Africa Manufacturing

How are African manufacturers embracing industry 4.0 opportunities?

The use of industry 4.0 technologies makes it possible to manufacture entirely new things in entirely new ways and revolutionise research and development, supply chains, production and business models; and around the world, the traditional manufacturing industry is in the throes of a digital transformation that is accelerated by the exponential growth of these smart technologies. Companies in developed and emerging markets alike need to adapt to this rapid change and exponential growth if they are not to be left behind by developments in their sector and by their competitors.

My team and I at Deloitte conducted a study on industry 4.0 in Africa by holding interviews with leading role players in manufacturing such as the CSIR-Meraka Institute, Department of Science and Technology, IDC (International Data Corporation) and Manufacturing Circle, as well as with executives from manufacturers such as CAD House, Ford, Hulamin, Nampak, Nissan and Toyota South Africa.

Adoption of industry 4.0 in Africa/South Africa is low compared to the rest of the world

The results of our survey found that the overall adoption level of smart technologies that accelerate industry 4.0 remains at a foundation stage in the South African/African manufacturing industries, but has the potential to reverse the dwindling contribution of manufacturing GDP in the case of South Africa, which is currently 12% of GDP compared to 25% in the 60s.

  • While a stronger usage of advanced analytics exists within the automation and automotive sectors, the real opportunities of advanced analytics in other sectors are generally not yet being explored by manufacturers.
  • Usage of robotics is mostly at an automated stage and not yet at a smart or advanced stage.
  • There is no widespread adoption of 3D printing yet within the South African manufacturing industry, although awareness of the significance and the potential of this exponential technology is high.

Reasons for low adoption of industry 4.0 technologies

The broader industry 4.0 adoption is hindered by a general reluctance to invest in new knowledge and technologies within government and industry, as the current economic environment forces South African manufacturers to save costs first and spend less on innovation.

Poor connectivity and accessibility are also factors that influence low adoption, as well as concerns around cyber security.

Outlook for usage of smart technologies amongst African manufacturers

Emerging economies can become early adopters of industry 4.0, acquire capabilities to develop advanced manufacturing systems and leapfrog their global competitors with unique locally-developed high-tech products and services. China’s shift in recent years from a manufacturing-intensive ‘made in China’ economy to an innovation driven ‘designed in China’ economy clearly illustrates that opportunity.

The majority of our interviewees believe that industry 4.0 will have a strong impact in the coming years on Africa/South Africa in general and especially the South African manufacturing industry. At the moment, however, manufacturing in South Africa is going backwards in its percentage contribution to GDP. The question we have to ask ourselves at this moment in time is, do we continue on this path of deindustrialisation without complementing it with industry 4.0, or do we try to reverse the decline? If it is to be the latter, then it will require a getting together of the right minds to define where manufacturing is going in South Africa.

I invite you to connect with me to discuss this topic further. South Africa is not short of brainpower both in the private and public sectors, but it needs to become a collective effort. You are welcome to also download our Africa Industry 4.0 report, for further reading.

Karthi Pillay
Africa Manufacturing & Automotive Leader
+27 11 806 5173

About the author

Karthi Pillay

I am the Manufacturing and Automotive industry leader for Africa. I focus on assisting organisations and government to improve their competitiveness, and drive world class Manufacturing thinking.

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