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Monday, 29 April 2024 19:11

Digital transformation drives resilience in Africa's manufacturing sector.

By Mark Wilson, CEO, Syspro EMEA & APAC.

There's no avoiding the reality that we’re in a tough economic cycle laden with global and local uncertainty. Since 2020, the manufacturing sector has undergone a period of unprecedented change. Multiple overlapping – and largely unpredicted – macro-level shocks have combined to create a radically changed world.

A recent report from SYSPRO shows that Africa is the most affected by business instability because of economic uncertainty. It's a tough time to be a manufacturer. With very little that they can control in their external environment, it's critically important for African manufacturers to develop internal resilience to survive in an unpredictable and highly competitive economic landscape.

Understandably, for many manufacturers this includes not only cost-cutting measures internally, but also the consideration of increasing margins to customers. However, the challenge facing manufacturers is that customers are also increasingly price-sensitive and looking to reduce their own costs. By looking to shore up resilience internally, manufacturers can balance building resilience with being attuned to customer needs.  

Digital transformation is changing manufacturing

An important step in the process of developing a resilient company is embracing digitalisation and all the benefits it offers manufacturers. Resilience starts with assessing where gains can be made internally, including measures such as cost-cutting, increasing efficiency, and focusing on quality management.

What we've seen is that during the pandemic, businesses that had already started their digitalisation journeys were much better placed to pivot and adapt to a changing marketplace. Conversely, lack of innovation has been shown to stifle competitiveness. This highlights the importance of being enabled with digital technology and embracing digital solutions and automation. Manufacturers who have embarked on a digital transformation journey are seeing improved efficiency and productivity, and greater competitiveness.

Embedding digitalisation throughout the organisation leverages recent advances in technology to improve quality, equipment efficiency and reliability for a seamless manufacturing process. Process digitalisation also enables data-led decision-making. Using innovative technologies such as Artificial Intelligence (AI) and Industrial Internet of Things (IIoT) devices throughout the manufacturing process and supply chain provides a wealth of data for manufacturers to interrogate, to understand not only where the opportunities lie to boost efficiency, but also in identifying new market and product opportunities.

Technology enables internal resilience

For manufacturers to find a competitive edge, they must have a company-wide view of operations. AI-enabled technologies facilitate greater communication between departments, while AI-driven analytics provide valuable insights into operational performance, identifying areas for improvement that enable continuous process enhancement.

Data analytics capabilities enable manufacturers to identify and gain valuable insights into their product lines, keep track of market segments and industry trends, and identify customer preferences. And when manufacturers can track inventory, production and sales in real time, predictive analytics also helps manufacturers forecast market shifts, pinpoint customer tastes or flag areas where a new opportunity could be seized based on regional or seasonal shifts. This enables manufacturers to more accurately forecast demand, manage inventory and align their supply chain to take maximum advantage of market movements, all of which helps them maintain a customer focus.

Taking to the cloud

Cloud ERP Software-as-a-Service (SaaS) democratises access to essential resources like computing power, data storage, scalability, and crucially, it boosts affordability because it eliminates the need for expensive on-site hardware and the infrastructure and manpower to manage and maintain it.

Introducing cloud-based ERP fosters a collaborative environment by breaking down silos and enabling cross-functional teams to access and share real-time information effortlessly. This promotes synergy across departments, enhances decision-making processes, and accelerates time-to-market for new products or innovations.

It equips manufacturers with the ability to harness big data in real-time across their business operations, providing agility and invaluable insights into market movements. This heightened efficiency enables manufacturers to swiftly adapt to shifting consumer habits and optimise inventory management practices.

Tighter financial management also allows manufacturers to better manage risk. The scalability of cloud-based ERP empowers companies to flexibly adjust to changing workloads, ensuring optimal resource utilisation and operational performance. Subscription-based pricing models further offer manufacturers the flexibility to scale up or down in response to market demands, providing price transparency to effectively manage budgets and maintain fiscal discipline. All of these elements combine to reinforce financial resilience for manufacturers.

Building from within

With ERP systems offering manufacturers the business-wide insights and analytics needed to drive data-led decision, business longevity and resilience can be built from within to reinforce sustainability. A modern ERP system can offer manufacturers a much clearer real-time view across the business, with real-time data, visual tools and analytics.

The added advantage is that this holistic view across the business can highlight opportunities for growth. Wherever manufacturers can 'bake in' resilience internally, this provides a much-needed buffer against external uncertainties.