…Honing Namibia’s manufacturers’ competitive edge with technology
By Hilary Mare
SINCE the advent of the growth at home initiative, Namibia has been pinning some of her hope for economic growth and job creation on industrialisation and with a young population, dynamic growth and rapidly improving infrastructure, Namibia has the potential to become a manufacturing powerhouse in the years to come.
In essence, secondary industries contributed 17.4 percent to GDP in 2016 for which manufacturing sector’s contribution to GDP and to total secondary industry contribution to GDP was 11.0 and 63.1 percent respectively which clearly indicates that the manufacturing sector remains one of the major sectors of the economy.
In order to harness this potential, Namibian manufacturers must boost efficiency, productivity and quality if they are to compete with low-cost producers in Asia as well as with the high-tech, tightly integrated supply chains in North America and Europe.
A new industrial revolution is rapidly transforming how and where goods are made, and the Namibian industry needs to keep up.
For example, advanced robotics and a range of innovative materials are making it cheaper and faster to produce even complex technical goods in factories across the world. Leading manufacturers are using tools such as the Internet of Things, big data, cloud computing, and artificial intelligence (AI) to improve productivity, reduce energy and resource consumption – and African companies stand a chance of getting left behind.
It is disheartening that at a time like this, a report recently released by the National Planning Commission titled ‘status of the Namibian economy’ has noted that the secondary industry declined by 7.8 percent in 2016 driven by most notably a contraction in construction sector, one of the sectors which have been the economy’s key growth drivers in recent years.
“The utility (electricity and water) sector recorded a strong growth of 7.7 percent in the first quarter of 2017, after which it declined by 1.1 and 5.5 percent in the second and third quarters of 2017 on the back of poor performance by both electricity and water subsectors. The utility sector is expected to play a significant role in the country’s industrialisation drive to support the achievement of NDP5 and Vision 2030 targets.
“Therefore, the noted weak growth performance of the sector as suggested by latest statistics does not bode well with national targets and aspirations. The weak growth especially in view of electricity sub-sector for which over 50.0 percent is imported from neighbouring countries will continue exerting pressure on the already low foreign reserves thereby affecting the import cover,” reads part of the report.
Furthermore in 2017, the manufacturing sector recorded a contraction of 2.5 percent in the first before recording slow growth of 3.1 and 0.8 percent in the second and third quarters, respectively.
During 2016, the sector registered contractions of 4.3 and 4.1 percent in the first and second quarters respectively, before accelerating to 11.9 percent in the third quarter.
The sector’s third quarter performance for 2017 is attributable to increases in real value added recorded for diamond cutting and polishing and fabricated metals which recorded 34.3 and 36.9 percent respectively. This was despite slower growths of 3.6 percent in beverages, 11.8 percent in non-metallic mineral products.
“The manufacturing sector contributed N$17.7 billion (11.0 percent) to GDP in 2016. The manufacturing sector contribution to GDP target under NDP5 is to contribute N$20.6 billion by 2021/22. However, the latest growth statistics suggests that the country appears to be some distance towards achieving that target. Therefore, the country should continue boosting manufacturing and industrialisation through the “Growth at Home” strategy if the “Growth at Home and NDP5 targets are to be realised. The achievement of these targets will place the country on course towards the achievement of industrialised country status as articulated in Vision 2030,” acknowledges the report.
To stand out in a globalised market, Namibian manufacturers need to be able to compete with low cost overseas competitors. Taking control of data for better customer insight is key – it will enable manufacturers to anticipate customer demands and become more agile.
Delivering the right product, at the right time and at the right price requires manufacturers to take total control of their product development process, from initial design to final production. Using specialist technology will help shorten the time-to-market for products, improve product quality, and increase customer satisfaction.
Before jumping into advanced robotics or AI, Namibia’s manufacturers should be looking at their business management systems to ensure they are fit for purpose. Many of them are using legacy systems or even heavily manual processes, rather than integrated enterprise applications. A robust business management solution can be a real game changer, helping manufacturers meet the evolving challenges of today’s business world.
According to a recent Forrester report, manufacturers can realise up to 218 percent return on investment (ROI) within four months by implementing effective business management solutions. The report also found that, as well as receiving significant ROI within a short amount of time, manufacturing organisations reported strong improvements in: financial management; purchasing; sale management; inventory management; and customer service.
Business management solutions enable manufacturers to meet the challenges of today’s business world, helping them to accelerate collaboration and reporting, providing real-time insight into costs and operational performance, and providing information for smarter and faster business decisions. This, in turn, allows them to enhance efficiency, diminish costs, and increase sales and profitability.
Technological business management systems enable a company to optimise the end-to-end manufacturing process – including production planning, project management, process scheduling, compliance, and mobile supply chain management, while reducing overall total manufacturing costs.
Removing the heavy-lifting and mundane tasks that slow down productivity, stifle flexibility and inhibit growth can transform an organisation into a world-class player. Improved visibility between the front- and the back-office will lead to better insight and improved decision making across key company operations.
Technological solutions take the complexity out of running a manufacturing business, simplifying operations to allow enterprises to grow faster and stay agile. With minimal IT investment and resources, companies can enjoy rich, integrated functionality to support all core business processes. And they’re easy to adapt to fit unique processes, roles and preferences.
Automated solutions and consistent processes lead to time and cost savings, easier collaboration and faster outcomes. Integrated reporting allows regular and real-time operational insights, enabling better, quicker business decisions. The right solution will allow African manufacturing companies to consistently deliver and take advantage of new commercial opportunities.
The efficient, streamlined processes that stem from the right business management solutions enable improved productivity and profitability – and accelerated growth.
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