Manufacturing in South Africa should be a catalyst for the future growth of the gross domestic product (GDP) as it constitutes a significant portion of the economy. The manufacturing industry is a vital contributor of jobs, income and export sales.

According to the World Bank, manufacturing is the highest job multiplier of any industry. For every rand invested in manufacturing, fiscal revenue increases by 35 cents. A R1 million investment can create three extra jobs. It is imperative that South Africa harnesses the full power of its manufacturing industry.

The current challenges facing the industry include political uncertainty, increasing tariffs for water and electricity, the unstable rand and lack of complete confidence from investors. Many of these problems are due to the upcoming general elections in May 2019; after which, the future direction of the industry will be more certain.

Problems caused by an inefficient manufacturing process

Manufacturing is an important link in the value chain for many companies. If systems and processes are not optimised and made absolutely efficient, then the entire value chain becomes weaker. Proper assessment of the systems and processes must be undertaken in order to gauge what improvements need to be made.

If problems in the manufacturing process are not addressed, then a number of problems may be encountered. Firstly, there will be a reduction in productivity. Adding more processes to an already inefficient manufacturing cycle will lead to longer periods of inactivity. Likewise, introducing extra reporting processes will increase the administration time for management, making the whole process more inefficient.

Secondly, there will be a reduction in factory efficiency as the planning and acquisition of raw materials takes more time to complete. This lost time results in slower output and lost income to the company. It also means that storage space is left either empty or occupied for longer periods of time; costing the business more for inefficient use of space.

Thirdly, an inefficient manufacturing process leads to more overtime and more capital being diverted to salaries and wages. Workers will need to work after hours in order to meet production targets. Overtime can drastically increase labour costs for the company.

Lastly, it leads to an increase in wastage. The longer it takes to identify problem areas of the manufacturing process, the more faulty products may need to be discarded. This increases the wastage and unrecoverable products that end up as scrap.

Establishing an efficient production line

There are a few key considerations to address when trying to set up an efficient manufacturing process. Firstly, the management team and executive board need to be committed and dedicated to the business. The company should be prepared for change and there needs to be support from the top down.

Secondly, the entire staff network needs to be dedicated to the new process. They need to be well-informed of the changes and held to the standard required to meet the target. Next, the budget needs to carefully planned and adhered to at all stages.

Finally, there needs to be continuous improvement in the strategy and a sustainability plan must be implemented to ensure that the process runs smoothly going forward. Without improvement, there can be no growth. Once a manufacturing process becomes efficient, it results in reduced costs across the entire value chain.

Other benefits include improved staff morale and loyalty, increased customer satisfaction, timely delivery of products, improvements in procurements, increased profitability and better logistics.

It is vital that South Africa supports its manufacturing industry as it a key contributor to the economy and a provider of jobs for citizens. Running an efficient manufacturing process is not that difficult once the challenges are tackled and overcome. The benefits of an efficient manufacturing industry are felt by the whole country.

Formex Industries is a metal forming and assembly company that supplies a variety of complex products to the local automotive industry and export market. The company is based in the Nelson Mandela Bay metropole, South Africa’s foremost region for automotive manufacturing and export.

Formex specialises in producing components for the catalytic converter industry, as well as metal components and assemblies for the various vehicles. Formex aims to become one of the foremost suppliers for the South African automotive industry by 2035, aligning itself with the South African Automotive Masterplan (SAAM) which takes effect in 2020.

Formex is a Level 2 B-BBEE supplier with over 80% black ownership, of which more than 40% are black women. The company is owned by Deneb Investments Limited – a subsidiary of Hosken Consolidated Investments Limited (HCI) – one of South Africa’s biggest true B-BBEE companies listed on the Johannesburg Stock Exchange (JSE).

Follow us on FacebookInstagramLinkedIn and Google+ for the latest industry news and features relating to our products and services.

Share This