February 2017
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MANUFACTURING TECHNOLOGY Bridging the skills gap.
Where is NZ manufacturing heading in 2017 and beyond? By Henry Zhou What will be the main trends for New Zealand manufacturing next year and beyond? Can we expect to see more “smart” factories across New Zealand? Will more New Zealand businesses embrace automation and Industry 4.0 data exchange? Can we expect to see improvements in workplace safety? The answer to all these questions is an emphatic YES. Money is the smartest thing in the world and it can be a very accurate predictor of future trends. Huge amounts have recently been invested globally in the following technologies: • Artificial Intelligence (AI) • Robotics: Opening new markets including service industries • 3D printing: This is now being used widely in small volume and customised manufacturing – it will challenge and disrupt the traditional mass production model • IoT: Data is becoming a key competitive advantage. NZ manufacturers can expect a further breakdown of existing technology barriers. This includes: • High level programming languages to unify and simplify automation programming
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SMART MANUFACTURING Industrial IoT goes mainstream in 2017.
NEWS 30 BUSINESS Fair and free trade for all.
Onwards and upwards in 2017! -Dieter Adam, NZMEA A warm welcome to 2017! I hope everyone was able to take some time off to rest and relax before, hopefully, a busy year for manufacturers and exporters. As we enter the New Year, many things seem uncertain, particularly in the realm of global politics, after 2016 ushered in changes that were unexpected to most. Domestically, things appear reasonably solid, but the exchange rate, access to skills and housing with its associated risks are key challenges – the lead-up to the next election will hopefully mean a quality discussion on how to address these issues and put growth in manufacturing and exports back towards the top of the agenda - the NZMEA will be pushing to make this happen. Globally, slow economic growth in spite of massive money-printing by key central banks, low inflation, rising debt, inequality and climate change remain as key concerns looking throughout the year, paired with increasing political discontent and anti-establishment movements in many areas.
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Not to mention, the continued technological change in processes and automation that both holds great potential for productivity, and raises further political questions on jobs and incomes. The question is, what should we expect the impact of all these uncertainties to be on the orders we expect from our customers off-shore? Around the world, since the GFC, growth policy has relied more heavily on monetary policy, through record low interest rates and quantitative easing, than Government spending. One unknown is - what will happen when interest rates rise, as we can already see in the US? Unless coinciding with strong growth in their economies, this will be a big challenge for a number of countries with high debt, such as those in the southern Eurozone, and those with highly leveraged housing sectors, such as Australia and New Zealand. We may well see additional policy around housing debt both here and abroad to try and limit and risks to financial stability, as the Reserve Bank of New Zealand has already discussed in 2016.
Omron’s powerful Sysmac platform can help to reduce costs significantly
direct3dprinting.com.au
Social unrest and political instability as a result partly of income inequality and a skewed distribution of wealth here and abroad has been on the agenda
for some time. It was listed as one of the top three risks in a number of recent international reports, including the recent “Global Risks Report 2017”, by the World Economic Forum. The report highlights how higher inequality can act as a drag on an economy, as highlighted in an OECD report a few years back. The key, both New Zealand and aboard, will be finding the right policy set that helps address the issue while also creating a
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FOOD GRADE COMPLIANCE IS EASY WITH CHEMZ
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
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4 EDITORIAL
ADVISORS
Looking beyond TPP.
5 BUSINESS NEWS
Demand drives surging salaries for engineers.
6 MANUFACTURING TECHNOLOGY
Craig Carlyle
Is Director of Maintenance Transformations Ltd, an executive member of the Maintenance Engineering Societyand the Event Director of the NationalMaintenance Engineering Conference.
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Three quarters of Australian manufacturers plan to invest in automation. Autodesk business solutions for additive manufacturing.
Catherine Beard
Bridging the skills gap and creating new services. Clean, high-tech; this is the factory of the future.
11 TRADE FAIR NEWS
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Looking forward to SouthMACH 2017.
Is Executive Director of Export NZ and Manufacturing, divisions of Business NZ, NewZealand’s largest business advocacy group, representing businesses of all sizes.
12 SUPPLY CHAIN
Applicability of supply chain framework and practices to the public sector.
13 THE CIRCULAR ECONOMY
Can waste solve the waste problem?
Dieter Adam
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.
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14 DEVELOPMENTS
Where is NZ manufacturing heading in 2017 and beyond?
Lewis Woodward
15 CLIMATE CHANGE
Why green cities make dollars and sense.
16 PRODUCTIVITY
18
C’mon engineers – Lift your bloody game!
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.
18 SMART MANUFACTURING
Industrial IoT goes mainstream in 2017. How a 10-minute conversation with a machine saved $12 million.
Dr Wolfgang Scholz
Is HERA Director and a Fellow of the Institute of Professional Engineers NZ.
Disruptive technologies driving sustainability. Robot rights: at what point should an intelligent machine be considered a person?
24 FOOD MANUFACTURING
Robotics company complete package for South East Asian food industry.
26 NEW PRODUCTS FOR
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MANUFACTURERS
Ultra-low noise battery charger. Welders for difficult environments. New universal rope guide for safety and flexibility.
28 ANALYSIS
Globalisation: Isolation would cost us dearly. 30 BUSINESS NEWS Fair and free trade for all.
31 REAR VIEW
Why science and engineering need to remind us of forgotten lessons in history.
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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.
Looking beyond TPP
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, Henry Zhou, Antony Bourne, Bob Gill, Wes Wemicki, Craig Carlyle, Greg Gorbach, Colin Paris, Wolfgang Scholz www.mscnewswire.co.nz
ADVERTISING
Doug Green T: + 64 6 870 9029 E: publisher@xtra.co.nz
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WEB MASTER
Jason Bowerman E: jason.bowerman@gmail.com
There are big issues facing the country this year, namely productivity, climate change and (what to do about) post -TPP? You can probably think of more but the above three are crucial to our way of life and need to be dealt with. Climate change will make us continue to refine and look at what we can manufacture in these times. To allow us to specialise with products using materials to cope with the changing weather patterns. In agriculture, for example, figs are becoming more favourable because they thrive in warm dry climates. In the workshop, what we make is different of course but is still subject to market forces and tailoring these products to the conditions of the importer, the buyer.
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Vol.8 No.1 February 2017 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
With post-TPP (let’s call it as it is) New Zealand is very capable of finding other countries to trade with. Most countries who would have comprised TPP can be traded with under new conditions, new trade deals. We are currently trading with them one to one anyway and we can reach out further to China and India and growing economies in Bangladesh and Indonesia. The United Kingdom out of Brexit provides us with other options and Todd McClay can initiate these processes for us
ASIA
MANUFACTURING NEWS
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quite capably. Australia had trade representatives in London early after the leaving announcement and opportunities surely exist for us as well as our close Pacific neighbour to further extend trade into the UK. Productivity. What do we do about productivity? Everyone screams out about it and this coupled with the lack of qualified tradespeople is a real dilemma. There are a substantial number of New Zealanders who have slipped through the cracks of employment. It is reported up to 450,000. So, what on earth is going on? These people are not part of the calculated 5.2 percent who are unemployed. Underground economies, boats being met at sea, people making money other ways? How many of those 450,000 people are productive and we don’t know about it? Are we recording the productivity figures the right way?
Success Through Innovation
EDITORIAL
Enjoy the read.
Doug Green
In an environment where new skills emerge as fast as others become extinct, employability is less about what you already know and more about your capacity to learn.
BUSINESS NEWS
Jonas Prising, Chairman and CEO, ManpowerGroup
Demand drives surging salaries for engineers
What we are all going to have to deal with this year…
Engineers take home an average of nearly $100,000 a year and their salaries are growing strongly, according to the annual IPENZ Remuneration Survey. Engineers’ median base salary grew by 6.3 per cent in the year to October 2016. According to Statistics New Zealand, average wage inflation in the year to June 2016 was 1.5 per cent. Engineers’ median base salary is $92,500, with another $5500 on top of that in bonus or other payments. The survey reveals that in the very first year of their career, engineers earn an average of $55,000 plus another $2000 in cash benefits. Institution of Professional Engineers New Zealand Chief Executive Susan Freeman-Greene says engineers’ strong salary growth reflects demand for all types of engineers in every part of New Zealand. “New Zealand desperately needs more engineers. With huge growth and expanding range of opportunities, it’s an exciting time to be an engineer. “Engineering affects all New Zealanders. As well as being financially rewarding, an engineering career means you can make a positive, tangible difference to our society. “Engineers are driven by the desire to
Commercial & industrial growth
make the world better. Engineering is at the heart of every major technological and societal breakthrough – from smart phones to greener transport to robotic surgery. Engineering is all about making our lives better, easier and healthier. “We’re also seeing enormous growth at the intersection of engineering with big data. The Internet of Things connects objects and devices and will radically change how we work and live.” More than 3200 IPENZ members completed the IPENZ 2016 Remuneration Survey, which was sponsored by RobLawMax Recruitment. Just over 65 per cent of engineers surveyed also received non-cash benefits. The most common benefit was health insurance (32 per cent), followed by a car park (19 per cent ) and a car (18 per cent). According to the survey, more engineers live in Auckland than anywhere else, with 38 per cent based there. Canterbury is the next biggest engineering centre, with nearly twice as many engineers as Wellington.
Engineers take home an average of nearly $100,000 a year and their salaries are growing strongly, according to the annual IPENZ Remuneration Survey.
Improving Productivity Climate Change Automation Job Training Globalisation IoT Manufacturing Markets Trade Deals – post TPP How is your company going about these issues? Let me know. publisher@xtra.co.nz
Employment growth
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.
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MANUFACTURING TECHNOLOGY
No one will emerge as a winner in a trade war.
-Xi Jinping, President of the People’s Republic of China
Three quarters of Australian manufacturers plan to invest in automation Robotics most popular type of automation chosen for future investment among Australian manufacturers Universal Robots, the Danish pioneer of human-robot collaboration, has released the results of a survey, which canvassed the views of members of various online groups dedicated to communicating with the Australian manufacturing community. These groups include; the Australian Manufacturers Forum, the Australian Furniture Association Industry Forum, the First 500 group of SME business owners, the Australian Advanced Manufacturing Council and The AiG Australian Manufacturing LinkedIn group. The results showed three quarters of respondents were looking to invest in automation in the future, suggesting an increasing focus on innovation within the Australian manufacturing industry, backed by continued growth[1] and business confidence. Amongst those respondents looking to invest in automation, an overwhelming majority (57 per cent) plan to invest in robotic solutions in the future, while 36 per cent plan to invest in automation via materials handling. A quarter of respondents plan to spend on Internet of Things solutions, while just over one fifth will invest in on logistics. Universal Robots’ results reinforce recent research from Telsyte, which found that one in three organisations intend to use robotics and 25 per cent of large organisations are already using Robotic Process Automation[2]. According to the findings, the top reasons for Australian manufacturers to automate processes include; improving business efficiency, reducing production time, improving quality, reducing staff costs and freeing up staff to work on value add tasks, as well as to satisfy growing orders. “In the face of high local labour costs and the need to drive efficiencies, automating processes is now considered essential in order to compete both on a regional and international level,” said Shermine Gotfredsen, General Manager, Universal Robots, Southeast Asia & Oceania. While the vast majority of Australian manufacturers are confident in their
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business growth and plan to invest in automation, the research also indicated that a lack of funds and information available continue to be a barrier to achieving innovation. The top five barriers to innovation were identified as a lack of budget, inability to raise funds, lack of knowledge of what products are available, unsure where to start and too busy with day-to-day operations. “The uptake of automation in the ANZ market has not yet reached the scale of adoption of Asian neighbours. As our research shows, a lack of information and awareness of available automation options is still a significant hindrance to Australian and New Zealand manufacturers achieving greater levels of innovation. Local industry players are not widely informed of where they can find information and help with their automation and business needs,” said Gotfredsen. Other key findings from the survey include: • Over 80 per cent of business are either confident or extremely confident about sales in the coming year. This is despite of a clear lack of confidence in the Australian Government’s management of the manufacturing sector of the economy, with 83 per cent of respondents identifying it as being either managed either poorly or not very well. • To fund automation, the majority of manufacturers (63 per cent) rely on cash reserves, followed by asset finance (29 per cent) and either a business growth fund or state aid/ grant (23 per cent). • 95 per cent of organisations expect a full return on investment on an automation solution after 12 to 24 months. [1] AI group, ‘Australian PMI®: Manufacturing edges back into growth in October’, https://www.aigroup.com.au/ policy-and-research/mediacentre/releases/ PMI-Oct2016/
Telsyte, ‘Developing new products and services now the top priority for Australian ICT leaders’, http://www.telsyte.com.au/ announcements/2016/11/1/developingnew-products-and-services-now-the-toppriority-for-australian-ict-leaders
[2]
The industrial internet will be two times as big as the digital internet.
