The increasing cost of labour and electricity is an increasing challenge for the manufacturing sector in South Africa.
The demand for opportunities to learn from best international practice in order to survive and keep the doors open is bigger than ever. There are, however, opportunities for improvement and learning for local manufacturers.
The world’s longest running benchmarking contest for the international manufacturing sector is now in its 28th year and, for the second year, also be open for manufacturers in South Africa.
The Factory of the Year competition was first initiated in Germany in 1992 by Kearney, a management consultancy that advises manufacturing companies around the world on competitive strategies to improve efficiencies and reduce costs.
Local support for the competition from the Department of Trade and Industry (DTI) shows that the process offers invaluable insight into the South African industrial landscape.
“Globally, manufacturing is becoming increasingly competitive, with automation and robotics transforming manufacturing processes to deliver greater efficiencies and outputs. So, achieving world-class excellence is a priority for any manufacturing concern,” says Igor Hulak, partner at Kearney.
South Africa’s manufacturing sector is facing unprecedented challenges. In the early 1990s, the country’s manufacturing sector contributed 22% to its GDP, while today, its contribution has declined to only 2%. Factories face the challenges of increased labour and electricity costs, while the consumer market has slowed, and global players compete against local pricing.
With its economic challenges and growth pressures, achieving global excellence in South Africa becomes even more important explains Hulak. “We believe that Factory of the Year has a crucial role to play in helping South African companies to understand and analyse their strengths and weaknesses, against global benchmarks, as well as improve their efficiencies and outputs, ensuring that they are not left behind by the Fourth Industrial Revolution.”
He adds that a key incentive for entering the competition is that, following the assessment process, factories will receive feedback against global benchmarks about where they can achieve greater efficiencies, and where their drawbacks lie. “This feedback from is invaluable in helping companies to work towards these benchmarks and continue to target excellence in the years to come.”
“Factory of the Year is much more than a competition, it is bringing about consciousness of future manufacturing in South Africa, trends and examples of Industry 4.0 solutions that work,” says Ilse Karg, chief director of future industrial production technologies at the DTI.
The event is further supported by the Manufacturing Circle, the Manufacturing Indaba and the Council for Scientific and Industrial Research (CSIR).
Entrants should visit the website, www.safactoryoftheyear.co.za, to download the questionnaire. Due to a number of requests from the industry and the time required to complete the questionnaire that includes production statistics and other metrics, the entry date for the Factory of the Year competition has been extended to 31 March 2020.
The questionnaire covers six categories: customer satisfaction, quality, value creation, economics, agility, and innovation.
Once a factory makes it onto the shortlist, a Factory of the Year representative will conduct a site visit to verify the information provided, observe how the factory is working, and identify possible improvement areas. They take these results to a jury, made up of members of the DTI, CSIR, Manufacturing Circle and Manufacturing Indaba. The 2020 winners will be announced at the Indaba in June.
While it is clear from the GDP contribution of South Africa’s manufacturing sector that there is room for improvement in this sector, Saunders says that there are some standout pockets of excellence in the South African context.
“These star performers are focusing on moving to digital and driving efficiency, and it is these that we want to find and award in Factory of the Year,” he says. “We’re looking forward to celebrating excellence in South African manufacturing for a second year running – and also to continuing to help those facing economic headwinds to overcome obstacles and identify necessary improvements to support their global competitiveness in 2020.”
Sky News and other news outlets reported on Saturday that Peter Norris, the chairman of Virgin Atlantic Airways’ majority shareholder, Virgin Group, will write to Prime Minister Boris Johnson on Monday to warn that the sector needs immediate financial aid to survive.
The bailout request will come ahead of what could prove to be the bloodiest week in British aviation history, with British Airways, Virgin Atlantic, easyJet and Ryanair all expected to announce mass groundings of aircraft and potentially huge redundancies as the COVID-19 crisis escalates.
Mr Norris’s letter – which is also understood to be being signed by Shai Weiss, Virgin Atlantic’s chief executive – would ask the government to provide airlines with a credit facility to help them finance themselves through a potentially protracted period of negligible revenue.
That support, which the Virgin chairman estimates would be worth between £5bn and £7.5bn across the industry, would include cash advances and guarantees, as well as other measures to ensure that credit card companies do not continue to hoard revenue from airline bookings.
Under Mr Norris’s blueprint, this emergency financing would be repaid once trading returns to more normal levels.
Mr Norris would also ask the PM to extend the timetable for allowing airlines to keep planes grounded without losing their prized take-off and landing slots for the entire summer season.
