Published on the 11/03/2026 | Written by Heather Wright

Digital manufacturing on a shoestring…

The New Zealand government is rolling out the red carpet – or at least a modest factory-adjacent welcome mat, for manufacturing SMEs with an expanded Digital Manufacturing Light program.

Offering up $475,000 a year over three years it’s being framed as a productivity booster for manufacturers, with plans for ‘at least 180 manufacturers’ to benefit – to the tune of an average annual $2,638.89 each (to give some perspective, Stats NZ says there’s only around 830 manufacturers with >50 staff).

“The program is premised on a shoestring-but-smart approach: Smaller tech, lower cost, fewer barriers.”

The University of Auckland-led program, which aims to get SME manufacturers adopting ‘practical’ digital tools to improve productivity, build workforce capability and support long-term business resilience, was first piloted in 2022 in partnership with Auckland Council.

Appropriately enough, it builds on the Digital Manufacturing on a Shoestring framework developed by a team from the University of Cambridge’s Institute for Manufacturing.

With its less than $1.5 million in funding for the entire three years, it may feel less like a bold national push and more like a polite gesture made from the loose change of the significant economic benefits the sector delivers – particularly when compared with Australian initiatives, which include a AU$28.7 million Industry Growth Program aimed at strengthening local manufacturing and supporting SMEs.

However, the program is premised on a shoestring-but-smart approach: Smaller tech, lower cost, fewer barriers, faster wins. It uses low-cost, off-the-shelf technologies and open-source software to help manufacturers integrate digital tools into existing operations without major capital investment or complex infrastructure changes. Participants in the program, which is co-funded by participating manufacturers, receive a customised assessment of their operations, guidance on selecting appropriate digital solutions and hands-on installation assistance. Training is also included to ensure factory staff can operate the new technologies effectively.

Small business and manufacturing minister Chris Penk says the program addresses a long-running barrier for manufactures who need the tools international competitors are harnessing, including automation, AI, robotics and cloud computing, to sharpen their competitive edge, but are often held back by cost or concerns about disrupting operations, especially where in-house technical expertise is limited.

A Digital Manufacturing Light Insights paper says while New Zealand has a host of inventive and energetic manufacturing companies creating top-notch products and exporting globally, they produce just over half the output of similar firms in other advanced economies of comparable size.

“Overall, productivity in New Zealand’s manufacturing sector is significantly lower than in many peer countries. In 2022, the industry’s productivity (measured as value added per hour worked) was US$102.40, compared with US$136.29 in Denmark and US$167.04 in Ireland.

“Digital transformation can help turn this around.”

Many businesses continue to operate 20-year-old – and older – machines that are mechanically functioning and, mostly, still producing high quality output but which lack the capability and business benefits offered by modern data collection, connectivity and automation.

A survey of Employers and Manufacturers Association members carried out as part of the development phase of the pilot confirmed key barriers to implementing new digital solutions were cost (identified by 61 percent of respondents), lack of time and resources (54 percent) and challenges associated with existing or legacy systems (52 percent). Those are all areas the program says it addresses with low cost, low risk, solutions that are easy to implement.

“The Digital Manufacturing Light initiative has been designed to help companies ‘dip their toe in the water’, build confidence and enhance both technology and workforce capabilities, while also addressing key barriers to adoption.

Beyond Auckland

MBIE says the new funding, which kicks in from April, will allow the program to support at least 180 manufacturers across Auckland, parts of the Waikato, Northland and the Bay of Plenty, where around 55 percent of New Zealand’s manufacturers are located.

The pilot saw the University of Auckland’s Faculty of Engineering and Design’s Laboratory for Industry 4.0 Smart Manufacturing Systems working with Auckland Council to test and adapt the Shoestring program for the Kiwi market, launching a 12-month Digital Manufacturing Light pilot in July 2025. Twelve Auckland companies took part in the pilot.

Information on the program’s pilot work says to maintain affordability Digital Manufacturing Light provides a pre-developed library of digital solutions sourced from the Shoestring program and developed locally in New Zealand. The solution kits include a detailed list of ‘affordable’ electronic components, all of which can be purchased online from major retailers, along with necessary open-source software to connect the components and create easy-to-understand dashboards. The program also offers a distributed and repeatable method for developing specific solutions, Auckland Unlimited says, and peer-to-peer assistance is promoted.

A survey of EMA members showed top digital manufacturing priorities were real-time digital tracking of internal jobs, capacity and utilisation monitoring and process monitoring (temperature and power). Digital starter solutions for those areas are already available via the Shoestring program, with each of the starter kits costing less than $2000.

Practical improvements expected from the program include more consistent machine monitoring, better visibility of bottlenecks, improved quality control and reduced reliance on manual processes. The Auckland Unlimited documentation on the pilot, is however, somewhat light on the actual benefits seen.

The document is based on two Digital Manufacturing Light pilot projects carried out with Auckland companies Spiraweld Stainless and ABB New Zealand. In Spiraweld’s case legacy machines were retrofitted to provide automation in the pipe welding process, using computer vision to measure a welding gap, a stepper motor to rotate the welding rig knob, a Raspberry Pi microcomputer as a controller and a touch screen. The hardware costs were below $1000, while development costs were around $5000. For Spiraweld, the primary benefit was the ability to weld pipes automatically, freeing the operator to perform other tasks and improving productivity.

University of Auckland Faculty of Engineering and Design Laboratory for Industry 4.0 Smart Manufacturing Systems (LISMS) professor Xan Xu says the pilot demonstrated how the university’s engineering expertise could translate international best practice into practical solutions for Kiwi SMEs.

“Most manufacturing firms are small, operating with limited capital and older machinery. Our Auckland pilot showed that accessible, low-cost digital tools can quickly improve productivity, operational visibility and product quality,” Xu says.