Hope for the Best, Plan for the Worst

October 13, 2021

Hope for the Best, Plan for the Worst

I hope that we are going to have an easy ride and an open summer with lots of fun in the sun with family and friends. I hope that we will have freedom to go where we want and see who we want. I hope that I don’t know anyone that gets very sick, or dies, from some new disease. I hope my kids can play on a jungle gym, visit their grandparents and eat ice cream from a cone. I hope Santa comes.

What I am planning for is that Delta is here to stay. That we are going to have community infection in every part of the country and that we are going to be facing a summer of high infection and huge disruption to our way of life. I am planning for a Christmas where the whole country is locked down, not because we have been instructed to during a 1pm briefing, but because the unvaccinated are sick and our health system is on its knees, which will impact our way of life more than we have ever experienced.

We can’t get rid of it, so now we have to get through it.

I am not wanting to drive fear or make a political statement, I am only wanting to look at what could impact our businesses and present some practical solutions to help get through and ensure we all come out the other side in the strongest possible position.

Our role in your future.

Fero’s purpose is to support local manufacturing and ensure that New Zealand manufactures can operate and compete on the world stage. In order to live to this, we must look forward and see what we can do to help our industry get through.

I expect that we are going to face an impact on our capacity, as an industry and country, to maintain our productivity. We have done a fantastic job until now, but it has mostly been theoretical. The next few months are going to see us face Covid-19 in the same way as every other country has had to.

The good news is we are facing this period of infection with the vaccine as a tool to minimise the impact. There is no doubt that this will shorten the period that we have to get through and will see us coming out the other side with less societal impact and faster than if we did not have it.

The other good news is, we will see a return to normal life by the end of this summer and, 12 months from now, will be preparing for the end of 2022 in a much more normal way. Soon Covid will be a thing of the past. Until then we need to get through the best that we can.

What have we done in the last few months?

  • We have increased our stock holding by about 40% since April in preparation for disruption.
  • We have worked with our customers to understand better the future demand on our resources.
  • We have increased our capacity, and now we are wanting to get ahead of production in order to buffer against any productivity reduction that we see impacting us or our customers.

We have found some additional solutions with some customers.

One customer has filled a warehouse with 8 weeks of All stock that they need for their production. This buffer is to protect against any supply chain issues and already has allowed them to continue manufacturing whilst some of their suppliers struggle to deliver.

Another customer has provided us with orders for all their expected demand out to January. We have produced this and are confident that no matter what happens we will be able to dispatch to their required dates for the next 4 months. We also understand that under the model, there will still be some unforeseen demand, but we have capacity for this and it is much easier to achieve.

Our recommendation to you.

I strongly recommend getting orders placed with us as far out as possible. Please communicate to us that you would like us to make this and to deliver to the future dates. It helps us to ensure that we have product ready to go a long time in advance of when it is needed and it does not impact your cash flow at all.

I encourage anyone that is wanting to plan for the worst to get in touch and look at what Fero can do to help you ensure that your supply chain is as strong as possible and that if you have demand and capacity, you will be able to continue to supply you customers and maintain your productivity.

This is a call to all to protect our capacity, productivity and business continuity and ensure that you have orders in to see you at least until the new year. We are working frantically to get as far ahead as possible and ensure that we have finished product that we will be able to send.

We will get through this and those of us that have planned and taken steps to do so and allow our businesses to continue will come out the strongest. Please get in touch to discuss how we can help to ensure continuity and the best outcome for your recovery.

I hope our health system can cope and that our vaccine rates mean we will be able to live without restrictions, however if this is not to be, we want to be ready for it.

March 10, 2019

Stop the rollercoaster, we feel sick.

What a rollercoaster ride the last few months have been with our new Labour government. We’ve seen quite a bit of upheaval and discussion. Discussion is good, but it can also be unsettling and creates nervousness in the marketplace. Businesses like to know what’s around the corner as it helps them plan for the future. If doubt sets in then plans go out the window and economic development risks being put on the backburner. We’ve seen several new policies and changes come into effect that have impacted the manufacturing industry.

 

Fero - labour relations

 

Employment Relations in NZ
Perhaps the most significant change of the past few months, even years, is to employment relations. We’ve seen unprecedented industrial actions from several unions and industries, not least teachers and nurses. There are no signs that this will ease, in fact we can predict that it will increase as unions become increasingly empowered through Multi Employer Collective Agreements.

 

The increasing NZ Minimum Wage
The hard facts are that this government will increase the minimum wage by 28% within its first term, and so what about its second term? We only have to look across the Tasman to Australia to see the devastating effects of increased costs and increased legislation on the manufacturing industry.

