. Acvate/de-acvate the installaons yourself.

06 8337093 enquiries@baycad.biz

Prices quoted do not include GST. Promoon ends 5:00PM Dec 23 2016

NZ Manufacturer Features 2017.

FEBRUARY

JULY

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

MARCH

AUGUST

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

APRIL SPECIAL: Manufacturing Technology (including Additive Manufacturing) Industry 4.0 The Future of Manufacturing (including converging technologies) Disruptive and Future Technologies SHOW PREVIEW: SouthMACH 2017 Iot and Manufacturing

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

OCTOBER

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

Preventative Maintenance -NMEC Preview Manufacturing Technology (including converging technologies) Workshop Tools (Including injection moulding and CNC machines)

Manufacturing Technology

NOVEMBER

Supply Chain

Manufacturing Technology (including CAD/CAM)) Production and Distribution SPECIAL: Production Management

DECEMBER SPECIAL: The Year in Review

Industry 4.0 Automation Robotics Additive Manufacturing Composites Nanomaterials Food Manufacturing Environmental Technology

Manufacturing Technology

The Aviation Industry

SPECIAL: Machinery Marketplace Directory

The Marine Industry

Automation

NZ Infrastructure

SHOW REVIEW: SouthMACH

For further information contact Doug Green E publisher@xtra.co.nz

T 06 870 9029 M O27 625 6166 W www.nzmanufacturer.co.nz

Plastics Developments Outsourcing Energy Food Manufacturing The Construction Industry Business Services Industry Training Production Management Preventative Maintenance Forestry Trade Shows and Exhibitions

CONTENTS DEPARTMENTS 4 EDITORIAL

6

ADVISORS

Keep the wheels turning.

5 BUSINESS NEWS

Craig Carlyle

Is Director of Maintenance Transformations Ltd, an executive member of the Maintenance Engineering Societyand the Event Director of the NationalMaintenance Engineering Conference.

New manager for steel industry body.

Trans Tasman collaboration vision advanced.

What is competitiveness?

7 MANUFACTURING TECHNOLOGY

Record-size industrial gear unit in one-piece housing.

11 Catherine Beard

Speech recognition with Dragon.

Is Executive Director of Export NZ and Manufacturing, divisions of Business NZ, NewZealand’s largest business advocacy group, representing businesses of all sizes.

FactoryTalk Batch software enhances scalability.

Rotary Tube Pro makes it easier to cut parts.

10 COMMENT

Chinese business: From imitation to innovation.

11 DEVELOPMENTS

13

Proposed changes to Skilled Migrant Category.

Dieter Adam

Corruption looks different in China.

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.

Survey shows firms poised for progress.

Apprenticeship boost is welcome and needed.

Practical response to skills shortage.

Otago Polytechnic addresses inequality.

Maintenance Engineering Society’s awards to Ewen Baker and Jamie Noakes.

14 ANALYSIS

Remanufacturing – the smart choice.

16 BUSINESS NEWS

Lewis Woodward

20

New Zealand’s ASEAN FTA: Call for submissions.

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.

17 SMART MANUFACTURING

Why protecting SCADA and ICS systems is no longer optional.

In-House or Outsource? Advantages of an in-house 3D printer.

Robot Macroeconomics: What economic history can teach us.

23

Dr Wolfgang Scholz

Is HERA Director and a Fellow of the Institute of Professional Engineers NZ.

24 FOOD MANUFACTURING

DNA technology improves agricultural production.

Sustainable Foods Summit explores sustainability in the food industry.

26

WORKSHOP TOOLS PlantMaster provides end-to-end plant control.

Bearings answer challenges in bridge construction.

28 SUPPLY CHAIN

26 29

Warehouse management – the Cinderella of management training.

29 ANALYSIS

Robot revolution: rise of the intelligent automated workforce.

IoT revolutionising the electronics industry.

31 REAR VIEW

Collapse of Australian car manufacturing will harm R & D in other sectors.

30

Garth Wyllie

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.

Keep the wheels turning

PUBLISHER

Media Hawke’s Bay Ltd,1/121 Russell Street North, Hastings, New Zealand 4122.

MANAGING EDITOR Doug Green T: +64 6 870 9029 E: publisher@xtra.co.nz

CONTRIBUTORS

Dieter Adam, Holly Green, Dieter Adam, Bruce McKern, Nolan Sharkey, Sean Duca, John Lewis, Bobbi Ryan Danushka Bollegala, Abbas Valadkhani www.mscnewswire.co.nz

ADVERTISING

Doug Green T: + 64 6 870 9029 E: publisher@xtra.co.nz

DESIGN & PRODUCTION Kim Alves, KA Design T: + 64 6 879 5815 E: kim.alves@xtra.co.nz

We have again gone through an earthquake event which sees us refocus and revalue our way of life.

And whenever earthquakes happen it causes us to look at our resources and figure out the best way of going forward. Bill English is going through this right now, evaluating the way to pay for the repairs in Wellington and the South Island and to keep the economy on an even keel.

What is difficult in the ‘shaky isles’ is not knowing when the next big one will come. Or even if the reconstruction efforts will be wiped away when the next big one comes again.

A most frustrating and disturbing situation that no one can foresee and do anything about.

WEB MASTER

Jason Bowerman E: jason.bowerman@gmail.com

PUBLISHING SERVICES On-Line Publisher Media Hawke’s Bay Ltd

DIGITAL SUBSCRIPTIONS E: info@nzmanufacturer.co.nz Free of Charge.

MEDIA HAWKES BAY LTD T: +64 6 870 4506 F: +64 6 878 8150 E: mediahb@xtra.co.nz 1/121 Russell Street North, Hastings PO Box 1109, Hastings, NZ NZ Manufacturer ISSN 1179-4992

Vol.7 No.10 November 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.

Affiliates

When this tragedy and destruction occurs things slow down. In Wellington buildings are destabilised, streets are closed, heavy rain comes, time is taken off work to be safe and for a little while, we stop making things until we can recover.

In Kaikoura, an incredibly transfixing place to visit as a tourist, there is a lot to recover from especially being cut off, isolated from the rest of the South Island.

And the infrastructure needing to be repaired is huge. Roads and train lines blocked and broken, lives to be put back together and confidences to be restored as a price to pay for living in the ‘shaky isles’.

So, when we have these unfortunate disturbances which have a serious effect on the economy, we need New Zealand to be robust enough, with enough options, to continue to generate growth.

In this magazine I talk manufacturing. But it is also true that other areas of activity which benefit the economy include tourism, agriculture, horticulture and immigration. Some more so.

Success Through Innovation

EDITORIAL

All of these areas improve our way of life by being the success that they are. And in a time, such as this, we know that their functioning – in full or in part – play an important role.

Doug Green

Coming in December issue…

The Year in Review

To be included please email me publisher@xtra.co.nz Your success stories, thoughts on the business year, where to in 2017.

ASIA

MANUFACTURING NEWS

4

NZ Manufacturer November 2016

/

www.nzmanufacturer.co.nz

A consultant is someone who saves his client almost enough to pay his fee.

- Arnold H. Glasow

BUSINESS NEWS

New manager for steel industry body Steel Construction New Zealand (SCNZ) has appointed Darren O’Riley as its new Manager, based in the organisation’s Auckland office. Darren’s knowledge and expertise are a strong fit for SCNZ as the organisation moves forward. He has 28 years of sales and marketing, and business development experience, gained largely in the building and construction industry.

He joins SCNZ from Fletcher Aluminium, a division of Fletcher Building, where he was for 16 years. Prior to that Darren held

positions at BHP New Zealand Steel, Solid Energy, Marley NZ and Plyco Doors. He has also just ended his time on the board of industry organisation the Window Association NZ where he served for 12 years, seven as Chairman.

Darren says: “I’m delighted to be joining such a progressive industry. In the last decade New Zealand’s structural steel sector has invested significantly in people, equipment and technology to boost capacity, quality and efficiency. It has

proactively introduced Steel Fabricator Certification, an industry-led quality initiative to set itself apart from offshore suppliers.

“The present climate presents both challenges and opportunities. I’m looking forward to supporting the industry on the next phase of its journey as it continues to grow and develop.” Darren replaces Alistair Fussell, who is stepping down from the role after 11 years. Alistair plans to establish a structural engineering

consultancy and will continue his association with SCNZ on a contract basis.

Ends

Trans-Tasman collaboration vision advanced Collaboration on infrastructure, tourism, health technologies and innovation, along with addressing non tariff barriers for agri-business in third markets will be among the key drivers of the CER vision in coming years, say business leaders from Australia and New Zealand.

The 11th Australia New Zealand Leadership Forum met in Sydney on 28 October and brought together over 200 senior representatives from government, business and the wider community from the two countries.

“The future of the relationship lies more in what we can achieve together in relation to global markets rather than

Commercial & industrial growth

our increasingly integrated, but still small, trans-Tasman economy” said New Zealand Forum Co-Chair Adrian Littlewood.

“CER has already created the basis for a single economic market. While some work remains to be done to address remaining barriers, bigger opportunities for us both lie further afield if we can pool our combined strengths and collaborate actively where it makes sense to do so.”

This year’s Forum focused on five key sectors considered to be drivers of new economic value - tourism, infrastructure, health technology, innovation and agri-business.

“The

focus

on

sectors

has

seen

engagement by a range of business people across both countries who have come together to consider what new value can be created by working in a more focused and joined up way across the Tasman” said Australia Co-Chair Rod McGeoch AO. “The number of people thinking about the future of the relationship has increased significantly and the options presented at the Forum constitute a solid agenda for the two countries to work on”.

Forum knowledge partner McKinsey & Co assisted in the development of these options which have been elaborated within an overall framework of ‘mega trends’ addressing both economies. These trends

Employment growth

include greater global interconnections, industrialisation and urbanisation, an aging world and disruptive technologies.

The Leadership Forum was addressed by the Australian Treasurer, Hon Scott Morrison and the New Zealand Finance Minister Hon Bill English. A number of other Ministers also participated.

Recommendations from the Leadership Forum are now being prepared in a letter to the two Prime Ministers.

“The relationship is strong but the scale of the opportunity and the disruptive forces ahead means that we must collaborate and innovate to take the relationship forward” concluded Adrian Littlewood.

Economic output

Crime rate East Tamaki is the largest industrial precinct in Auckland with 2000 businesses and a growth rate higher than the regional average.

getba

getba.org.nz

Greater East Tamaki Business Association Inc.

www.nzmanufacturer.co.nz

/

NZ Manufacturer November 2016

5

BUSINESS NEWS

The leader who exercises power with honour will work from the inside out, starting with himself.

-Blaine Lee

What is competitiveness?

What is competitiveness? There are actually a number of definitions out there. The World Economic Forum, which has been measuring competitiveness among countries since 1979, defines it as “the set of institutions, policies and factors that determine the level of productivity of a country”. Others are subtly different but all generally use the word “productivity”.

Another way to think about what makes a country competitive is to consider how it actually promotes our well-being. A competitive economy, we believe, is a productive one. And productivity leads to growth, which leads to income levels and hopefully, at the risk of sounding simplistic, improved well-being.

Why should we care about it?

Productivity is important because it has been found to be the main factor driving growth and income levels. And income levels are very closely linked to human welfare. So understanding the factors that allow for this chain of events to occur is very important.

Basically, rising competitiveness means rising prosperity. At the World Economic Forum, we believe that competitive economies are those that are most likely to be able to grow more sustainably and inclusively, meaning more likelihood that everyone in society will benefit from the fruits of

economic growth.

How do we measure it?

We break down countries’ competitiveness into 12 distinct areas, or pillars, which we group into three sub-indexes.

These are “basic requirements” which comprise institutions, infrastructure, macroeconomic environment and health and primary education. We call these “basic” as these pillars tend to be those that countries at earlier stages of development tackle first.

Next comes our “efficiency enhancers” sub-index. Essentially we’re looking at markets – whether it is the functioning of goods, labour or financial markets – but we also consider higher education and training, and technological readiness, which measures how well economies are prepared for the transition into more advanced, knowledge-based economies.

Our last pillar, innovation and sophistication, consists of two pillars: business sophistication and innovation. These are more complex areas of competitiveness that require an economy to be able to draw on world-class businesses and research establishments, as well as an innovative, supportive government.

Countries that score highly in these pillars tend to be advanced economies with high gross domestic product per capita.

What doesn’t competitiveness tell us?

played in raising millions of people

Generally, the world is getting better and better at measuring things, but nonetheless there are always black-spots in any benchmarking exercise. Despite our best efforts, we still haven’t found a fail-safe way of including a country’s environmental record into its competitiveness score.

Nor do we attempt to measure whether, or to what degree, competitiveness makes people happy, although there are others that do attempt to measure this.

countries’ openness when it comes to

Does a country that is competitive mean it is best able to face the future?

Again, the answer is yes and no: some countries are investing for the onset of the Fourth Industrial Revolution in ways that we have not yet found a reliable way of measuring. This last area is a focus of considerable work here these days.

undergone some form of monetary

What have we learned this year?

those economies that have engaged in

Aside from some countries going up and others going down, this year’s set of data gives us insight into three areas that continue to be important to policy-makers in 2016.

this period, we find that those with

With the debate on globalisation becoming increasingly politicized, with opponents blaming it for increasing levels of inequality and offshoring of manufacturing jobs, and proponents emphasing the role it has

bank balance sheets by a greater

out of poverty, we actually find that trading goods and services with one another has been declining steadily, if slowly, for the past 10 years.

With to

openness

economic

directly

growth,

this

linked seems

significant, especially as the trend seems to stem mainly from the encroachment of non-tariff barriers, which are subtle and often hard to detect.

With every advanced economy having stimulus such as quantitative easing since the great recession, the report also helps us understand why some countries have been more effective than others in reigniting sustained growth.

By comparing the competitiveness of monetary stimulus programmes over high competitiveness scores were more successful in driving economic growth than others with lower scores, even if the latter have expanded their central amount.

The report offers insight into how priorities may be shifting for nations in earlier stages of development. While basic drivers of competitiveness such as infrastructure, health, education and well-functioning markets will always be important, data in the report suggests that a nation’s performance in terms of technological readiness, business sophistication and innovation is now as important in driving competitiveness and growth.

This is important for policy-makers and leaders in emerging markets who need to be aware that the reality when it comes to helping move their economy up the income ladder is much more nuanced than they may have previously believed.

Spring & Wire form manufacturing company where solutions are created for your problems.

09 277 5982 •

6

NZ Manufacturer November 2016

/

www.nzmanufacturer.co.nz

www.natspring.co.nz

The world will never be the same.

-Cher on US elections.

MANUFACTURING TECHNOLOGY

Record-size industrial gear unit in one-piece housing Nord Drivesystems, a leader in drive technology, has engineered an industrial gear unit with 240,000 Nm rated torque load and various application-specific features for a Moroccan mine. It is to date the largest system with a one-piece gear case.

The UNICASE gear design prevents leaks and delivers excellent radial and axial load capacities with a small footprint. The gear unit can be mounted on all six sides as well as by means of a flange. A bevel gear unit

configuration was used for this mining application. The drive comprises an electric drum brake.

