This year’s Manufacturing Indaba painted a picture of a dynamic industry powering South Africa into a more prosperous future. As Trade, Industry, and Competition Minister Ebrahim Patel noted in his opening keynote, innovation and cooperation between companies in the value chain are key to competitiveness. 

That’s especially true as the manufacturing sector navigates uncertain times. As we emerge from the pandemic, the July unrest and the KZN floods, supply chains have yet to return to normal and some components and commodities remain in short supply. High inflation, disrupted power and water supplies, and low consumer confidence are also impacting manufacturing enterprises. 

Yet it’s not all bad news. Among the three major trends we see unfolding in the manufacturing sector, there are great opportunities for manufacturers to grow. 

Winning in the green economy 

Most manufacturers accept that climate change is a reality and that they need to attune themselves to environmental, social and governance (ESG) concerns if they are to be global players. The growing pressure to embrace sustainability and become greener means that manufacturers will need to relook many of their processes and practices. As they seek to reduce emissions, transition to circular business models and report more accurately on ESG metrics, manufacturers need modern business systems that give them a multi-faceted, real-time view of the business. 

Driving regional trade

Africa makes up 15% of the global population but only accounts for 2.3% of exports. The African Continental Free Trade Area (AfCFTA) will pave the way to more tightly integrated regional value chains and higher levels of cross-border trade. The free trade arena can thrive by designing policies and monitoring systems through complete visibility, tracking, insights, and centralised communication.

Adapting to change with innovative technology

Digital transformation has emerged as an imperative, enabling manufacturers to automate repetitive, low value activities and empowering them with powerful analytic capabilities, AI and Machine Learning. Tomorrow’s leaders are moving fast to implement digital tools that give them the visibility, flexibility, and efficiency to manage finances, operations, and people.

To navigate this new world, manufacturers are looking to modern business solutions to deliver:

• Improved production efficiencies,
• Smooth supply chain processes and supplier relationships,
• The ability to adapt quickly to changing costs and prices, and
• Clear inventory oversight at all times.

Forward-thinking manufacturers are looking to move beyond outdated legacy systems and monolithic ERP towards more flexible modular solutions that allow them to monitor the supply chain in real-time and collaborate seamlessly across the enterprise and value chain. These next-generation business management systems offer insights in real-time, overcoming the data siloes and redundant processes of legacy technology. Inefficiencies and errors are reduced, which lowers unnecessary costs and delays.

Accelerating structural reforms and supporting SMBs to drive economic growth 

The South African manufacturing industry is struggling under the weight of unstable electricity supply, inadequate digital communication infrastructure, unsustainable water supply, inefficient freight transport, and a lack of interest from investors. With this as the current economic backdrop, the Presidency and National Treasury introduced Operation Vulundlela, a joint initiative to accelerate structural reforms in South Africa. This economic reconstruction and recovery plan is a light at the end of the tunnel for South African SMEs. It will help them modernise, transform, and unlock investment to increase growth and competitiveness.

Small and medium businesses (SMBs), including those in the manufacturing sector, are the backbone of the global economy and are crucial to economic growth and job creation. With sustainable business models and information technology, manufacturing SMBs can make agile and informed decisions and futureproof their businesses. The right business solution can help any manufacturer to unlock smart manufacturing that reduces costs and increases competitiveness.

By Pragasen Moodley, Director - Key Account Management, Sage South Africa