-Steve Bolze, GE President and Chief Executive Officer
MANUFACTURING TECHNOLOGY
Autodesk business solutions portfolio for additive & subtractive manufacturing As exciting as the world of 3D is, traditional methods still can’t be discounted. And with the new Autodesk manufacturing portfolio, not only do we see a mix of technology— but also some big names bringing it all together. Allowing manufacturers to reap the benefits with higher-quality products that are made rapidly and more affordably, giving them a leg up on less progressive competition, this new portfolio brings together a set of hybrid manufacturing solutions from companies such as Autodesk, Delcam, Netfabb, Pan Computing and Magestic Systems—also including HSMWorks, Inventor HSM, Fusion 360, FeatureCAM, PowerMill, PartMaker (now included in FeatureCAM), PowerShape, and PowerInspect. The idea is for the customer to be able to find solutions to the challenges they are working to overcome within manufacturing. With this portfolio, they should also be able to integrate design with machining in a streamlined fashion through capabilities such as cloud connection, allowing for more efficient product development and workflow. The manufacturing portfolio covers: • Computer-aided (CAM)
manufacturing
• Additive manufacturing
manufacturing prowess.
• Composites
Solutions include FeatureCAM for automating CNC programming; PartMaker for precision part manufacturing with Swiss-type lathes; PowerMill for programming the most complex molds, dies and other components; PowerShape for preparing complex models for manufacture; and PowerInspect for inspection in every environment.
• Robotics fabrication • Factory layout • Inspection and modelling Autodesk has long been a leader and innovator in 3D design, engineering and the technologies that expand the applications of industrial 3D printing, but no product is really complete until it’s realised through physical manufacture. Autodesk is also a leader in technologies that expand the applications of industrial 3D printing. See the following list of features for more specifics. Autodesk HSMWorks: A fully integrated CAM solution for Solidworks allowing users to get up to speed and become productive quickly, using tools and workflows they are familiar with.
problems and if we didn’t have it to automate a large portion of file preparation process, each build would be substantially more time consuming and labour intensive. Fusion 360: Fusion 360 combines CAD, CAM and CAE together in one package. It allows users to take their designs all the way to production with included 3D printing capabilities as well as HSM powered toolpath technology for 2 through 5 axis milling machines, turning centers, and waterjets.
Autodesk Netfabb: Complete software is included for reduction of cost, increasing efficiency, and improving part performance in additive manufacturing and 3D printing.
This new integrated portfolio from Autodesk brings together technology Autodesk has been growing and investing in across the full manufacturing spectrum. “This combination of solutions makes modular and scalable manufacturing solutions available to manufacturers of all sizes.”
Not only is the Netfabb bundle easy to use, it also does much of the heavy lifting in preparing models for 3D printing. The software streamlines the process of fixing common 3D print file
Autodesk Inventor HSM: Assists CNC programmers, designers, and engineers in the rapid production of machined parts that can be created in nearly any CAD system. Autodesk 2017 CAM Products: Offering a wide range for advanced manufacturing applications, these new products combine CAM software from Delcam with Autodesk’s 3D design and
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MANUFACTURING TECHNOLOGY Bridging the skills gap and creating new services: Key success factors for manufacturers By Antony Bourne IFS, Global Industry Director of Industrial and High-tech Manufacturing Bridging the skills gap and boosting services will be top priorities for manufacturers this year. And IoT? Today, 50% of the costs of IoT projects go on integration. This year will also see many manufacturers realizing they already have ‘IoT’ solutions; now they need to integrate them better to leverage the full benefits. Outlined below are my three key predictions for 2017—and beyond.
performance data from equipment since the 80’s and 90’s.
Prediction 1: Over 80% of manufacturers will realise they already have ‘IoT’ solutions— the question is: How easily integrated are they?
But for manufacturers producing a higher volume of smaller products in-house, IoT field sensors and monitoring would be very costly. In these cases, preventing problems before the goods leave the factory is the priority.
And many continue to do so. So manufacturers need to think carefully about which data performance tracking technology is most relevant to them. For those producing large-scale capital equipment to be deployed in the field, new sensor-enabled data gathering technology is a fantastic value-add. It enables them to offer maintenance and services around the clock, in tough environments—a serious competitive edge.
After years of hype, we tend to forget that many manufacturers already have ‘IoT’ capabilities. And have had for years. They just might not identify them as such. But systems like Supervisory Control and Data Acquisition (SCADA) and Programmable Logic Controller (PLC) have efficiently gathered
So If SCADA or PLC do the job—an ‘IoT’ solution is already effectively up and running. Currently 50% of the cost of implementing IoT projects goes to integration. For these high-volume manufacturers an open architecture ERP system that lets them integrate
their existing legacy systems without costly integration could be money better spent.
expected to result in 2 million of those jobs going unfilled”. In Europe the picture is similar.
Carry out an audit. Identify which KPIs, measured where, really count for your business.
Almost 82% of the executives surveyed in Deloitte’s report believe the skills gap will impact their ability to meet customer demand. More than 78% believe it will impact their ability to increase productivity and implement new technologies.
Today’s ‘IoT’ offers tremendous advantages for some. But for others it can be a costly irrelevance.
Prediction 2: Within the next three years, apprenticeships will become more important than university degrees The future of every industry depends on its people. And sometimes good people are hard to find. Across Europe and the US, manufacturers are wrestling with a skills gap. In 2017, solving the skills shortages could bring in a new era of apprenticeships, in-house peer training and manufacturers working more closely with local education institutions to get younger talent into the industry. A Deloitte study found “over the next decade nearly 3.5 million manufacturing jobs in the US will likely need to be filled. The skills gap is
And the study shows that a career in manufacturing is ranked consistently low. Only 37% said they would encourage their children to go for a manufacturing career. So what is to be done? Manufacturers need to start being more proactive in spotting and training talent young. Apprenticeships and in-house training will move up the agenda. Take UK firm British Engines, a global engineering group producing technology for a whole range of industrial sectors. During a recent recruitment drive they turned away from LinkedIn and reached out instead to young talent in their local area. Ads were placed on local public transport and in local papers. The success of their campaign reflects the findings of a 2016 Wall Street Journal report: “…hard-to-fill roles are middle-skill positions, such as a maintenance technician, that require education or training beyond high school, like an apprenticeship or a course at community college.” For young talent, apprenticeships mean solid, bankable skills with no debt attached. For employers, it means the skills they really want. There are also new types of skills that will be in particularly high demand in the future. A factory will often consist of thousands of IoT sensors and a number of new devices connected to the internet continuously gathering data.
2017 New Zealand Manufacturer Excellence in Manufacturing For an Entry Form and further information contact: Doug Green, Publisher, NZ Manufacturer P: 0064 6 870 9029 E: publisher@xtra.co.nz
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Without a national digital education programme, command of and access to technology will be distributed unevenly, exacerbating inequality and hindering socio-economic mobility. Yuhyun Park, Chair, infollutionZERO Foundation
This will result in a greater need to analyse large data volumes and automating key processes based on data. For young apprentices, the technical, analytic and personal skills learnt are gifts that will keep giving. In some countries, like the UK, manufacturing salaries are higher than the national average. So bring in new blood. Think carefully about how you build up your skills set. Ask yourself: Who will benefit my company more in the long run—a graduate with a degree? Or a young, eager professional schooled in the reality of my business and committed to its success?
Prediction 3: 75% of mid-sized manufacturers in Europe and the US will adopt servitisation before 2018 It’s not easy being a manufacturer: The price of manufactured goods in the West has been falling for decades. The Producer Price Index for major European or the US show the same trend: from 2015-2016, the price of manufactured goods in the UK fell 0.7%, 1.4% in Finland and 0.29% in Germany. Some years prices may creep up, but the big picture is clear: In 10 years’ time, western manufacturers will no longer be able to compete on price.
The days of ‘make it and sell it’ as a default business model are over. So how else can manufacturers compete? Jargon aside ‘servitisation’ means understanding the bottom line of what your customers really want. After decades of producing more sophisticated photocopiers, Xerox in 2000 asked themselves: What is it our customers really want? Great photocopying machines? Or excellent quality printed documents on demand—whenever, however? Managed Print Services was born. By 2013, Xerox had transformed from product-centric to service-centric. The results for Xerox customers were broad and positive: Reuters achieved a 19% cut in its Total Cost of Ownership, Sandwell Council a 30% cut in printing costs, PwC met 100% of its security needs, and the UK’s Department of Work and Pensions had a 36% cut in electricity consumption. For Xerox, too, the rewards were significant: a sharper competitive edge, more predictable revenue streams and a portfolio of customers who are in it for the long haul. IFS customer Beijer Electronics is another great example. A global innovator in industrial automation and data, Beijer makes smart black-box systems that optimise input / output devices.
With copies of their technology appearing at ever cheaper prices and hardware sales predicted to decline, Beijer needed to be both proactive and innovative. The company servitised, launching the online WARP Engineering Studio.
harnessing it to make sure that their customers get what they really want. So how can manufactures start building their services?
Step one: Start small. Are you offering customers spare parts and consumables that add value to their purchase?
Jargon aside ‘servitisation’ means understanding the bottom line of what your customers really want.
Step two: What maintenance services do you offer customers? Built-in maintenance de-risks a customer’s purchase. Service contracts that guarantee, for example 99% uptime, can be optimised through live IoT feeds, where the supplier schedules preventative maintenance that lets the customer focus on their core business. Step three is all about sharing risk—and revenues. It’s about selling capabilities rather than just equipment. Customers pay a monthly fee for a guaranteed service. Manufacturers get a solid, predictable revenue stream independent of falling product prices.
With WARP, customers can integrate, customise and better control how they use Beijer’s products. WARP provides premium services customers can operate on top of their black boxes— and speeds up their processes.
The journey isn’t easy, and sales cycles can be longer, new service departments may need to be created, revenue gaps can occur before services mature. But when manufacturers move beyond the factory walls and ask themselves what it is their customers really need from their products, new relationships, growth, and opportunity can flourish.
For Beijer, selling products as a service through WARP means customers will not want, or need, to compare them on product price. The capabilities the Studio delivers are what customers value. Servitisation gives Beijer a highly strategic competitive edge. It lets them monetise their vast in-house expertise,
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Work is about more than making a living: it’s also a source of meaning. -Michael Sandel, Professor of Government, Harvard University.
dominant cog in factories for several years to come, certainly well into the coming decade. In both developed markets, where populations are aging out of the workforce, and lower-cost markets, where workers will need increasingly better skills, technology will be a valuable step toward quickly unlocking productivity gains and enabling untapped labour pools. The structure, location and scale of factories
By employing digital twins, simulations and virtual reality, designers and operators will be virtually immersed in interactive media to optimise design, production processes and material flows.
The factory of the future is hyper-efficient and sustainable, increasingly modularized with interchangeable lines that can be easily reconfigured for multiple production batches. Digital production technologies will allow software developers, product designers and production technicians to work in open, airy environments. As technology diminishes the role of low-cost labour and lowers the threshold of economies of scale, distributed manufacturing will become the norm. Producers will be able to augment their traditional production footprints with smaller and more flexible units located next to points of consumption, allowing them to meet local requirements with a more responsive supply chain.
Printing in 3D offers vast potential for new product designs and functional capabilities, as well as allowing for more customisation.
These more localised, more energy-efficient, lower-waste factories will contribute to advances in the circular economy.
New relationships between operators and machines
While these general trends seem likely, the factory of the future will not follow a single paradigm. Change will come more quickly in some places, or look different in others as industry sectors and developing vs. developed economies seek their own path.
Innovation is taking manufacturing to a new level.
Clean, high-tech: this is the factory of the future Factories have long held a place in the popular imagination, not just as sources of employment and community prosperity, but also as hectic, noisy, grimy and polluting facilities, where thousands of people are employed in largely low-skilled line positions.
like 3D printing, advanced robotics, the Internet of Things, artificial intelligence, wearable devices, and virtual and augmented reality are converging to create new value, enabling the hyper-efficient and flexible factory of the future.
Today’s factories are changing. Breathtaking advances in technology, automation and globalisation are transforming how and where manufacturers plan, construct, operate and integrate their factory networks. They are also ushering in significant operational, political and societal changes.
The value created is real: large global producers have increased efficiency and reduced costs by up to 30% across all operations, driven by improvements in overall operating efficiency, lower inventory, energy and water costs, and reduction in incidents involving safety. While the pace of change and how these changes will propagate across networks will differ by industry and country, the factory of the future is a more digital, virtual and resource-efficient space. It is an environment that is more connected, both in terms of information availability and machines speaking to and directing each other.
From America’s Rust Belt to rural India and China, a chorus of voices is struggling to understand: how are technologies changing how we produce and distribute products? Are automation and free trade taking away valuable factory jobs? What type of skills will be required? How can communities prosper in the face of new production technologies? How and when should manufacturers upgrade their legacy equipment to embrace new technologies to boost yields and efficiency for advantage or simply to remain competitive?
It is a place where automation, simulation, visualisation and analytics are deployed more widely to eliminate waste and increase efficiency, in terms of material yields, energy consumption, effort and time.
What will the factory of the future look like?
Digital shop floor processes that are connected, automated and flexible
Factories of the future have three common overarching characteristics:
The key answers will come from the factory floor where new technologies
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combined with analytics and artificial intelligence will improve asset efficiency, decrease downtime and unplanned maintenance, and allow manufacturers to uncover new sources of value in services.