The components at the inlet of the gear unit are hidden by safety guards to protect operators from the rotating

parts. The application side, which includes the gear unit, can be fully disconnected from the motor side via a hydraulic coupling. The solution ensures ultra-reliable operation and a high level of safety.

This gear unit is mounted on a drive unit comprising a base, medium-voltage electric motor, hydraulic coupling, electro-hydraulic brake and, of course, the bevel gear unit. It is one of 26 drive units designed by Nord as part of a project for a semi-portable hopper used in a phosphate mine in Morocco.

The company designed each of these units according to an extremely stringent set of specifications and taking into account the harsh environmental and operating conditions.

These units drive a conveyor that is over two kilometers long and which carries phosphate ore with loads exceeding several hundred tonnes.

The high-performance gear unit meets the client’s stringent requirements, in particular maximum uptime and high tolerance to peak loads and impacts.

NORD´s office Casablanca office engineered the drive with the assistance of the engineering offices in France and Germany. An SK 15407 industrial bevel gear unit and a motor with a 450 kW performance rating are mounted on a swing base.

Tailored to specific applications, the conveyor drive with industrial gear unit in a one-piece housing ensures high load-bearing capacity and ultra-reliable performance.

www.nzmanufacturer.co.nz

/

NZ Manufacturer November 2016

7

MANUFACTURING TECHNOLOGY

Good design is good business.

- J. Watson

Maximise productivity with Dragon voice tool Nuance Dragon Professional Individual v15 for the PC is a smarter next-generation speech recognition solution. It provides busy professionals with fast, accurate dictation and high-performance speech recognition features, such as custom vocabulary and commands, to help boost productivity.

Leveraging the latest in Deep Learning technology, Dragon constantly learns and adapts to your unique voice and environmental variations even while you’re dictating, to deliver new levels of personalised accuracy and productivity.

Quickly dictate and edit documents and reports, send emails and notes,

or search the Web – all by voice.

Dragon helps you spend less time on documentation and more time on activities that boost the bottom line.

Nuance Dragon Professional Individual v15 is available as a digital download or in a box pack from $530 at www.newzealand.nuance.com

FactoryTalk Batch software introduces modern approaches for applications Industrial producers with batch applications can now create more flexible, reliable and productive operations with the latest release of FactoryTalk Batch software from Rockwell Automation.

The software enhances scalability and responsive control of distributed, skid-level phases with the integrity of plant-level coordination, whilst delivering an improved, reliable user experience with built-in mobility.

“Rather than trying to force-fit applications into rigid batch control systems, producers can now

customise a modern batch system to their application’s needs,” said Dan UpDyke, Product Manager, Rockwell Automation.

“These enhancements give batch producers greater flexibility when designing, operating and expanding batch systems. They also enable producers to use mobile devices for a more intuitive experience and improved workflows.”

Integration with the SequenceManager solution from Rockwell Automation enables batch sequencing to occur at either the controller or server level.

This allows machine builders to develop and deliver fully tested skids that end users can integrate into their batch process with minimal validation and commissioning effort.

It also minimises the rework required when manufacturers with small, controller-based batch systems expand to larger, server-based batch systems.

New mobile support can help create intuitive workflows, reduce procedural

steps and increase collaboration. With mobile devices, workers no longer need to be bound to control rooms and fixed terminals. Instead, they can access real-time information, interact with processes and secure approvals from anywhere in a plant.

A modern web interface also helps reduce the number of clicks required to access information.

Design Energy Specialists in Industrial Automation Giving local manufacturers a globally competitive edge

Robots Turn-key Solution Design Services • Machine Tending • Welding • Product Life Testing

8

• Palletising/Packing • Machining • Labour Replacement

• Assembly • Labelling and Marking • Custom Processes

High Performance Industrial Robots

Production Solutions for SMEs

World Leading Collaborative Robots

www.designenergy.co.nz

0508 ROBOTS

info@designenergy.co.nz

NZ Manufacturer November 2016

/

(0508 762 687)

www.nzmanufacturer.co.nz

I am not yet ready to be Tsar. I know nothing of the business of ruling.

- Nicholas II of Russia

MANUFACTURING TECHNOLOGY

Hypertherm releases Rotary Tube Pro tube cutting software Hypertherm, a U.S. based manufacturer of plasma, laser, and waterjet cutting systems, has released Rotary Tube Pro, software that makes it easier to design and cut tube and pipe parts with no 3D CAD experience required.

Hypertherm software developers were able to deliver optimal outcomes based on factory-tested and proven job parameters including leads, separations, kerf, feedrate, and cutting techniques. Also,

The software features a parametric design interface that allows main tubes and side-wall cutouts to be added from a list of pre-defined shapes.

Alternatively, users can add tubes and cutouts directly from a CAD program.

This flexibility means fabricators and manufacturers can enjoy greater productivity by increasing programming speed, and improving cut quality for improved fit-up with fewer secondary operations.

Hypertherm has applied feedback received during months of testing to the Rotary Tube Pro version.

Enhancements include:

The software also includes an optional rotary bevel interface provided with bevel cut charts based on True Bevel™ technology, which greatly reduce bevel setup time.

Rotary Tube Pro software includes more embedded cut process expertise in the NC code than other tube and pipe software. By drawing on years of research and development,

• New 3D geometric modeling engine that delivers a faster, more responsive 3D model when entering dimensions and other properties • Ability to import STEP file formats (*.step), for the quick exchange of 3D objects from one platform to another • Cut sequence enhancements that allow for the cutting of interior parts first and improved sequencing flexibility • Simplified bevel material selection in which only materials and classes that can be beveled are displayed • New setups, spreadsheets and

machine files that enhance cut quality and accuracy on beveled tubes Rotary Tube Pro supports plasma, laser, waterjet, and oxyfuel cutting processes for virtually all brands of tube cutting machines, including stand-alone units and cutting table add-ons. In addition, it supports perpendicular cutting as a standard feature and bevel cutting as an optional module.

The software takes programming of pipe and tube jobs to a whole new level. Not only is it incredibly easy to use, it delivers outstanding results that translate into tangible outcomes impacting our customers; such as improved on-time delivery, and increased profitability.

Hypertherm designs and manufactures advanced cutting products for use

in a variety of industries such as shipbuilding, manufacturing, and automotive repair. Its product line includes plasma, laser and waterjet cutting systems, in addition to CNC motion and height controls, CAM nesting software, robotic software and consumables.

Overcoming expense management pain points Many businesses begin their expense tracking with spreadsheet software like Microsoft Excel. However, as an organisation grows or expands operations, the limitations of spreadsheets quickly become apparent. It then becomes essential to consider software that is purpose-built to manage business and staff expenses.

There are a number of expense management pain points that businesses can overcome by moving to purpose-built expense software, according to Concur.

Matt Goss, ANZ managing director, Concur, said, “It’s common for businesses to be hesitant about changing their expense management process.

They have invested considerable time in their spreadsheets and may lack the time, money or business case to move away from that model.

“But when it comes to tracking

expenses over time, there’s a lot your spreadsheet can’t tell you that an automated solution can. This includes trends tracking, the organisation’s most profitable clients or products, or where the business’s money is being spent.”

Automated expense management software makes the expense process faster. Data can be entered automatically, letting finance teams export a variety of reports, and roll up data into a dashboard for easy visibility into daily operations. The software can also be set up to notify the appropriate person within a business if someone violates the expense policy.

Concur has developed eight areas that organisations should consider when justifying a move away from spreadsheets to an automated expense solution: 1. Labour costs: How long does it take the finance team to consolidate

information, correct expense data and tweak spreadsheet formulas every month?

2. Data integrity: Can the organisation be sure that the data is accurate? Is there one true source of centralised data and can the data be viewed historically to highlight trends? Is the business basing important decisions on data that could be impacted by human error, like formulas?

3. Reports: Does it take a considerable amount of time to develop reliable reports from existing spreadsheets or can they be developed at the push of a button? Is the right combination of data included in the report?

4. Visibility: What is the organisation spending money on? How quickly can trends and problems be spotted and can they be viewed on a consolidated dashboard?

5. Opportunity costs: If the finance

point of contact was away from the office and a business opportunity arose that relied on the right data being served up quickly, would this be possible?

6. Mobility: Can staff access data from their smartphones or capture receipts and record expense data away from the office? With a growing mobile workforce it’s key for businesses to embrace this.

7.

Policy violations: How does the organisation currently spot violations of expense policies? If the spreadsheet format cannot automatically alert the finance team about potential violations, an automated solution can alleviate this issue.

8. Integration: Can the spreadsheet be integrated with other applications that are used within the organisation, i.e. travel management or time sheets?

FOOD GRADE COMPLIANCE IS EASY WITH CHEMZ www.nzmanufacturer.co.nz

/

NZ Manufacturer November 2016

9

COMMENT

I’ve found that in business opportunities will constantly emerge or situations develop that make you revise your plans along the way.

-Benjamin Cohen

Made in China: Chinese business has evolved from imitation to innovation Bruce McKern, Honorary Professor, Business School; Recently Visiting Fellow at Hoover Institution, Stanford University and Oxford University, University of Sydney.

Most of us use products made in China every day and are aware of its growing economic power as a factory to the world. But China intends to become a developed nation by mid-century and integral to this ambition is its intense focus on innovation.

From copying to fit for purpose

In a very few decades, Chinese companies had evolved from imitators to imaginative and effective innovators.

This competitive experience in the fast-growing markets of China led Chinese firms to the second phase in their evolution.

As part of my research with my colleague George Yip on this issue, we identified three key phases in China’s development:

From followers to world standard

1. From Copying to Fit for Purpose 2. From Followers to World Standard 3.

From Seeking New Resources to Seeking New Knowledge Chinese companies now pose a challenge to established multinationals, as they enter the markets of the developed world to become insiders.

Since China’s former leader, Deng Xiaoping, implemented market-oriented economic reforms to China in 1979-80, the driving forces of this transformation have been the customer and the culture. Chinese customers have an insatiable and rapidly growing demand for products, as the large, diverse population seeks better lives. This has stimulated many companies to develop affordable products for those needs. And a culture of entrepreneurship in the business sector has been facilitated by a far-sighted government with a strong drive for independence and economic development.

The Chinese government has fostered an innovation ecosystem across the country, consisting of some 100 science and technology parks, universities and government research institutions, which provide support for new enterprises. The Chinese government and business invested some US$190 billion in research and development in 2013, which is around 40% of the annual R&D investment in the United States.

The first phase of China’s innovation saw many Chinese companies producing components for multinational corporations such as BMW. Claro Cortes/Reuters

In the first phase of development, Chinese companies started by copying products and processes from Western firms or producing components for the supply chains of multinational corporations. Chinese suppliers to multinationals were forced by their business partners to achieve high standards of quality at low cost.

While demand from domestic consumers was initially for very cheap products, Chinese producers quickly learned to develop products that were “good enough”, combining fitness for purpose with low cost. For example, an enterprising start-up created the “Apple Peel”, a component which the customer could combine with an iPod Touch, turning it into a mobile phone, very much like an iPhone.

Contrary to the low level of competition in China’s state-owned sector, private companies operated in sectors that were more open and competitive.

Chinese firms’ better understanding of local customers enabled them over time to compete effectively with multinationals in the Chinese market.

China’s research and development expenditure represents just over 2% of its GDP, which is slightly more as a share of GDP than that of Western Europe. The government’s priority for technological development is matched by the entrepreneurial spirit and drive of Chinese entrepreneurs.

Although local firms lacked the research and development capabilities of foreign companies, they were helped to innovate by the extensive technology network and innovation ecosystem developed by the Chinese government. With the experience they gained in satisfying customer demands and dealing with intense competition, Chinese firms were also able to diversify into other markets and more advanced products.

10

/

NZ Manufacturer November 2016

An example of this is Joyoung, a Hangzhou-based domestic appliance company, which began as the inventor of an appliance that makes soy milk, later copied by many others (including foreign firms). Joyoung built on its success with its soy milk appliance to become a large diversified maker of small household appliances.

www.nzmanufacturer.co.nz

In this phase, Chinese firms ambitiously set their sights on achieving global standards, particularly those companies active in export markets, such as the domestic appliance firm Haier.

Haier from the beginning was focused on innovation and is now the biggest company by sale revenue in the appliance sector. A legendary innovation of Haier’s is a washing machine that washes potatoes as well as clothes, which was in response to a need from farmers.

Many of China’s companies have now reached global standards of quality.

However, very few have strong brands that are recognised outside China.

This is one of the reasons for the third phase in their evolution.

From seeking new resources to seeking new knowledge Building on the capabilities they developed in the domestic market, coupled with the cash generated by their successes, Chinese businesses are now moving outside China.

In contrast to the earlier expansion of Chinese firms investing abroad in petroleum and other natural resources, this third phase is very much about exploiting innovation developed at home and applying it to the consumer and industrial markets of the West.

Chinese businesses are seeking brands, market access and technologies that may be missing from their home-developed portfolios. Their entries into foreign markets are often by acquisition, and European firms (particularly German middle-sized companies) have been popular targets.

Others have set up research and development centres in the United States and Europe, located in centres of innovation such as Silicon Valley. A

good example is the telecoms equipment and smartphone maker Huawei.

Over many years of international expansion, Huawei has developed a global network of 16 research and development institutes and 36 joint customer innovation centres. Huawei and the other major Chinese telecoms company ZTE are consistently among the top 10 patent filers each year in the international patent system (PCT) application process.

Chinese lessons in business management Chinese firms have also adopted a number of management practices that are less common in the West.

Our research identified ten of these, ranging from deep understanding of their customers, rapid decision-making, rapid prototyping and learning from mistakes, to a ready willingness to deploy extensive resources to innovate.

While these are not of themselves particularly new, they are a source of competitive advantage in the Chinese environment, where foreign companies have not applied them consistently.

Foreign companies have much to learn from China, as it is becoming a leading market for the world. They can develop in China capabilities that they may have neglected, including bold experimentation, speedy implementation, new product category creation, focus on “lean value” and developing mixed teams and global leaders.

There is a tidal wave of competition approaching the developed world from China. The best way multinationals can prepare themselves for this is by participating directly in the Chinese innovation ecosystem.

There is a tidal wave of competition approaching the developed world from China.

When I jumped off a roof in Cannes in a bee costume, I looked ridiculous. But this is my business; I have to humiliate myself.

-Jerry Seinfeld

DEVELOPMENTS

Proposed changes to Skilled Migrant Category -Dieter Adam, NZMEA

As part of a set of changes to New Zealand’s immigration settings, the Government is proposing changes to the Skilled Migrant Category (SMC) Visa. The NZMEA submitted to this, and we appreciate the feedback and comments received from our manufacturing members.

Here I want to give you an idea of what they are proposing – initial submissions have closed, but we would welcome any additional feedback from members on the changes and their own experience, to inform any future discussions.

are classified as skilled for the purpose of the SMC. Some of these are changes that could be positive for manufacturers, particularly around the experience component – we often hear from manufacturers that experience is what they need when trying to fill skill shortages. However, like always, the key will be in the details, especially when talking about income levels.

The Ministry of Business, Innovation and Employment (MBIE) describe the changes in main points: introducing the use of salary levels to help define skilled employment, strengthening the use of work experience to define skilled employment, and realigning the points system to better recognise highly skilled migrants.

