Will SA manufacturers survive the fourth industrial revolution?

Over time we have seen how mechanisation, mass production, computers and automation have greatly impacted manufacturing industries – proving time and again that nothing is more powerful than an idea whose time has come.

Now, as we teeter ever closer to Industry 4.0 – the fourth global industrial evolution that is set to be as pivotal if not more than its three predecessors put together — the most important question for South African manufacturers is whether we are ready to meet global competitors at the forefront of technology innovation.

Although its output has remained in a contractionary state, the manufacturing sector continues to be one of the country's biggest contributors to GDP growth; improving by 1.7% in November 2017 from the same month in 2016, and beating the economists' consensus of a 0.45% year-on-year growth.

This boost came largely from food and beverages, which grew 6% and contributed 1.5 percentage points of the total. Basic iron and steel, non-ferrous metal products, metal products and machinery grew 4.6% and contributed 0.8 of a percentage point.

The Ministry of Finance has touched on these advancements briefly during the 2018 budget speech, in which the need for SA “to be bold and coordinated in building sectors where we have comparative advantage and can be truly world class” was outlined.

According to the National Development Plan, South Africa hopes to double its GDP growth to 2.1% by 2020 - and to do so, we would need to maximise efforts in several key sectors including mining, agriculture, tourism, as well as manufacturing and service exports to the rest of Africa and globally.

Paying attention to Industry 4.0 The impending Industry 4.0 revolution will bring manufacturing, automation, and data exchange together with a strong emphasis on data analytics, cybersecurity and the Internet of Things to create a new world standard of Smart Factories that offer even higher production output at better quality, minimum time, and less cost.

The cumulative force of Industry 4.0 will result in increased levels of automation and digitization within the factories of the future, where machines will use self-optimisation, self-configuration and even artificial intelligence to complete complex tasks and deliver at maximum efficiency. Already some of SA’s global contenders, including its long-standing trade partner China, have expedited plans to align their manufacturing industries with innovative technologies over the next few years in order to solidify their smart factories.

According to Derick Cluley, country-head of operations for prescriptive analytics company, FICO South Africa – manufacturing in the region is currently at the cusp of marked success. “This (fourth industrial revolution) is really a perfect opportunity for South Africa to begin to level the playing field with its most important global contenders. “We have seen plenty of room for growth in this area, and believe that optimizing factory models will go a long way in reforming processes to ensure that SA not only gets more yield out of its manufacturing but is well poised to beat the technology curve,” said Cluley.

Prescriptive analytics will be key. Optimization solutions that make use of prescriptive analytics can help manufacturers in solving complex business challenges across the manufacturing lifecycle, from inventory optimization, production planning and scheduling through to shipment and distribution planning.

The challenge is that processes often involve a large number of interwoven machines, processes, and resources. Determining the best production schedule for a range of products is challenging. Paired with ever growing competitive pressure, complex supply chains, and evolving customer and compliance demands, manufacturers are under extreme pressure to plan effectively and make the ‘best’ decisions within an ever evolving list of requirements.

This is where advanced analytical optimization comes in. It allows you to accommodate unlimited amounts of data to achieve the ideal set of decisions to meet specified objectives.

Cluley explains that optimization software can crunch massive amounts of data in very short timeframes, solving for specific objectives while accounting for conflicting constraints allowing the business to make optimal decisions. Optimization tools leverage the flexible workflows needed to maintain consistently optimal operations in a constantly changing environment while driving stronger collaboration and engagement across the enterprise.

 “More than ever, today’s manufacturers are seeking ways to apply advanced analytics through the entire planning and production lifecycle to effect change at a foundational level,” Cluley said.

“Advanced mathematical algorithms do the heavy lifting of calculating complex load building specifications or supplies needed for production planning, while business experts can apply their expertise in comparing various scenarios to minimize waste and maximize profit. It is definitely a way for South Africa to catapult its productivity to desirable levels.”

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