Investing in 4IR technology makes business sense for IM&E manufacturers

By Johan du Toit, Strategic Sales Executive for SYSPRO Africa

Johan du Toit, Strategic Sales Executive for SYSPRO Africa. (Photo: Supplied)

The pace of technology change keeps accelerating, not just in the manufacturing sector, but across industry sectors globally. Machines are faster, more powerful and more sophisticated than ever, and this trend shows no signs of easing off. However, for many reasons, South African industrial equipment and machinery (IM&E) manufacturers have been slow to adopt some of the latest technology, relying instead on old models. In doing so, they run the risk of falling behind their regional and global counterparts.

In a country where manual labour is affordable and widely available, it may seem logical to stick with machinery and equipment that is driven by manual processes, even though they may already be outdated elsewhere in the world. In fact, a PwC report into South African manufacturers readiness for Industry 4.0 technology found that investment in 4IR is very low, with most businesses engaged in it investing less than R10 million in digital transformation, and 16% of respondents indicating that no investment in 4IR had been made at all. The study also found that manufacturing in South Africa is ‘selectively automated and connected’, with no manufacturers reporting to be fully automated or having plans to be fully automated within the next five years.

However, there are many benefits to introducing more advanced IM&E technology. Modern manufacturing is increasingly automated and technology-driven, and is progressively relying on the application of advanced technologies and systems. There are many capabilities that digital technologies offer to manufacturers, including the ability to increase quality, flexibility, performance, and overall competitiveness.  On the converse, outdated machinery and systems can cause business challenges such as inaccurate supply chain and inventory forecasting, disconnected legacy systems, and premature failure of machinery.

Investing in manufacturing technologies reaps benefits

Change is hard. And it’s both difficult and costly when you’re updating or upgrading machinery and processes that have been adequately completing the necessary tasks for a long time. However, being a late adopter doesn’t come with advantages that outweigh the downside of delaying adoption. By automating and speeding up the processes that would otherwise require manual inputs, manufacturers increase productivity and efficiency, which in turn reduces operating costs by saving energy, materials and expenses.

The implementation of innovative technologies can improve the way manufacturing businesses operate. These technologies can increase the efficiency of business systems and processes, streamline relationships with suppliers and customers, and increase the speed, flexibility and efficiency of production processes. Combine this with modern ERP systems that use technology such as AI to analyse the data generated from IM&E IIoT sensors and devices, and the business advantages grow.

IM&E can offer manufacturers many direct benefits in terms of increased productivity, efficiency, product quality, innovation and competitiveness, and particularly so for manufacturers who are still in the early phases of digital adoption. However, to maximise the benefits of modern IM&E technology, manufacturers need to implement ERP software that can help them manage their operations more effectively to expand knowledge integration, visibility across the entire manufacturing process and supply chain, and boost integrated knowledge through shared platforms.

Data has tremendous value for businesses

The phrase ‘data is the new oil’ has become somewhat of a cliché, but that doesn’t detract from the validity of the statement. One of the main benefits of embracing IM&E technology is that by using smart sensors, data analytics and machine learning, manufacturers can scrutinise and optimise the operation of their machines, equipment and systems in real-time. Predictive analytics can flag potential issues and the resultant predictive maintenance can avoid costly unscheduled downtime. Data analytics can also help keep manufacturers abreast of changing trends and buying patterns, helping manufacturers to adapt to changing market needs and conditions.

This is where having the right ERP system in place is invaluable. By implementing advanced ERP technologies, manufacturers can harness the power of automation to reduce wastage and costs, improving productivity and increasing communication across the business. With improved information sharing also comes greater communication between departments, reducing instances of duplicated work across the business. This means employees have more time to focus on revenue-generating tasks rather than managing daily business activities.

Data-led decision-making helps managers monitor performance, identify problems and optimise solutions using real-time data and reporting tools. An ERP system should supply end-to-end supply chain visibility, with data-led insights providing accurate price forecasting, strong financial controls and the ability to fully trace and implement warranties on goods.

IM&E manufacturers have their own unique challenges, and this is where using an ERP system that is specifically designed for IM&E manufacturing avoids unnecessary and cumbersome workarounds. IM&E ERP systems address the specific challenges in the sector, such as an integrated Management Execution System to manage scheduling work orders, track time and materials, record output, measure KPIs and more.

A fit-for-purpose ERP system will also support inbound and outbound logistics, accurately forecast inventory to avoid stock outages and unplanned downtime, and provide a full tracing and recall feature. A flexible and agile planning and scheduling capability allows for labour and machine efficiency and scheduling accuracy.

While it may feel daunting, investing in the latest technology will help South African manufacturers keep up with their customers and support growth, allowing them to seize their opportunities, and in doing so, ultimately boosting profits.

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