The first proposed change is adding minimum salary thresholds, meaning those using this visa would have a job (or job offer) at the current ANZSCO level 1, 2 or 3, and need to earn over such thresholds. The idea here being that such a minimum would help define skilled work and limit the number of skilled visa used for lower-paid work. The proposed levels range from $47,486 (annually, 40 hours a week) to $56,992).

Skilled employment is defined using the Australian and New Zealand Standard Classification of Occupations (ANZSCO), which assigns an occupation to one of five skill levels. A skill level is based on the range and complexity of tasks performed in a particular role and measured by the level or amount of required formal education and training, on-the-job training, and previous experience. Levels 1, 2 and 3

Getting these values right is imperative to ensure manufacturers who cannot fill skill shortages in New Zealand can still use this visa category to find people with the appropriate skill levels, qualifications or experience. The first threshold is close to the median hourly income of manufacturing, and from the feedback revived from manufacturers, likely the best option here.

We also believe there is a case for different thresholds across regions.

Businesses in the regions are also facing skill shortages, especially for those with experience, but may be less able to compete with those in main centres in terms of their ability to pay higher salaries.

The second change is to allow those on not meeting ANZSCO level 1, 2 or 3 to still claim points, but with higher minimum income thresholds to meet.

They would still be subject to experience and qualification requirements, but this would allow skill shortages for some higher paid jobs that don’t meet the skill classification to gain points to meet this visa category. The key again is setting these thresholds right, with consideration for the regions and accompanied by regular reviews of the ANZSCO classifications.

Finally, the other significant change is requiring minimum years of relevant experience, for roles under ANZSCO level 3 and some level 2 roles. This would mean an applicant would need 3 years of relevant work experience even if they also have qualifications.

For most manufacturers, experience is the key requirement for filling skill shortages, and is often what is not available in New Zealand – a minimum of 3 years’ experience is often exactly what manufacturer’s need.

This

change may make it harder for those trying to fill shortages with people who have qualifications alone, but not for manufacturers who are already seeking levels of experience. It may thus help manufacturers by increasing the share in the total quota of migrants with experience.

We will be watching how these changes develop and will be looking to provide further information to represent manufacturers if possible we would welcome and comments or feedback from manufacturers.

For most manufacturers, experience is the key requirement for filling skill shortages, and is often what is not available in New Zealand.

Corruption looks different in China -Nolan Sharkey,Winthrop Professor of Law, University of Western Australia There has been significant suspicion in Australia and elsewhere on the wealth of particular business people, investors and companies from China. There’s always the suggestion that there is something unacceptable about it, whether it be tax evasion, corruption money, stolen money and illegitimate or illegal business ventures.

However this is because we’re looking at the situation with Western goggles on. When you consider the way things run in China, corruption starts to look very different.

There is a lot of academic, anecdotal and official material to support the suspicions about China. The problem of corruption is now notorious not

least because of the Chinese g o v e r n m e n t ’s c u r r e n t anti-corruption campaign.

The diversion of state assets is one form of corruption of major concern in China. This is when

www.nzmanufacturer.co.nz

/

resources that belong to the state are diverted into private hands. It takes

continued on page 23

NZ Manufacturer November 2016

11

DEVELOPMENTS

For me, the winning strategy in any start-up business is, ‘Think big but start small.’

-Carmen Busquets

Sustainable Business survey shows firms poised for progress New Zealand businesses are taking mostly tentative steps into the world of sustainability, but may be gearing up to tackle the big issues, according to a University of Auckland survey.

The survey, conducted by the University’s Business School, found over half (53 percent) of the 33 respondents – chosen because they’d already made moves towards improved sustainability – aimed to become sustainability leaders in their sectors in the next three to five years.

“The emphasis can be expected to shift to product and services demand and development, employee engagement and diversity, reporting (probably non-financial) and environmental and carbon footprint product,” says Professor Greg Whittred, Dean of the Business School.

One-fifth aimed to disrupt their markets.

“Businesses are realising they can innovate, differentiate and build relationships with their customers through being sustainable.

Sustainability is becoming a competitive frontier. It also helps them compete for quality staff.”

Businesses surveyed said they were targeting projects that deliver clear payback, such as improved energy efficiency and reduced waste. But they expected to embrace more ambitious goals, such as reducing environmental impacts and carbon emissions, in the next three years.

The primary driver for sustainability for these businesses was the future market opportunities it offers, and efforts to seize those opportunities were being led from the top – the executive suite and boardroom. Customer and client demand was significant, too, in some areas. Investor pressure ranked lowest

of the drivers listed, though.

“It is striking that pressure from investors ranks so low,” says Professor Whittred. “The reaction to KiwiSaver portfolios including cluster bombs and tobacco investments shows how quickly that can change once we start to catch up with other countries on our understanding of socially responsible investment.”

Fieldwork for the survey was conducted before the cluster bomb issue made headlines in August.

Lack of incentives and regulatory barriers were the biggest obstacles identified by respondents.

“This could refer to how stacking up a business case for sustainable initiatives is a challenge, or to the fact that costs to the environment – externalities – are still often falling on the public and taxpayer,” says Professor Whittred.

The next-biggest obstacle was insufficient customer demand. “This reflects the fact that we’re a small market and the sustainable consumer is still a small portion of that. Also, many can’t afford to pay a premium for sustainably produced goods and services.”

Cost, and resistance from middle managers and staff were also flagged as challenges to overcome.

Apprenticeship boost is welcome and needed The government’s commitment to invest a further $10 million into industry training and apprenticeships next year is a very welcome and wise investment, says the Industry Training Federation (ITF).

on-the-job training. It comes on top of a boost to apprenticeships in Budget 2016.

“The announcement will help to fuel growth and meet strong demand for workforce skills.” ITF Chief Executive Josh Williams says.

“It’s good to see the government backing employers and Industry Training Organisations (ITOs) to upskill the workforce, and keeping its promise following the recession that funding would return when the demand was there.” Mr Williams says.

Establishing a target of 50,000 apprentices by 2020, reflects both strong demand, and increased commitment by employers to boost the skills of the workforce through

Like many countries, New Zealand is experiencing a renaissance of apprenticeships as a critical and cost-effective way to develop a skilled workforce. Apprentices have paying

jobs, pay tax, don’t have student loans, and gain the right skills through developing and deploying skills in real workplaces.

commitment to collaboration in the announcement of new skills hubs, as well as sector-focused and regionally-based initiatives.

“Apprenticeships are a powerful way to efficiently grow workforce skills and provide successful futures for people of all ages” Mr Williams says.

“Participation and performance has improved markedly in recent years, as a result of more capable ITOs, revamped qualifications, and fundamentally, the commitment by employers to deliver skills for their industries.”

“Too often, vocational education has happened in silos, and these joined-up regional efforts are helping to ensure that programmes are targeted at real industry needs, develop core skills like on-site literacy and numeracy, support lifelong learning, and broker people into jobs and careers where skills are badly needed.” Mr Williams says.

The ITF also welcomes the further

Otago Polytechnic addresses inequality Otago Polytechnic has come up with a boost for women wanting to get into the male-dominated fields of engineering and IT. Recognising that women are under-represented in these industries, Otago Polytechnic has created two scholarships, each worth $1000 for every year of study.

Director of Communications, Mike Waddell, says it’s important to promote inclusion in all programmes. “Otago Polytechnic values our responsibility in

society. If we can support women into under-represented areas of study, it’s better for the community as a whole.”

Both the IT and Engineering industries are on New Zealand Immigration’s skill shortage list for long term shortages.

Waitaki District Council Asset Manager, Caitlin Donovan, graduated from Otago Polytechnic in 2011 with a NZ Diploma in Engineering (Civil). There were only two women in her class, but she says that didn’t affect her studies or desire to enter a career in engineering.

“It ticks all my boxes. It’s a great job, and one of the higher paying industries.

There are plenty of opportunities going forward too” she says.

Tracey Ayre is co-leader of the Diversity and Inclusion programme at IPENZ (Institution of Professional Engineers NZ). She says female representation is increasing in very small steps. “When the Diversity and Inclusion programme was launched in 2011, only 11% of members were women. Now it’s at about 14%.”

“There are lots of great opportunities in engineering. It pays really well, qualifications are recognised overseas, and there’s a shortage of engineers around the country” Ms Ayre says.

Caitlin Donovan sums it all up in one sentence. “Just because there aren’t many women in the industry doesn’t mean there shouldn’t be!”

Applications for the scholarships close on February 7th 2017.

Practical response to skills shortage Two new jobs and skills hubs announced are where training and services can be delivered in support of large construction projects in Auckland: the Tamaki hub supporting housing development around Tamaki, and the CBD hub supporting commercial and housing development in central areas of Auckland.

BusinessNZ Chief Executive Kirk Hope said the ‘training and services hub approach’ is working well at Auckland Airport, where it is delivering the skills needed for local construction development and allowing for local people to be upskilled in areas of specific demand. He said it was good news that this approach was going to

12

/

NZ Manufacturer November 2016

www.nzmanufacturer.co.nz

be used more widely.

An announcement of additional funding for more apprenticeships was also made, in support of an enlarged target of 50,000 people in apprenticeships by 2020.

Mr Hope said that was a practical response to current skills shortages and would be helpful in lowering

the numbers of young people not in employment, education or training.

The announcements form part of the release of a new chapter of the Government’s Business Growth Agenda - ‘Building Skilled and Safe Workplaces’ - aimed at increasing employment skills in areas of greatest demand.

DEVELOPMENTS

I don’t want yes-men around me. I want everyone to tell the truth, even if it costs them their jobs.

- Samuel Goldwyn

Bill Buckley awards scholarship to Ewen Baker Otago student lands job and prestigious scholarship in same week Last week Ewen Baker had just started 3 weeks of work experience for his engineering apprenticeship.

Then he landed a full- time position with Scott Technology and has now been awarded the $5000, Bill Buckley Scholarship Award.

The presentation was announced on Wednesday at the Maintenance Engineering Society’s annual conference in Hamilton. Baker was the outstanding candidate from over 30 finalists submitted from throughout the country.

“His presentation stood out from the rest” said Bill Sole, Industry Engagement Manager of Competenz and one of MESNZ panel members making the selection. “Ewen has both the academic results plus the hands-on skills and ambition to become an engineering leader of the future. He clearly has a good mechanical aptitude and we are sure this scholarship will set him up for his future career”.

precision electromagnets used in the manufacture of silicon chips, flat-panel screens, high-end medical machinery and particle accelerators used in medical proton and photon therapy – systems that will revolutionise cancer treatments of the future.

On hand to make the presentation, was the award namesake, Bill Buckley. Bill Buckley is the patron of MESNZ and founder of Auckland based Buckley Systems Limited (BSL), the world’s leading supplier of

The Stuart Tolhurst Award for the engineering apprentice of the year was presented to Jamie Noakes for his work at Hawera based Croucher & Crowder Engineering Services.

Bayer commissions water treatment station at Manukau Bayer is continuing its investment in producing high-quality animal health medicines in New Zealand with the commissioning of a new $3 million water treatment station at its Manukau production site.

The new plant takes ordinary tap water and through a system of filtering, deionizing and softening converts it into Pure Water (PW). It is then further refined and distilled to create Water For Injec-tion (WFI).

Both types of water are used in manufacturing a wide range of animal medicines and products ranging from metabolics for dairy cows to drenches and supplements for farm livestock and hors-es.

Bayer New Zealand managing director Derek Bartlett says the new water treatment plant is a ma-jor leap for the production site.

two large storage tanks.

Following the commissioning of the plant, there will be a two month testing and validation process before full manufacturing begins in January.

The new water treatment plant is part of a series of multi-million upgrades to the Manukau plant.

Other improvements will be made to its Liquids and Pastes production facility starting next year.

“Bayer firmly believes in supporting our local farming industry here in New Zealand,” says Bartlett.

“To do that, it is crucial that we invest in our manufacturing plant, which not only produces animal medicines for local use, but also exports to more than 70 countries around the world.”

“Previously it would take about six hours to produce 2000 litres of Water For Injection. Now we can produce 2000 litres in one hour. We can now get high quality water whenever we want with-out any restrictions, which will impact positively on our production times.”

*The

National

Maintenance

“Basically, it self-checks itself to ensure the water being produced does not get contaminated or go out of spec,” says Bartlett.

Chris Buttkus, Product Supply Site Manager, pouring the first vial.

Engineering Conference (NMEC) is the annual conference of the Maintenance Engineering Society of New Zealand, a technical interest group of IPENZ (Institute of professional Engineers).

150 delegates attending the conference along with 50 exhibitors in the adjacent trade show.

Hawera apprentice scores national title An innovative young engineer with a passion for stainless pipe field work was today announced as the winner of the celebrated Stuart Tolhurst Memorial Award at the annual National Maintenance Engineering Conference (NMEC) in Hamilton.

Jamie Noakes won the award from five national finalists for his work at Hawera based Croucher & Crowder Engineering Services.

“This is probably my greatest ever achievement, and I am a bit over-whelmed”, said Jamie in accepting the prestigious trophy.

Making the presentation was Bill Sole, Industry Engagement Manager of Competenz, who said “Jamie, despite being near the end of his apprenticeship in mechanical engineering, is enthusiastic and motivated about his career. Jamie recognises that there is still a lot to learn and he is already planning on doing his level 5 and level 6 qualifications, and hopes to continue to move up the ranks”.

Bill Sole presents award to Jamie Noakes.

by SKF NZ for over 30 years. He was widely acknowledged as the New Zealand expert and ‘go to man’ in rolling element bearing design and application.

“This year we had 5 very worthy finalists who made the selection process very difficult for our judges”, said Bill Sole.

The runner-up was Mitchell Vickery of Methanex New Zealand Ltd. Other finalists were:

Allen Good who is Jamie’s’ supervisor at Croucher and Crowder, said that James is the “best apprentice he has ever had. He can run jobs on his own and takes ownership whilst still being a great team player. He is innovative, always looking to create and build new things outside of work”.

Another important feature of the water treatment plant is its ability to self-monitor.

As well as treating water, the new plant also distributes it throughout the Manukau production site 24/7 and has

Buckley spoke of his time as an engineering apprentice and his desire “to go after the stuff that is too complicated for the average engineer”.

Slone Lingman of ATNZ - NZ Steel Taharoa Cleland Coetzee of Taranakipine Sawmills Nathan Claridge of Tawse Foods The annual Maintenance Engineering Society of NZ scholarship was awarded to Ewen Baker from Otago Polytechnic.

This Award remembers Stuart Tolhurst, a highly regarded application engineer, acknowledged as a bearing authority throughout New Zealand who was employed

www.nzmanufacturer.co.nz

/

NZ Manufacturer November 2016

13

ANALYSIS

Right now, this is a job. If I advance any higher, this would be my career.

And if this were my career, I’d have to throw myself in front of a train.-

Jim Halpert, The Office

Remanufacturing – the smart choice In an increasingly ‘throw away’ society, remanufacturing is often overlooked as the ‘next best’ option to buying new.

Although, what if a remanufactured product was just as good if not better than new for a reduced price while also delivering a multitude of environmental and societal benefits?

