INTERNATIONAL MANUFACTURING STRATEGY SURVEY IN NEW ZEALAND, 2005
Abstract for a paper to be submitted for the EUROMOT 2006 Conference at Aston Business School, Sept. 2006

By

Tom Batley, University of Otago Business School
POBox 56, Dunedin, New Zealand
tbatley@business.otago.ac.nz
corresponding author

Richard Greatbanks, University of Otago Business School

Andre Everett, University of Otago Business School


Possible Tracks for the Paper –
1. Technology Strategy
2. Innovation and New Product Development










Abstract
New Zealand was invited to join in the International Manufacturing Strategy Survey (IMSS – IV) for the first time in 2005, along with 23 other countries throughout the world. Three researchers at the University of Otago Business School were responsible for collecting and collating data from 30 metal manufacturing companies throughout New Zealand with a standard questionnaire, coordinated from Italy. The results enabled the researchers to gain an understanding of how NZ manufacturing firms made strategic decisions to enable them to compete more effectively. The results also provided a comparison of strategic decision making in NZ metal manufacturing firms with other countries throughout the world.
The questionnaire was directed at Operations Managers in metal manufacturing companies of all kinds and it was 12 pages long. Initially few managers were willing to spend their time answering all the questions without a lot of persuasion. The researchers then had to spend time in each company getting to know the operations and advising managers on the meaning of the questions appropriate to their companies. Several of the key unit performance figures that you might expect to find in a typical metal manufacturing firm were often not available. Indeed some of these figures were often not understood by typical operations managers. Figures such a return on investment (%ROI), return on sales (%ROS) and market share were often not available and were not used in strategic decision making.
A number of general conclusions were reached from the results regarding the NZ respondents before the international comparisons were made. Many of these were characteristics of the NZ metal manufacturing industries which had strong influences on the formation of appropriate strategies. For example, NZ has a small population of about 4 million people only and consequently most manufacturing companies are very small by international comparisons. When decisions are made about machines, equipment and appropriate technology these small companies will generally only be able to afford lower cost technologies. This makes it difficult for NZ firms to compete with larger international firms on unit costs of their products.
Many of the metal manufacturing companies approached for the survey had in the last two years decided to re-locate their manufacturing facilities, mainly in Asia, in order to lower costs and gain from cheaper labour rates. Most of these firms had decided that they could not compete effectively on the cost of standard products produced in NZ compared with the cost of products made overseas.
Many NZ firms use ingenuity to develop different products often for niche markets. Kiwi Ingenuity is well known and has resulted in many successful inventions and new products which have created new markets.
Many small NZ manufacturers are exporting successfully. Fluctuations in the $NZ exchange rate against the $US have large effects on export earnings, probably larger than most other countries. The $NZ can change in value by plus or minus 25% in less than twelve months. This has a strong influence on the value of export order prices quoted then delivered maybe six or nine months later. Profit or loss on an export order can often be a gamble.