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Recent key developments in MAKE│NZ
We’ve got a packed line up for you today folks!
To kick things off we have two different surveys for you – one from us here at MAKE│NZ and one from Dirk Pons & Kt Lee at the University of Canterbury.
Our survey is taking a look at current wage rates in the industry. We’d love to get some feedback – anonymously of course – on what you’re currently offering to some of your assembly, production, and fabrication staff. Once we get the results in we’ll be sharing some findings next week, so if you want to find out what the industry currently looks like make sure to share your information with us. The larger amount of data, the more accurate our findings! So to help with that please follow THIS LINK and fill out the survey.
For the next survey, Dirk Pons and Kt Lee from the University of Canterbury have approached us- Kt is researching manufacturing lean-quality-safety and needs all the responses she can get. Again, the more information we get the better our data, so if you could spare a moment and go to THIS SURVEY I’m sure the UC team will be very grateful.
We’ve also had the Tania Brixton from the University of Centerbury reach out let us know about upcoming student projects. They’re working to connect masters students with manufacturers to tackle business information systems, with the students especially focused on :
-Business workflows and process optimisation
-CRM data analytics and dynamic dashboard creation
-Market research and solution development for forecasting tools
If this is something you might be interested in, don’t hesitate to contact Tania Brixton tania.gaskin@canterbury.ac.nz
And for some exciting news- we’ll be holding our next Production Managers Meeting in conjunction with The University of Canterbury. Most of you have been (or will be) working with a graduate engineer, most likely from the University of Canterbury. Did you ever ask yourself what these engineers actually learn and what they’re being taught in their studies? Do you know about all the cool activities taking place outside of their formal studies, for example in the student-led Professional Clubs?
Here’s your chance! The Department of Mechanical Engineering at UC has kindly offered to host a meeting where we will meet current staff (academics and technicians), but also – and most importantly – current students, including those from Professional Clubs: UC Motorsports (Formula Student racing), UC Robotics, UC Biomed, or UC Aerospace. You’ll find details on all of these here. There will be lots of opportunities to talk to students about their passions. Moreover, be prepared to answer questions from students about what life is really like on the shop floor.
If you haven’t gotten an invitation via email make sure to reach out to the team!
Recent key developments in New Zealand
•Over the weekend, I had a chat with someone who is overseeing the operations of a large chain of nationwide service providers in the automotive industry. One of his tasks is to decide which local outlets to invest more in, and which to disinvest from. To do that, you need to have access to data on KPIs like turnover and profit for each local branch. And he is really struggling to get that information in full, and in time.
His experience is, unfortunately, still very typical. It comes back to the fundamental insight that whoever exerts control over data and information is holding power. The power to refuse or delay access to that data, or ‘modify’ it. In the example above, information was often provided with a rider claiming that the underlying data can’t be trusted because of X, Y or Z. That may actually be a valid concern but just points to poor systems of data capture.
The flipside of the above are the powerful advantages of everyone involved having access to relevant information and the (digital) data it is based on being automatically captured and processed in real time. In some industries the systems and processes required for that are still poorly developed. In manufacturing, we have the big advantage of that no longer being the case. With Industry 4.0, the technology (sensors) and systems and processes for automatic data capture in real time on the shop floor are becoming more accessible all the time. It is still true that, especially in larger operations with complex manufacturing processes, implementing automatic data capture end-to-end can be a challenge. We have seen several examples of that locally just recently. But this is not a question of all-or-nothing. Even if you put in place automatic data capture in real time for only some of your manufacturing processes, you will still be better off. The old saying of “You can’t improve what you don’t measure” still applies.
•Oh, green shoots wh’re art thee?! 2025 was supposed to be the year when we are going to ‘turn the corner’ and the economy getting a move on again, including for manufacturers. Is it?
When we look for information about current economic development in manufacturing, there are two sources we can turn to – the monthly ANZ Business Outlook Survey, and the monthly BNZ – BusinessNZ Performance of Manufacturing Index [PMI].
Looking at the ANZ data first, and starting with actuals, we can see that – apart from agriculture – the trend has turned to negative again after recent increases:
Comparing survey results for manufacturing across a range of KPIs with those from other sectors:
The net balance represents the difference between the percentage of businesses reporting positive expectations and the percentage reporting negative expectations for a specific indicator.
When it comes to manufacturers participating in the ANZ Survey reporting on what their biggest problems are, we can see a clear trend recently of growing concerns about low turnover and rising competition:
And, finally, recent trends in the PMI, which point in the same direction, dropping again recently after a rise early in the year:
A conversation yesterday with the local director for commercial and institutional banking from one of the major banks wasn’t exactly encouraging, either. They are still seeing a lot of their customers operating in a ‘holding pattern’.
Green shoots there will be at some stage. Just don’t expect them to be bamboo …
Recent key developments in the World
Last week we talked about France’s initiative to stimulate their economy – Now well under way and showing some results. As we also reported two weeks ago, industrial output – and employment in manufacturing – in the UK has been flat-lining for a number of years now, in spite of some initiatives in the recent past to strengthen the UK’s industrial base. Now the Labour government is having another go: On June 23, it published a 160-page plan, The UK’s Modern Industrial Strategy 2025.
