A new insights paper from Tātaki Auckland Unlimited reveals how small manufacturers can embrace digital technologies without breaking the bank or risking disruption to their processes.
Manufacturing remains a cornerstone of Tāmaki Makaurau Auckland’s economy, contributing more than $11 billion to the region’s GDP and employing approximately 85,000 people.
Despite this significant economic footprint, New Zealand’s manufacturing sector faces persistent productivity challenges compared with other advanced economies.
A pioneering initiative called Digital Manufacturing Light aims to change this by helping small and medium-sized enterprises (SMEs) in the manufacturing sector take their first steps toward digital transformation.
This month, Tātaki Auckland Unlimited (the region’s economic development and cultural agency delivering on behalf of Auckland Council) is releasing an insights paper that introduces the Digital Manufacturing Light concept and shares findings from a successful pilot programme.
The Digital Manufacturing Light pilot, which began in April 2022, was led by the University of Auckland in collaboration with Tātaki Auckland Unlimited.
Around 20 Auckland-based organisations participated in the pilot, which included workshops and trial deployments of digital solutions.
The Digital Manufacturing Light concept draws inspiration from the United Kingdom’s ‘Digital Manufacturing on a Shoestring’ programme developed by the Institute for Manufacturing (IfM) at the University of Cambridge, and is being developed in collaboration with IfM and partners across Australia and New Zealand.
It follows similar principles but has been adjusted to suit the New Zealand business environment.
This approach is particularly relevant for New Zealand’s manufacturing sector, which is predominantly composed of small businesses.
Of the country’s 24,000 manufacturing businesses, only 1.6 per cent employ more than 100 people, and 74 per cent generate annual sales of less than $1.5 million. For these smaller operations, traditional approaches to digital transformation often seem out of reach due to cost and complexity.
Professor Xun Xu, director of the Laboratory for Industry 4.0 Smart Manufacturing Systems (LISMS), says: “Recent research suggests that New Zealand lags at least 10 years behind many OECD countries in adopting digital technologies in manufacturing“.
“The Digital Manufacturing Light programme aims to close this gap by making digital transformation accessible and practical for smaller manufacturers.”
The insights paper outlines the expected outcomes of scaling the Digital Manufacturing Light concept into a national programme:
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Increased production efficiency – enhancing manufacturing processes through digital solutions to produce more with the same or fewer resources
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Lower business costs – achieving significant cost reductions through improved operational efficiencies and resource management
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Improved product and process design – implementing digital tools that enhance design capabilities and innovation
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Higher business turnover – generating increased revenue streams through digital transformation initiatives
Ultimately, the concept leads to greater overall productivity, combining efficiency improvements, cost reductions and innovation to achieve substantial productivity gains.
The insights paper serves not only as a guide for manufacturing SMEs looking to implement digital solutions but also as an advocacy tool to promote the benefits of this approach among stakeholders in both government and industry.
A pragmatic approach to productivity
For Dr Jan Polzer, lead researcher of the pilot at the University of Auckland, adds, “As Industry 4.0 continues to transform manufacturing globally, initiatives like Digital Manufacturing Light may help ensure that New Zealand’s manufacturing sector remains competitive in an increasingly digital world.”
“New Zealand’s productivity figures tell a concerning story,” Polzer notes. “We’re falling behind our international counterparts, and in manufacturing that gap is particularly pronounced. Digital transformation isn’t just a nice-to-have – it’s essential for our economic future. Australian manufacturers are already making big strides in implementing the Shoestring concept.”
Polzer believes the Digital Manufacturing Light methodology offers a pragmatic path forward. “What makes this approach so powerful is its accessibility. We’re not asking companies to invest millions in enterprise-wide systems or to reinvent their processes. We’re showing them how to take small, strategic steps that deliver immediate value.”
The insights paper reveals that participating companies typically saw productivity improvements of 5 to 12 per cent from their first digital solution. “These aren’t marginal gains,” says Polzer. “When you’re operating on thin margins, as many of our manufacturers are, improvements of this magnitude can mean the difference between struggling and thriving.”
To download the insights paper, please visit:
https://industry.aucklandnz.com/techakl/research-and-projects/digital-manufacturing-light-insights-paper