The Automotive Industry Development Centre Eastern Cape (AIDC EC) has partnered with the Japanese International Cooperation Agency (JICA) to roll out a Kaizen implementation programme aimed at improving the competitiveness of component suppliers within the province’s automotive industry.
Kaizen is a Japanese business philosophy that focuses on gradually improving productivity by involving all employees and by making the work environment more efficient. It focuses on quality and productivity improvement (QPI).
The aim is to capacitate suppliers to access new markets, attain international benchmarks and develop new business opportunities.
AIDC EC CEO Thabo Shenxane says the Eastern Cape accounts for about half of South Africa’s light vehicle exports, and 43% of the country’s light vehicle production.
The Eastern Cape also serves as the base for 42% of the National Association of Automotive Component and Allied Manufacturers’ directory of suppliers, and four of the country’s big vehicle manufacturers, namely Volkswagen, Mercedes-Benz, Isuzu and Ford.
“We have great confidence that a Kaizen culture will have a profound impact on the future of automotive manufacturing in South Africa,” notes Shenxane.
Empirical results from Kaizen programmes at eight Tier 1 South African [component] manufacturers between 2016 and 2019, show that production more than doubled and that on-time delivery improved from 73% to 95%.
Overtime work, on average, also dropped from 13.8 hours a week to 4.6 hours a week, while lead times, on average, improved by 40%.
“The results clearly justify scaling up of the Kaizen philosophy in the automotive manufacturing sector,” says Shenxane.
“And, like JICA, we believe that South Africa can compete with India and Thailand’s automotive component industries, but we must agree on a common vision and plan for this to happen in our province.”
Shenxane says the AIDC EC will work closely with a range of stakeholders to implement the Kaizen rollout, including JICA, Toyota Wessels Institute for Manufacturing Studies (TWIMS), AIDC Gauteng, Naacam, naamsa | The Automotive Business Council, and the Department of Trade, Industry and Competition.
“The idea is to reach out to at least 120 Tier 2 and 3 component suppliers, over the next three years, in the Eastern Cape,” he notes.
SA Needs More Manufacturing
TWIMS executive director Dr Justin Barnes says fresh input is required to remedy the poor performance of South Africa’s manufacturing industry.
He says manufacturing dropped to 12% of South Africa’s economy in 2019, down from 17% in 2000 and 21% in 1990.
He adds that South Africa’s manufacturing sector employed more people in 1969 than it does today.
“If we had kept manufacturing at 1990 levels we would have employed over a million people more.’
“The sector is shedding jobs and becoming more capital intensive at a time of employment crisis.
“To achieve a high-income society, the driving force is manufacturing productivity and good jobs, whereas the economy is now welfare dependent.”
Barnes notes that the domestic auto industry has performed better than the manufacturing sector at large, increasing vehicle production from 376 000 units in 1995, to 632 000 in 2019, but that the “dark cloud is that local content has dropped”.