According to Stats SA, the recession in South Africa has ended with the economy growing by 2.2 percent in the third quarter of 2018. Manufacturing was the main driver, growing by 7.5%, it’s largest jump since 2016, followed by agriculture (6.5%) and transport (5.7%). Hein Pretorius, CEO of technology strategy firm Onpro Consulting, says heavy investment in Industry 4.0 by local manufacturers can help drive South Africa’s return to investment grade.
What is Industry 4.0?
Industry 4.0 refers to using current and emerging technologies to create intelligent, automated industrial operations. The technologies include mobile computing and communications, cloud computing, artificial intelligence, advanced analytics and data science, IoT, sensor technology, video analytics, and more.
In the future, Industry 4.0 will see smart factories emerge where interconnected, AI-managed machines, processes and people will cooperate seamlessly to produce quality products faster, more efficiently and at a lower cost than humanly possible. Externally, smart factories up and down the supply chain will coordinate intelligently to bring only goods that are in demand to market with minimal waste of time and materials.
Says Pretorius: “The smart supply chain is still evolving but companies should begin implementing Industry 4.0 as soon as possible. By investing now, they’ll be far ahead when their competitors finally realise they need to gear up or be left behind.”
Industry 4.0 gained prominence with German projects aimed at allowing first-world countries to compete with third-world countries were cheap labour meant goods could be manufactured at very low costs. While some countries, like the US, are investing heavily in Industry 4.0, others are holding back. According to Pretorius, there’s a window of opportunity for South Africa to pull ahead of these regions. “By becoming an Industry 4.0 oriented country that increases its output through technology, SA could become the go-to investment destination for industry investors,” he says.
The right approach
Most important, these technologies are building blocks that won’t deliver benefits in isolation. They require human ingenuity to combined them effectively to suit each business case. Only then can the right synergies, operational scalability and sustainable efficiencies be achieved. “Many companies start by acquiring individual components to solve discrete problems based on cheapest price,” says Pretorius. “Inevitably, they end up with isolated solutions that can’t be integrated, don’t benefit the manufacturing process as a whole, and deliver limited results to the organisation. So it’s important to start with a comprehensive strategy.”
The right skills
The required strategic systems design skills are almost never available inside the manufacturer’s organisation or from vendors of the discreet building blocks. Also, vendors may overlook shortcomings in their design in favour of making a sale. Companies should engage a brand-agnostic technology strategist from business case to solution architecture phase, and to project manage the solution to completion. “An impartial third party will make decisions based on corporate goals and future integration scenarios for the best ROI,” advises Pretorius. “Otherwise, it’s a waste of time and money.”
Africa’s Industry 4.0 capital?
South Africa can make a strong comeback to investment grade, driven by its manufacturing sector, but it must take the initiative. Companies must not only invest in Industry 4.0 to compete locally, in Africa and globally, but also implement their plan intelligently to gain a lasting competitive advantage. Onpro invites interested parties to contact its offices on +27 11 881 5855 or firstname.lastname@example.org for more information.