Technologies are changing the nature of work and skills required from operators. Robotics are automating most of the “dull, dirty, and dangerous” tasks, and increasingly collaborative robots are moving out of the cage to work side by side with operators. Augmented reality and wearables are also changing how operators train, assemble and make decisions on the shop floor, increasing flexibility, productivity, and quality.
If communities are to prosper as technology redirects the flow of jobs, eliminating scale-oriented, low-cost, labour-based jobs, distributing higher-skill-based jobs to regional market centres, then they must bring forward the required skills and infrastructure.
The Internet of Things and connectivity
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In the meantime, producers need to reconsider their capital investment strategies in light of rapidly changing capabilities that will make historical investment horizons obsolete. Some are already there; others cannot afford to stay behind for too long.
Image: Public domain
This is where policymakers must take the lead – in partnership with business, academia and societal organisations – in preparing their communities.
Labour will remain cost-effective in many arenas, as technology allows workers to significantly improve their productivity even as overall numbers decline. Some human-cyber combination will likely remain the
Whereas previous industrial revolutions evolved over the course of multiple generations, the pace of the Fourth Industrial Revolution requires more rapid response if communities do not want to be passed by.
TRADE FAIR NEWS
Autopilot didn’t put pilots out of a job; instead it foreshadowed an increasing collaboration between human and machine on complex tasks. Laurent Haug, author
Looking forward to SouthMACH 2017 SouthMACH, the region’s largest trade exhibition for the Manufacturing, Engineering, Machinery & Electronics industries returns to Christchurch this May and is set to be the ‘must attend event’ for 2017. NZ’s largest Trade Show organiser, XPO Exhibitions (XPO), is working hard to continue the growth of SouthMACH at a time when there’s a positive vibe in the manufacturing and engineering industry.
as providing an example of great collaboration between industrial designers and manufacturing industries.
Competenz (in collaboration with NZMEA)
On the back of a great event in 2015 (the first under XPO’s new ownership) and a fantastic EMEX 2016 (both of which experienced significant increases in exhibitor & visitor attendance), SouthMACH 2017 will be held at the Horncastle Arena, Addington, Christchurch from 24-25 May.
will be running Apprenticeship ‘best practice’ workshops on both days.
Showcasing the very latest innovations, equipment, technology, services and products to industry professionals, the event again will feature a comprehensive educational and professional development seminar series with keynote speakers and workshops. This year’s event includes a number of soon to be announced special features showcasing amazing product innovations from the South Island’s leading Design and Manufacturing Companies. These companies are leading the world in technology advancement and innovation as well
SouthMACH 2017 is well on track to deliver a record number of exhibitors showcasing products and services that reach across the current themes within the technology sector such as Robotics and Automation, 3D Printing, Energy Efficiency and Industry 4.0.
A full seminar program over the two days will touch on these themes and provide a forum for education, discussion and the sharing of knowledge and expertise, critical in the sustainability and growth of the industry.
joined by Callaghan Innovation. They all will bring their specific expertise to SouthMACH and are there to support the industry through sharing their knowledge and expertise. If your customers are manufacturing or processing goods or services, using General Engineering, Machine and Metalworking Technology, Plant Automation & Maintenance, Engineering Software & Computerisation, Welding, Cutting & Plastics Engineering, Fluid Engineering or measurement, Control & Instrumentation, SouthMACH 2017 offers opportunities you can’t afford to miss.
Another important issue and a focus for SouthMACH 2017 is the shortage of skilled staff within the manufacturing industry in New Zealand and therefore business continuity and efficiency. We’re also excited to announce that Competenz (in collaboration with NZMEA) will be running Apprenticeship ‘best practice’ workshops on both days for employers to de-mystify the process of employing an apprentice.
SouthMACH 17 will provide an effective, engaging and dynamic forum allowing those in the industry to connect and grow, and in doing so, foster the growth and development of many of the South Islands and New Zealand’s manufacturing, engineering and technology associated businesses.
Also: school leavers will appreciate an increased awareness of this alternative pathway by participating in the speed interview sessions that will be part of the workshops. SouthMACH 2017 is supported by more industry associations and professional bodies than ever. The New Zealand Manufacturers and Exporters Association, Maintenance Engineers Society of New Zealand and Canterbury University are now also
Prime locations are limited so enquire today at www.southmach.co.nz or call or email Exhibition Sales Manager, Aad van der Poel on 09 976 8350 / 021 314 199. aad@xpo.co.nz
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 $2.2 billion to Christchurch's GDP* Combine this with the wider South Island economy and SouthMACH has the opportunity to deliver your business to a targeted and qualified audience like no other marketing platform.
www.southmach.co.nz
INTERESTED IN EXHIBITING? CONTACT OUR TEAM Aad van der Poel, Exhibition Manager Aad@xpo.co.nz +64 (9) 976 8350 or +64 (21) 314 199
*Source: Canterbury Development Corporation (CDC) SPONSORED BY
ORGANISED BY
SUPPORTED BY
Showcase. Educate. Sell.
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SUPPLY CHAIN
Many members of the global workforce can’t keep up with the shift in skills required for jobs, which are seen by some as part of the evolving Fourth Industrial Revolution. Allen Blue, Co-Founder and Vice President, Product Management, LinkedIn
Applicability of supply chain framework and practices to the public sector Wes Wernicki, Business Process Consultant the background by enabling things to work smoothly, like taxation, standards organisations and the legal system.
Over the last few years I have been looking at how public sector supply chains work. Many are service supply chains delivering health services or education and other social outcomes.
When I look at many of these supply chains I often view these through the lens of the SCOR framework with the delivery of goods and services from a supplier’s supplier – our elected representatives through various agencies and institutions to the customers – being you and me. While
Central government agencies also register cars, provide people with passports and licence various types of institutions. Sometimes these services are invisible because we simply do not utilise them, or they just run in
the SCOR terminology may not be a common way of describing what is done by the DHBs, ACC or Inland Revenue, the principles I believe, are comparable. It is possible to see the Plan, Source, Make, Deliver, Return and Enable elements in the way most public entities operate. So why should this matter? Well, from my view we operate within one integrated
system. As important as efficiency and effectiveness is in the private sector to deliver on customer expectations, so is it in the public sector. From an NZPICS perspective I wonder what opportunities we have in broadening our membership by better integrating with our supply chain colleagues working in the public sector? The public sector can well inform the private sector about government policy and state sector decision making, including why it is important to be involved in the regulatory process at industry or even organisational level. My hypothesis is that the public sector could also benefit from the modelling of supply chains, especially with reference to standardised practices, common nomenclature and performance metrics. I also think we should be all be encouraged to become more interested in researching, developing and optimising our public sector supply chains. After all, we are all stakeholders in both their funding and the outputs they produce, not just in election years but all the time.
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NZ MANUFACTURER • March 2017 Issue • Features
Manufacturing Technology (Robotics)
Production and Distribution Productivity Climate Change Show Preview: SouthMACH 2017
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Focus: Workplace Development/ Industry Training Smart Manufacturing: Disruptive and Future Technologies
Advertising Booking Deadline – 17 March 2017
Editorial material to be sent to :
Advertising Copy Deadline – 17 March 2017
Doug Green,
Editorial Copy Deadline – 17 March 2017 Advertising – For bookings and further information contact: Doug Green, P O Box 1109, Hastings 4156, Hawke’s Bay Email: publisher@xtra.co.nz
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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.
THE CIRCULAR ECONOMY
Pay attention to those who are 30 years old. They are the builders of the world. -Jack Ma, Executive Chairman, Alibaba Group
CAN WASTE SOLVE THE WASTE PROBLEM? -This glimpse of the future was crafted by Tim Plenderleith
Who ever said ‘happily ever after’ was just the stuff of fairytales? These days those words are written into the soles of Lionel Messi’s cleats. (Or at least, that’s the idea.) The “Sport Infinity” range by sports apparel company Adidas uses worn-out cleats and, by combining them with scrap materials from other industries, reimagines them into high quality new shoes. “The football boots of the future could contain everything from carbon used in aircraft manufacturing to fibres of the boots that scored during the World Cup,” Adidas said in a statement. It’s called infinity recycling – one of the many good ideas wrought by circular economy thinking – and it may just be the Sunday game norm someday. With three billion new middle-class consumers expected to enter global markets in the next 15 years, we can expect three billion more hungry appetites for the resources and infrastructure required to meet their lifestyle demands. Currently, our economy is run by a ‘take-make-dispose’ linear approach that generates a breathtaking amount of waste. According to Richard Girling’s book Rubbish!, 90% of the raw materials used in manufacturing don’t even make it out the factory doors, while 80% of products made are thrown away within the first six months of their life cycle. The resource crunch is more like a suffocation, with our incriminating fingerprints all over the planet’s throat. The extractive industry’s approach is unsustainable – raw materials are being depleted quicker than they can regenerate. The circular economy may be a highly practical solution to our planet’s burgeoning woes. The idea behind a circular economy is to rethink and redesign the way we make stuff. Rather than ditching your worn-out old jeans, send them into the factory for recycling and upgrade to a new pair. Done with your old iPhone 5? Reconsider buying the Puzzlephone, which can be easily disassembled, repaired and upgraded over a ten-year lifespan. In the circular economy, products are not downgraded, as they are in recycling, but reimagined to infuse the same, if not more, value back into the system. Basically, there’s no such thing as waste in a circular system –
all waste bears the raw materials to become something else. By finding fresh, creative ways to use the same resources, a one-way death march to unsustainable collapse is inadvertently avoided.
washing machines, DIY equipment or even Levi jeans.
Could we halt the downward spiral by using waste to solve the waste crisis?
But it will firstly require a good deal of unlearning and open-mindedness for us who have been immersed in linear thinking.
With McKinsey rolling out projections as high as $1 trillion to gain from a closed-loop economy, circularity seems to have our ‘thumbs up’ in principle. The truth is however, we are a far cry from adopting its practical reality in our design-distribution streams. So how will we get there? If the circular economy is indeed the way of the future, what needs to change now to usher it in? Could the circular economy define the end of the extractive industry as we know it?
According to Richard Girling’s book Rubbish!, 90% of the raw materials used in manufacturing don’t even make it out the factory doors, while 80% of products made are thrown away within the first six months of their life cycle. We have to believe in a new buying power The Kingfisher Group has much to say on the future shift in consumerism, and they’re using power tools to say it. Rather than buying that drill that is used on average six minutes in a year, why not rent it for the day? Surely it would be better value for money on that rare occasion when a hinge is loose?
sustainable, future-proofed ecosystems if everybody is on board. Perhaps even more important than the engineers and designers, governance and regulation are crucial in endorsing these processes. Redesigning supply chains and business models require robust round-table discussions between businesses, universities, social groups and policymakers.
Access, not ownership, to a product will be the new trading power. This will launch fantastic new intelligent systems to undergird the process.
Initiatives such as the Ellen MacArthur Foundation’s Circular Economy 100 embraces this idea that closed-loop ambitions can never be achieved by working in isolation.
We have to up our game Within the former linear structure, sales were the success markers. Manufacturing and design simply had to align just enough to make the product sparkle, shine and ultimately sell. They didn’t have to consider the total fossil fuel emission of production or its biodegradability in landfill. The product’s recyclability was not in question. It was only the swipe of the credit card.
This group ties together supply chain leaders, industries and geographies. From designers to academics, CEOs to city mayors, people are locking heads and sharing their complementary expertise. The result of which is a more effective and holistic solution that generates wins for both the planet and our pockets.
A circular economy, however, is really complex. It accounts for a product’s entire life cycle in its design. Systems-level redesign and skills we haven’t yet imagined will be needed in order to recall, repair and reincarnate products into an upgraded former self. Rapid innovation will generate IoT platforms and seamless technologies into new services and product offerings.
Linear thinking can’t meet the needs of the emerging circular economy. However, all is not lost. Draw a straight line long enough and it would actually envelop the globe, paradoxically making a circle. What we need is linear thinkers to be open-minded to extrapolate their thinking out far enough in order to, ultimately, draw the same conclusion – that a circular approach is actually where all roads lead. Going forward, drawing circles around our consumer behaviour may be the best way to draw the line.
The need for ongoing research and development will drive STEM (Science, Technology, Engineering, Mathematics) disciplines. We need to prepare for these complexities, so that the added layers of life cycles are anticipated in tomorrow’s briefs and an egg-on-face situation is narrowly averted.
Aurecon has launched a new futuristic blog! Called Just Imagine, it provides a glimpse into the future for curious readers, exploring ideas that are probable, possible and for the imagination.
We have to collaborate Circular solutions will only realise
Their company, along with others like Mud Jeans and Philips, are paving the way for new ideology and design around products and how we relate to them. Consumerism is moving to stewardship, with the emphasis on service over product acquisition. So, in other words, the ‘pay per use’ contractual agreements associated with smartphones could extend to
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DEVELOPMENTS
To turn our back on globalisation, to turn our back on helping development, is exactly the wrong approach. - Christine Lagarde, Managing Director of the IMF
Just saying… Whoever owns the IPR related to the manufacture of robotics and smart software for production will dominate the world. It’s not just about technology it’s also being able to understand and exploit technology further up the value chain to create the technologies to build the robotic and smart systems of the future. Spending billions on defence is a dead end - just a transfer of treasury to other countries. -Ian Wicking, management consultant Training has been an issue given that it is not too long ago that “skills shortage” was the buzz phrase. Given the falling numbers of apprentices and low finishing rates it still is. -Bill Mullen, mechanical technician
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Onwards and upwards in 2017 more productive economy with higher incomes.
to keep looking for areas of quality trade agreements, while improving our existing agreements to gain more access for manufacturers.