The trade body IATA has estimated that the airline industry globally could forfeit $113bn in revenue as a result of COVID-19 – a figure it may have to increase again.
This week, Alex Cruz, BA’s chief executive, told the flag-carrier’s 45,000 staff that it was being engulfed by “a crisis of global proportions like no other we have known”.
Mr Cruz warned of impending job cuts, although he declined to say in his message to employees how many would be affected.
He added that the COVID-19 situation was “more serious” than the financial crisis of 2008, the SARS epidemic and the terrorist attacks of September 11, 2001.
The UK aviation industry generates approximately £10bn of GDP and employs roughly 200,000 people.
For many of us, the threat of coronavirus suddenly feels much closer to home. The last few days have seen a rapid increase in the number of cases in South Korea, Iran and Italy. Now officially a pandemic, the virus has proven adept at crossing borders, with confirmed cases reported in over 100 countries (for the latest numbers, refer to our coronavirus mapping tool).
In the face of this escalating outbreak, it can be difficult to gauge how concerned we should be. What threat does the coronavirus pose to us as individuals? And what are the broader societal risks of this outbreak? Answering these key questions can help place the daily headlines in context.
Fear for our personal safety is an understandable instinct when faced with minute-by-minute coronavirus updates. Fortunately, our understanding of the clinical effects of this novel virus is improving with each passing day.
Based on data from over 44,000 confirmed cases in China, we know that roughly 80% of people have mild illness, 14% have severe disease (for instance, involving shortness of breath or reduced blood oxygen levels), and 5% become critically ill (suffering respiratory failure, septic shock and/or organ failure). If many mild cases are going undetected, the proportion of severe and critical infections may turn out to be lower once the dust has settled.
The proportion of reported cases of a disease that lead to death is called the case fatality rate (CFR). Estimating the CFR for the coronavirus disease (COVID-19) is challenging when uncertainty over the total number of infections remains. As things stand, our best estimates put this value in the range of 0.3% to 1%. This is lower than the 10% CFR of the Sars outbreak that affected China in 2003, but up to ten times higher than the less-than-0.1% CFR of a typical flu season.
However, it is crucial to remember that the CFR is not a fixed entity. It varies according to age, health condition and the level of clinical care available to people who become severely ill. Among confirmed cases in China, the estimated CFR is less than 0.5% in under-50s but rises to almost 15% among over-80s. The fatality rate is also substantially higher in people with other conditions, such as cardiovascular disease (10.5%), diabetes (7.3%) and chronic respiratory disease (6.3%).
The message is clear – reducing the risk of exposing high-risk people is key to our individual and societal response to the coronavirus outbreak. Or to put it bluntly, don’t visit elderly friends or relatives if you feel at all unwell.
Many uncertainties remain. For example, under-20s made up less than 3% of the confirmed cases in China and no deaths were recorded in children under ten. This is comforting news, but raises questions over whether school closures – a key strategy used to combat the 2009 swine flu pandemic – will help slow down the spread of coronavirus.
Early reports suggest that pregnant women are not at greater risk of severe illness with COVID-19, in contrast to both Sars and influenza. There is also currently no evidence of transmission to babies in the womb or via breastmilk. But continued monitoring of how the virus affects pregnant women will be crucial as cases of this new disease rise.
The fact that most cases of COVID-19 are mild may seem at odds with the alarming coverage of the outbreak. While panic is neither helpful nor warranted, we must also guard against complacency.
As the virus spreads through susceptible populations, the numbers quickly add up. Recent reports from Italy suggest that around 10% of confirmed cases require admission to intensive care units. As the epidemic ignites in more and more countries, COVID-19 is poised to place a huge strain on health systems across the globe. In the northern hemisphere, this surge arrives at a time when hospitals are already racing to keep up with the demands of winter.
As a result, social distancing measures (such as self-isolation, workplace closures and the cancellation of public events) are likely to play an important role in the evolution of the pandemic. The torrent might not be prevented, but slowing it down is our best chance of ensuring the dam will hold.
The stakes go beyond coronavirus. During the 2014 outbreak of Ebola in West Africa, deaths from malaria, HIV and several other causes rose dramatically as health systems buckled under the pressure of the unfolding epidemic. The more resources that COVID-19 absorbs, the larger the ripple effects throughout our health systems will be.
Fortunately, we know that quarantine and containment can be effective against COVID-19. According to a recent WHO report, the stringent measures enforced in China have “averted or at least delayed hundreds of thousands of COVID-19 cases in the country”. It is likely that the measures brought in across Italy this week will have a similar effect in curbing the course of the outbreak.
