The next 6 years......
How will the manufacturing industry evolve
The globalisation of manufacturing has been a hallmark of the past 15 years. The transfer of jobs in the manufacturing sector (especially, but not only, labour-intensive activities) from developed markets to emerging markets will continue over the next decade and beyond. However in the recent 2013 Global Manufacturing Competitiveness Index, South Africa was placed 24th on the global competitiveness ranking, and is expected to move down a further position in the next five years.
The reality is that it is difficult to be globally competitive when your population size is 3.86% of China, and 4.3% of India, but as Africa we have the critical mass to compete. There absolutely are challenges to achieve this and LTS is continuously helping businesses to become more competitive and realize the full potential. We will high light some of the trends in the manufacturing industry that focusses in increasing efficiency and profitability.
Plant efficiency is critical to survival
Manufacturing plants around the world are feeling competitive pressure with escalating demand for higher quality products at a lower cost and with reasonable profit margins. The increased costs of raw materials, utilities and labour are putting pressure on manufacturers margins. In the current economical climate we have seen an increase in the demand for our services that are focussing on these particular area's as increasing efficiency now has become a priority and will remain so in the foreseeable future. Four strategies that add significant value in the process of increasing efficiency are:
- Process Control Optimisation
- Workforce Modelling
- Business Process re-engineering
- Decision Support
Process Control Optimisation
Process control optimisation will provide the answer in terms of process control performance, where are you currently, where should you be and what needs to be done to get there and close the performance gap.The focus is to eliminate variation from you manufacturing process that has a direct impact on productivity, quality and cost. Obtaining and optimising the dynamic performance of control systems can make a measurable difference in plant operation and profit. How efficient is you manufacturing process?
The analysis of complex datasets along with the evaluation of complicated, interdependent systems is necessary to understand the behaviour of systems under set conditions. There are a wide range of operations research and simulation modelling techniques available to evaluate and interpret system behaviour over time. This provides invaluable information to help identifying underlying risks, trends, unexpected constraints and realistic output performance of a modelled scenario prior to process change or the allocation of capital expenditure.
Workforce Modelling
In the past workforce related cost savings have been synonymous with broad cuts to headcount but there is an alternative. Cost savings may be gained through the reconciliation and re-alignment of the organisations workforce rather than a reduction in personnel. Over-staffing may lead to overspending, while under staffing leads to lost opportunities. The effective application of your workforce can lead to significant cost savings and operational improvements.
Studies and experience have proven that better outcomes are achieved when organisations make cuts strategically, rather than slicing a little from everywhere. It is important to identify how to realize savings, based on strategic plans, performance measures and a clear understanding of priorities and responsibilities.
Business Process re-engineering
How important is business process re-engineering for the manufacturing industry?
- The world is becoming more competitive. both internationally and domestically there is over capacity in the world because many technological improvements have resulted in less staff being n
- eeded;
- Technology will continue to make jobs obsolete;
- It is unclear if demand from emerging markets will fill up that capacity some Asian markets are already feeling strong competition form other Asian markets;
- It is unclear whether savings rates will increase it is unclear whether consumption rates will increase it is unclear how much government spending will occur due to large debt;
- In some countries population is stagnant or decreasing spending by retires in some countries will be much lower than projected housing gains will not allow for large consumption in many countries energy prices will take a larger percentage of income water shortages may increase the price of food.
Decision Support
Many companies are actively investing in new machines, technologies and expanding their business activities. Uncertainty about the impact of these changes and the risks associated with wrong decisions due to sophisticated and complicated business processes can be hard.The analysis of complex datasets along with the evaluation of complicated, interdependent systems is necessary to understand the behaviour of systems under set conditions. There are a wide range of operations research and simulation modelling techniques available to evaluate and interpret system behaviour over time. This provides invaluable information to help identifying underlying risks, trends, unexpected constraints and realistic output performance of a modelled scenario prior to process change or the allocation of capital expenditure.
Great article interesting read
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