Staying abreast of these three trends and its influence on the manufacturing sector might help your business to march more confidently into the future.
Shifts in customer demands, the changing economics of production and distribution and the emergence of ‘smart’ products, are driving manufacturers to incorporate new strategies of creating and capturing value.
“Manufacturing used to be about making physical products. Today, however, changes in consumer demand, the nature of products, the economics of production, and the economics of the value chain have led to major shifts in the way goods are designed, produced, and sold,” says Karthi Pillay, Africa Automotive Leader.
To ensure you continue to succeed in South Africa’s manufacturing industry, you’ll need to know what to expect in the medium-term and what trends will allow you to capture additional value.
The future economy
Despite a poor economic outlook, South Africa’s manufacturing industry unexpectedly increased in output in Q2 by 1.5% year-on-year, which was more than the 1.1% decline in July and the forecast of a 0.5% decline.
Related: Experts’ visions on the future of the manufacturing industry
The biggest contributor to the manufacturing industry is basic iron and steel fabrication, non-ferrous metal product production, metal products and machinery divisions, which increased output by 11.3% year-on-year and contributed 2% to the overall South African manufacturing growth.
Manufacturing’s future outlook is improving, with the help of strengthening international demand and rising commodity prices.
To ensure your future strategies are successful, you’ll need to know what elements affect and influence the manufacturing sector. You’ll need to take advantage of the opportunities, while leaning on the strengths, avoiding the weakness and mitigate the threats were you can.
- The South African manufacturing industry is known to be relatively stable and has become highly efficient, with the ability to maximise both worker and machine productivity and profits.
- Weaknesses in the manufacturing industry include its sensitivity to the economy, which can have a crippling effect. A further weakness is that it’s a mature industry, with arguably too many heavy-hitters and not a lot of room to grow.
- Over 300 000 South African manufacturing jobs have been lost or exported to other countries since 2008. Electricity costs have risen by 170% and are predicted to continue to escalate. South Africa is also vulnerable to low-wage high-productivity nations such as China, India and Brazil, where highly-skilled individuals can do the same work for much less.
Here is a more comprehensive SWOT analysis of South Africa’s manufacturing industry.
Now that you have a more inclusive idea of the manufacturing landscape, here are the three trends that will come into power and influence the sector in the next five years:
Three trends that will shape the course of manufacturing
1. Virtual reality tools
Manufacturers are beginning to use new strategies to create and test mock-ups in the virtual world. This will enable you to simulate the design process and the assembly line before developing an actual product, reports the World Economic Forum (WEF). The product-creation phase assists your team in reducing production time and ensuring manufacturing processes deliver what you planned to create.
This trend is already gaining momentum and “is poised to accelerate as the benefits become increasingly clear, offerings, hardware and applications mature and move to the next level and manufacturers increase their digital transformation efforts on the strategic and staged path towards the realisation of Industry 4.0 and the digital transformation of manufacturing,” reports I-Scoop, digital and technological expert platform.
Case Study: At Flex, an American multinational technological manufacturer, they use augmented reality solutions for remote assistance. This allows people in locations around the world to connect in a live view and brainstorm together. For example, a China-based engineer can consult with a USA-based engineer on a technical challenge and receive feedback in real time through wearable Augmented Reality glasses.
This trend assists manufacturers in expediting the troubleshooting process along with significantly reducing travel costs.
Related: What you need to know about IoT in manufacturing
2. Connected factories
The new factory environment is being advanced by Cloud computing and smart sensors. Smart sensors can convert information into different units of measurements, communicating with multiple machines, while recording statistics and feedback and shutting down devices if a safety or performance issue arises, says WEF.
You can use Internet-of-Things functionality to track and analyse production quotas, consolidate control rooms and create models of predictive maintenance. This connectedness offers manufacturers the right data at the right time to make strategic and accurate decisions.
For example, this technology is the equivalent of a speedometer that shows how fast you’re driving in the moment versus your speed from yesterday.
Cloud computing gives your manufacturing business the ability to extract and analyse data that impacts the production line. The World Economic Forum reports that you can incorporate data from augmented and Virtual Reality using Cloud computing. Your customer feedback can now have a direct impact on your research and development, helping you to meet customer expectation, faster and more cost-effectively.
A Cloud computing solution could ultimately drive innovation in your manufacturing plant. “Although Cloud is widely recognised as a technology game changer, it’s potential for driving business innovation remains virtually untapped,” reports The Economist Intelligence Unit and IBM.
“Interestingly, while our research clearly reveals organisations intend to rely on Cloud to enhance their business capabilities, only 38% cite Cloud as a leading priority for the entire company. Rather, Cloud is still viewed by many as an IT solution, with 62% citing it as a leading priority for their IT organisations.”
3. Autopilot manufacturing
Automation is the next growing trend that will influence the future of the South African manufacturing industry. In a slow-growth environment, like the manufacturing industry is currently experiencing, productivity gains are vital, PwC reports.
Case Study: 50% of Flex’s manufacturing process are already fully-automated. This offers them a level of accuracy and productivity beyond human ability, even in an environment that is unsafe for human operators.
“Robots offer high levels of precision and their connectivity will play a key role in new digital manufacturing environments,” says Joe Gemma, president of the International Federation of Robotics. “Increasing availability enables more and more manufacturers from companies of all sizes to automate.”
The next generation of robots will be easier to programme and use, with capabilities such as voice and image recognition to re-create complex human tasks. While automation will rely further on this machinery and eliminate some of the most tedious manufacturing functions, it will also create new jobs for a re-trained workforce.
Although the global manufacturing industry will continue to grow slowly over the next few years, to ensure sustainability and profitability, businesses need productivity strategies. You can use these three growing trends to ensure your manufacturing business maintains its level of competitiveness and improves productivity into the future.
Related: How to become fast and flexible in your manufacturing processes
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