Lastly, growing anti-globalisation and anti-establishment sentiment is pushing politicians and politics to the fore who are hostile to multi-lateral trade agreements – or at least they say so.
Recent signs from Bill English’s meeting with Angela Merkel were encouraging when it comes to negotiating an FTA with the EU, but how our own negotiations with the UK will go in the face of Brexit remains to be seen.
Time will tell if Brexit and the election of Trump, are just blips in the future of global trade, or a sign of more to come.
How all these developments move the level of the exchange rate will be a vital factor. While the latter half of 2015 saw some of the long awaited
Regardless, New Zealand does need
downward correction towards a fair value, in 2016, the exchange rate trended upwards significantly all year. On the TWI, it moved from around 72 at the start of 2016, up to around 78 by the end of the year. Much talk this year will focus on the US Dollar, as the Federal Reserve looks to increase rates once again – which could further exasperate the situation of economic areas with high debt and low growth, such as parts of the Eurozone, for example. Any further correction downward in our cross rate
with the U.S would help, however, other rates, such as the Australian Dollar, may be even more important for manufacturing exporters. Going into the election here, it will be important to have further discussion on how to address our problem of a stubbornly overvalued exchange rate. At this early stage, it’s hard to tell exactly where 2017 will lead us, especially in terms of doing business overseas – significant opportunities and risks lie ahead.
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Where is NZ manufacturing heading in 2017 and beyond? This presents more opportunities for developed nations like New Zealand.
• Common communication protocols So what will manufacturers?
this
mean
for
China, a global leader in manufacturing, is now moving into a consumption driven economy.
It means IT professionals can enter the automation field more easily. This will create a huge talent pool and bring in more creativity and rapid changes.
The transition has opened the door to great opportunities for New Zealand’s food and beverage sector.
It also means site PLC standards will become unnecessary, opening the field for competition on true value.
Increased competition But on the other side of the coin manufacturers can expect increased competition from new players in other industries, especially ICT.
Manufacturing on-shoring And with advancements in technology and automation we can expect to see more manufacturing on-shoring. More NZ manufacturers will follow the US lead and bring their manufacturing operations back to home soil.
Companies like Tesla, Apple and Uber have disrupted the traditional marketplace with revolutionary ideas and sweeping changes. We can expect to see a new business culture and new skillsets with fast and aggressive changes.
Automation will bring with it reduced labour costs and higher productivity. New Zealand manufacturers can expect a reduction of the labour cost ratio.
In this environment fast learners will survive and thrive, while the “resisters” will vanish.
With the growth in robotics and 3D printing in NZ manufacturing plants labour costs are becoming less important in manufacturing. It’s now more important to be close to customers and close to the source of raw materials.
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Will automation cause widespread job losses? No. It will increase demand of high skill and well paid job to replace lower end jobs. Business opportunities
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Automation will give NZ manufacturers a competitive edge globally. It will mean access to a larger market and more business opportunities. In the past, traditional industrial automation has not been an economically viable option for many manufacturers, but this situation is now drastically changing. A powerful control platform, such as Omron’s Sysmac platform, can now help to reduce costs significantly. Sysmac can run configuration, programming, and simulation, controlling, monitoring and troubleshooting for all automation equipment including sensors, vision, PLC, VSD, servo, temperature, safety and robotics. In the past five years, the technology has improved dramatically. Key to the future Machine vision technology is providing the key to the future. New machines can see things as well – if not better – than the human eye. In the past the human muscle was replicated in manufacturing
technology, but now we’re replicating the whole human. Companies like Omron, a global leader in automation, will play a key role in reshaping the face of manufacturing in Australia in years to come. While many plants are still using a standardisation model that was developed 20 years ago, automation technology is improving monthly. Omron will challenge the status quo and bring in the fresh ideas to the industry by technology innovation. A fully automated processing plant with the latest technologies and lower engineering cost can potentially deliver improved productivity and yield while reducing costs. New Zealand manufacturers can look forward to 2017 and beyond with great anticipation. *Henry Zhou is General Manager for Omron Electronics Australia. The Omron group has more than 36,000 employers in 35 countries throughout the world. Net sales are approaching $US8 billion a year.
I’ve insulated myself – I started hanging out with wealthy people, I started going to fancier restaurants. - Anthony Scaramucci, who heads up the White House Office of Public Engagement.
CLIMATE CHANGE
Why green cities make dollars and sense – Green Property Summit 2017 Building sustainable future cities that are good for the planet and offer sound economic returns is the focus of the upcoming Green Property Summit in 2017. Taking place on 29 March at the Grand Millennium Hotel in Auckland, the summit will bring together leading experts in sustainability and the built environment to discuss how New Zealand can combine building green with lucrative investment opportunities, to create healthy cities of the future. The summit is a joint event by the New Zealand Green Building Council (NZGBC) and Property Council New Zealand. The summit’s theme ‘Future Cities, Post 2020’ will delve into climate change, technology advancements, energy efficiencies, and the development of urban communities within proven guidelines and rating tools. According to NZGBC chief executive, Andrew Eagles the summit comes at a crucial time for the property industry with the building sector responsible for 20 per cent of the
country’s energy-related greenhouse gas emissions. “The talent we have brought together in this summit is vital to addressing the issues future cities face. With increasingly urbanised populations, cities are the focal point for some of the greatest challenges facing humanity. We know that green offices provide better capital returns. New Harvard research outlines staff productivity increases more than 20 per cent. Green certification is the future with the built environment an essential area of focus of the interface between man and nature.” Chief executive of the Property Council New Zealand, Connal Townsend agrees, saying that smart planning can create healthy, productive buildings that provide a powerful and sustainable platform for the future prosperity of the nation. “It’s good for the planet, it’s good for cities and it’s good for investors. This is the way forward and we all need to get on board and create sustainable, green buildings that people want to live and work in,” he says.
people’s frustrations of living in cities and improve the efficiency of our energy use.
The summit will feature keynote speaker Dr John Keung, CEO of Singapore’s Building and Construction Authority (BCA). Dr Keung who was named one of the Top 25 Newsmakers of the Year 2013 by Engineering News-Record for his work guiding Singapore in sustainable design and construction, will present on how going green isn’t just environmentally sound, but also makes economic sense.
* Peter Mence, Chief Executive, Argosy Property Limited and President of the Property Council of New Zealand. * Matthew Cockram, Principal and CEO New Zealand, Cooper and Company and independent director of Tainui Group Holdings Limited and Waterfront Theatre Limited. He is also a member of the New Zealand Initiative, the New Zealand Infrastructure Council, Committee for Auckland and the New Zealand Law Society.
Other speakers include: * Katie Swenson, a Boston, USA-based leader in sustainable design for low income communities, speaker, author, and green design expert.
Industry-leading CEOs will also discuss their ‘light bulb moments’ where their perspectives on green buildings have changed, how they see Green Star and NABERSNZ standards as necessities for the industry, and how the adoption of sustainable practices has benefited their organisations.
* Davina Rooney, general manager Sustainability Stockland’s, and sustainability champion, recognised for numerous industry awards including NAWIC NSW 2016 Sustainability Award, PCA 2014 Future Leaders Award and Sydney University Engineering Young Alumni Award.
Mr Townsend urges urban planners, architects, engineers, construction industry professionals and developers to attend the Green Property Summit.
* Matthew Ensor, Business Director – Advisory, Beca and Smart Cities consultant. Matt advocates data-driven smart design to reduce
Just saying… “Manufacturing isn’t the issue. Employment is the issue. More specifically a living wage”. While it is valid to look at the stats and debate the relative value of a domestic manufacturing job, to a cheaper ticket price, to the value of that job in a previously underdeveloped country, the core issue remains. Where are our grandchildren’s jobs going to come from? The pace of change is accelerating, VR, AI, and all the other acronyms and results of those acronyms are coming, some are here already. We appear to be doing nothing much of value to reset the drivers of our education and social systems to accommodate the changes we can only respond to, not control in any way. Best we can do is participate, and we are not even trying to do that in any effective manner. -Allan Roberts, brand development High manufacturing employment may be a thing of the past in the first world states but manufacturing itself is vital for our economy and the well-being of our citizens. The mistake our politicians, economists, bankers, unions and industry leaders often make is to confuse change with obligatory evolution. Einstein was right, but his reaction was never a knee jerk. The conclusion I draw is that we must bring manufacturing back. The commentators and academics will not help us. Our innovators and entrepreneurs must be supported by governments and banks alike and not be obstructed by them. --Ezio Viti, business management Are you capable of new thinking on this job loss topic? Can we continue to be an economy based on consumption? How do we measure contentment and standard of living? What examples are there from other countries that seem to have solved this problem? Are we mature enough to learn from others and embrace solutions not invented here?
Spring & Wire form manufacturing company where solutions are created for your problems. 09 277 5982 •
-Dave Kinnear
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PRODUCTIVITY
If you went back 10,000 years and spoke with someone working in a field, they probably wouldn’t ask what you do for a living – that wouldn’t be a meaningful question. - Google co-founder Sergey Brin
C’mon Engineers - Lift your bloody game! - Craig Carlyle If I had a beer with your boss, what would he be telling me about your engineering department? How often do you think about the external perception of your maintenance function? Is your barometer rising or falling?
It took a cuddle and a cup of coffee to settle the poor engineer down. How could I say such a thing? But I mean it. Engineers need to understand that regardless of the topic; (work planning, purchasing, budgets, insurance auditors, health and safety, food safety, compliance, KPI’s), outside influences will fill the vacuum left by your maintenance management system, if the solutions are not already delivered, implemented and transparently managed.
One of my work benefits is that I meet engineers up and down New Zealand, across a whole variety of companies and industries. This provides a beneficial yardstick of what’s happening in industry and certainly helps me keep my head out the clouds and in touch with “real” people. Most sites seem to have a hot topic that is the current focus of management and invariably it seems to involve the maintenance department. I am always concerned when I see engineers being run around with the latest “thing” instead of focusing on their core duties. No names no pack drills, but my observation is one of engineers being pushed by the latest generation of management re-inventing and “things”.
Check your own barometer. How would your site respond if I asked them what they really want from their engineering department? I would wager a bet that they would desire a proactive function delivered as professionally as the other business functions.
How’s your accounting stress? If you do not know MORE about your rolling budget forecast, YTD totals, committals and stores inventory than the accountant, is it any wonder he sets the rules?
Sadly, like the 80/20 rule, most engineering departments I encounter have their heads down in the trenches, dodging bullets. The good news is, the journey from “ok” to “excellence” is not that difficult and does not take a lot of expense, training, resources or tools.
Many times have I encountered Engineering Managers sweating about Key Performance Indicators (KPI’s) in deference to what’s actually happening with their own systems?
“Stop griping. These people only fill the vacuum left by you engineers. How can you complain when they are only imposing their ideas of a system because you haven’t?
Why don’t you have the confidence to develop your own measures that tell YOUR customers how good you are? Think about your own situation – if your internal customers thought your department was the best thing since
Lift your bloody game and start providing a professional service to your company”
Convinced yet? Enough examples. I am sure you can think of your own. Regardless of the topic, my whole point is that engineers need to lift their game and aim for professionalism, regardless of their industry or situation.
When tackled, why is YOUR department not able to say, “Yes, we have already a system and process. We can demonstrate our transparent management, management history, continuous learning, proactive plans and our embedded culture.”
Why would a company need to impose a short sighted blanket clamp on spending if your maintenance budget is linked live to a 5 year rolling forecast?
My message is about external drivers filling the vacuum left by engineers. I gave to one poor Engineering Manager this message when he was griping about the totally impractical work rules imposed upon his department, making his life a misery;
sliced bread, delivering the highest plant reliability at the lowest delivered cost for the greatest operational confidence, why would your boss need to beat you around the head with KPI’s, KRA’s or worse still, a contrived Service Level Agreement??
It takes the cheapest, most effective resource out there, ATTITUDE. There are some distinct steps along the way and embedded cultures that you might have to stomp on, but the rewards are enormous, in dollar and self esteem terms. If I haven’t touched a nerve, then good on you. You either have your act together and are already a white knight of engineering (20%er), or are blissfully unaware of a world outside of the trench. If, as I suspect, you recognise at least one example, do
yourself a favour and consider today how you can lift your game. If you are part of a corporate group, consider how you can collectively harvest the best of what you do to lift the game of ALL of your sites. If you work in isolation, a great starting point is by talking to your peers and mentors at the Maintenance Engineering Society (MESNZ). MESNZ strives to support and lift the game of maintenance engineers in New Zealand. That is why MESNZ receives my full support. MESNZ seeks to encourage those in the 20% bracket to share their experience and achievements with the other 80%. The society achieves this by recounting its collective experiences and inspirations to maintenance engineers throughout the country, via print, mentoring , the National Maintenance Engineering Conference or connecting companies with practitioners . Regardless of your role in the maintenance function, customer or department member, talking to the MESNZ via any forum is a great way for you to begin lifting your game.
