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The manufacturing output as a share of GDP has shrunk from 21% of GDP in 1994 to 12% of GDP in 2022. Unemployment has risen from 27% in 2018 to 32% in 2023. 

There are various reasons for this, from macro-economic to political. The effects on the country are dire. Unemployment leads to various social ills, from crime to helplessness to anger and depression.

One of the only ways to get out of the downward spiral is to increase the manufacturing sector in the country. Investing in the manufacturing sector will increase jobs and increase output from manufacturing. However, this can only work if the increase in output is done profitably and competitively. Manufacturers in South Africa today need to compete against China and the far east, not against expensive America and Europe. The only way for South African manufacturing companies to remain competitive is by managing the cost and reducing wastage. 

Manufacturers go to great lengths with great expenditure to find the cheapest raw materials at reliable sources. They have loads of digital supply-chain data to motivate their choices and they monitor supplier performance continuously. However, in a lot of cases, once the raw material goes into production, data gathering is done on an ad-hoc basis and wastage and efficiency as a result is managed in the same way.

To increase competitiveness and ensure long-term viability, companies need to increase their digital monitoring infrastructure within the manufacturing facility. Trying to pick up patterns using paper-based systems is difficult, or even impossible, but digital tools make it so much easier. Not having digital data and decision-making information about every step of the manufacturing process makes it difficult and tedious to identify areas of improvement. On the other hand, digital data can identify issues manufacturers did not even realize they had.

At MESA Africa, we strive to provide an environment for manufacturers to share knowledge and lessons learned with their peers and to provide access to supplier companies that can assist them in their journey to global competitiveness. 

Author: Gerhard Greeff, Divisional Manager, PM&C, Iritron (Pty) Ltd

Chair: MESA Africa | Vice Chair MESA EMEA