According to Tarang Shah, operations manager, Customer Support and Maintenance at Rockwell Automation, “Remanufacturing is an option that is well worth exploring, especially when it comes to investments in industrial automation. An important distinction to be made is the distinction between ‘repair’ and ‘remanufacture’- the end result is that a remanufactured product is restored to ‘like new’ or better with warranty on the entire unit, not just the part repaired.”

Reductions in maintenance staff and spare parts inventory often lead to longer downtime and lost revenue when automation assets malfunction or fail. Just fixing the problem that caused the equipment malfunction is not always enough to guarantee its proper operation.

To help customers improve productivity and reduce downtime, Rockwell Automation has invested in a proprietary remanufacturing and testing process to extend equipment life. The remanufacturing process restores failed units to ‘like new’ condition, extending the life of equipment and enhancing its performance.

“This is achieved by installing all applicable software and hardware updates and enhancements,

replacement of failed or aged components, parametric testing and cleaning and cosmetic restoration,” said Shah.

Mitigating risk The pace and demands of production today are relentless. System outages cost on average between 110,000 dollars to 150,000 dollars per hour and 20 billion dollars to the process industries per year. “Remanufacturing provides an attractive value proposition to endusers wanting to mitigate risk associated with downtime,” Shah explained.

The state-of-the-art Rockwell Automation Remanufacturing facility in Bayswater, Victoria has all the latest testing technologies and technicians with more than 84 years combined experience. “At any one time, we have 2.5 million dollars worth of stock across most product lines available for exchange to help minimise downtime,” said Shah.

Remanufactured products use only genuine components and also include the latest software and firmware updates. This is particularly important in the current industrial environment where rigorous production demands and the pace of change intensify the pressures on people and equipment.

The higher the capacity you’re working at, the faster the costs of downtime rise so mitigating risks becomes a key consideration.

The remanufacturing process The Rockwell Automation seven step remanufacturing process ensures

Each unit is cleaned and then updated to any applicable hardware and firmware revisions.

14

NZ Manufacturer November 2016

/

www.nzmanufacturer.co.nz

compatibility and extends the life of equipment. The first step in the process is verification of the unit catalogue number, series and revision data for the warranty.

Step two is the revisions and enhancements process where the unit is cleaned and updated to current applicable hardware and copyrighted firmware revisions. It is replaced or enhanced with the latest proprietary release and updated to original equipment manufacturer specifications. Each component is then reviewed and inspected and any damaged or outdated components are rebuilt or replaced using the latest computer and fibre optic technology.

Remanufacturing is an option that is well worth exploring, especially when it comes to investments in industrial automation.

Dynamic functional testing is conducted to original equipment manufacturer’s specifications under various loads and operation parameters. The unit then undergoes environmental testing using fully computerized simulation platforms to identify any intermittent problems not readily apparent, preventing premature failures. Final quality inspection is conducted for complete compliance to Rockwell Automation standards and the product is then ready for secure shipping. Each remanufactured part receives a 12 month warranty on the entire unit, not just the replaced components.

Total lifecycle support Manufacturing plants are facing the constant challenge to reduce operating costs associated with managing spare parts while mitigating risks associated with downtime. A Parts Management Agreement (PMA) from Rockwell Automation helps address this by providing quick access to spare parts while reducing the internal operating costs associated with maintaining an independent spare parts inventory.

Through the PMA, Rockwell Automation owns and manages the spare parts inventory for a fixed cost, providing an attractive alternative to purchasing spare parts. Any spare parts consumed are replenished within 48 hours and the cost is covered as part of the fixed price agreement. It provides the availability of parts that match the install base 24 hours a day, seven days a week so when a part is required, it is there ready to go.

“These agreements are backed by our remanufacturing and renewal parts services to replenish any inventory used. They also support equipment with limited lifecycle as spares can leave with decommissioned equipment and warranties on new parts are only initiated upon installation, reducing expenses associated with carrying inventory,” Shah explained.

Sustainable productivity In addition to the business benefits of mitigating risk, remanufacturing also reduces impact on the environment; in fact, it has been referred to as the ‘ultimate form of recycling’ providing many benefits including reduced raw material and energy consumption and reduced landfill.

“To make remanufacturing an easily accessible option, we have positioned ‘repair bins’ at some customer sites.

Products requiring repair are placed in the bin, collected by distributors and brought to the centre for remanufacturing,” said Shah.

As a company, Rockwell Automation supports efforts to operate more efficient and responsible businesses.

From helping customers design, operate and maintain safe and secure operating environments; meet regulatory compliance requirements; reduce waste and emissions; and to ultimately, protecting their reputations as suppliers of quality products and good stewards of the environment.

Success in almost any field depends more on energy and drive than it does on intelligence. This explains why we have so many stupid leaders.

- Sloan Wilson

DEVELOPMENTS

Wood dust health risks a major focus of new WorkSafe campaign Protecting workers from the effects of wood dust is a major prong of a new WorkSafe campaign to raise awareness of health risks in the manufacturing and construction sectors.

Workers in the manufacturing sector are 25 times more likely to die from health conditions caused by contaminants, such as wood dust, than from a workplace incident.

The focus on wood dust, welding fumes, and carbon monoxide, forms part of the Healthy Work strategic plan for work-related health. It broadens the organisation’s focus on workplace airborne contaminants which initially started with silica and organic solvents.

It includes a strong focus on educating and supporting employers and employees in industries including furniture making, joinery, construction, frame and truss, sawmills, wood manufacturing and wood processing – where wood dust is produced through cutting, grinding, drilling, sanding or pulverising wood.

“There are multiple diseases associated with wood dust, including cancers, asthma and chronic lung conditions,” says Marcus Nalter, Programme

and

supporting employers and employees to recognise and manage risks.

Every year, an estimated 600-900 people die in New Zealand from work-related health conditions and a further 5,000-6,000 are hospitalised with cancer, chronic obstructive pulmonary disease and other chronic illnesses from workplace exposure to airborne contaminants.

“Employers have an obligation under the Health and Safety at Work Act not just to keep workers safe, but healthy too and there are some very good examples of employers who take health risks seriously. We are very happy to provide support and advice for businesses around improving their management of wood dust in the workplace and engaging their workers in the process.”

Manager for Manufacturing Construction at WorkSafe.

“The effects of exposure may not be visible for days, weeks, months or even decades,” said Mr Nalter. “But workers in the construction sector are 20 times more likely to die of exposure to harmful airborne substances than from a workplace incident, and that rises to 25 times more likely for manufacturing workers.”

During 2015 and 2016, WorkSafe did nearly 1,000 proactive inspections focused on welding fumes and wood dust. In 150 of these, inspectors found risks weren’t being managed and enforcement action was required.

Mr Nalter said WorkSafe will continue to monitor workplaces and take enforcement action, where necessary, to protect workers’ health, but the emphasis is on educating and

These include Placemakers Frame & Truss in Auckland, which has always monitored and managed air quality and already had a large extraction system. But in 2012, after legal limits for airborne dust were reduced, one area of the factory was exceeding limits. The business worked with a specialist ventilation engineer to develop a solution – building plywood booths around dropsaws to enable more efficient sawdust extraction.

“The booths were cheap to make, simple and effective, and they don’t restrict us in any way,” says Laurie Smith, Northern Manager for Placemakers Frame & Truss. “Workers helped design, build and test the solution

and they were very happy to be part of the process.

We worked together to create the best possible w o r k i n g environment.”

Naylor Love Construction is also among businesses engaging with its workers to raise awareness about the importance of managing risks around airborne contaminants.

Mark Taylor, the company’s Regional Health and Safety Manager for Canterbury, said: “The guys are more aware that ‘dust is dangerous’ and they are working out that it is a lot nicer working with their saw or grinder plugged into a vacuum – and it’s cleaner.”

Looking after workers’ health also has significant productivity benefits for businesses. Research has shown that one in 10 lost working days in New Zealand is due to ill health caused by work, with the average cost of lost productivity estimated to be $44,500 per case.

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.

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.

“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.

The FTA is a good one, but since it was negotiated, China and New Zealand have negotiated other agreements.

“The other focus is a number of 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.

“It is important that the regulations around e-commerce facilitate the expansion of this trade.

“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.”

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 sales@southmach.co.nz +64 (9) 976 8350 or +64 (21) 314 199

www.southmach.co.nz www.nzmanufacturer.co.nz

/

ORGANISED BY

15

Showcase.

Educate. Sell.

NZ Manufacturer November 2016

BUSINESS NEWS

A satisfied customer is the best business strategy of all.

-Michael LeBoeuf

New Zealand’s ASEAN FTA: Call for submissions MFAT wants to hear from businesses about how well the ASEAN Australia New Zealand Free Trade Agreement has been working and what could be done to maximise its benefits for New Zealand businesses.

In 2017 the Governments of New Zealand, Australia and the ten countries that make up the Association of South East Asian Nations (ASEAN) will launch a comprehensive review of the ASEAN Australia New Zealand Free Trade Agreement (AANZFTA).

Ahead of this, MFAT want to hear from you about how well the agreement has been working and what could be done to maximise its benefits for NZ businesses.

The 12 countries covered by AANZFTA are home to 600 million people, with a combined economic output of USD 2.65 trillion.

The introduction of more liberal and transparent trade rules have helped to grow New Zealand’s trade with ASEAN from around $12 billion in 2010 to over $15 billion in 2015.

The Government would like to use the upcoming review to ensure AANZFTA is working as hard for New Zealand businesses as it could.

As part of this, we have the opportunity to update, improve or expand the scope of the agreement if needed.

respond to changing business needs and the evolving regional economic situation.

economic relationship with South East Asia.

There have been a number of important developments since 2010: The Trans Pacific Partnership was concluded, negotiations towards the Regional Comprehensive Economic Partnership progressed, and the ASEAN Economic Community was launched.

All submissions will be treated as commercial-in-confidence and not shared outside the Government without your permission.

The Government would like to use the review to ensure AANZFTA is benefiting New Zealand businesses.

Why your submission is important Your submission will help ensure the Government has a thorough understanding of the issues that matter to New Zealand companies doing business in South East Asia.

The following questions may help guide the content of your submission.

They highlight the sort of information we are interested in, but you should not feel limited by them. Please include anything else you think is relevant.

Who MFAT want submissions from

• Which countries in South East Asia do you receive imports or investments from?

NZTE would like to hear from New Zealand businesses that are doing business with or in South East Asian countries, including those who are: • Exporting or importing goods • Supplying or receiving services • Investing in the region or receiving investments from the region

When it was signed, the 12 parties to the agreement envisaged that AANZFTA would be a ‘living document’, able to

And they would also like the views of groups or individuals who have a more general interest in New Zealand’s

16

Questions to consider

• What sector(s) does your business operate in?

AANZFTA entered into force for New Zealand in 2010.

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

Please ensure you identify any issues that you would prefer to discuss with MFAT officials, rather than including in your submission.

It will help inform the Government’s approach to the review and allow us to safeguard and enhance New Zealand’s key economic interests in the region.

In particular, they are interested in getting the views of companies using AANZFTA or that might use AANZFTA in the future.

Why AANZFTA is being reviewed

How your submission will be used

• Which countries in South East Asia do you export to or invest in?

• What proportion of your exports go to countries in South East Asia?

AANZFTA, or another FTA with South East Asia (i.e. Malaysia-NZ FTA or the Thai-New Zealand Closer Economic Partnership)? What factors contributed to your decision?

• What benefit, if any, has AANZFTA had on your business?

• How could we make AANZFTA easier to use or more relevant to your business?

• What are the biggest impediments to growing your business in South East Asia (e.g. tariffs, standards and conformance issues, regulations)?

• What areas of regulation are the most challenging for your business?

• What sort of advantages do you think your international competitors have in the markets you operate in?

What would help give you the edge?

How to make a submission MFAT will accept written submissions in no particular format and are happy to speak to you in person should you wish to make an oral submission.

Email your submission or meeting request to exports@mfat.govt.nz.

• What sort of presence do you have in South East Asia (e.g. sales office, full subsidiary)?

• Are the goods or services you export or import part of a ‘supply chain’ that crosses borders? What obstacles to you face in participating in cross-border supply chains?

• Do

you

export

under

NZ MANUFACTURER • DECEMBER 2016 Issue • Features

NZ Manufacturer November 2016

www.nzmanufacturer.co.nz

The Year in Review

Automation and Control

Distribution

Manufacturing Technology

Smart Manufacturing Advertising Booking Deadline – 15 December 2016

Editorial material to be sent to :

Advertising Copy Deadline – 15 December 2016

Doug Green,

Editorial Copy Deadline – 15 December 2016 Advertising – For bookings and further information contact: Doug Green, P O Box 1109, Hastings 4156, Hawke’s Bay Email: publisher@xtra.co.nz

P O Box 1109, Hastings 4156, Hawke’s Bay

/

www.nzmanufacturer.co.nz

Email: publisher@xtra.co.nz Tel: 06 870 9029 Fax: 06 878 8150

At NZ MANUFACTURER our aim is to keep our readers up to date with the latest industry news and manufacturing advances in a tasty paper morsel, ensuring they do not get left behind in the highly competitive and rapidly evolving manufacturing world.

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 Zealand’s leading producers.

Among Mike and his team’s strengths are industrial robotics and automated production where the company puts much of its focus.

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.

Sandra Lukey

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 years’ experience working with companies to boost profile and build influential connections.

Katalin Csikasz

Katalin is a highly knowledgeable engineer with strong capabilities in; industrial design, quality assurance, product compliance, technical expert support, troubleshooting and process improvement.

Phillip Wilson

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 from medium sized SME’s to divisions of large corporates.

www.nzmanufacturer.co.nz

/

NZ Manufacturer November 2016

17

The best way to appreciate your job is to imagine yourself without one Oscar Wilde

Why protecting SCADA and ICS systems is no longer optional Sean Duca, Palo Alto Networks.

-

New Zealand manufacturing businesses are under increasing threat from cyberattacks, forcing them to deploy more sophisticated and advanced cybersecurity measures.

Attacks on critical Supervisory Control and Data Acquisition systems (SCADA) and Industrial Control Systems (ICS) can cause serious disruptions to daily operations.

Protecting these systems is paramount to avoid the potentially devastating impact of a cyberattack.

Targeted attacks to SCADA and ICS have progressively become more sophisticated. Stuxnet first exposed the vulnerability of ICS by showing how a combination of social engineering, applications, file types and vulnerabilities, for both windows and ICS software, could be exploited to compromise an industrial control process.

The more recent Energetic Bear campaign raised the bar in its use of trojanised malware residing in ICS software installers and in how it implements commonly-deployed ICS protocols such as OPC.

To avoid becoming vulnerable, businesses must implement the right protection measures. The first step is to understand why industries are now more vulnerable to cyberattacks than in the past. Reasons include: • commonly-used industrial protocols and tools (such as Modbus) were not originally designed with security in mind and they lack basic authentication features • industry networks were never designed to account for potential intrusions • there are numerous unpatched and unpatchable systems • new technologies such as mobile computing, smart metering, and the slow-but-inevitable evolution towards IP-based access expose operational networks to cyberattacks. These systems were not previously protected because they were not as highly-connected as they are now

Understanding these advanced threats and how to mitigate them is very important for New Zealand manufacturing organisations.

