LMAC Insight

Make New Zealand Great


There’s a growing recognition amongst economists and industry leaders that the off-shore manufacturing model has peaked and is in decline. A new generation of consumers wants customised products with shorter lead times and they’re also more socially and environmentally aware about their purchasing decisions.

As a result, reshoring — defined as “the practice of transferring a business operation that was moved overseas back to the country from which it was originally relocated” — is all the rage these days.

A recent article in Industry Week highlighted this trend towards reshoring in the United States. Since manufacturing employment figures in the US reached record lows in 2010, over 750,000 jobs have been reshored.  The companies committed to reshoring cited quality and cost as the main factors for bringing jobs back home. The ‘Trump factor’, including tariffs and the ongoing trade war with China, has also forced companies to rethink their manufacturing processes. Trump’s ‘Make America Great Again’ mantra and his persona may rub some people the wrong way but his policies have had a largely positive impact on US manufacturing jobs.

As a realist, I understand there will always be a place for off-shore manufacturing in low wage economies, but it doesn’t mean I have to like it. And I don’t. For too long now, organisations in the western world have relied upon offshoring the bulk of their manufacturing operations to China and Southeast Asia to prop up their margins. The fact is, this strategy is not, and never has been, a long-term sustainable approach.

Remember when ‘Made in China’ meant cheap? Not so much these days. Jeremy Clarkson, the wonderfully opinionated former host of Top Gear put it best when he said, “There’s no such thing as cheap and cheerful, there’s only cheap and rubbish”. We’re not just buying cheap rubbish anymore, we’re buying expensive rubbish, and most of it ends up in landfill.

That’s not the only negative impact on the environment from offshoring manufacturing jobs. Generally speaking, low wage economies are way behind when it comes to renewable energy sources and pollution control regulations. China, despite its recent high profile push into electric vehicles and renewable energy, is still pumping out ozone-eating CFC emissions when they think the rest of the world isn’t looking. That’s particularly bad news for New Zealanders living with a large hole in the ozone above our heads and the highest rate of skin cancer in the world.

Reshoring might cost companies in the short term but it’s a no-brainer in the long run. For those with the insight and the balls to do it, reshoring could be a winning strategy. It won’t be easy and it certainly won’t be a case of doing things the way we used to. Companies will have to rethink and relearn how they do things. Investment in technology, innovation and automation will be required, and, perhaps more importantly, faith in the fact that consumers are crying out for quality products, that are ethically and environmentally produced right here in New Zealand.

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Complete the questions below to test your data maturity.

Over the next two years, which three of the 14 key performance indicators do you most want to improve on as a business?

Make a note of these before you carry on reading.

The key 14 performance indicator categories:


  • Asset & equipment efficiency
  • Inventory efficiency
  • Materials efficiency
  • Utilities efficiency
  • Workforce efficiency


  • Planning & scheduling effectiveness
  • Production flexibility
  • Workforce flexibility


  • Time to market
  • Time to delivery


  • Product quality
  • Process quality
  • Safety
  • Security

Now ask yourself – what is your current performance against these three KPIs? Can you tell me how you performed in the last hour, yesterday or last week?

If you can’t answer this question for all three because you aren’t measuring the data, then the next step is clear. Figure out what data you need to enable you to measure it, and decide how you are going to collect that data.

If you can answer it historically; last week or last month – ask yourself, is this retrospective view sufficient for me to really make improvements?

If you can answer it for all three up to the minute, then it is quite possible that shopfloor intelligence isn’t a number one priority for you. Look out for parts 2 and 3 of this blog series for some more insights into how you can make the data work for you.