Ending on a High Note The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during January 2017, shows total sales in December 2016 increased 7.23% (year on year export sales increased by 10.01% with domestic sales increasing by 3.30%) on December 2015. In the 3 months to December, export sales decreased an average of 1.4%, and domestic sales increased 11.7% on average. The NZMEA survey sample this month covered NZ$275m in annualised sales, with an export content of 60%.
NZ Manufacturer February 2017
Supervisors, tradespersons, managers, professional/scientists and operators/ labourers reported a moderate shortage.
Constraints reported were markets and 22% skilled staff.
“Export sales in December improved 10.01% on the same month in 2015, which was higher than the increase of 6.44% reported in November.
78%
A net 45% of respondents reported a productivity increase in December. Staff numbers decreased 7.9% year on year in December.
Net confidence rose to 10, up from 8 in November.
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The current performance index (a combination of profitability and cash flow) is at 99.3, up from 98.3 last month, the change index (capacity utilisation, staff levels, orders and inventories) was at 101, with no change from the last survey, and the forecast index (investment, sales, profitability and staff) is at 104.5, up on the last result of 103.2. Anything over 100 indicates expansion.
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“December’s manufacturing sales results showed a good bounce back from the results seen in October, September and July, particularly in export sales – manufacturers ended the year on a high note.” Said Dieter Adam.
“Domestic sales in December stayed positive with a 3.3% increase on December 2015. This was, however, a
moderation on the exceptional growth felt in the previous three months. The average monthly growth of domestic sales in the 3 months to December remained high at 11.7%. “We can now get a good picture on how the manufacturing sector fared in 2016. Domestic sales experienced an average monthly growth of 5.8% on the previous year’s months over the last 12 months, representing a positive trend of domestic sales. Export sales saw an average monthly growth of 2.1% in the same period. 2016 most definitely had its ups and downs for manufacturing sales, the trend showed solid growth for the year overall.”
The only way you’ll have a fair slice of the cake is if you have more than one hand on the knife. -Philip J Jennings, General Secretary, UNI Global Union
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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.
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.
Phillip Wilson Chris Whittington
Senior Lecturer at AUT, Chris Whittington is a versatile Engineer, Educator and Researcher. Chris has had many years experience in senior engineering and product management. Chris has a strong background in computational modelling, 3-D scanning and printing, and a strong interest in engineering education.
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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.
The future is not pre-ordained by machines. it’s created by humans. -Erik Brynjolfsson, Director, MIT Initiative on the Digital Economy
Industrial IoT Goes Mainstream in 2017 By Greg Gorbach and Bob Gill Welcome to 2017, the year when Industrial IoT (IIoT) goes mainstream. The pieces have been falling into place for some time now, a trend that accelerated in the last half of 2016 and will certainly characterise 2017.
as venture capital firms, are pushing solution providers to maximize a return on investment, which can lead to pursuing markets and use cases for which they are not completely prepared.
We saw a lot of progress in 2016, notably, a much improved understanding of IIoT architectures, security requirements, platforms, sensors and devices, analytics, and open systems. It was also a year when automation suppliers, service providers, and software companies laid the groundwork for success by building IIoT products and services for the industrial market.
From Cloud to Industrial Edge
Now that many of them have reached critical mass, and can not only talk about, but actually deliver real solutions, we expect to see even more activity as IIoT goes mainstream. So let’s take a closer look at some of the factors that have brought us to this point and will be strong drivers for 2017
Industrial Analytics & Machine Learning One of the big factors driving the market is the maturation of advanced industrial analytics solutions. There is a growing recognition throughout the industrial space that machine learning or artificial intelligence has reached the point where it can deliver real operational improvements in production. The same underlying technologies also can enable new business models and services based on smart, connected products. Still, there is still a fair amount of confusion here, because while new means for solving problems are being offered, often by new market entrants and entrepreneurs, end users are still trying to understand how they work. Solutions are being dubbed predictive and prescriptive, offered as applications and platforms, and marketed with a mix of confusing terms such as adaptive algorithms, cognitive analysis, data models, machine learning, and many more. Meanwhile, solution providers are grappling with pricing, sales cycles, service levels, deployment models, and roadmaps. And investors, such
All of these dynamics are clearly evident in the advanced analytics market. Despite the confusion, users are making significant strides in absorbing the complexity and will put the technology to use in 2017.
In the first wave of IIoT solutions, a somewhat simplistic idea of the IIoT architecture prevailed, which focused on connectivity of devices and analytics in the cloud. But by the end of 2016, a more robust view in which computing and analytics is deployed at the edge and in the cloud. ARC’s Chantal Polsonetti has been doing some great research on the industrial edge and will continue to do so in 2017. An emphasis on bringing higher-level, typically cloud-based functionality to the edge, as well as support of device-to-cloud integration, are primary differentiators between edge computing and today’s control and HMI environment. Edge or fog computing strategies rely on microprocessor-based devices with standard operating systems capable of hosting applications that can be executed at the edge. How much edge processing to move to network edge devices is still under discussion and varies by customer profile.
Cloud Application Platforms and Ecosystems Cloud application platforms provide a modern approach for developing and deploying software applications. The approach is gradually displacing the older client/server model, in which large complex, monolithic applications were created and run. In industrial companies, the client/server model came to dominate both the IT and the OT software spaces in recent decades. The pace of this changeover is accelerating, however, as more and more companies embrace the modern platform approach. This has also sparked a platform v. platform competition in the marketplace, with large suppliers seeking to have the dominant platform ecosystem and the broadest library of third-party applications, and with smaller suppliers trying to figure out just how they should compete in the emerging
environment.
Asset Performance Management Improving asset performance can lead to greater efficiencies in two main areas: improving production performance and offering new business models and services based on smart, connected products. One of the most promising areas for substantial change is asset performance management (APM), and it’s no surprise to find a lot of solutions focused on predictive maintenance, asset analytics, and asset management. There are opportunities to better utilize assets, coordinate with operating and business needs, improve the availability of replacement parts, and improve the efficiency of field service groups. Equipment manufacturers are rapidly adopting IIoT to offer asset health monitoring and predictive maintenance subscriptions for new sources of aftermarket revenue.
suppliers such as Ericsson, Huawei and others are developing technologies to meet emerging standards, notably NB-IoT and LTE-M, for efficiently connecting things rather than people on cellular networks. Furthermore, the ramp-up in speed and performance that goes with the next evolution (commercial roll-out anticipated in the 2020 timeframe) of the cellular story, 5G, brings with it increased relevance for IIoT. The extremely low latency of one millisecond (versus about 25 ms for 4G) makes 5G viable for critical industrial applications – such as cloud robotics – involving control rather than just monitoring.
IIoT in the Oil & Gas Industry At ARC we’re always asked about use cases for IIoT, and we’ve been collecting many examples across many industry segments and publishing these on our Industrial IoT/Industrie 4.0 Viewpoints blog.
Meanwhile, in the unlicensed spectrum, the two major LPWAN (Power Wide Area Network proponents, LoRa Alliance and Sigfox, offer technology for connecting low-cost, battery-operated sensors over long distances. Singapore is set to see the first Sigfox deployment in Asia this year, and the network is expected to play a useful role in the context of the country’s Smart Nation initiative.
ARC analysts Tim Shea and Peter Reynolds have written many posts that feature specific examples in the oil and gas sector, and we expect that this activity will only increase in 2017, as companies gain experience in using IIoT to transform various aspects of their business.
Just the Beginning A host of large software and automation suppliers to industrial companies have developed real products and services to offer their customers. Global service providers and system integrators have built IIoT practices and focused on digitization.
For instance, recent ARC Advisory Group research indicates that investment in oilfield operations management systems (OOMS) can provide significant operational value and ROI. We forecast more robust demand from applications that can leverage the power of IIoT-enabled solutions such as advanced analytics and simulation tools to help lower costs and boost production.
And many industrial segments – including oil & gas, chemicals, heavy equipment, utilities, food and beverage, aerospace & defense, and others – are primed for more and better IIoT solutions and looking for opportunities for digital transformation.
IIoT-enabled OOMS solutions that can help automate workflows and improve productivity are also expected to be in greater demand as companies struggle to increase production with fewer employees, especially those who are more experienced and possess deep domain expertise.
So expect to see a lot of IIoT/I4.0 projects get kicked off this year, but keep in mind that it’s only the beginning! *Greg Gorbach is Vice President, Information-Driven Manufacturing, and Bob Gill is General, Manager, Southeast Asia, are from ARC Advisory Group (www.arcweb.com).
Network Communications As telcos look towards to the Internet of Things as the next driver of data traffic growth, network equipment
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My best advice for everyone is to strap in... -Former Trump Adviser
How a 10-minute conversation with a machine saved $12 million by Colin Paris human-to-machine, to machine-to-machine, and we’ve given it a new name – the Internet of Things.
A call comes through on my tablet. It’s a familiar digital voice letting me know that one of GE’s power generation turbines installed at a utility customer’s power plant was experiencing a change in its operating profile.
We see the IoT in the home, when we talk to Amazon Echo’s Alexa or to Google and ask them for information or to perform a simple task. To understand those questions and requests, Alexa uses a dictionary that is gained from Wikipedia – and its capabilities are developing quickly, since much of the digital infrastructure of the consumer IoT is already in place.
This change was causing a critical part to wear more rapidly than usual. It would not necessarily cause a problem today, explains the caller, or even in the coming months. But further down the line, it could become an issue that would reduce the overall performance of the power plant and lead to more expensive repairs.
The industrial IoT is developing even quicker, despite exponentially higher technological and regulatory complexities. Industrial devices – like a power generation turbine, a jet engine, a locomotive, or an MRI machine – are beginning to be linked via a digital thread.
That voice on the other end of the line is not a human operator. It is the turbine’s Digital Twin, an exact digital replica of the physical machine built with artificial intelligence algorithms that allow it to see, think and act just like human beings do.
We’re building the knowledge domains for Digital Twins, introducing industrial terms like shroud, nozzle, blade and spallation (that engineers might associate with a jet engine, for example).
In my ten- minute conversation with this Digital Twin, we figure out a solution that would save $12 million for the customer with a simple adjustment in how the turbine operates. The drop-off in performance and higher repair costs will be avoided thanks to a few simple changes the Twin itself recommended based on its assessment of historical data, other turbines in this fleet, and its deep knowledge of the physical stress on the turbine in question.
As the digital industrial dictionary grows, conversations with industrial Digital Twins will be like those with Alexa, but the economic, societal and financial stakes of this back and forth will be much higher. Recently, Gartner, one of the world’s leading information technology research firms, cited the Digital Twin in its 2017 list of top 10 tech trends.
The Internet ushered in the world of connectedness on a level no one had previously imagined. Today, that connectedness has spread from human-to-human, to
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maintenance events with aircraft not only cause great stress and inconvenience for passengers because of flight delays and cancellations; they cost the global airline industry an estimated $8 billion according to a Future of Work report published by GE. Eliminating unplanned downtime is routine with the Digital Twin, which can mitigate airline costs and the inconvenience and stress caused by travel delays.
The Digital Twin will become a major pillar of the Data Economy for industry. In renewable power, the ability of digital twins on wind farms to talk with each other and to share and act upon insights about factors such as the prevailing wind direction has contributed to making wind cost competitive and helps to reduce our carbon footprint. We value the contributions of Digital Twins in the hundreds of millions of dollars. A more specific number is impossible to predict, but if a simple adjustment in a steam turbine’s operation saved a company $12M, the possibilities of what the Digital Twin
can do are endless. The Digital Twins’ impact on the industrial worker also is worth noting. From the outside, it seems as though the Digital Twin has taken the job previously done by a human. But no human spends time watching one single turbine or jet engine. Technicians are called when an asset has already broken. The Digital Twin gets ahead of the problem. This allows for the technicians to better plan their days and eliminate their own downtime. Those who don’t service machines, but work with them – techs operating the ultrasound, nurses and doctors, etc. – can focus their time on their patients, clients, and customers. Instead of eliminating jobs, the Digital Twin will enrich them by letting humans focus on personal development, new ideas and interpersonal interactions. Unlike many of their industry and enterprise precursors, the Twins are not just big data crunchers. Through their machine learning and AI capabilities, they continually learn, adapt and change even as the physical machines and their environment change. So a twin of a 20-year-old jet engine will act and think differently than a twin of a newly minted one. In health care, you often hear doctors tell you to “listen to what your body is telling you” to remain healthy and feel as good as you can. That’s what we’re now able to do in industry with Digital Twins. The Twins have given industrial machines a mind and a voice to speak their mind. We can listen to what our machines are telling us, so that our customers can receive the highest level of performance, productivity and efficiency possible. The industrial IoT is manifested through the arrival of the Digital Twin and it’s disrupting how industry will work in the future. For GE and the rest of the industrial world, this means trillions of dollars in new growth opportunities. The Digital Twin will become a major pillar of the Data Economy for industry. To date, we have only just begun to scratch the surface of the immense impact the Twin will have in years to come.