Because of these factors, it is critical that New Zealand manufacturing businesses invest to protect their data, employees and entire operations.

Without appropriate security measures in place, entire systems could be impacted.

Why SCADA and ICS are so vulnerable

How businesses can protect themselves against cyberattacks

Because SCADA and ICS are both used in the manufacturing industry, they present an attractive target for attackers. Monitoring tasks, from temperature and humidity to air flow and uninterruptable power supplies, offer opportunities for sabotage. It is also important to note that SCADA cyberthreats could also be the result of unintentional incidents. These have just as much impact on service disruption as malicious events.

To mitigate the business risks associated with an attack, asset owners need to control network access, block threats and reduce the downtime caused by such incidents. Businesses should deploy a system that will control network traffic and threat prevention, centrally managing the protection of key infrastructure from cyberthreats and ensuring network availability for continued operations.

As businesses have become savvier regarding external, internet-based attacks, many have neglected to protect against risks presented by these internal networks. Attackers have realised that they can use weak links such as SCADA and ICS to access an organisation’s valuable data sources.

Many SCADA systems are managed by ageing Windows servers and desktops, such as Windows XP, that cannot be upgraded because the control software is not compatible with newer versions of Windows, or the upgrade cost is prohibitive. Protecting these systems is difficult, leaving organisations in a precarious position.

18

NZ Manufacturer September 2016

There are five key ways to protect SCADA and ICS networks: 1. Use advanced cyber protection.

Measures such as next-generation firewalls work to protect assets and create microsegments across the organisation, which increases visibility and decreases the threat of attacks.

2. Secure access to the SCADA zone.

Processes should be put in place to tie security policies with user identities to ensure non-authorised users are denied access. Systems such as a Secure Sockets Layer (SSL) Virtual Private Network (VPN) can achieve this.

/

www.nzmanufacturer.co.nz

3. Eliminate the risk of having to manage multiple ports. Ensure multiple ports are protected by one firewall.

and periodic security audits and reviews. These measures will deliver the best opportunity to protect valuable operations systems.

4. Deploy a complete vulnerability protection framework.

An entire framework will inspect all traffic traversing the SCADA zone for exploits, malware, botnet and targeted threats.

Once these strategies are implemented it is also essential to communicate with employees to ensure they are well aware of cyberthreats, their impacts and what employees can do to help protect the business.

5.

Ensure protection from unsupported operating systems.

Using a next-generation firewall effectively detects and defends against Windows XP and SCADA application-specific attacks across the network, so that organisations using SCADA environments have ongoing protection despite the withdrawal of support for Windows XP.

Management should also implement IT policies and configurations across both enterprise and control networks.

Additional security measures and processes It is important to note that network segmentation can be an effective method to reduce the scope and risks of SCADA and ICS but only if it is deployed with the right cybersecurity technologies in place.

Putting appropriate threat intelligence and risk prevention measures in place is vital.

In addition, organisations should establish ongoing risk-management procedures, routine self-assessments,

Other actions to be taken include: • logging and reporting incidents and potential threats • using and understanding security software • using software to aggregate logs from all sites to a central point to gain holistic insights into network usage and security incidents • using software to facilitate documentation and completing regular cyber audits.

Ultimately, the team should also apply a lifecycle approach to threat prevention that controls attack vectors before having to block known and zero-day threats.

As cyberattacks on SCADA and ICS systems become even more targeted, sophisticated and persistent, businesses must invest more time and resources to implement the right countermeasures to guarantee maximum protection of critical infrastructure.

Understanding where the threats come from and how to effectively mitigate or respond to them is no longer optional. Businesses that fail to protect their SCADA and ICS systems risk catastrophic ramifications. Putting appropriate threat intelligence and risk prevention measures in place is vital.

Few great men would have got past personnel.

- Paul Goodman

www.nzmanufacturer.co.nz

/

NZ Manufacturer September 2016

19

The key to being a good manager is keeping the people who hate you away from those who are still undecided. - Casey Stengel total design delay time can be five or 10 times the actual turnaround time when outsourcing. And in many cases, this process may be repeated two or three times before a product design is finalised for production.

Delayed time to market is not the only cost: Even though some things can be done in parallel, a significant amount of time is spent waiting for models to return from an outsource provider.

In comparison, an in-house 3D printer produces a prototype within hours, rather than days. Additional time can be saved by printing during the night or over the weekend. This can shave weeks off the development cycle and dramatically accelerate time to market for new products and new features for existing products.

In-House or Outsource?

S I X B U S I N E S S A D V A N TA G E S O F O W N I N G A N I N - H O U S E 3 D P R I N T E R The benefits of 3D printing and rapid prototyping are numerous and well recognized. Whether it’s design validation, functional testing or faster launch of new products, executives seldom need to be to be convinced of the benefits. Still, many businesses continue to outsource 3D printing because they believe ownership is cost prohibitive.

brings a significant cost saving, even if your company prints only two models per month on average.

What many companies don ’t realise is that 3D printing has advanced dramatically; the availability of a new breed of high-quality 3D printers at affordable prices now discredits the argument that they are too costly.

What ’s more, the lower upfront costs of 3D printers represent just the tip of the tangible benefits: Even with relatively few modelling builds, having in-house 3D printing capabilities provides a range of operational and business benefits that provide real bottom-line advantages.

One Fused Deposition Modelling (FDM ®) customer Akaishi, estimates it reduced costs by 73% with in-house prototyping versus the traditional outsourcing method.

The six key advantages an in-house 3D printer offers discussed in this white paper are lower costs; accelerated time to market; competitive advantage; fewer manufacturing errors; greater confidentiality; and improved model accuracy and quality.

– Mr. Makoto Muraoka, Akaishi

Consumer goods manufacturer Akaishi estimates switching to in-house prototyping saved it 73% developing its line of products.

1. Lower Costs An outsourced prototype can cost from several hundred dollars for a simple design to thousands of dollars for a more complex model – as much as three to five times that of a part printed in-house. Creating the same prototype on an in-house 3D printer

20

NZ Manufacturer September 2016

In a survey of over 1,000 Stratasys 3D Printer owners, almost one third reported experiencing a 25 percent or higher improvement in product launch times. More than half of respondents reported a product launch time improvement of at least 10 percent or more (see chart on page 2).

These savings are augmented by designers and developers not having to wait for prototypes to return, time to market savings, and savings on reduced manufacturing errors due to the ability to print many prototypes, discussed in categories below.

“Outsourcing to local service bureaus had a 10-day lead time and high expense for a single round of prototyping of an unverified design.

We bought the Dimension ® 3D Printer to bring prototyping back in-house.

Now, we can verify the functionality as much as we want because the cost to make prototypes is low.”

2. Accelerated Time To Market Turnaround time with outsourcing rarely takes the perceived two to three days to get models back. In fact, it normally takes around a week or longer. Most delays take place before a model order is placed, in large part because of the prohibitive cost of outsourced prototyping. For example, a company might not order a model until the design is advanced enough that the company feels it’s worth spending the money.

Including internal design review meetings, order placement, approval processes and other procedures, the

/

www.nzmanufacturer.co.nz

Additionally, because development continues while a design is at the outsource provider and after the model comes back, designers are often caught in a development time lag with prototypes that are already obsolete.

The ability to quickly print 3D models in just hours means decisions can be based on accurate prototypes and data.

Cool Gear, Inc. saved more than 12 weeks getting products like its food storage containers and water bottles to market by switching to in-house 3D printing.

Business has only two functions marketing and innovation.

-Milan Kundera

“The Dimension [3D Printer] was easy to operate, the cost was right and the speed of build was great. We can digitally make these products, print them out and have a prototype in hand in a couple of days.”

- John Mason, Senior Developer, Cool Gear, Inc.

almost one-third of respondents were able to reduce iterations by 25 percent or more by having a 3D printer in-house. More than half of the respondents reported a reduction of up to 10

prototypes using FDM Technology™.

FDM is the only 3D-printing method that supports production- grade thermoplastics, which are lightweight but durable enough for rugged end-use parts.

Product

“The part quality and finish are as good as the stereo lithography parts we used to get from our service bureau. And we can have a part in just a few hours, versus several days and lots of paperwork when we had to outsource.”

- Mike Zeigle, Manager, Prototype Development Group, Trek Bicycles

Summary Having in-house, quality 3D printing capabilities offers significant benefits for the entire product development cycle. Model creation takes hours instead of weeks; costs a fraction of outsourcing; delivers comparable or better quality and accuracy; and enables frequent iterations, speeding up design changes and ensuring quality. 3D printing also promotes creativity and innovation and allows accurate design verification before embarking on costly pre-production.

Frequent in-house prototyping allowed Fender Instruments to play around with design until it found the perfect solution.

3. Frequent Prototyping Competitive Advantage Many factors can slow down the introduction of new products during the product development lifecycle – everything from choice of tools to time spent waiting for prototypes to arrive from an outsource vendor.

Sidestep this problem with an in-house 3D printing system: Early-stage and frequent prototyping leads to more effective product launches, enabling a company to introduce new innovations to market ahead of their competitors.

Consider: If a picture speaks a thousand words, how many thousands does a life-like 3D replica speak? Designers can quickly visualize all their product ideas by avoiding lengthy processes, budgetary decisions and approvals for outsourcing. Innovative design ideas can be effectively communicated with 3D models, ensuring that great ideas are not overlooked because team members and managers didn’t understand the designer’s explanation.

The same visual power of an accurate 3D model can turn ideas into winners in front of customers. The ability to quickly print physical models that customers can see, touch and play with is instrumental in winning bids or gaining approval to proceed with jobs. “Having an in-house Objet ® 3D Printer means we can experiment more. It’s given us a lot of freedom and creative latitude. If I have an idea for something new and edgy, I can design it and have a prototype in just a few hours. If it doesn’t work out, I’ve only used an afternoon instead of a week.”

- Shawn Greene, Senior Industrial Designer, Fender Instruments Reduced design cycle iterations by having a Stratasys 3D Printer in-house* to find the optimal design, using small variations on the model to check for functionality. In a recent survey of over 1,000 Stratasys 3D Printer owners,

Return on investment with an in-house 3D printer is typically fast, even when outsourced modelling is low-volume.

The short-term economic return becomes long-term advantage through enhanced innovation, increased confidentiality, more productive design cycles, higher-quality designs and faster time to market.

4. Fewer Manufacturing Errors Prototyping reduces manufacturing costs by fine- tuning designs before moulds and die casts are made.

When prototyping is readily available and can be done inexpensively in multiple iterations, the potential for design errors is significantly reduced.

Designers can test out different ideas percent thanks to their in-house 3D printer (see chart on page 3).

“Manufacturing dental models using our Objet 3D Printer has contributed increased speed, consistency and accuracy – and enabled a new cost-effective business model.” Markus Dohrn, general manager, DCD Dental Consulting

6. Improved model accuracy and quality Regardless of how a prototype is produced, the goal is to accurately simulate the real-life product. In every field, high-quality, precise models are vital for form, fit and function testing. Quality 3D printers provide functional and visual accuracy. They can print the smallest features and finest details, smooth surfaces, and even moving parts, in a single build.

And, with a choice of model materials and varied post-processing options, it is possible to create models that

All of the advantages of in-house 3D printing are possible with Stratasys 3D Printers.

“Because the Dimension 3D Printer saves time over out of house printing, we can keep our minds fresh on the design. Each day, we can continually improve a design rather than having to refresh our minds after time away.

We can stay with one product and not have to bounce around between projects while waiting for a model to come back.”

- Brandon Davey, Senior Designer, NEMO Equipment NEMO Equipment improved its turnaround time and attention to detail with its on-site 3D printer. www.objective3d.com.au

DCD Dental Consulting Laboratories used its in-house 3D printer to create accurate dental models that produce perfect fits and excellent aesthetic results.

5. Greater confidentiality In today’s competitive market, a leaked design may spell disaster, making it imperative to ensure confidentiality.

closely resemble the end product. With today’s affordable 3D printers, it’s possible to create stunning models at a far lower cost in-house compared to outsourcing.

Keeping rapid prototyping in-house with a 3D printer eliminates the need to transmit design files to any external network. It ensures that designs never leave the company premises, safeguarding intellectual property.

NASA uses Stratasys to create its 3D

Trek Bicycles’ improved prototype quality empowered its breakthrough design for a new Speed Concept Series 9 bike.

www.nzmanufacturer.co.nz

/

NZ Manufacturer September 2016

21

Eagles soar, but weasels don’t get sucked into jet engines .- Steven Wright

Robot Macroeconomics: What can theory and several centuries of economic history teach us? John Lewis.

Advances in machine learning and mobile robotics mean that robots could do your job better than you.

That’s led to some radical predictions of mass unemployment, much more leisure or a work free future.

But labour saving innovations and the debates around them aren’t really anything new. Queen Elizabeth I denied a patent for a knitting machine over fears it would create unemployment, Ricardo thought technology would lower wages and Keynes famously predicted a 15 hour working week by 2030.

Understanding why these beliefs proved to be wrong gives us important insights into why similar claims about robotisation might be incorrect. But automation could nevertheless have sizeable distributional implications and ramifications well beyond the industries in which it’s deployed.

Technological progress won’t create mass unemployment…

Technology can lead to workers being displaced in one particular industry, but this doesn’t hold for the economy as a whole.

In Krugman’s celebrated example, imagine there are two goods, sausages and bread rolls, which are then combined one for one to make hot dogs. 120 million workers are divided equally between the two industries: 60 million producing sausages, the other 60 million producing rolls, and both taking two days to produce one unit of output.

Now suppose technology doubles productivity in bakeries.

Fewer workers are required to make rolls, but this increased productivity will mean that consumers get 33% more hot dogs. Eventually the economy has 40 million workers making rolls, and 80 million making sausages.

In the interim, the transition might lead to unemployment, particularly if skills are very specific to the baking industry. But in the long run, a change in relative productivity reallocates rather than destroys employment, even if the distributional impacts of that reallocation can be complicated and significant.

they could work the same hours and devote the productivity boost entirely to raising consumption or, more likely, enjoy a bit more of both.

This so-called “income effect” means working hours should fall, but by less than one for one with the rise in productivity.

But that’s not the only thing going on – rising productivity tilts the relative prices of leisure and consumption in favour of the latter – what economists call the “substitution effect”.

The overall effect on hours depends on the balance of the two. Angus Maddison’s 2001 magnum opus estimates that between 1820 and 1998, real GDP per capita in Western Europe increased 15-fold. Over the same period hours declined by about a half.

So the productivity dividend was split about 7:1 in favour of consumption.

On that basis, unless automation leads to vast productivity gains, any fall in hours would be modest and slow. It would take a 75% rise in productivity to deliver a 10% fall in hours. Or a 150% rise to knock a day off the working week.

…and it’ll probably push up average wages The consensus view amongst economists is that technological change is labour augmenting- i.e. it acts to increase output in the same way as an increase in labour input. If that sounds counterintuitive it is merely the flip side of assuming that innovations are labour-saving.

History provides a good testbed for this hypothesis – if technical change is labour augmenting, then technological change should lead to a rise in the wage rate, but leave the interest rate unchanged.