The plan contains a large number of initiatives combined into four themes:
- Ease, speed, and long-term stability for business
- Supporting the UK’s city regions and clusters
- Supporting our frontier industries
- [Government] Creating an enduring partnership with business.
By way of background, the UK government has identified eight sectors – the IS-8 – that it judges have the highest potential for economic growth. They are: Advanced Manufacturing, the Creative Industries, Life Sciences, Clean Energy, Defence, Digital and Technology Businesses, Financial Services, and Professional Services. As before, we’ll focus here on initiatives related to skills development.
Under (1), one of the major initiatives is Enhance Skills and Accelerate Access to Talent. Part of the underlying problem definition is that “Over the last 15 years, we have seen falls in participation in adult further education and employer investment in training per worker. We have also seen a decline in participation in apprenticeships with numbers falling by almost a fifth between 2016/17 and 2023/24, while 10% of businesses report at least one skills shortage vacancy.”
Among the measures under this heading are the following Initiatives:
- Government will ensure there are sufficient courses to support an additional 65,000 16–19-year-olds in England by 2028-29, including providing key pathways into priority occupations in the IS-8 (£400m in 2025-26)
- Government will continue to roll out shorter duration and foundation apprenticeships to give more people the opportunity to learn and earn in IS-8 sectors from August 2025. This will include introducing short courses in England, funded through the Growth and Skills Levy, in areas such as digital, artificial intelligence and engineering
- From January 2027, Government will launch the Lifelong Learning Entitlement, which will enable individuals to learn, upskill and retrain across their working lives. The first modular courses for approval will support progression into the IS-8
- Government will provide specific support for skills critical to the IS-8, including an engineering package – recognising that engineering skills are at the heart of several of the IS-8. We will provide investment of over £100 million over three years to support engineering skills in England.
Under (3) – Advanced Manufacturing, one of the six proposed initiatives is “Build the sector’s skills base through wider reforms to the skills system in England and by launching a new upskilling and reskilling programme specific to Advanced Manufacturing businesses, which will address the need for short courses for the workforce.” No further details, including on funding, have been provided at this stage.
The reference to declining apprenticeship numbers above is interesting. In 2017, the UK government introduced a ‘train or pay’ apprenticeship levy system, with the declared aim to further increase apprenticeship numbers that had already gone up significantly in 2010/11. Unfortunately, what happened in response to the levy was exactly the opposite:
By the way, the share of apprenticeship starts in 2023/24 for Engineering and Manufacturing Technologies was 14.4%. The picture is even worse when we look at apprenticeship completions:
Other trends include a significant shift towards higher-level apprenticeships (Levels 4 & 5):
A detailed critical review of the levy scheme introduced in 2017 can be found here:
The original scheme underwent a number of modifications and has just been replaced with the Growth and Skills Levy mentioned above last month. The new scheme doesn’t appear to be fundamentally different to the one it replaces, so it will be interesting to see what impact all the new measures listed above will have. The French have set a benchmark – at least in sheer numbers of additional apprenticeships started – that will be a challenge to match (see last week’s edition).
By the way – why do we keep throwing numbers at you? Because so much of the public debate these days (or always?) is dominated by the views and perceptions of individuals. We suggest that to come up with viable improvements in whatever area, you have to start with the facts – and numbers are a good way to express facts. You find that boring? Let us know!
There can be no doubt that the amount of spending on military globally is rising rapidly, even accounting for inflation:
And recent increases are just the thin edge of the wedge. For example, if all European NATO countries are to raise their military expenditure to 3.5% of GDP, as they pledged to do a t the recent NATO summit, for most of them that would mean doubling their current spend. Not to mention the EU’s ReArm Europe Plan/Readiness 2030 that proposes to raise €800 billion of additional military expenditure.
However, unlike in the USA or the Russian Federation, the existing manufacturing infrastructure in Europe dedicated to supplying the military is far from able to absorb the projected increase in demand. No surprise, then, that a number of companies in Germany’s struggling automotive industries have set their sights on realigning part of their operations to military supply chains – companies like Volkswagen, Bosch, Continental or ZF.
Any manufacturer considering doing the same – pivot towards becoming part of military supply chains – may wish to consider emerging trends in military technology. Recent and current military campaigns in the Near East (Middle East) and the Ukraine have shown that ‘quantity is the new quality’. Attacks using large numbers of comparatively cheap weapon systems will ultimately overcome highly sophisticated and expensive defence systems. Not to mention the time – possibly in the near future – when AI-controlled drone swarms become a reality. We’re not quite there yet, with a lack of training data being one of the challenges, but probably close, given recent progress, as mentioned in a recent newsletter on Edge AI, for example, and the amount of resources thrown at the problem.
And last, we talked about the problems the Volkswagen Group is facing in China in one of our earlier editions. Now there is an excellent Financial Times video that looks at the topic from a wider perspective – highly recommend. There are certainly signs of the company’s leaders being “caught napping at the wheel”, with the complicated ownership structure an aggravating factor. Is any of that of interest or relevance to us …?
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