Innovation and speed the keys to going global

By Yoke Har Lee


Like it or not, New Zealand's manufacturers are faced with the harsh reality of having to go global or stay stagnant.

And in the globalised world, new products will dominate businesses.

One of the big issues for local manufacturers is how to overcome the handicap of distance from markets by producing niche products that can't be easily imitated.

Six manufacturers yesterday shared their perspective on the changes taking place in their businesses.

Their stories were similar: the world's going global and consumers have higher expectations of products and services.

The big task is how not only to produce these unique products but to make them at an efficient cost; and how to find the technology and skills to keep their companies innovative.

Jim Donavan, managing director of Deltech Communications Group, a telecommunications company, highlighted the short life span of the company's products that characterise today's business.

"Some 70 per cent of our sales are from products two years old," he said, adding that in the future 90 per cent of products sold would be those less than 18 months old.

Noel Robinson, chairman of Robinson Industries, a fabricated metal manufacturing company, touched on the challenge of increasing automation and finding ways to make products quickly.

Factory floors, he said, were no longer assembly lines but had to be flexible and adaptable, leading to the importance of flow manufacturing.

For some, the advent of electronic commerce would significantly alter distribution and marketing structures. But for others like Maxwell Winches, a leading world supplier of anchoring equipment, being close to the customer was still vital.

Steve Corbett, a partner with Deloitte Touche Consulting Group, brought home one key point: the question for the New Zealand manufacturing sector was no longer should it go global but where it should go.

Because of globalisation, companies were moving beyond marketing products - their emphasis had shifted to creating networks in research, manufacturing and distribution, he said.

Globalisation also demanded that companies move across borders, seeking the best ways to integrate their supply chains or to produce and distribute their products; as well as build globally competitive structures.

Global manufacturing companies' wealth was also increasingly dictated by how fast they executed the sale of their products or services and how flexible and adaptable they were in meeting customers' requirements.

Having access to cheap or free capital was also becoming important for global companies. "When you are running a global company, you are going to have to look at payback for your capital, free capital or access to it," Mr Corbett said.