With the future of manufacturing still a point of concern in South Africa, multinational professional services firm Deloitte manufacturing industry leader Karthi Pillay believes that, in order to advance manufacturing in the country, better understanding of the technology used in manufactured products is needed.
“Manufacturing plants made to global best standards are today tooled with technology which is able to meet customers’ demand for personalisation and customisation,” he says, adding that consumers’ rising power and unmet needs around personalisation, customisation and co-creation are causing niche markets to proliferate.
Owing to this, as technology continues to advance exponentially, Pillay notes that barriers to market entry, commercialisation and learning are eroding.
“Also, technologies such as additive manufacturing are making it possible to cost-effectively manufacture products more quickly, in smaller and smaller batches. “On the other hand, digital technologies are narrowing the distance between manufacturer and consumer, allowing manufacturers to bypass traditional intermediaries,” he points out.
This, Pillay believes, has led leading manufacturers to build to order rather than building to stock. In this environment, intermediaries that create value by holding inventory are becoming less and less necessary. Together, these shifts have made it more difficult to create value in traditional ways.
Moreover, he identifies a trend whereby products are becoming less objects of value in their own right and more the means for accessing information and experiences.
“These trends have the capability of affecting different manufacturing sectors at different rates. To determine the speed and intensity of the coming shifts in a particular sector, companies should consider factors including the extent of regulation, product size and complexity, and the sector’s level of digitisation,” Pillay advises.
Deloitte believes that as the manufacturing landscape evolves and competitive pressure mounts – driven by the needs of demanding customers – position will matter more than ever.
Therefore, by understanding these shifts, roles and influence points, both incumbents and new entrants can equip their businesses to successfully navigate the new landscape of manufacturing.