EXPORT RECOVERY SERIES | SECTOR UPDATE | MANUFACTURING
‘Thinking the unthinkable – Managing the looming cliffs, above and below ….’
Much of the discussion on our last webinar, on the state of New Zealand’s Manufacturing sector during the C19 era, focused on-shoring vs offshoring parts of your supply chain and focusing on the right channels to today’s demand, without ‘pivoting until you are bent over…’
The outtakes from the discussion with our excellent Industry Panelists:
‘We have the ingredients to make cake, but are making pikelets’. The metaphor of the today went to Todd Graydon when the Panel was discussing long term planning – Blunt sees the potential to make their products in New Zealand as they are a New Zealand company, and it ties to Blunt’s story – but ‘we have to be smarter on innovation and working collectively and with Government….’
Simon Thomas – ‘managing the unknowns was the hardest part of the last 3 months, but in our business, with the diversity in product and channel, we kept motoring along. Diversification was key – this crisis showed us where we were weak, and where we were strong.’
WIll Radford had a different take as a start up – ‘it has been an interesting ride, success comes with its own fears’. Demand surged as his company is in the ‘home-crafting’ space, and customers were stuck inside and wanted to colour-in things, a lot. Will had to make some tough calls on moving their limited stock around – some customers were winners, and some were losers. ‘Align decisions to your longer term strategy and roll with it’.
On the access to the online marketplaces – Amazon DC’s are getting better, and easing restrictions on access, in the US and elsewhere.
‘Hedge with Plan B’. The most dangerous number in business is 1 – 1 channel, 1 market, 1 supplier… Are we rethinking where we are making our products? Todd Graydon – ‘there is a shift to look at where things are manufactured, South east Asia, South America are possibilities now over China.’
Onshoring vs Offshoring? Paul Cook – ‘it is not about asking if China is right for us – we could be in Vietnam and something goes wrong – it’s not about moving production to another country, but having a second manufacturing location to protect against risk.’
Success is a double edged sword. What problems come with success? Paul Cook – ‘with the jump in sales, look to 3rd party manufacturers, divert responsibility, this provides security without the capex outlay when there’s a question mark around the sustainability of the demand surge’.
How to keep planning when you don’t know how long the sales growth will last? Will Radford – ‘we had a 400% increase in sales over the last 3 months – we bought the right people in to grow capability, not spending a large amount of capex, but sensible increase in capacity with the right machinery.’
Protectionism is here to stay. But as Todd Graydon noted, it was already here, always has been. Things just got a bit more complicated.
Globalisation vs anti-globalisation. Paul Cook – ‘the debate ebbs and flows, the reality is that parts for everything you can imagine are coming in from all over the world, crossing ocean after ocean’.
All the Export Recovery Series Webinars from our series are available to watch here, alongside contact details of all our panelists, and the key outtakes and resources from each.
The Export Recovery Series team would like to acknowledge the invaluable contributions of our friends at Kea New Zealand and the Ministry of Foreign Affairs and Trade, for helping to make these webinars possible. Thank you.