March 2021
www.nzmanufacturer.co.nz
9 MANUFACTURING TECHNOLOGY
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Mike Shatford on the year ahead.
THE CIRCULAR ECONOMY Re-thinking how we use materials in a circular economy.
Listen to uniquely Kiwi stories contributing to New Zealand’s future
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VIEW 27 REAR Why haven’t construction companies demonstrated notable improvement?
High demand and growth puts pressure on manufacturing sector The beginning of 2021 is proving a headache for the manufacturing sector and it could be some time before the pain relief kicks in. The cost of sourcing materials, increased demand, and supply issues are some of the areas industry is grappling with, according to Helen Down, Chief Executive of the Hutt Valley Chamber of Commerce. “It’s clear supply issues are continuing to have an impact as manufacturers are unable to source their
raw materials in a timely or cost effective manner. With limitations to international travel, we are witnessing a dramatic change in customers buying habits, with people spending their money on home and recreational products. “This puts pressure on businesses who can’t keep up with demand in specific areas,” she said. “A wide range of businesses are finding it extremely time consuming to source raw materials. Some components are simply not available, and won’t be available, for many months, coupled with rapidly rising costs for materials.”
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Can you spend your way to world class? -Ian Walsh, Managing Director, Intent Group Limited I was recently reflecting on a discussion with a company that, like a few at the moment, has seen rapid growth due to increased demand for their products. They reviewed their ability to meet this demand and concluded they need to expand their facilities. This makes sense – interest rates are low, banks are keen to lend, so why not invest in new plant and equipment? Indeed, why not? “Have you optimised your current plant and equipment?” was my response – even if capital is readily available, why spend it if you can meet your needs with what you already have? In my experience many companies don’t know their true
process potential or capacity. Obvious moves such as crewing all shifts and running through breaks have not been implemented, let alone proper debottlenecking and flow improvements. These combined efforts can lead to significant increases in throughput (in many cases 2-3 times) and avoid the need for investment altogether. There’s an assumption that by buying new equipment all the problems will go away and a warm rosy glow will shine on the business – this is rarely the case. Not unless you have deeper pockets than your
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