As productivity rises, people could just work fewer hours and enjoy the same level of consumption. But equally,

22

/

NZ Manufacturer September 2016

Figure 1: Wages and Interest rates over time

Gregory Clarke’s fascinating dataset suggests that in 1700 a craftsman needed to work for almost 10 hours to earn the 2 old pence required to purchase a kilo of beef. But by 2014 a median UK worker can earn the ten pounds or so need to buy that kilo of beef in less than hour. And so measured in beef, or goods in general, the reward for working that extra hour is much bigger.

The Bank’s own historical datasets suggests long rates have (periods of high inflation excepted) hovered around 4% since the 1500s. And the chart below shows that since 1800, the return to labour – i.e. the real wage rate – has grown by a factor of around

…and it probably won’t make your working week much shorter…

15. Of course these aggregate figures might well mask substantial variation across industry and worker groups.

Certain workers may be hit very hard, especially if their human capital is rendered obsolete. Robotisation may not be good news for all workers and may pose important distributional challenges.

www.nzmanufacturer.co.nz

Is robotisation different?

So to argue that robotisation will benefit capital at the expense of labour you have to believe there is something intrinsically different about it compared to innovations that went before.

Imagine a taxi and its driver – there is in essence no substitutability between the two. They have to be combined in fixed proportions, and so having a taxi with two drivers, or a driver with two taxis creates no extra output.

Earlier technological progress, faster cars, satnav, Uber, didn’t change much on that score. But perhaps robots will make labour and capital much more interchangeable – so the driver can be substituted by a computer, and the passenger rides round in a driverless car. If this pushes substitutability above one, growth in the capital stock over time leads to a higher share of income for capital.

Could robots help combat secular stagnation?

On the plus side, if you are worried about secular stagnation then robots offer you a couple of reasons to be cheerful. First up, if robotisation does constitute a major productivity gain that raises the marginal productivity of capital, then this should push up on long run-equilibrium real rates, and hence ease fears of secular stagnation.

Second, whilst economic theory usually assumes that technological growth means capital is just costlessly melted down and made into newer, more productive machines, in practice, some innovations might require scrapping of old capital, and hence a wave of new investment.

Beware unexpected consequences But perhaps the most important h i s t o r i c a l lesson of all for economists is to remember that often the biggest implications of an innovation occur far away from that good’s own industry.

Take the humble s h i p p i n g container.

Tr a n s p o r t i n g goods in pre-packed locked containers, which can be lifted straight onto a lorry or train, yielded enormous savings relative to having cargo transported in crates which needed loading and packing individually at each port.

Their inventor estimated that the combined savings on labour costs, time at the dockside and insurance for breakage and theft reduced the price of a tonne of cargo 39-fold. Bernhofen et al calculate this led to an eight fold increase in bilateral trade between countries with container ports.

Whilst employment fell, productivity of labour increased nearly 20 fold.

For the shipping industry this wasn’t a massively disruptive technologythough trade patterns changed, the industry became more concentrated and ironically less profitable.

But by reducing the cost of trading, containerisation opened up the possibility of new supply chains and trading arrangements that were previously too expensive to undertake.

And, in so doing, the resultant trade flows led to a substantial spatial reallocation of economic activity. The real macro impact of containerisation didn’t occur at sea or on the dock side. Perhaps the biggest effect of robotisation might occur far away from the industries which adopt the robots, and in ways which today’s macroeconomists could never imagine.

My boss doesn’t believe that money equals happiness. So instead of raises, he gives us Prozac. -anon

World Robotics Report 2016 Collaborative robots as market driver Universal Robots welcomes new report that documents how “cobots” are now the hottest growth segment in industrial automation with forecasts showing no signs of slowing.

The World Robotics Report 2016 recently released by the International Federation of Robotics (IFR) forecasts that compact, user-friendly collaborative robots will become a key driver in the automation market.

The report predicts the worldwide annual sales of industrial robots to increase by at least 13 percent on average per year from 2017 to 2019.

Human-robot collaboration will have a “breakthrough“ in this period, enabling robots and humans to work safely side-by-side without any fences, while increasing production efficiency and quality.

“As the market leader of the cobot industry, Universal Robots welcomes the report which confirms the validity of our mission: lowering barriers and enabling automation in areas previously considered too complex or costly,” said Chief Commercial Officer of Universal Robots, Daniel Friis.

“Our installed base of more than 10,000 cobots worldwide illustrates the dramatic growth potential of this game-changing automation technology. We enable small and medium-sized enterprises to optimise their competitiveness on the global

stage with an industry leading payback period.”

Industries predicted by IFR to adopt cobots at an increasing rate include automotive, the plastics industry, electronics assembly and the machine tool industry. These are all sectors where Universal Robots is seeing strong traction.

“UR robots are now increasingly deployed on the auto assembly line, working hand-in-hand with employees, by relieving them of ergonomically unfavourable tasks. We have recent case studies documenting how cobots quadrupled injection moulding production, and how our new UR3 table-top robot is now a sought-after automation tool for light assembly, such as circuit board handling,” said Friis.

In Australia and the Asia region in particular, strong, continued robot growth is forecasted by IFR, with the recent report suggesting a rise of 18 percent in robot supplies this year, while installations are expected to rise by 15 percent. However, China is predicted to remain the main driver of robot growth, expanding its dominance with almost 40 percent of

the global robot supply being installed in China by 2019.

According to Friis, the demand for consumer goods across global markets is pushing manufacturers to produce innovative, high-quality products more quickly, consistently, and sustainably around the world.

“To support the growing demand for flexible cobot solutions, Universal Robots recently launched Universal Robots+, an online showroom for end-effectors, software, peripherals and accessories from the UR ecosystem of 3rd-party developers that are optimised to work flawlessly with UR robots. This allows UR’s integrators, distributors and customers to hit the ground running when completing their next UR robot installation,” said Friis.

Complementing Universal Robots+, is the new UR Academy, which includes

free e-learning modules available to all that make up the basic programming training for UR robots. This includes adding end-effectors, connecting I/ Os for communication with external devices and setting up safety zones.

Universal Robots expects the initiative to help support Industry 4.0.

“It’s unprecedented in the industry to provide hands-on interactive teaching modules available for free with no licensing required. The Academy offers an instrumental tool in helping us educate the market on how our technology can address key business challenges. ‘’As Australia faces widening skills gaps reported across the agricultural, manufacturing and medical technology industries, educating future operators and programmers now to bridge this gap becomes even more important,” said Friis.

continued fro page 11

Corruption looks different in China many forms, from direct cash or asset diversion to the selling of land to developers when there is ostensibly no right to sell.

decision-making and competitiveness.

Local officials are meant to adapt laws to fit competitive local economic development and they do.

Pirated goods and fake products as a result of illegitimate businesses is another side of many corrupt practices.

A large section of the new wealthy middle class has become rich on the exploitation of housing allocations.

They got these from connections in particular governmental and state owned enterprise posts, in the previous era. This may appear illegitimate but the state is now actively fostering this middle class for political and economic goals.

Developed rule of law has simply not existed in China since the economy changed at the end of the 1970s.

Although arguably changing, the system in China has been that, those who entrepreneurially take advantage of available state resources and generate wealth for themselves and the country are usually allowed to do so. Many of these people are themselves public officials or closely connected to them.

In addition, the evolving system of government has encouraged local state entrepreneurship through vague laws and localised administrative

China generally supports those who took advantage of state assets in the earlier economic era and successfully generated economic activity because of the role they played in the country’s economic transformation.

This means the government doesn’t really see these people as corrupt or tax avoiders. In fact, tight definitions

of legitimacy have little to do with China’s current and past reality.

Notably, a large part of the story of China’s successful economic transformation is the story of individuals and officials who violated restrictive regulations and laws on economic activity to positive economic outcomes for the country.

of corruption. The business concerned, on the other hand, may be accused of tax evasion.

That said, there is no doubt that there are true ill-gotten gains in China and truly corrupt people. It’s just that this truth needs to be understood through a more complex and murky institutional prism of legitimacy.

However, this also means an official can be accused of corruption as part of a politically motivated initiative to remove them. A business person can be accused of breaking a business law or tax evasion for a similar purpose.

This all raises some significant problems for other countries that seek to attract Chinese capital and business but do not like the idea that this money may not be legitimate.

For example, there are cases where businesses that local officials view as desirable to the local economy are given tax treatment that is far more generous than the law allows. If the relevant local leaders are subsequently the target of a political campaign, this tax deal can be presented as evidence

It would be unfair to argue that it is illegitimate simply because it does not accord with the standards applicable in Western countries. Likewise, it may be unfair not to protect a person accused of corruption, if the truth is that they are actually the target of a politically motivated persecution.

www.nzmanufacturer.co.nz

/

NZ Manufacturer September 2016

23

FOOD MANUFACTURING

Being powerful is like being a lady. If you have to tell people you are, you aren’t.

-Margaret Thatcher

DNA technology to accelerate improvements in agricultural production A new deoxyribonucleic acid (DNA) analysis technology called Genotyping

by Random Amplicon Sequencing (GRAS) uses analytical materials. This technology is capable of dramatically improving the efficiency of identifying and selecting useful genetic information for agricultural plant improvement.

This technology should lead to substantial time and cost savings in the agricultural plant improvement process.

Toyota Motor Corporation (TMC0 is involved in a wide range of initiatives in order to help achieve a sustainable society. In addition to improving the fuel efficiency of its vehicles to help prevent global warming and to also enhance energy security; TMC is also supporting various bio-technology businesses.

For example, TMC has applied its wealth of knowledge about production control systems and process improvements to the agricultural field so as to help develop the cloud-based agricultural IT management tool (Housaku Keikaku).

At the same time, TMC is also developing a technology that would help to increase the yield of sugar-cane as an alternative biofuel source.

Conventional agricultural plant improvement to increase crop yields involves selecting and interbreeding of parent varieties based on extensive past improvement data, assessing progeny over the long term, as well as selecting new progeny with the desired property.

However, although the recently developed marker technology(1), which uses genetic information to predict plant characteristics has helped to improve the efficiency of this process, the lengthy time needed as well as the high cost of this method of DNA analysis have sought to hinder its adoption.

In response, TMC has paired its proprietary sample preparation technology(2) with a next-generation sequencer(3) to develop GRAS, a new technology that can substantially simplify the process of identifying and selecting useful genetic information.

GRAS is capable of analyzing DNA in about one-tenth the time needed,

and at around one-third the cost of conventional techniques that are being utilized. This is a promising technology that has the potential to boost sugar-cane production, and to increase biofuel crop yields per unit area of land.

In addition to increasing biofuel crop yields, TMC believes that this new technology can also be used to help increase the production and the disease resistance of food crops. TMC plans to continue actively disclosing and providing information about this technology to help facilitate its application in the agricultural sector.

A technical evaluation is already under way in cooperation with the Kazusa DNA Research Institute, as the institute has an extensive experience in the field of DNA analysis.

(markers) on the genome (genetic information) to identify useful genes, and to also analyse the presence of these genes, as well as parent/progeny and genetic relationships.

(2) Proprietary sample preparation technology:Technology that amplifies thousands to tens of thousands of locations on the genome with a high degree of repeatability as a means of amplifying the sequence of an analysis sample using a proprietary primer (nucleic acid fragments necessary for the synthesis and replication of DNA).

(3) Next-generation sequencer:A device capable of analyzing tens of million to billion locations on the genome at the same time.

(1) Marker technology:Technology that uses characteristic DNA sequences

New business models in food & agriculture could create US$2.3 trillion windfall Companies could unlock US$2.3 trillion a year in the food and agriculture sectors with an annual investment of US$320 billion in sustainable business models by 2030, a 7-fold return on investment.

This could also lead to more than 80 million jobs, according to a new report, Valuing the SDG Prize in Food & Agriculture, from the Business and Sustainable Development Commission.

The opportunities are broken down across 14 areas, including food waste, farming technology, low-income food markets, micro-irrigation, restoring land and forests, product reformulation, changing diets, aquaculture, reducing package waste, cattle intensification and urban agriculture. Researchers estimate a range of value for each opportunity; the lowest in the range is US$15 billion per year (for cattle intensification) while the highest goes up to US$405 billion per year (for reducing food waste across the production process, or value chain).

Of the 80 million jobs the report estimates could be created by 2030, 90% could be in developing countries,

24

NZ Manufacturer November 2016

including 21 million in Africa and more than 49 million in Asia. The report further breaks down job creation potential in Asia to 22 million in India, 12 million in China, and the remaining 15 million in developing Asia. There could also be an additional 5 million new jobs in Latin America.

The annual investments needed to open these market opportunities must be scaled significantly, requiring an estimated US$320 billion a year to unlock these opportunities by 2030.

The current capital base in 31 leading agriculture funds is just under US$4 billion a year—less than 1.5% the annual investment needed to capture these opportunities. Partnering with government will also be critical to put in place enabling policies and the right regulatory frameworks as well as to advance research for facilitating product innovation.

The report looks at how food and agriculture businesses can experience growth by pursuing sustainable and inclusive business models aligned with the Sustainable Development Goals (SDGs), or Global Goals.

Launched in 2015, the SDGs are 17

/

www.nzmanufacturer.co.nz

time-bound targets for ending poverty and hunger, reducing inequality and tackling urgent challenges such as climate change, by 2030. The food and agriculture sectors directly relate to SDGs 2 (ending hunger), 3 (health & well-being), 8 (decent work and economic growth), 10 (reduced inequalities), 12 (responsible consumption and production), 13 (climate action), 14 (protect life below water) and 15 (protect life on land), but they are cross-cutting sectors that also affect the remaining Global Goals.

for businesses, and in Latin America and Africa, it is forest ecosystem services.

The research shows that developing countries have the most to gain from SDG-aligned business opportunities, capturing more than two-thirds of the estimated economic value due to their large shares of arable land, high future consumption growth and large potential efficiency gains.

If the private sector can put these prerequisites in place, the social benefits, including food security, job creation and health outcomes, could be significant. Improving technology in smallholder farms and restoring degraded land, for example, could double the incomes of smallholder farmers in the world, who are among the poorest in the global economy, the report finds.

Across regions, the biggest business opportunity in developing Asia is in cutting food waste across the value chain; while in developed Asian countries like South Korea and Japan, the opportunity is greatest in consumer waste. In India, low-income food markets are the strongest opportunity

Companies will need to operationalise sustainability across its supply chain and internalise social and environmental costs, while transforming consumption.

Unlocking social and economic rewards in food and agriculture will require closer collaboration among business, government and society, and new ways of working together to advance common social, economic and environmental objectives.

According to the UN, of the 2.5 billion people in poor countries living directly from the food and agriculture sector, 1.5 billion people live in smallholder households.

FOOD MANUFACTURING

If I had asked people what they wanted, they would have said faster horses.

- Attributed to Henry Ford

Sustainable Foods Summit The summit (www.sustainablefoodssummit.com) is taking place on 18-20th January 2017 in San Francisco for the seventh consecutive year.

Agriculture is often cited as the cause and victim of many of the environmental and social issues facing the planet: from climate change, biodiversity loss, water scarcity to social inequality and economic migration.

The opening session will highlight the role of sustainable food systems in helping resolve some of these major issues. The Regenerative Design Institute will discuss the solutions provided by permaculture, whilst another paper explores the science of biomimicry.

