The increasing cost of labour and electricity is an increasing challenge for the manufacturing sector in South Africa.
The demand for opportunities to learn from best international practice in order to survive and keep the doors open is bigger than ever. There are, however, opportunities for improvement and learning for local manufacturers.
The world’s longest running benchmarking contest for the international manufacturing sector is now in its 28th year and, for the second year, also be open for manufacturers in South Africa.
The Factory of the Year competition was first initiated in Germany in 1992 by Kearney, a management consultancy that advises manufacturing companies around the world on competitive strategies to improve efficiencies and reduce costs.
Local support for the competition from the Department of Trade and Industry (DTI) shows that the process offers invaluable insight into the South African industrial landscape.
“Globally, manufacturing is becoming increasingly competitive, with automation and robotics transforming manufacturing processes to deliver greater efficiencies and outputs. So, achieving world-class excellence is a priority for any manufacturing concern,” says Igor Hulak, partner at Kearney.
South Africa’s manufacturing sector is facing unprecedented challenges. In the early 1990s, the country’s manufacturing sector contributed 22% to its GDP, while today, its contribution has declined to only 2%. Factories face the challenges of increased labour and electricity costs, while the consumer market has slowed, and global players compete against local pricing.
With its economic challenges and growth pressures, achieving global excellence in South Africa becomes even more important explains Hulak. “We believe that Factory of the Year has a crucial role to play in helping South African companies to understand and analyse their strengths and weaknesses, against global benchmarks, as well as improve their efficiencies and outputs, ensuring that they are not left behind by the Fourth Industrial Revolution.”
He adds that a key incentive for entering the competition is that, following the assessment process, factories will receive feedback against global benchmarks about where they can achieve greater efficiencies, and where their drawbacks lie. “This feedback from is invaluable in helping companies to work towards these benchmarks and continue to target excellence in the years to come.”
“Factory of the Year is much more than a competition, it is bringing about consciousness of future manufacturing in South Africa, trends and examples of Industry 4.0 solutions that work,” says Ilse Karg, chief director of future industrial production technologies at the DTI.
The event is further supported by the Manufacturing Circle, the Manufacturing Indaba and the Council for Scientific and Industrial Research (CSIR).
Entrants should visit the website, www.safactoryoftheyear.co.za, to download the questionnaire. Due to a number of requests from the industry and the time required to complete the questionnaire that includes production statistics and other metrics, the entry date for the Factory of the Year competition has been extended to 31 March 2020.
The questionnaire covers six categories: customer satisfaction, quality, value creation, economics, agility, and innovation.
Once a factory makes it onto the shortlist, a Factory of the Year representative will conduct a site visit to verify the information provided, observe how the factory is working, and identify possible improvement areas. They take these results to a jury, made up of members of the DTI, CSIR, Manufacturing Circle and Manufacturing Indaba. The 2020 winners will be announced at the Indaba in June.
While it is clear from the GDP contribution of South Africa’s manufacturing sector that there is room for improvement in this sector, Saunders says that there are some standout pockets of excellence in the South African context.
“These star performers are focusing on moving to digital and driving efficiency, and it is these that we want to find and award in Factory of the Year,” he says. “We’re looking forward to celebrating excellence in South African manufacturing for a second year running – and also to continuing to help those facing economic headwinds to overcome obstacles and identify necessary improvements to support their global competitiveness in 2020.”