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Formal education will make you a living; self-education will make you a fortune. -Jim Rohn
Why organisations need to upgrade their IT infrastructure for IoT The Internet of Things (IoT) presents a number of challenges for enterprises and their IT planners. To make best use of the technology, it’s important that CIOs and wider management teams work with trained network and security architects to upgrade their IT infrastructures to intelligent systems that address the increased scalability, reliability and security demands of IoT. Colin McCabe, Director of Consulting, Red Hat, said, “In order to utilise IoT, organisations need the right architecture and systems in place to collate billions of data objects from millions of distinct endpoints, and cope with stringent system availability demands, particularly when using IoT for mission critical applications.” The distributed nature of IoT solutions can also present significant security challenges, as intelligent systems often rely on the Internet for connectivity or use cloud-based resources. Security
systems must therefore be extended to protect against data loss, service theft and sophisticated denial of service attacks in a scalable manner. Colin McCabe said, “Intelligent systems need cohesive authentication, authorisation and auditing capabilities to establish trust, govern access to resources, and ensure compliance with government regulations and corporate policies. They must also support strong encryption schemes to safeguard data confidentiality and protect intellectual property.” Organisations should deploy intelligent systems solutions, specifically designed to address the stringent scalability, reliability and security requirements of IoT-based systems. Best-practice solutions are based on a hierarchical model that uses standards-based protocols and components for flexibility and cost-efficiency.
3. The data centre and cloud tier that performs large-scale data computation and acts as a repository for data storage and strategic analysis. It should also provide a virtual environment for instantiating applications, storing data, and executing complex event processing, distributed computing, and business analytics functions. At this level, the system intelligently creates and adapts business rules based on historical trends.
According to Red Hat, an intelligent IoT hierarchical systems architecture includes: 1. The device level with multiple intelligent endpoints, including mobile computing devices, wearable technology, remote sensors and controls, and autonomous machines and appliances. At the device level, standards-based wired and wireless networking protocols are employed for connectivity, while standards-based data transport and messaging mechanisms are used to forward raw data and exchange control information.
Colin McCabe said, “This tiered model helps organisations take full advantage of the Internet and cloud computing for IoT. Using open and standards-based solutions delivers maximum choice and cost savings, as well as helping to accelerate deployment, optimise performance, and address the stringent scalability, reliability and security demands of IoT.”
2. The control tier, which acts as an intermediary to facilitate communications, offloads processing functions and drives action. It also analyses tactical data, executes business rules and issues control information upstream.
Analysing performance on operational motors without mechanical sensors Measuring mechanical loads typically requires load sensors that can be costly or physically inaccessible. The Fluke® 438-II Power Quality and Motor Analyser uses innovative algorithms to analyse not only three-phase power quality but also torque, efficiency, and speed to determine system performance and detect overloaded conditions, eliminating the need for motor load sensors.
The analyser also provides measurements to determine a motor’s efficiency (i.e. the conversion of electrical energy to mechanical torque) and mechanical power under operating load conditions. These measures allow maintenance engineers to determine
the motors in-service operating power compared to its rated power to determine if the motor is operating in overloaded condition or, inversely, if it is oversized for the application energy may be wasted and operating cost increased.
The 438-II is part of the Fluke 430 Series of three-phase power quality analysers that provide frontline troubleshooting and long-term trending to keep equipment running smoothly.
The Fluke 438-II simplifies the process of motor performance diagnosis by providing analysis data for both the electrical and mechanical characteristics of the motor while it is in operation. Using proprietary algorithms, the 438-II measures the three-phase current and voltage waveforms and compares them against rated specifications to calculate motor mechanical performance. The analysis is presented in simple readouts, making it easy to gauge the operating performance and determine if adjustments are needed before failures cause an operational shut down.
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When I let go of what I am, I become what I might be. - Lao Tzu
Disruptive technologies driving sustainability Disruptive technologies and digital infrastructure have the potential to solve some of the world’s most pressing risks and to transform industries. These include safeguarding the planet’s soil and water, and improving inequality and education. The 2017 report’s top findings are:
This is the main conclusions of the 2017 Global Opportunity Report, released by DNV GL, Sustainia and the United Nations Global Compact.
• Smart water technology is perceived as the biggest market opportunity. • Providing e-learning to conflict-affected areas is the second-biggest opportunity, giving business the potential to contribute to creating more peaceful societies.
The Global Opportunity Report is an opportunity and solution based response to the World Economic Forum’s Global Risk Report. It enables leaders to navigate new markets, new business opportunities and solutions.
• Rising trust in digital technologies such as blockchain[1] technology and artificial intelligence can help combat many of the global risks such as cybercrime and rising inequality.
For the 2017 edition, 5 500 leaders from within business, government and civil society across five continents provide their insights. They identify and rank 15 sustainability opportunities and in addition showcase 120 practical projects and solutions that already exist around the globe.
• Leaders agree that rising inequality is the biggest of the five risks in the report. Smart water tech uncovers new market opportunities
These range from micro grids that make cities more resilient to climate change, to bacteria that bring depleted soil back to life, to peer-to-peer trading, and inviting ethical hackers to test cyber security.
Smart water technology took first place in this year’s rankings, being deemed the most impactful and applicable of all 15 opportunities. Technology that automatically saves and reuses
water protects this scarce resource while creating sustainable options for citizens. This finding reaffirms a tendency that is present in all Global Opportunity Reports to date — addressing issues found in the SDGs, such as providing and managing access to water, can create a myriad of market opportunities for business. Lise Kingo, CEO and Executive Director of the UN Global Compact affirms: “The Sustainable Development Goals not only provide a clear path to a sustainable world which leaves nobody behind, they also outline new markets and opportunities for responsible business. The Global Opportunity Report demonstrates how companies around the world are developing and deploying innovative technologies and business models to address the needs of our planet and society to achieve the SDGs.
” It is time for all companies to figure out how their own operations, products and services can play a role in creating the world we want.” Dare to think big, digital and new combinations The report’s unequivocal take-away message is that businesses are ready to welcome cutting-edge digital technology and seize opportunities that accelerate sustainable development. For example, 38 per cent of the leaders asked in the survey stated that they are likely to grasp the opportunity of intelligent cyber security, which is driven by artificial intelligence. Simply put, blockchain is an open source digital ledger, acting like an accounting book and tracing all transactions. Everyone owns it but no one individual can make changes, which makes it tamper-proof. [1]
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Speak softly and carry a big stick; you will go far. -Theodore Roosevelt
Robot rights: at what point should an intelligent machine be considered a ‘person’? Science fiction likes to depict robots as autonomous machines, capable of making their own decisions and often expressing their own personalities. Yet we also tend to think of robots as property, and as lacking the kind of rights that we reserve for people. But if a machine can think, decide and act on its own volition, if it can be harmed or held responsible for its actions, should we stop treating it like property and start treating it more like a person with rights? What if a robot achieves true self-awareness? Should it have equal rights with us and the same protection under the law, or at least something similar? These are some of the issues being discussed by the European Parliament’s Committee on Legal Affairs. Last year it released a draft report and motion calling for a set of civil law rules on robotics regulating their manufacture, use, autonomy and impact upon society. Of the legal solutions proposed, perhaps most interesting was the suggestion of creating a legal status of “electronic persons” for the most sophisticated robots.
Approaching personhood The report acknowledged that improvements in the autonomous and cognitive abilities of robots makes them more than simple tools, and makes ordinary rules on liability, such as contractual and tort liability, insufficient for handling them. For example, the current EU directive on liability for harm by robots only covers foreseeable damage caused by manufacturing defects. In these cases, the manufacturer is responsible. However, when robots are able to learn and adapt to their environment in unpredictable ways, it’s harder for a manufacturer to foresee problems that could cause harm. The report also questions about whether or not sufficiently sophisticated robots should be regarded as natural persons, legal persons (like corporations), animals or objects. Rather than lumping them into an existing category, it proposes that a new category of “electronic person” is more appropriate. The report does not advocate immediate legislative action, though. Instead it proposes that legislation be updated if robots become more complex; if and when they develop
more behavioural sophistication. If this occurs, one recommendation is to reduce the liability of “creators” proportional to the autonomy of the robot, and that a compulsory “no-fault” liability insurance could cover the shortfall. But why go so far as to create a new category of “electronic persons”? After all, computers still have a long way to go before they match human intelligence, if they ever do. But it can be agreed that robots – or more precisely the software that controls them – is becoming increasingly complex. Autonomous (or “emergent”) machines are becoming more common. There are ongoing discussions about the legal liability for autonomous vehicles, or whether we might be able to sue robotic surgeons.
There are also other incredible successes, such as the computer that creates soundtracks to videos that are indistinguishable from natural sounds, the robot that can beat CAPTCHA, one that can create handwriting indistinguishable from human handwriting and the AI that recently beat some of the world’s best poker players.
not a physical person but is recognised as a legal subject. Legal objects, on the other hand, do not have rights or duties although they may have economic value. Assigning rights and duties to an inanimate object or software program independent of their creators may seem strange. However, with corporations we already see extensive rights and obligations given to fictitious legal entities.
Robots may eventually match human cognitive abilities and they are becoming increasingly human-like, including the ability to “feel” pain.
Perhaps the approach to robots could be similar to that of corporations? The robot (or software program), if sufficiently sophisticated or if satisfying certain requirements, could be given similar rights to a corporation. This would allow it to earn money, pay taxes, own assets and sue or be sued independently of its creators. Its creators could, like directors of corporations, have rights or duties to the robot and to others with whom the robot interacts.
If this progress continues, it may not be long before self-aware robots are not just a product of fantastic speculation. The EU report is among the first to formally consider these issues, but other countries are also engaging. Peking University’s Yueh-Hsuan Weng writes that Japan and South Korea expect us to live in a human-robot coexistence by 2030. Japan’s Ministry of Economy, Trade and Industry has created a series of robot guidelines addressing business and safety issues for next generation robots.
These are not complicated problems as long as liability rests with the manufacturers. But what if manufacturers cannot be easily identified, such as if open source software is used by autonomous vehicles? Whom do you sue when there are millions of “creators” all over the world?
Electronic persons
Artificial intelligence is also starting to live up to its moniker. Alan Turing, the father of modern computing, proposed a test in which a computer is considered “intelligent” if it fools humans into believing that the computer is human by its responses to questions. Already there are machines that are getting close to passing this test.
If we did give robots some kind of legal status, what would it be? If they behaved like humans we could treat them like legal subjects rather than legal objects, or at least something in between. Legal subjects have rights and duties, and this gives them legal “personhood”. They do not have to be physical persons; a corporation is
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Robots would still have to be partly treated as legal objects since, unlike corporations, they may have physical bodies. The “electronic person” could thus be a combination of both a legal subject and a legal object. The European Parliament will vote on the resolution this month. Regardless of the result, reconsidering robots and the law is inevitable and will require complex legal, computer science and insurance research.
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FOOD MANUFACTURING
You can’t fall if you don’t climb. But there’s no joy in living your whole life on the ground. - Unknown
Robotics company is complete package for South East Asian food industry work with the customer to resolve it quite quickly.” HMPS has more than 300 machines in the field and has grown by almost 30 per cent in the past three years. It is in the process of developing other niche products including machines with Internet of Things (IoT) technology to further improve its remote servicing. The company is trialling the technology in Australia and plans to roll it out to its international clients if it proves successful. “We are developing a way in which the customer and us would be able to monitor performance and put in preventative procedures during production,” Bui (right) said.
The HMPS5000 Wraparound Case Packer was designed and built by HMPS for a South Australian food company. It is used for the packing of plastic tubs.
Packaging robots from Australia fitted with cameras to allow remote troubleshooting are helping to streamline South East Asia’s surging food and beverage industry. HMPS, based in Adelaide, South Australia, is one of the largest automation manufacturers in the country.
dual-function machine they supplied Nestlé in South Africa. The device processes sachets of food into boxes and trays simultaneously.
It designs and develops bespoke machines to fill specific industry needs, including packaging, organising, weighing and x-raying materials to ensure there are no foreign substances.
HMPS Business Development Manager Linh Bui said its base location in Adelaide made it ideally placed to service South East Asia because of time-zone similarities and geographical proximity.
HMPS machines are being been used in a number of countries in South East Asia including the Philippines, Malaysia, Indonesia and Thailand. It also has machines operating across Australia, South Africa and New Zealand.
He said the region’s rising middle-class growth and the expansion of its food and beverage industries had created demand for effective packaging systems. “We provide a whole gamut of turnkey products for packaging food and drinks,” he said.
The company won the Export Achievement Award at the 2015 Auspack Awards for their unique
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Design, prototype, final build and testing all happen at the local HMPS factory near Adelaide Airport.
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options for our products where we include a modem and camera on the machine. “As soon as we get a phone call we can review footage and identify what the problem is and where it occurred and
“For example, if you’re looking after multiple sites, you would be able to monitor the situations on your mobile or tablet while you are traveling, and make sure the machines in the factories are working how they should.” HMPS will showcase its machines in Thailand in June, at ProPak Asia 2017. ProPak is Asia’s largest processing and packaging event and this year’s show will feature more than 1200 exhibitors from more than 20 countries.
