As the likes of advanced robotics, machine learning, 3D printing, connected sensors and augmented reality transform the traditional manufacturing industry, some tantalising new opportunities emerge for local manufacturers.
Recent research from Capgemini Consulting* predicts that so-called ‘Smart Factories’ have the potential to add between $500 billion and $1,5 trillion to the annual global economy, within the next 5 years.
These benefits will be achieved through radical improvements in automation, optimisation and digitisation within the manufacturing sector – as new factories come alive with networks of intelligent sensors, motors, machines and tools. Smart Factories allow for the easier integration of eco-friendly manufacturing methods, green energy, smart grid technology, and server-less Cloud Computing.
For South Africa’s roughly 3500 manufacturing companies – some large and diversified, others smaller and more specialised – Smart Factories pave the way for many new opportunities.
Perhaps the most immediate of these is the opportunity to access new international markets – suddenly brought within reach, via digitised value chains and clear visibility into shipping and logistics.
We’re now entering a manufacturing era where the world is fluid and borderless. Everyday South African consumers can purchase Internationally produced ready-mix with the same ease as local cement, for instance. With every manufacturer now competing on a global stage, it becomes crucial to take advantage of the latest and greatest in digital technology.
By embracing Smart Factories and Smart Logistics, local manufacturers can quickly globalise their operations, breaking into new international markets and finding new routes to market. With scalable, Cloud-based digital platforms, and the use of connected sensors, it becomes possible to take orders and execute the delivery of goods, to any corner of the world.
For example, a local manufacturer that specialises in parts for the locally-produced BMW 3-series, could develop a digital, global value chain to supply these parts to other BMW plants in Europe (or indeed anywhere else in the world). Using GPS tracking, and connected sensors that record shocks, heat, humidity and other environmental forces, manufacturers can get real-time insights into their deliveries, understanding how to create new efficiencies and improve their logistics.
With a reputation for producing components of excellent quality, and with a relatively cost-effective labour base, SA manufacturers have a golden opportunity to combine manual labour and human intelligence, with algorithm-driven Smart Factory principles.
Three key areas
But to grab these opportunities, local manufacturers will need to commit energy and resources to bold digitisation strategies. Here, there are three key areas to address:
Re-skilling your people and reshaping the organisation… The knee-jerk reaction in South Africa is often that, because we’re a labour-driven nation, Smart Factories may not suit us. But the reality is that with a well-planned transition, and a concerted re-skilling programme, modern plants can create an increased number of higher-level jobs, while automating and digitising those at lower-levels. The very DNA of the organisation needs to shift towards one embracing learning, development, and reskilling. Over time, the processes and systems will continue to morph, until the entire outfit is reshaped for the digital era.
Powerful, scalable digital platforms… You’ll need a specialised technology partner that has the global reach and the depth of expertise to build a scalable digital platform. T-Systems South Africa, for example, already has built global enablement processes, developed in Germany (the world’s driving force behind the Industrie 4.0 movement), backed by a wealth of expertise in re-engineering industrial processes towards the Smart Factory vision. So, it is critical to have such type of partners within reach.
Impenetrable cyber-security defences… As you look to capture new digital opportunities and increasingly embrace digitised value chains, you inevitably expose yourself to greater risks of cyber-security attacks. With new attack surfaces in-play, you should invest in the technology and the partnerships that will minimise the risk of data breach, financial loss, downtime, or reputation damage.
Transitioning to Smart Factories certainly positions local manufacturers for a growing array of unfolding opportunities in the future. But, for now, it’s a case of ‘the world is our oyster’. As our local economy sees stubbornly low growth, the big opportunities now lie overseas.
By Dereshin (Dees) Pillay, Head of Manufacturing & Automotive at T-Systems South Africa