With proteins coming under scrutiny for their high ecological impacts, approaches to reduce environmental impacts of livestock and seafood production will be discussed. Theresa Marquez, Chief Marketing Executive of Organic Valley, will highlight the benefits provided by organic livestock farming.

Elizabeth Candelario, Managing Director of Demeter Association, will explain how biodynamic agriculture can produce climate-friendly foods.

The Global Salmon Initiative will show how sustainable seafood farming can help alleviate the proteins crisis.

Another session gives an update on the growing palette of sustainable ingredients available to food and beverage firms. Seema Kedia from Barry Callebaut will kick off the session with details of the company’s sustainable sourcing programs.

She will give insights on how such programs are improving the lives of impoverished growers in developing countries. Other papers will cover developments in marine ingredients,

natural colours.

flavourings,

and

natural

Although the mandatory GM labeling bill has now been passed, there remain concerns about its scope and implementation. Details will be given of the new bill and its implications to the sustainable food community.

Will adoption rates of voluntary schemes such as the Non-GMO Project continue to rise? What new schemes could emerge to cover GMOs in livestock products and / or the foodservice sector?

The waste impacts session highlights best-practices in tackling food and packaging waste. Over 120 billion pounds of food goes to waste in the US each year, having significant environmental, social and economic repercussions. At the same time, almost 15 percent of the American population is experiencing food poverty. Christine Moseley, CEO of Full Harvest, will show how its new digital platform is creating new markets for unwanted food.

their supply chains.

About the Sustainable Foods Summit Organized by Organic Monitor, the aim of the Sustainable Foods Summit is to explore new horizons for eco-labels and sustainability in the food industry by discussing key industry issues in a high level forum. The international series of summits now takes place in the major geographic regions of the world.

The North American edition will be hosted at the Parc 55 San Francisco on 18-20th January 2017. Other editions in 2017 will take place in Europe (1-2nd June, Amsterdam), Latin America (28-29th June, São Paulo), and the Asia-Pacific (22-24th November, Singapore). More information is available from www.sustainablefoodssummit.com

Organic Monitor is a specialist research, consulting & training company that focuses on the global organic & related product industries. Since 2001, we have been providing a range of business services to operators in high-growth ethical & sustainable industries. Our services include market research publications, business & technical consulting, seminars & workshops, and sustainability summits. Visit us at www.organicmonitor.com Further Information For further information, including detailed program, please contact: Ms. Janina Wolfert PR & Marketing Coordinator Organic Monitor Tel: (44) 20 8567 0788 Email: press@organicmonitor.com

About Organic Monitor

A case study will be given of a natural food company creating new ingredients from food byproducts.

Other topics include zero waste at food manufacturing, role of packaging in waste reduction, consumer behavior, and responsible consumption.

The summit will be preceded by two workshops for sustainable food firms.

With financing business growth a major challenge for some firms, the first workshop will highlight the sustainable financing options available.

The second workshop covers food authenticity and traceability. Food fraud is now a major issue, with one in ten foods estimated to be adulterated or mislabelled. The workshop will helps companies mitigate against food fraud risks and provide greater controls in

Low maintenance actuator and isolators Air Springs Supply Pty Ltd, is expanding its range of replacement parts integral to the reliable operation and maintenance of OEM equipment widely used by major industries.

These include versatile and highly cost-efficient Firestone Airstroke actuators and Airmount actuators and isolators that help fill a potential supply gap resulting from a substantial trend over the last 10-20 years for processors and manufacturers to import complete OEM systems of the latest overseas-manufactured technology.

Air Springs Supply is also exclusive national distributor of a broader range of Firestone technology integral to

OEM equipment including conveyor lines, materials handling systems, vibrating screens and packaging units, stamping presses, shock absorbers, lift tables and processing and packaging lines.

The ranges of Firestone OEM and replacement products also includes Marsh Mellow rubber noise and vibration isolators and Airpicker and Airgripper end effectors for packaging, bottling and dispatch.

OEM and replacement markets are attracted by the advantages of flexible walled pneumatic actuators that contain no internal moving parts to wear or break and which are durable,

operate well in corrosive and abrasive industrial environments, easily accept misalignment, and offer a high ratio of stroke to collapsed height.

• Lift tables • Air grippers/pickers • Shaker screens/vibrating packers

Air springs are also being increasingly used as replacement actuators for existing motion and fluid control applications that had previously used traditional pneumatic or hydraulic cylinders involving internal moving parts that can break or wear.

Airstroke, Airmount, Marsh Mellow and complementary technologies can be found in Food and beverage industries in applications such as: • Conveyors

www.nzmanufacturer.co.nz

/

NZ Manufacturer November 2016

25

WORKSHOP TOOLS

The most ineffective workers are systematically moved to the place where they can do the least damage: management.

-Scott Adams (Dilbert)

Bearings answer challenges of smaller bridge construction and upkeep A challenge facing builders and operators of thousands of smaller bridges throughout Australasia is ensuring such structures can flexibly and cost-efficiently cope with internal movement and stresses caused by changing loads, vibration, thermal expansion and other common attritional factors.

The ability to provide cost-efficient and maintenance-free solutions to such issues is especially important to road and pedestrian access projects demanding high safety, such as those undertaken in metropolitan infrastructure projects, including health and carpark facilities.

Such capabilities are also important in remote area service vehicle and pedestrian access facilities, such as those providing supply, exploration and service routes to mining and energy and oil and gas projects, where movement within access structures is caused by factors such as climate, changing uses and delivery of plant including conveyors, motors, turbines and reticulation systems.

“Low maintenance is equally important also to government authorities as they face demands from local businesses to refurbish and renew private and public regional infrastructure,” says Mr David Booty, Manager, Hercules Engineering (a division of Cut To Size Plastics).

“It is estimated* that there are more 30,000 timber and concrete bridges maintained by local authorities, for example, of which more than a quarter are in poor or fair condition.” *Source: National State of the Assets Survey 2015 Many of these are smaller road bridges or pedestrian walkways or bridges and could benefit from a no-maintenance, cost-efficient solution provided by Hercules Engineering through its range of Herculon Type D Bearings (HLD/SG, HLD/FF & HLD/FX), which are widely proven on applications ranging from steel and concrete beam engineering structures through to materials handling and processing facilities.

Herculon HLD Bearings are part of a comprehensive range of Hercules composite slip joints and structural bearings incorporating engineered high performance combinations of engineered thermoplastics and stainless steel facing surfaces.

They are engineered to minimise downtime and maintenance by accommodating the vertical and horizontal stresses imposed by the shuddering and vibration of varying loads.

“Among the big plusses of HLD Bearings, compared with more sophisticated and expensive heavy

alternatives such as pot bearings and roller bearings, are benefits such as lower initial cost, easier installation and no maintenance for periods of 30 years or more,” says Mr Booty.

“Larger bridge structures Smaller bridge construction and maintenance can benefit demand sophisticated from cost-efficient Herculon type D sliding bearings in and typically more capacities up to 60 tons per bearing. expensive solutions, such as mineral processing and oil, but HLD bearings are very suitable gas and energy infrastructure and for a wide range of bridge, materials conveyors in applications extending handling and process equipment from ports to power plants. structures up to 60 tons per bearing.”

Performance characteristics include Herculon type D sliding bearings – incorporating polymers proven • Outstanding stick-slip performance, to provide smooth, easy movement globally for outstanding durability under load without lubrication or maintenance – were developed to fulfil the need for • Friction co-efficient 0.05 – 0.08 depending on stress low-friction bearings on corbels and columns where continuous slip joints • Expansion capacity up to ± 40mm for standard Bearings. (Larger were not appropriate. movements can be accommodated No-maintenance performance upon request) Type D Herculon Bearings (HLD/SG) • Maximum contact stress 10-12 MPa are designed to accept a lateral load • Maximum rotation up to 0.02 radians of 30 per cent of the vertical rated Maximum temperature 80 deg load, which can be up to 600 kN per • C (with higher temperatures bearing in stock sizes, with higher accommodated by thermally capacity available custom-engineered insulating bearings or using high for particular applications. They are temperature materials, both as removable and replaceable, to optimise recommended by Hercules). no-maintenance performance in access infrastructure and high output plant

Konecranes extends steel industry and advanced technology leadership Global crane manufacturer and service leader Konecranes is extending its technology and leadership involvement in the steel industry by being a major sponsor of the Australian Steel Convention for the 5th year in a row.

At this year’s convention, hosted in Melbourne CBD in September Konecranes, which employs over 12,000 people across 600 locations in 48 countries, demonstrated its UNITON crane. UNITON is particularly applicable to the steel industry and related uses such as materials handling, manufacturing and maintenance.

Managing Director, Australia, New Zealand and Philippines, Mr James Dowe.

Mr Dowe will also personally be attending Konecranes’ booth at the convention, along with Konecranes Head of APAC Region, Mr Steve Gagnuss, National Industrial Equipment Sales Manager, Mr Peter Monaghan and Operations Manager, Mr Daniel Mccarney in order to answer any questions about Konecranes technologies or the steel industry in general.

A strong focus this year was on advanced technologies such as SMART features, lifecycle care through yourKONECRANES and the new Konecranes parts store, all of which are designed to provide a greater level of safety, reliability and information that can help to better plan maintenance and service schedules.

“Our company has a strong ethos of safety, which is vital to the steel industry. I’ve had some insightful conversations about the future of the steel industry at past conferences, and I’d invite anyone who is interested in cranes for the steel industry to visit our booth and chat to me and my team about the latest advanced technologies for the steel industry,” said Mr Dowe.

“Our continued support of this convention provides us with a valuable opportunity to discuss the steel industry with other experts and help shape its future into one that is safe, efficient and reliable,” said Konecranes

“One of our biggest focuses over the past 12 months has been on improving the user experience when deciding on, ordering and receiving a crane, part or service. Our lifecycle care campaign can add years to the overall life of

26

/

NZ Manufacturer November 2016

www.nzmanufacturer.co.nz

valuable plant and identify problems before they occur,” he said.

UNITON is an excellent all-around crane with good fundamentals and performance. It provides the duty class, hoisting speeds and trolley traversing speeds you need and full compliance with your safety requirements. UNITON has a number of distinct advantages for steel and related industries, including: • Maintenance-friendly trolley • Range of operator interfaces • Extended Speed Range as option • Built for the customer’s environment Konecranes’ new yourKONECRANES portal yourKONECRANES customer portal provides direct access to maintenance data –including planned inspections, service and reports – in an easy-to-access and responsive web interface.

All these features are designed to integrate Konecranes’ equipment with customers’ overall handling systems.

The simple objective is to increase productivity, reduce manpower and improve energy saving and environmental targets Konecranes recently launched an intuitive new crane parts store to Australasia, making it easier for customers to find the parts they need, check availabilities and track orders. In addition to the full suite of Konecranes parts, the store will also offer replacement parts for all makes and models of crane, regardless of the original manufacturer.

Smart features are available on most cranes, and make operations safer and more productive using advanced technologies. Examples include: • Sway Control • Target Positioning • Shock Load Control • Safety Zoning • Regenerative Drive Systems

Konecranes staff at the 2016 Steel Convention.

From left to right, Daniel McCarney (Operations Manager), Peter Monaghan (National Industrial Equipment Sales Manager), James Dowe (Managing Director, Australia, New Zealand and Philippines) and Steve Gagnuss (Head of APAC Region).

WORKSHOP TOOLS

Only one man in a thousand is a leader of men--the other 999 follow women.

-Groucho Marx

F720i fibre laser really does deliver The F720i high speed fibre laser is designed to deliver clear, legible and durable codes on to aluminium cans, and with a high IP rating. It is particularly suited to withstand the harsh production environments and high speed coding demands of the beverage canning sector.

Central to the appeal of the F720i is its IP65 rating and robust design, which is capable of maintaining continuous output in extremely harsh, humid and temperature-challenging production environments of up to 45C.

PlantMaster gives manufacturers end-to-end plant control A new version of the Tetra Pak PlantMaster enables manufacturers to programme their entire plant through a single data management system.

The upgrade includes the Tetra Pak PlantMaster MES Suite (Manufacturing Execution Systems), a new software programme specifically designed for the food and beverage industry, which provides a user-friendly interface.

In the food and beverage industry, manufacturers often have equipment from different suppliers in one plant, using separate information systems.

Some of these machines even require manual data collection.

With the new software, the Tetra Pak PlantMaster provides a single set of tools that integrate all operations, from incoming raw materials to finished, palletised products. This gives manufacturers complete control of the plant. It streamlines data collection, facilitates accurate data analysis and, ultimately, improves efficiency.

Developed to maintain superior levels of flexibility and coding quality at unmatched high speed, the F720i applies standard codes at a rate of 90,000 cans per hour and has the capability to deliver complex codes and promotional data of more than 60 characters at a rate of 42,000 cans per hour. The new solution can maintain these exceptional coding speeds and quality of output even on the concave surfaces of the can bases.

Unlike conventional fibre lasers, the 3D power concentration of the F720i generates a highly focused beam which

is being distributed in short intense pulses resulting in an increase of the marking speed. Its unique design and unrivalled optical laser beam quality enables it to create the finest, yet robust characters with greater resistance to vibrations or water condensation, limiting downtime and eliminating waste through lost production.

promotional marketing codes, as well as meeting requirements for clear, legible and long lasting characters.

The F720i not only meets current coding demands within the beverage canning sector, it also provides the flexibility to cater to future customer requirements.

These include even faster production speeds, more intricate and detailed

Introducing

A point of difference in today’s busy FMCG market.

Developed by AsureQuality, inSight™ provides shoppers with independently verified information about the products they are about to buy.

After a successful application process, producers can place the inSight™ logo and a QR code on their product packaging.

When shoppers scan the QR code at the point of sale they can access information about the product, including: • • • • •

Environmental sustainability Social and ethical concerns Nutritional information Safety and quality Origin

A plant management system has to easily calculate every part of an operation, optimise the processes and be more efficient. With the new Tetra Pak PlantMaster, there is all the information needed for planning and production management.

Why the Need for inSight™? inSight™ takes product assurances into the 21st century

PlantMaster provides customers with a simple end-to-end solution by unifying plant control in one single data system.

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

A new innovation taking product assurances into the 21st Century

Freephone 0508 00 11 22 | www.aqinsight.com

www.nzmanufacturer.co.nz

/

NZ Manufacturer November 2016

27

SUPPLY CHAIN

Tell them what you’re going to tell them, tell them, then tell them what you told them.

-Communications axim

Warehousing management – the Cinderella of management training

By Bobbi Ryan

The pathways to managerial careers in New Zealand are very well defined, via our tertiary institutions and other post-graduate training providers.

Three such managers I worked with came from food science and planning roles – and have since risen high in the warehousing world. And they love it.

But there’s one area of business – quite a vital area – where the creation of a manager, and particularly an effective one, appears to be largely accidental – warehouse management. Almost no one goes to University thinking “I’m going to be a Warehouse Manager”.

But there are great careers to be had in that space.

Warehouse management is rewarding in many ways. Remuneration packages for large-scale warehouses or multi-site roles can come with a significant six-figure salary package. But it’s also an area with excellent opportunities for individuals to develop their leadership skills: warehousing teams range from 2-3 person units to those in the hundreds.

