The future of manufacturing lies in digital transformation

Mike Vincent, Deloitte Consulting C&IP Leader and Africa Industrial Products & Services Leader
Mike Vincent, Deloitte Consulting C&IP Leader and Africa Industrial Products & Services Leader
Mike Vincent, Deloitte Consulting C&IP Leader and Africa Industrial Products & Services Leader
Mike Vincent, Deloitte Consulting C&IP Leader and Africa Industrial Products & Services Leader

The South African manufacturing industry has come under significant pressure in the last decade with the traditional manufacturing industry currently in the throes of a digital transformation that is accelerated by the exponential growth of smart technologies.

The adoption and impact of Industry 4.0 in South Africa has been relatively low at a foundation stage in the manufacturing industry overall, with some sector differences.

The concept of digitizing everything is becoming a reality. Automation, artificial intelligence, IoT, machine learning and other advanced technologies can quickly capture and analyze a wealth of data that gives us previously unimaginable amounts and types of information to work from.

The business challenge becomes moving to the next phase which is about changing how we think, train and work using data to create value from the findings obtained through advanced technologies.

Emerging economies have more constraints than the developed world when it comes to new technology adoption, however, this is a topic that is increasingly being acknowledged and discussed by industry leaders and policy makers. The biggest challenges on the African continent remain connectivity and accessibility.

Progress in these will drive broader adoption of Industry 4.0 or IoT applications by businesses and consumers. More innovation still needs to happen first, before widespread adoption will occur.

According to the Deloitte Industry 4.0: Are you ready? survey, which polled 1,600 C-level executives across 19 countries, coupled with select interviews, organizations that expand their use of Industry 4.0 technologies to include suppliers, customers, workers, partners and others in their ecosystems can find more transformative benefits.

One example is having data about how a customer uses a product or service being fed back into the design process, enabling an organization to develop a better product that more effectively suits customers’ needs, pinpointing when and how a product breaks to troubleshoot more effectively and predictively or to develop wholly new products based on previously unseen customer behavior.

Africa has an advantage over developed markets having already shown an aptitude to adopt new technologies and change because it is not weighed down by infrastructure legacy issues. Numerous opportunities exist to use connected networks across various industries for competitive advantage.

There is also a huge potential for collaboration between government, industries and research institutions. However, more education and information about the topic of advanced manufacturing and its benefits for policy makers as well as industry leaders is needed.

Overall, Industry 4.0 offers great opportunities for South African manufacturers to lead the way and create completely new business models. A move of value propositions from products to services and usage of smart technology could also make a real impact on a socio-economic level.

It is key for manufacturers to plug into a networked economy and develop completely new offerings that enable faster, simpler service to customers.

Through the Internet of Things (IoT) there is an opportunity to help manufacturers in South Africa and the rest of the continent be more globally competitive, streamline operations and increase productivity. IoT can lead to a positive outlook on the future of manufacturing in Africa on condition that appropriate investments are made.

Innovative new sensory technology in the IoT space allows manufacturing companies to better monitor and analyse the manufacturing process. This includes how the end user interacts with the products. IoT’s new data processing technologies and availability of analytical forecasting models monitor the entire manufacturing value chain – from concept to completion and beyond.

By adding innovative IoT sensors in the operation, connectivity is improved at all levels. The business becomes inherently smarter.

A potential negative impact of Industry 4.0 that has been much discussed, is potentially reduced employment within the manufacturing sector as increasing automation reduces the need for manual labour. The flip side opportunity however is that when scale and low-cost wages are no longer large sources of competitive advantage to global players, this allows local manufacturers to reclaim dominance in local markets.

Deloitte’s Industry 4.0 survey revealed that, overall, executives around the world are in the early stages of readying their organizations to harness the full potential of Industry 4.0. While the Fourth Industrial Revolution has the power to change many things across a broad spectrum—work, operations, society—one thing is certain: It’s here, and executives need to be ready.

It is clear that the old way of doing things isn’t enough anymore, and those who make the most impact will be the ones who embrace all facets of Industry 4.0 and all the opportunities it will bring.

By Mike Vincent, Deloitte Consulting C&IP Leader and Africa Industrial Products & Services Leader