NZ manufacturers & retailers must embrace technology faster

New Zealand manufacturers that evolve fast to new technologies, leveraging sensors, data analytics, additive manufacturing and virtual reality will be able to compete well on the world stage, a major study into New Zealand technology says.

NZTech’s landmark Digital Nation report released today says globally, digital manufacturing is in its infancy which presents New Zealand with an enormous opportunity. NZTech chief executive Graeme Muller says.

“The export success of the tech sector’s high-tech manufacturers is testament to the ability of New Zealand manufacturers to leverage advanced technology to take on the world. Global additive manufacturing is expected to reach US$20.4 billion by 2019 which is nothing compared with a global manufacturing market worth approximately US$11 trillion,” Muller says.

“Over the past decades manufacturing in New Zealand has decreased as bigger plants in lower cost countries had a competitive advantage. Now as we enter an era of digital manufacturing, design and production near to demand will be a competitive advantage.

The report says tech sector growth helps in many ways, especially income generation, cost reductions, new or better product and new production techniques. Numerous technological developments are transforming the manufacturing and retail sectors.  In manufacturing developments are occurring in materials science, 3D printing, sensors and robotics.

Retail is being revolutionised by the growth of online sales and mobility.  Both manufacturing and retail are being shaped by the Internet of Things, where parts and machines are connected to the Internet. Improved internet connectivity is benefiting both the retail and manufacturing sectors by enabling the connection of goods, machines, suppliers and consumers to each other.

Digital technologies are starting to disrupt the manufacturing sector as they have the media, finance and other sectors. New computing capabilities and increasing data, along with advances in automation, robotics, additive technology, artificial intelligence and human-machine interfaces are unleashing innovations that are disrupting manufacturing, the report says.

While some manufacturers are recognising the opportunities – and threats – of digitisation, few are responding in a comprehensive, coordinated way.  Manufacturing generates more data than any other sector of the economy yet few companies are harnessing it. Manufacturing companies that invest in technology to capture and understand the data they generate will uncover valuable insights to drive profits and growth.

Muller says the retail sector would respond quite strongly to a tech productivity rise, through the benefits of the latest sensor technology, improved inventory management, better connectivity to retail services and more effective connections between retailers and customers.

“Sensor technology and associated information systems for retail are becoming more advanced. Sensors are being embedded into products, which are then connected to each other via information networks, creating new business models, improving processes and reducing costs and risks.

“In-store experiences and store profitability can be improved through sensors that monitor and deliver new services to shoppers – the emergence of so-called ‘smart stores’.  Sensors can be used to monitor shelf stock levels and analyse shopper traffic patterns. Technology exists for special sensors to detect where shoppers’ eyes linger, and even to react to a shopper’s attention by providing a special offer on that product in real time.

“NZIER calculated that a productivity increase in the tech sector, perhaps driven by sensors, could boost the retail sector’s GDP by as much as $200 million. Particularly impacted would be the retail centres of Auckland, Wellington and Christchurch. Consumers benefit a great deal too, with efficiency gains passed through to customers to the point where prices would fall,” Muller says.