Future African businesses will need to scale up their operations along digital solutions if they are to survive the ongoing Fourth Industrial Revolution (4IR) disruption, experts have warned.
The manufacturing sector, which has for long relied on labour intensive processes to meet production targets, will need to restructure and adopt emerging technologies to withstand business shocks, including those caused by Covid-19.
To attain sustainability in the post pandemic period, technological solutions will be crucial in helping reduce costs, improve product quality while meeting customer expectations faster and more efficiently.
During a recent webinar on the future of manufacturing, Syspro Africa Head of Solutions and Engineering Deirdre Fryer revealed that a research conducted in 2019 on the state of manufacturing in Africa by Syspro and Strathmore University found that only 10.3 percent of manufacturing companies in Kenya, for instance, are fully automated while the rest are semi-automated or still fully manual.
The report indicates that many manufacturing plants in the continent are yet to acknowledge the power of digital solutions, in a period where every sector is undergoing rapid change to align businesses to the demands of the current digital transformation wave.
Ms Fryer noted that while many businesses are fuelled by competition and driven by adoption of new and disruptive forms of technology, many organisations are still using traditional technologies and seem not to understand the future of the industry.
“For a long time, we have been talking about digital transformation. In some business circles it was not well understood; in others, it was just ignored. But now we are suddenly seeing people and businesses beginning to develop an interest in digital transformation. It has now become a re-ignited topic, one that people are paying attention to and want to explore,” she remarked.
She explained that digital transformation essentially involves a fundamental change in how an enterprise uses its technology, its workforce and business processes to improve its performance and value to customers.
“It is important to understand that the digital transformation journey is not a vertical process but a horizontal process meaning its implementation shouldn’t be left to only one department or an individual in a company, it is a process that involves multiple departments and multiple people. Successful digital transformation only happens when there is a coordinated change effort through all aspects of the business,” she said.
Arthur Goldstuck of the World Wide Worx reminded business leaders that to know the future of any industry, they have to look back at its history and whether industrial predictions made since 1918 have come to pass.
“Customer preference have shifted and that can be confirmed by Google Trends data that shows that during the pandemic a spike in the use of Zoom and Netflix, which are digital products, was witnessed. People will now permanently consume them in future,” he exemplified.
He advised manufactures to study which technologies are attracting more investment and make informed decisions in their operations.
“To understand the change around us, we must follow where the money is being channeled. More customers are ready to subscribe to digital solutions because of the convenience and affordability. For instance, while Netflix business soared, Disney’s profits have dipped because it is a physical business,” he said.
Mark Walker, Associate Vice President of global provider of market intelligence IDC said that while it is important to help manufactures shift their business to digital realm, other sectors such as education, health, transport, government services, agriculture and retail should not be left out.
“New technology paradigms are the key drivers of digital transformation. From an African perspective manufactures should embrace next-gen security, cloud computing, Big Data analytics, virtual and augmented reality, 3D printing, Artificial Intelligence and robotics and Internet of Things because they are the key Industry 4.0 enablers,” he advised.
While businesses can gain massive value opportunities in these areas, companies undertaking these efforts quickly learn that the adopting technology in digital transformation is often the impactful element of change.
Development gains from digital transformation, however, are not automatic and may result in new divides and widen industry inequalities.
Syspro noted that ICT adoption has been identified as a key factor that can increase competitiveness for Kenyan businesses thus making products more affordable for consumers, but for this to happen, human capital with the right knowledge and skills to implement technology strategies, financial resources to maintain these technologies must be achieved first.
“Companies need skilled technical expertise within the company and in the external ecosystem where these technologies are purchased in order to have tailor-made, affordable solutions with local support.”
While manufacturing in Kenya, for exmaple, currently contributes 9.6 percent of the Gross Domestic Product, the goal to achieve capacity to contribute 20 percent of the GDP by 2022, will heavily require the ecosystem to adopt emerging technologies on massive scale.
Government incentives will be key to creating a health private sector that believes in the automation of manufacturing processes, while training existing employees to ensure they are not eliminated by the new innovations.
Moreover, Africa’s digital transformation journey will best be shaped by a change of mindsets among most C-suite leaders who still believe in traditional experience at the expense of new knowledge which is already seeing most manual operations being transformed through AI, robotics and 3D printing around the world.