 

Such a high leap in the minimum wage not only causes increases through all wage levels, but brings with it an inevitable compacting of wage levels from top to bottom. That leaves the more highly skilled and experienced worker feeling that there is less value placed on their abilities versus the non-skilled worker who is earning only a little less.

 

The reality for Fero
At Fero, we are significantly affected by government changes to labour relations and minimum wages. It places undue pressure on our ability to compete in the global market. This aside the changes proposed by government have forced us to think differently and a little more ‘outside the box’.

 

Luckily we saw the writing on the wall a couple of years ago and we put a great deal of effort into finding ways to absorb and mitigate these skyrocketing costs.

 

“The next 14 months alone is going to see a 15% wage increase for us. For many businesses that could mean the beginning of the end, but we’re confident we can overcome it through innovation, a unique offering and experience”
Sam Fulton, MD Fero

 

The future for Fero
We are working very hard to improve our sourcing and supply chain to remove cost through better purchasing and more effective partnerships with suppliers and or customers. Our engineering and purchasing teams have been focusing on each of our accounts and looking at ways to optimise their production and not pass on cost increases.

 

We are very pleased with our decision to establish a production plant in Samoa. This has allowed us to maintain a lot of our prices into the market, whilst at the same time providing a future for the business and some much needed jobs in Samoa. We’re proud of our involvement in Samoa and we believe strongly that it will make a significant difference to our future.

 

We have been very impressed with the speed at which our plant has been able to deliver to market and the ongoing productivity and quality that we are able to enjoy. It is a perfect synergy with our plant in NZ and together we are proud to be able to support and deliver to our international customer base.

 

Fero Samoa Production

September 22, 2014

Believing in Hi Tech Manufacturing.

Making NZ attractive to the best global talentI was recently going through old emails and came across a video of the late Sir Paul Callaghan speaking about what we can do to grow a better NZ for future generations, and what common myths there are out there that are holding us back from this. I watched it again, twice!

I felt that, even though this is about 3 years old, it is still very relevant to us today and even more so after such a tumultuous election. With all the hype and distraction from people more focused on trying to propound conspiracy theory and their own agendas, than what is working for NZ and what needs working on, we missed a lot of rhetoric about what we need to do to make a better NZ. Hopefully the ‘cusp of something great’ that John Key describes will have a lot to do with the development of niche technology manufacturing, of which NZ is so good at and which is so good for NZ, and the retention of good talent to our shores.

With all that we hear from the media these days on the importance of different industry sectors to our economy, it is very important that we understand the contribution that hi- tech manufacturing makes to the economy and the huge potential there is in this sector.

“Manufacturing is our biggest industry and probably the only one that can be grown sustainably and significantly.”

We are a country of innovators, inventors and entrepreneurs. We punch well above our weight on a world scale in all that we do. Hi Tech Manufacturing fits the New Zealand culture, it is what we have always been good at and what will drive our economy forward, making this the place that everyone wants to live in.

Attracting talent to New Zealand must be a focus of our industry. The flow of talent off shore has been stemmed but we must keep attracting more. If New Zealand’s mission statement is ‘to be a place that talent wants to live’ then the manufacturing sector must lead this.

attracting talent to NZAt Fero, we are always looking to attract talent. We know that we are only as good as our team. In the last 18 months we have gone through significant growth and as we grow our team to meet this demand, we are always asking how do we get the most talented people on board?
Recently we have relaunched our website and have put our core beliefs out there for all to see. More than just a mission statement, our core beliefs are why we get out of bed in the morning, what makes us feel that we are working towards a higher purpose than just producing high quality, cost effective wiring technology solutions. We feel we are here because ‘ we believe that sustainable local manufacture should thrive and NZ manufacturers should be leaders on the world stage’

A lot of the top technology manufacturers in NZ are customers of Fero. We want more, and to do that we have to work with our customers to help get them there. We need to attract talent to our company so that we can deliver the service and products that our customers need to be ‘leaders on the world stage’.

We know this is going to create a better New Zealand, which is great because this is where we live and play.
We know this is going to create a more prosperous New Zealand. More jobs is not enough, we need better jobs, and Hi Tech Manufacturing provides this

Callaghan lays down a challenge to us: To be leaders in growing New Zealand and making it a better place to live, more sustainably. Hi Tech Manufacturing has the ability to lead NZ and contribute above all others in making New Zealand the place where we all want to live.

Watch the video