What is far less certain is whether measures short of a total lockdown can keep the virus at bay. Early self-isolation, frequent handwashing and voluntary social distancing are being promoted in many countries, and the economic and social incentives for avoiding more drastic measures are substantial. But if the number of cases continues to rise, we must prepare for the possibility that more stringent measures will be needed.
Individual acts matter
Most of us will stay healthy throughout the coronavirus outbreak, and we must therefore quell our instinct for panic. But we all have a social responsibility to help keep this pandemic under control. We can do this by knowing how to recognise the symptoms of COVID-19, by staying up to date on local guidelines on what to do if we exhibit them, and by taking stringent social distancing measures. Every act that slows down the spread of the virus can make a difference.
Protecting the vulnerable in our communities should now be imperative to us all. At a time of social distancing, our social conscience will determine the fallout from this public health emergency.
The move was meant shore up a rapidly disintegrating global economy assailed by efforts to contain the escalating coronavirus pandemic.
“The effects of the coronavirus will weigh on economic activity in the near term and pose risks to the economic outlook. In light of these developments, the Committee decided to lower the target range,” the Fed said.
The Fed cut rates to a target range of 0% to 0.25% and said it would expand its balance sheet by at least $700 billion in coming weeks.
“The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals,” the Fed said.
In other moves, the Fed encouraged banks to use the trillions of dollars in equity and liquid assets built up as capital buffers since the financial crisis to lend to business and households whose balance sheets and lives have been upended by the virus.
The Fed and five other major foreign central banks also cut pricing on their swap lines to make it easier to provide dollars to their financial institutions facing stress in credit markets. The Fed, the Bank of Canada, European Central Bank, Bank of England, Bank of Japan and Swiss National Bank set up swap lines in the financial crisis.
The Fed already cut interest rates by half a percentage point on March 3 at an emergency meeting, the first rate cut outside of a regularly scheduled policy meeting since the financial crisis in 2008.
Policymakers were not due to hold their next interest-rate setting meeting until March 17-18.
The Sovereign Fund of Angola has invested US$2.0 billion on a 4.8% stake in the Pensana Rare Earths mining company, which is involved in a rare earth project Longonjo, Huambo province, said the Australian company in a market statement.
“Pensana Rare Earths announces with satisfaction that it has raised more than US$2 million from the Sovereign Fund of Angola that manages a part of our investment portfolio, distributed among various sectors and asset classes, including the mining sector,” the statement issued in West Perth by the Australian mining company.
The statement said that the amount raised from what it calls “a strategic investor” will be used to carry out the definitive economic viability study of the Longonjo project, where in April 2019 rare earths were discovered.
In April 2019 a mineral prospecting project in the municipality of Sunyani, which lasted approximately two years, had identified 23 billion tonnes of metals known as rare earths.
The mining project, exploration of which was scheduled for this year, was conducted in partnership between the Empresa Nacional de Ferro de Angola (Ferrangol) and Australia’s Pensana, said the administrative director of Ozango Minerais (the company resulting from the partnership), Timothy George, who did not provide figures on the investment nor the value of the metals.
George, quoted by the Angop news agency, also said that the mine has a diameter of 2.5 kilometres and in the prospecting phase had more than 200 test holes from the surface to a depth of 35 metres, in a prospecting grid of 500/700 metres.
Commercial vehicle operators including trotro, taxi and bus drivers are expected to provide hand sanitizers to passengers boarding such vehicles to curb the transfer and spread of Coronavirus (Covid-19).
President Nana Addo Dankwa Akufo-Addo, in an address to the nation on update of coronavirus, tasked the Ministry of Transport to work with private and commercial transport unions to make it possible.
“The Ministry of Transport should work with the transport unions and private and public transport operators to ensure enhanced hygienic conditions in all vehicles and terminals, by providing amongst others hand sanitizers, running water and soap for washing of hand,” the president said.
The governent has banned entry to non-residents who have travelled to a country affected by coronavirus in the last 14 days, the government officially announced on Sunday.
The ban comes to effect after 48 hours, the Minister of Information, Kojo Oppong Nkrumah, has announced at a media briefing Sunday afternoon.
In addition, the minister note that "all travels to Ghana is at this stage strongly discouraged until further notice."
Any traveler, except for Ghanaian citizens and persons with Ghana residence permit, who, within the last 14 days, has been to a country that has recorded at least 200 cases of COVID-19 , will not be permitted into the Ghanaian jurisdiction," the statement further said,