FOOD MANUFACTURING
Climbing to the top demands strength, whether it is to the top of Mount Everest or to the top of your career. -Abdul Kalam
Predictions for sustainable foods in 2017 Organic foods - global sales of organic foods are expected to continue the positive trajectory, with most growth envisaged in North America and Northern Europe. Organic food sales in the US and Canada are predicted to surpass US $50 billion for the first time this year. The market share of organic foods is also expected to approach 7-10 percent in the US, Germany, Switzerland, Denmark and neighbouring countries. With growth in organic farmland slowing, supply shortfalls are expected. Eco-labelled foods - Fairtrade will retain its position as the second largest eco-label for food products, however fragmentation will continue: more fair trade labels and standards are envisaged.
Food authenticity & traceability - Greater investment is envisaged in ingredient supply chains to provide transparency and to reduce risks of
food companies and retailers will make waste reduction pledges. Food byproducts will get greater recognition as a raw material and become a source of new products. ReGrained (USA) is an example of a sustainable food enterprise innovating using such raw materials.
food fraud and adulteration. Non-GMO labelling schemes are expected to continue to gain popularity in North America, although the GM labelling bill has been passed. Retail sales of Non-GMO Project Verified food sales are predicted to exceed $20 billion in 2017.
Green packaging - the adoption rate of sustainable materials, such as bioplastics, is expected to rise. More natural & organic food companies are likely to adopt such materials as they look to reduce their packaging impacts.
Waste impacts - as food waste rises on the sustainability agenda, more
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As will be shown in 2017 editions of the Sustainable Foods Summit (www.sustainablefoodssummit.com), other eco-labels are gaining traction in specific product categories; for instance, Rainforest Alliance for agricultural commodities, and Marine Stewardship Council for seafood. Sustainable sourcing - the market share of sustainable sourced ingredients is expected to rise. Roughly 20 percent of all coffee is now produced according to some sustainability scheme. The share of sustainable sourced tea, cocoa, vanilla and sugar is expected to increase as large companies - such as Barry Callebaut and Givaudan - make ethical commitments. Sustainability metrics - metrics are likely to become prominent in the sustainability programmes of food and ingredient companies. Whilst carbon and water footprints are still the most popular metrics, expect to see more metrics for energy, resource usage, waste, and social parameters. More natural & organic food companies are envisaged to make carbon neutral and zero waste pledges.
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.
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Environmental sustainability Social and ethical concerns Nutritional information Safety and quality Origin
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NEW PRODUCTS FOR MANUFACTURERS
There are two primary choices in they exist, or accept the responsib - Denis Waitley
Ultra low noise battery charger Backlighting added to The PB356-CML Series is a family of 13.8 Vdc and 27.6 Vdc 110W / 140W off-line battery chargers / DC uninterruptible power supplies which operate from 220/240 Vac main power. When Connected to a lead-acid battery, these units provide uninterrupted power to a DC load in the event of a mains failure.
The PB356-CML contains a switch-selectable two or three step current limited float / fast charger, externally adjustable battery charge current limiting, a battery low voltage disconnect switch / electronic circuit braker, automatic battery disconnected
mass flow and pressure instruments
/ battery fuse fail detection, optional battery float voltage temperature compensation, automatic and manual battery condition testing (BCT), four form-C alarm relays ( AC Mains Status, Rectifier Status, Battery Status and Battery Fault) and two multi function alarm / Status LED’s ( AC Mains & Rectifier Status, Battery and BCT Status).
Alicat Scientific has added backlighting as a standard feature on monochrome LCD displays for its core range of mass flow meters, mass flow controllers and pressure controllers.
It employs high efficiency switching technology, combined with low output noise which makes it suitable for powering sensitive loads such as radio equipment.
The backlighting illuminates Alicat’s full-information, menu-driven, multi-parameter LCD display screens for easy reading, regardless of lighting conditions.
In the future, the PB356-CML will also be available with a 10BaseT/100BaseTX Ethernet interface ( Option-N). This interface supports SNMP V1, XML and embedded webpage allowing the PB356-CML to be monitored remotely. All models employ natural convection cooling.
Though reliable and dependable, with low power consumption needs, monochrome LCD screen crystals lack strong contrast, meaning these screens are best read in well-lit situations.
The PB356-CML can be supplied with security enclosure and/or distribution.
on most Alicat instruments with monochrome LCD displays. Illuminated Thin-film Transistor multi-colour display and display-free instrument options remain available to suit customer preference.
With the new illuminated display, users can toggle the backlight on and off at the press of the button for easier reading and programming in darker environments. The new feature now comes standard
Welders for difficult environments Castolin Eutectic has launched two new last-generation arc welding machines (MMA). ACCUmax, the new portable power source running on high capacity lithium-ion battery, and POWERmax 4.0 at 150A, with the POWERmax 1800 alternative at 180A.
electricity. With a fully charged battery, welding jobs can be autonomously performed for up to 6 electrodes of 3.25 mm diameter and up to 18 electrodes of 2.5 mm diameter. ACCUmax is also fit for welding in electrically hazardous areas, such as in-situ boiler welding, container construction, shipbuilding.
Cable-less mobile welding on top of mountains, in difficult-access areas, in farming land or construction sites is now possible owing to AccuMax, the lightweight small MMA welding machine that does not require mains
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The fast-charging mode allows battery full charge in 30 mins, while the normal charge for maximised equipment
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autonomy needs 45 mins. In case of long-lasting welding repairs, a 2KV generator is enough and no expensive investments are needed. With reduced weight and compact size for versatile on-site handling, PowerMax 4.0 makes welding easier via an innovative resonance principle: the quick reacting characteristic curve control of the unit means the welding result is improved even with demanding manual electrodes.
The digital resonance inverter ensures an extremely stable arc, as well as reduced spatter formation. In addition, by adapting the power consumption to the network voltage, the losses (inductive and capacitive reactance effects) are reduced and the energy-efficiency improved. The Power Factor Correction enables energy savings and extended mains cables up to approx. 100 m, as well as a more flexible input voltage range.
n life: to accept conditions as bility for changing them.
NEW PRODUCTS FOR MANUFACTURERS New universal rope guide for safety and flexibility
Enerpac’s SyncHoist system enabled operators to adjust suspended loads
Positioning structural steel for the roof of Mercedes-Benz Stadium An Enerpac SyncHoist load hoisting and positioning system of a type previously proven on Australasian defence and infrastructure projects is now being used in a major US sports stadium project worth a projected $US1.4 billion (approx. $A1.868 billon, $NZ1.942 billion). The below-the-hook lifting solution for positioning of heavy loads in crane applications was deployed by Derr & Isbell Construction in Atlanta, Georgia, where the Atlanta Falcons American Football team is completing its new stadium project. Set to complete in 2017, the 30-story structure will contain roughly 20,000 tons of structural steel, a retractable roof and a 360-degree halo video board that will span five stories inside the Mercedes-Benz stadium. Working with the roof’s structural steel is very difficult, and requires precise lifting to ensure accurate placement. Additionally, the steel is extremely heavy at approximately 385,000kg (850,000 pounds), requiring a lifting solution that will not only accurately lift the steel but also safely. Solution Derr & Isbell Construction engineers on the project turned to Enerpac for a solution. Enerpac recommended using its SyncHoist System, a unique below-the-hook lifting solution used internationally on precision projects including Brisbane’s Riverwalk infrastructure project and the building of the Royal Australian Navy’s 28,000 ton Helicopter Landing Deck vessels. Using just one crane, the
SyncHoist System allows operators to easily position loads while ensuring complete safety, speed and control. To accurately lift and position the structural steel for the Mercedes-Benz stadium’s roof, the SyncHoist System employed two cylinders located between the hook and one of the two spreader beams, making the side load adjustable. The other two cylinders were located between the other spreader beam and the load, which allowed that side of the lift to be adjustable as well. This design allowed operators to completely control the load throughout the entire lift.
Konecranes is introducing to Australia and New Zealand its new lightweight and durable rope guide, for greater flexibility, reliability and safety on small or mid-sized wire rope hoists. It provides a high-quality, low-cost replacement for almost any brand of rope guide.
Konecranes’ new universal rope guide is designed to fit almost all makes and models
Wire rope hoists are used in a wide variety of industries including construction and infrastructure, mining, manufacturing and materials handling, automotive, cement, primary production, process engineering, ports, shipping and logistics.
The universal and patented design allows for a range of drum diameters with fast installation and high-value performance. Its roller wheels provide smooth transition movement, which can reduce drum wear.
performance of wire rope hoists, by guiding the rope as it extends or retracts, making sure it’s straight and not causing additional wear. They are an essential part of maintaining a long rope life,” explains Mr Williams.
“A variety of accessories, sensors or other equipment can be directly fitted on the frame, making it easy for customers to customise its use to their individual application,” said Mr Monaghan. This modular design allows for the fitting of additional features such as drum cleaning, side-pull prevention and rope measuring.
Designed to fit almost any make or model of crane, the new rope guide has a rigid construction, allowing it to withstand extreme and demanding environments, where factors like heat, wind or contaminants can wreak havoc on a less study design. “Not only is the new rope guide available at a lower cost without compromising on quality – it’s also simple to install with no specialty tools required. In most cases, just use a spanner or ratchet and in 5 minutes, it’s ready to use!” says Mr Kevin Williams, National Parts and Sales Support Manager, Konecranes Australia and New Zealand. “Rope
guides
optimise
The new rope guide will be available through Konecranes’ intuitive new parts store (store.konecranes.com), which is designed to improve inventory and lead time accuracy, as well as make it as simple as possible to find crane parts, regardless of the make or model. It provides 24/7 access to parts, inventory, manuals, lead times, prices and order history.
the
The ability to adjust the load once it is connected to the crane saves operators a significant amount of time during the lifting process. Oftentimes, larger lifting applications require the load to be set down multiple times to ensure the lift is positioned accurately. With the SyncHoist, operators can adjust the cylinders using pump-mounted manual valves. The pump also features load readings, which display the load at each SyncHoist cylinder. The SyncHoist System has been in use for the Mercedes-Benz Stadium since November 2015.
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ANALYSIS
If the burdens of day-to-day life are deleted through technology, maybe that leaves us free to think more deeply about what we do. - Google co-founder Sergey Brin
Globalisation: Isolation would cost us dearly -Klaus Desmet, Dávid Krisztián Nagy, Esteban Rossi-Hansberg Klaus Desmet
David Kriztian Nagy
Esteban Rossi-Hansberg
The process of globalisation, so lauded until recently, is under attack. Many people blame international trade and migration for the stagnation of their incomes and the lack of good job opportunities. increasing flow of goods and migrants have contributed to the decline in well-being of less-educated workers in the manufacturing regions of developed countries (e.g. Rodrik 1997, Autor et al. 2013, Borjas 2014).
Politicians’ views reflect this discontent—neither of the two candidates in the US presidential election supported expanding free trade. The winner, Donald Trump, campaigned on a platform of renegotiating NAFTA and raising tariffs on China.
Others say that the evidence is mixed and requires further scrutiny (e.g. Peri 2016). The consensus about the benefits of globalisation has floundered; it has become increasingly hard to find economists who unambiguously favour free trade and free migration.
Migration gets even more negative press. In the UK, Brexit won on the promise of regaining control over Britain’s borders. Today, the idea that migrants are unequivocally good for a country’s development has all but vanished from the political and economic debate.
The misleading short run We sharply disagree with this dismal view of globalisation. Our recent research indicates that the gains from trade and migration are tremendous and that the world stands to benefit greatly from their further liberalisation (Desmet et al. 2016).
At best, people advance arguments on why it might be beneficial to let in highly educated professionals, or to allow some students to stay after their postgraduate studies. At worst, migration elicits xenophobia and racism.
The problem with virtually all quantitative and empirical evaluations of trade and migration is their static nature. They completely ignore the dynamic gains from globalisation. As we will later discuss, these dynamic gains quantitatively dwarf any short-run costs.
The dismal view of globalisation What once sounded like the desperate cries of a few extremist commentators against the indomitable force of globalisation has now become increasingly mainstream.
The dynamic argument in favour of trade is simple – innovation requires scale, and scale requires trade.
The economics profession has been no stranger to what has perhaps become the most dangerous paradigm shift of our time.
The incentives of firms and individuals to invest effort, time, and resources
Some economists argue that the
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in generating new ways of producing valuable goods and services are intrinsically related to their ability to use the resulting knowledge repeatedly.
immigration is likewise distorted by a static, short-run view. When foreigners enter a country, they use up land and other fixed factors, and get access to public goods and services.
This replicability underlies the scale economies that form the basis of much of modern growth theory.
The result is more congestion, as fixed resources have to be shared between more people. If immigrants do not fully pay for these fixed factors and public services, the autochthonous population loses.