There are some exceptional Warehouse Managers out there, but try recruiting for one, as we do, and the talent pool is very shallow. The top-class warehouse managers we see have often landed in the role by accident from another function, thrown there to fill a gap for what was expected to be a short time – and they’ve thrived.

Warehousing has a direct impact on customer satisfaction, making it far more than a box-moving exercise, and it’s a function that has black-and-white measurements with a real opportunity to initiate improvements and deliver measureable results.

It’s also an area where there are significant, exciting technical developments taking place with robotics and software advances.

Wa r e h o u s e management offers great personal growth and the chance to really shine.

But most young people thinking about their future career hear next to nothing about warehousing.

There is a strong sense that it’s an occupation you go into if you’re not well-educated.

C o m p a n i e s don’t foster

28

NZ Manufacturer November 2016

/

www.nzmanufacturer.co.nz

their talented young people into these roles and there’s not a lot of specialised, formal training in the job – internally or externally – happening, so the calibre of those in the roles is understandably low.

Employers wouldn’t throw anyone into accounting roles who didn’t have the necessary training – but generally do for warehouse management roles.

Raising the profile of warehousing as a legitimate career option won’t be easy.

Employers have to start thinking differently about the function, and graduates need to see that it can be an attractive option. Businesses need to direct some of their “bright young things” into warehousing both as a career end in itself or a step to other supply chain roles and upper management positions – “seeding” the function with future leaders. It’s a very sensible entry point for juniors aspiring to supply chain roles; talented people will stand out easily and quickly get leadership experience much earlier than in other supply chain functions such as planning – which seems to be the preferred starting point for a supply chain career.

A graduate or school leaver looking at warehousing as a career should check out the NZ Association for Operations and Supply Chain Professionals (NZPICS) whose courses and qualifications cover supply chain certification including warehousing modules.

The two programmes that are suitable are the Principles of Operations Management and a new course - APICS Certificate in Logistics, Transport and Distribution (CLTD). Employers are increasingly seeking these credentials for supply chain roles.

The other dynamic at play in the warehousing scene in New Zealand (as overseas) is the shift to Third Party Logistics (3PL) – outsourcing a function like warehousing to an external provider, or even 4PL, where the provider takes over a great deal more than just simple line functions.

3PL and 4PL organisations are more switched-on around the training they provide their warehouse managers; where it’s missing is in organisations that do their own warehousing.

And as manufacturing increasingly moves offshore, with a subsequent rise in online activity and greater importing in NZ, warehousing will grow in commercial importance.

Warehousing and distribution will increasingly be core competencies, provide opportunities for greater efficiencies (and cost savings) and thus enhanced competitive advantage. All the more reason to plan and train for the highest level of expertise in the roles you can achieve.

Bobbi Ryan is a Partner with NZ executive search and recruitment firm Convergence Partners, specialising in Manufacturing including production, logistics, operations, planning, supply chain and warehouse management.

ANALYSIS

There’s no secret about success. Did you ever know a successful man who didn’t tell you about it?

-Kin Hubbard

Robot revolution: rise of the intelligent automated workforce Danushka Bollegala real concern. It is one thing getting a face incorrectly recognised in an image uploaded to Facebook, but a totally different matter if cancer is misdiagnosed by an AI, which could very easily happen. After all, computers make mistakes, just as people do.

Although AI-based systems are becoming smarter than humans in many fields, these systems are far from perfect and are unlikely to ever be perfect considering the unpredictable learning mechanisms they use.

Senior Lecturer at the Department of Computer Science, University of Liverpool

product on Amazon, or recognising faces in an image uploaded to Facebook.

Losing jobs to technology is nothing new. Since the industrial revolution, roles that were once exclusively performed by humans have been slowly but steadily replaced by some form of automated machinery.

Deep learning

Even in cases where the human worker is not completely replaced by a machine, humans have learnt to rely on a battery of machinery to be more efficient and accurate.

A report from the Oxford Martin School’s Programme on the Impacts of Future Technology said that 47% of all jobs in the US are likely to be replaced by automated systems. Among the jobs soon to be replaced by machines are real estate brokers, animal breeders, tax advisers, data entry workers, receptionists, and various personal assistants.

But you won’t need to pack up your desk and hand over to a computer just yet, and in fact jobs that require a certain level of social intelligence and creativity such as in education, healthcare, the arts and media are likely to remain in demand from humans, because such tasks remain difficult to be computerised.

Like it or not, we now live in an era dominated by artificial intelligence(AI).

AI can be seen as a collection of technologies that can be used to imitate or even to outperform tasks performed by humans using machines.

We might not first see it but we cannot avoid running into one or more systems that use some form of an AI algorithm in our day-to-day activities – such as searching for some information using Google, purchasing a recommended

Recent breakthroughs in AI are largely attributable to a technique called deep learning. Often known as machine learning or neural networking, deep learning involves “training” a computer model so it can recognise objects from images. The power of deep learning-based AI systems lies in their ability to automatically detect noticeable features and use them to solve hard recognition problems.

Although humans could easily perform such recognition tasks almost unconsciously, it is often difficult for a human to explain the exact procedure at a sufficiently detailed level so that it could be programmed into a computer.

With deep learning all this has changed. Now, deep learning-based AI systems can figure out the important features for solving difficult problems that were once thought to be solvable exclusively by humans.

like humans instead of machines. It will also free up time and energy for humans to engage in more creative and intellectually stimulating activities, possibly assisted by AI.

Emotional intelligence AI systems have already become far too complicated for the average person to understand, let alone repair, so there will be new roles created which will require people who can act as intermediaries between computers and humans.

Similar to professions such as medicine or law, where professionals with specialised skills are required to interpret technical details for everyday folk, we will need professionals who speak the language of AI. These professionals may vary in their skills and are likely to consist of software developers, computer scientists and data scientists.

But ethical issues arising from human and AI co-working environments is a

That said, it is likely to be the social and cultural changes that will be the real challenge, rather than the technical challenge of AI itself. So while robots taking over our jobs can be a good thing, only time will tell if we are ready to accept them as our co-workers.

Letting machines do the bulk of the work means that humans will be freed from routine tasks.

And as a result, humans will have to mentally prepare for the fact that some of our jobs will be lost to AI systems. We might even have to call AI systems our colleagues or bosses in the near future.

But despite the deeper level of knowledge that our computers will soon acquire, losing our jobs to machines doesn’t have to be a bad thing. Letting machines do the bulk of the work means that humans will be freed from routine tasks that computers are better at performing with higher accuracy rates, such as driving cars.

This should enable humans to think

www.nzmanufacturer.co.nz

/

NZ Manufacturer November 2016

29

HEADING

The shortest way to do many things is to do only one thing at once.

-Samuel Smiles

title text

Internet of Things revolutionising the electronics industry In keeping with the motto “Connected Worlds—Safe and Secure,” electronica, the largest electronics trade fair in the world, took place in Munich from November 8–11.

A total of 2,913 companies from more than 50 countries presented their solutions for this sector. They used the industry gathering to network with approximately 73,000 visitors and dialog with professionals from around the world.

According to Falk Senger, Managing Director at Messe München: “This year’s electronica did an impressive job of demonstrating how the various aspects of our lives will network with one another in the future and redefine our everyday lives.”

Kurt Sievers, Chairman of electronica’s Technical Advisory Board, European Vice President and General Manager Automotive, NXP Semiconductors, adds: “Smart technologies and applications make it vital for new security solutions to keep up with this development. Security by design is an important guiding principle for the industry.”

“It will play a key role in the future,” explains Christoph Stoppok, Managing Director of the Electronic Components and Systems Division and the PCB and Electronic Systems Division of the ZVEI (German Electrical and Electronic Manufacturers’ Association).

secure.” As the electronica Trend Index revealed, consumers around the world are aware that security in connected devices is essential.

Facts and figures about the fair Approximately 73,000 trade visitors from more than 80 countries attended the fair in Munich. As a survey conducted by Gelszus Messe-Marktforschung revealed, satisfaction among visitors remained high. 99 percent gave the fair a rating of good to excellent.

Besides Germany, the countries with the largest number of visitors were Italy, Austria, Great Britain and Northern Ireland, France, Switzerland, USA, Israel, the Russian Federation, Poland and Slovenia, in that order.

There was a significant increase in the number of visitors from France, China, Slovenia, Turkey and Israel.

“The only way to instill trust in consumers is to make high-tech products and their components secure.”

“The only way to instill trust in consumers is to make high-tech products and their components

A total of 2,913 exhibitors from than 50 countries presented their products and technologies at the fair. That corresponds to an increase of 7 percent over the 2014 exhibition, continuing a

30

/

NZ Manufacturer November 2016

www.nzmanufacturer.co.nz

trend during the last few years.

“More and more companies present components in the context of applications,” explains Senger. Besides Germany, the countries with the largest contingents of exhibitors were China, Taiwan, the USA and Great Britain (in that order).

Automotive electronics continues to make headway “Today, 80 percent of innovations are being driven by microelectronics and software,” says Falk Senger, the Managing Director at Messe München.

From new assistance systems to sensors and LEDs—automotive electronics continues to increase its presence at electronica. One-third of all exhibitors presented solutions for this sector.

The day before the fair started, the electronica Automotive Conference, in which 228 visitors from more than 20 countries participated, was an important prelude to this topic. A total of 228 visitors from 20 countries participated in the conference, a considerable increase over 2014.

Strong related events conference program

and

In keeping with the motto “Connected Worlds—Safe and Sound”, key figures from the semiconductor industry, OEMS and the scientific sector got warmed up at the CEO Roundtable on the first day of the fair.

This year’s discussion showed that security is important, but also highly complex. However, it can only be

achieved in close collaboration with the IT industry.

The Internet of Things and cyber security were also key themes of the Embedded Platforms Conference, which also saw an increase in attendance with a total of 218 participants.

IT2Industry, the International Trade Fair and Open Conference for Intelligent, Digitally Networked Working Environments, was also a success. It allowed visitors to gather information about topics such as Industrial Software & Systems, Industrial IT Security, Big Data & Cloud, Smart Factory, M2M Communication and Embedded Systems.

Successful start for electronica Fast Forward For the first time ever, electronica featured a new platform that revolves around aspiring founders and start-ups. For four days, 35 participants from around the world competed for the electronica Fast Forward Award in the categories “Idea,” “Prototype,“ and “Start-up.”

They demonstrated the enormous innovative strength and dynamics that lie in electronics and gave the industry important momentum with their ideas.

And their efforts were rewarded with the electronica Fast Forward Award.

Additional information about the finalists is available under “electronica Fast Forward” at the electronica website.

The next electronica takes place in Munich from November 13–16, 2018.

REAR HEADING VIEW

Nothing is illegal if a hundred businessmen decide to do it.

-Andrew Young

Collapse of Australian car manufacturing will harm R&D in other sectors: study -Abbas Valadkhani, Professor of Economics, Swinburne University of Technology By the end of next year, car manufacturers Mitsubishi, Ford, Holden and Toyota will all have largely exited Australian manufacturing, taking their assembly lines overseas where the cost of production is significantly lower. This will create a vacuum for 260 businesses that supply accessories and components to the Australian automotive sector.

But beyond the direct impact to suppliers, our research shows there will be a significant impact on output and tens of thousands of job losses in downstream and upstream industries, and in particular, the Professional, Scientific and Technical Services (PSTS) sector.

This sector, defined by the Australian Bureau of Statistics, currently employs more than one million people, or around 8.5% of the total workforce.

There are several reasons for the closure of Australia’s car manufacturing industry. The Australian market is too small and the industry cannot fully exploit economies of scale. To remain solvent they have no choice but to use cheaper foreign production inputs including both labour and parts.

The domestic market conditions in Australia has become untenable with a) the lowering of import tariffs and the signing of Free Trade Agreements; b) higher wages and better work conditions demanded by the unions; and c) the appreciation of the Australian dollar. It is very difficult to compete when labour costs in some Asian countries are only one-fourth of that of Australia.

computer systems design, law, accounting, advertising, market research, management and other consultancy, veterinary science and professional photography. Scientists in this sector, including CSIRO staff, are mainly involved in R&D activities.

Depending on the extent of sectoral linkages, the number of resulting full-time job losses varies across industries.. Many of these workers may have already found employment in other related industries, but different sectors are impacted.

Previous studies have found car manufacturers provide technical support, transferable skills and employee training for the small suppliers of parts. There are extensive knowledge spillovers from the automotive sector to other industries.

The 2008 Steve Bracks review of Australia’s automotive industry found: these spillovers support the contention that the automotive sector is an important component of Australia’s machinery and equipment capability.

Our results indicate that the collapse of the motor vehicle industry could severely disturb the PSTS industry by creating a vacuum in both upstream and downstream industries. Similar results were also obtained in 1998 and 2012 studies, suggesting that R&D-intensive manufacturing industries, such as the motor vehicle industry, play an important role in the

process of technology diffusion.

industry.

These findings are consistent with the argument in the Bracks report that R&D is a linchpin of the Australian automotive sector and that there are important knowledge spillovers to other industries.

A further budget cut to organisations such as the CSIRO can only exacerbate the situation by lowering R&D activities in the long run. This is a serious issue, particularly when the collapse of the motor vehicle industry happens to coincide with CSIRO losing 10% of its staff during the next four years due to tight measures introduced in the 2014 federal budget.

What is going to happen after the closure of this industry? Public comment from the car companies on this point has been patchy and is inconclusive.

Ford has stated that it will retain its production development centre and testing facility after it ceases manufacturing operations in 2016.

Holden has hinted that it will retain its global design studio after it ceases manufacturing in 2017, but has not commented on the fate of its product engineering work.

Toyota has stated “that it is considering reducing the scale of its Australian design base”.

However, there are fears that Ford and Holden, as well as Toyota, will move their R&D activities closer to manufacturing centres after shutting down their Australian plants. In particular, it is feared that Australia’s car components industry will not survive and its engineering capability will be adversely affected.

It seems inevitable that the collapse of the motor vehicle industry in Australia will create a large dent in the PSTS

With the absence of car manufacturing companies, we need more, not less investment into R&D and technological innovation. Otherwise, the lack of investment in these important areas will adversely influence the survival of the remaining industries, particularly technology-intensive industries. That’s not what we want in an “innovative and agile” economy.

Domestic market conditions in Australia have become untenable.

But the car manufacturing industry does not operate in isolation. In 2009-2010 there were approximately 73,772 full-time employees in the motor vehicle industry (which includes the production of other transport equipment as well as parts), producing a total gross output of approximately A$20 billion.

The output and employment multipliers in this industry are two and seven respectively, suggesting that $1 million in additional final demand can directly and indirectly generate $2 million extra output and seven jobs in the economy.

Importantly, the collapse of the motor vehicle industry could adversely impact the viability of the PSTS industry. This industry provides services in scientific research, architecture, engineering,

www.nzmanufacturer.co.nz

/

NZ Manufacturer November 2016

31

HEADING

The shortest way to do many things is to do only one thing at once.

-Samuel Smiles

title text

Manufacturers focused on

SUCCESS Join with...

32 tell NZ Manufacturer November 2016 / www.nzmanufacturer.co.nz www.nzmanufacturer.co.nz us your story publisher@xtra.co.nz