At no point in history have these forces been more evident than now. Ideas generate products that are replicated millions, or even billions of times in a matter of a few years, and companies can go from just a few programmers in a garage to a multi-billion dollar business in a decade. Clearly, the ability of firms to sell the goods and services they invent and improve depends on their capacity to reach their costumers cheaply and efficiently. The result is an obvious, and often tragically neglected, link between trade and growth. In a recent interview with the Financial Times, Bill Gates, founder of Microsoft, echoes this simple insight: “I wish for a week that we could shut down trade and then Boeing, Microsoft, Hollywood, pharma would resize [downsize] their R&D departments… people would go ‘Holy smokes, that was not a very good deal’.” Society’s
suspicion
towards
Even if the foreign residents are made to foot the bill, the citizens who do not own part of the fixed factors still suffer, as their marginal productivity gets eroded and their income declines. The basic economic logic of this argument is sound, but its premise is flawed – fixed factors are less fixed than they appear, and technology evolves endogenously, partly as a result of immigration. Many fixed factors, such as land, are not fully utilised. As for technology, we know that innovation flourishes in dense locations, partly because of spillovers between workers and partly because of stronger local demand. If people can move to the more productive regions of the world, those areas will become denser, spurring more future innovation and growth. Though there might be some discussion in the short run about the adequate
If you want to live a happy life, tie it to a goal, not to people or things. - Albert Einstein
skill level of immigrants, in the long run this is a secondary concern – the human capital, savings, and investment decisions of the descendants will be shaped by the country where they live. One thing is clear, measuring the static effect that immigrants have on the wages of other similarly skilled agents in the same location misses a tremendous number of effects. What if current residents move to other cities? What if they leave to the suburbs instead? What happens in neighbouring places, and in the immigrants’ regions of origin? How do the incentives to innovate in different cities and locations change?
and to forget about the big picture. In this context, such an approach is particularly perilous, as it runs the risk of shaping arguably the most important policy debate of our time.
It is hard to think about any other policy that could readily be applied at the world level for which estimated benefits are as large.
Locations within a country and across the world are linked via trade, migration, and production; when people migrate, the geographic distribution of production changes, affecting both trade flows and innovation in different locations. The static and partial equilibrium measurement and logic that treats locations as isolated islands is flawed, and will result in erroneous answers.
Quantifying the long-run gains from globalisation
In economics, it is unfortunately fairly common to focus on certain details
It is of course not enough to say that there are dynamic effects of
globalisation that are potentially important. Ultimately, to evaluate whether the dynamic gains compensate any static losses, there is a need to measure the different forces and quantify their effects.
It is hard to think about any other policy that could readily be applied at the world level for which estimated benefits are as large. Migration is uniquely powerful in generating positive effects. In economic terms, having an open-door policy is a no brainer, not because of some abstract theoretical arguments, but because the measurement of the relevant forces tells us so.
We split the world up into 64,800 grid cells of 1º by 1º (roughly speaking, 100km by 100km). Using large amounts of data, we calibrate the model and run it forward. The goal is to assess the evolution of the world economy over time and over space, under different assumptions on migration frictions and trade costs.
Turning back the clock on trade would have equally dire consequences. Increasing trade costs by 40% would lower real world output by 30% in present discounted value terms.
The results are stark. Completely lifting all migration restrictions would increase real world output by 126% in present discounted value terms.
Although globalisation might create losers in the short run, allowing the free flow of goods and people across regions and countries is still one of the best ways we know to ensure our long-run wealth and well-being.
Since such a policy may be unrealistic, consider instead a reform that liberalises migration so that 10% of the world population moves at impact. This would yield a present discounted value increase in real world output of 14%. Such a reform would cause some extra congestion in Europe and the US, implying that average welfare would increase by 9%, a smaller but still impressive figure.
If we worry about secular stagnation, there is no other policy that would be as effective in halting the productivity slowdown.
Export success Comparing October 2016 with October 2015 Exports rose $85 million to $3.9 billion. • Milk powder, butter, and cheese led the rise, up $122 million (13 percent). • Logs, wood, and wood articles rose $74 million (25 percent), led by untreated logs. • Fruit rose $42 million (40 percent), and the quantity rose 66 percent. • Meat and edible offal fell $71 million (18 percent), with falls in beef and lamb. • Of our top export destinations, only China and Japan had rises in value.
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BUSINESS NEWS
The first insight is that occupations that use computers grow faster, not slower – and there is no sign of technology causing large scale unemployment or polarisation. Erik Brynjolfsson, Director of the MIT Initiative for the Digital Economy
Fair and free trade for all Now Donald Trump has officially taken over as the 45th President of the United States, many of us Kiwis (particularly those in business) think New Zealand is well and truly Trumped. But is it really all doom and gloom for the future of our nation when it comes to dealing with America?
power - demonstrating a real support for change in the ‘greatest nation in the world’, where its current approach is a decided move away from New Zealand’s policy that more free trade is needed if we’re to be a prosperous country. So what is the right tactic to pursue in the quest for economic success and a happy gainfully employed nation? It’s a question that has led to a split in opinion the world over, particularly in the US and the UK - and with New Zealand’s next election looming, it’s clear our political parties will have to make their minds up quickly when it comes to what side of the fence they’re on.
One thing we can say with any certainty is there will be many outcomes affecting us - on the one hand, it’s likely our free trade ambitions will get a hit and lead to reduced access to some very big markets, on the other, it signals an opportunity for local manufacturing to respond proactively to emerging policies with our own political response, to arm local manufacturing with the scope to grow and make a bigger contribution to our economy.
No doubt, our own protectionist New Zealand past proves economic reform greatly increased our living standard and delivered positive changes to our industry. Operating in areas where we could be competitive made economic sense and kept our population employed, driving export growth globally with annual exports of $8.3 billion to the US - our third largest trading partner.
…it will all be about striking the right balance between growing a competitive economy which can continue to export successfully into the free trade space, and protecting ourselves against unfair trade…
While Trump has indicated that there might still be trade deals to be had with individual TTP countries, the general consensus is we won’t be the first to be negotiated with. It’s likely that by the time Trump gets to us, a status quo in terms of tariff policies will have been adopted and more sensitive items such as our metals trade compromised in an aim to protect America’s economy.
In the end – HERA believes it will all be about striking the right balance between growing a competitive economy which can continue to export successfully into the free trade space, and protecting ourselves against unfair trade such as dumped products and promptly matching new emerging tariff barriers with our own tariff increases.
Perhaps the most significant impact that may come our way is not the tariff increases for New Zealand trade itself, but the influx of importers to the market who’ll no doubt meet similar trade barriers and seek to sell their surpluses to anyone else that will take it – driving down product quality and reducing our own industries ability to remain cost competitive. We’ve already seen a glimpse of this in our current oversupplied steel trade where
The lay of the land through ‘Trump’ tinted glasses On the edge of our seats, we’ve watched the Trump empire come to
Comment by HERA Director Dr Wolfgang Scholz prices are at record low, and it’s likely this won’t be limited to steel imported directly, but also to fabricated steel products where overseas rivals are using low cost steel via “unequal“ pathways to import below true market value to displace otherwise competitive local products.
It’s time to prepare for negotiation From the onset, HERA has always supported New Zealand’s free trade policy - even if it challenged our local industry and forced us to be internationally viable. That’s why independent of what happens in the US, we think our industry needs to continue to strive for ongoing improvement in our competitiveness whether for export or against imports.
…with the understanding that our government upholds the principle of fair and equal trade and effectively protects local industry against any practices which undermines this… However, it has to be said that this stance has always been with the
understanding that our government upheld the principle of fair and equal trade and effectively protected local industry against any practices which undermined this - especially when we had no ability to respond ourselves. With this in mind, we believe it’s important that New Zealand reviews its trade policies so we can effectively and quickly respond to any challenges that may arise in the future. This approach should not only find support from partners who defend equal free trade – but also create a sustainable industry capable of contributing to New Zealand’s economy within the bounds of fair market practices. Of the many headline grabbing actions of the Trump administration, his trade related activities should certainly demand our industry’s full attention. After all - if policies aren’t put in place to allow us to respond quickly to any change in trading conditions, it’s our own back pocket in danger!
Where do we go from here? With the speed Trump is moving, we need to get cracking when it comes to discussing and analysing these new risks. We’d be keen to know what your thoughts are so we can take an informed industry approach, identify real threats and follow up with strong advocacy action.
Grant Simpson new GM for CHEMZ Grant Simpson has been appointed General Manager for CHEMZ, New Zealand manufacturers of a new range of chemicals
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for machinery applications with products for their and treatment in the food machinery maintenance. industry. The company Prior to this, Grant was the National Sales Manager for Weldwell NZ and also has been providing previously spent 8 years in Melbourne manufacturers for years with various ITW business units.
REAR VIEW
Cultivating digital intelligence grounded in human values is essential for our kids to become masters of technology instead of being mastered by it. Yuhyun Park, Chair, infollutionZERO Foundation
Why science and engineering need to remind students of forgotten lessons from history Muhammad H. Zaman HHMI Professor of Biomedical Engineering and International Health, Boston University Lately, there has been a lot of discussion highlighting the need for incorporating social sciences in STEM (science, technology, engineering and mathematics) disciplines in order to foster creativity, increase empathy and create a better understanding of the human condition among scientists. Unfortunately, however, all this talk hasn’t changed the reality on the ground. As a researcher and teacher in biomedical engineering, looking at the fundamental functions of the human body, I feel that we in engineering (as well as other sciences) have done a disservice to our students. We have failed to connect them to the history of science through stories of scientists. Our students, these days, have little knowledge about the giants on whose shoulders we all stand. And yet there is strong evidence that students are more likely to develop an interest in science and pursue science education when engaged through narratives that tell a story. Research also shows that such stories enable students in STEM disciplines to better understand and apply their classroom knowledge in real-world settings. Missing piece in science learning In one of my engineering classes, I discuss how fluids, such as air and blood, flow in the human body. These processes are critical to our health and well-being. As I do that, I also discuss the associated discoveries made by many leading scientists. The seminal work of scientists such as Joseph Fourier, Daniel Bernoulli and Isaac Newton has transformed our world and tremendously improved our quality of life.
However, beyond the most famous anecdote about the falling apple leading to the discovery of gravity, I find that students in my class know little about Newton’s contributions. While students in my class may have a rich understanding of the Fourier transform (a fundamental mathematical relationship that forms the basis of modern electrical engineering), they literally know nothing about who Fourier was. Research suggests that context and history play a strong role in connecting science and engineering theory with practice. But despite studies highlighting the importance of storytelling and historical case study approaches, impersonal PowerPoint presentations dominate classrooms. Historical perspectives and rich stories are missing in such presentations. Why it matters As educators, we face tremendous pressures to pack technical materials into our courses. So why should we include history in our lesson plans? First, history provides a compelling perspective on the process of scientific discovery. We have known through research that historical references can help students clear up common misconceptions about scientific topics, ranging from planetary motion to evolution.
modern engineering education is to create socially conscious engineering practitioners who have a strong sense of ethics. Following an engineering education, individuals could go on to develop medical technology for resource-constrained settings, or work on stem cells or genetic engineering. The importance of ethics in any of these areas cannot be underestimated.
Learning from history This dose of inspiration is particularly valuable for STEM students who face barriers in their academic work, either due to lack of financial resources or due to their gender or race. The stories of past scientists are a reminder to them that history is an opportunity. Not all great discoveries were made by people who were at the very top of the socioeconomic pyramid.
Case studies and history could be immensely valuable in teaching ethics. History provides strong evidence of how the environment around scientists was equally important in shaping their lives and discoveries. Lessons from history could provide insights into how to make ethical choices related to technology or engineering principles.
Connected to the process of discovery and innovation is the fundamental notion of the multidisciplinary approach. Students need to understand that this approach is not a creation of the 21st century. People have used the multidisciplinary tools of their time for hundreds of years. Johannes Gutenberg, for example, combined the flexibility of a coin punch with the mechanical strength of the wine press to invent the printing press, which created a profound global impact in disseminating knowledge.
History, heritage and a holistic view of learning
The Gutenberg Press replica. Casey Picker, CC BY-NC-ND
success and failure, we might find that the goals of retention, inspiration, access and rich engagement with the material are closer than we realize.
The goal, in the end, is not to compromise on the rigor, or to focus exclusively on history and personalities, but to make the material more accessible through story-telling and connection with our common heritage. By making students realize that they are part of a grand tradition of learning,
Looking at the story of science over centuries enables students to understand that research and discovery are continuous processes. They can then see that the laws and the equations that they use to solve problems were discovered through long and sometimes painful processes. The findings they arrive at today, in other words, are the fruits of the hard work of real people who lived in real societies and had complex lives, just like the rest of us. Second, a sense of history teaches students the all-important value of failure in science. It also highlights the persistence of the scientists who continued to push against the odds.
What do students know about Newton?
suggests that by discussing the struggles and failures of scientists, teachers are able to motivate students. Indeed, the discussion of struggles, obstacles, failures and persistence can lead to significant academic improvement of students, particularly for those who may be facing personal or financial difficulties or feeling discouraged by previous instructors and mentors.
Recent
research
Finally,
a
fundamental
goal
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HEADING
The shortest way to do many things is to do only one thing at once. -Samuel Smiles
title text
Manufacturers focused on
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