A conceptual approach to increase competitiveness in a typical South African manufacturing SME

Thesis (MEng)--Stellenbosch University, 2019.ENGLISH ABSTRACT: Global changes in the manufacturing landscape affect South African manufacturing small– and medium enterprises’ (SME) competitiveness, as they must contend with global competition in international markets. To remain competitive is increasingly difficult in this ever-changing landscape and a company’s success is to a large degree dependent on efficient operations. For a company to increase their efficiency, performance monitoring is essential. To capture performance measurement data there is an emphasis on real-time data collection, especially with the advent of the Fourth Industrial Revolution (referred to as Industry 4.0) and accompanying technologies. Industry 4.0 will ultimately change the competitiveness of companies. The adoption of Industry 4.0, and subsequently real-time data collection, in South Africa (SA) is still relatively limited in comparison to the rest of the world, due to a variety of challenges related to: (i) the economic environment; (ii) the adoption of smart technology; (iii) the collaboration between industries, research institutions, and governments; (iv) education and awareness of Industry 4.0; and (v) the high percentage of unskilled workforces being employed. The working environment in many South African manufacturing SMEs is still severely labour intensive, which can be attributed to South African policy makers and regulators who are trying to alleviate unemployment. However, a significant portion of the workers in these workforces are unskilled, which is a significant challenge to the SMEs. Moreover, these companies are also struggling to leverage technologies to their own benefit. It is argued that the transition towards Industry 4.0 in SA would take a considerable amount of time before the right foundation and polices would be in place. Consequently, for these companies to remain competitive there is a need for an approach to guide them in improving efficiencies through active performance management. For this reason, this study presents a generic approach that a typical South African manufacturing SME, that either cannot or does not want to implement Industry 4.0 principles and technologies yet, can use in order to remain competitive in the everchanging landscape through increased performance management. The generic approach was refined through a continuous process that was followed by using literature to analyse the use case, a Biltong Factory, for which a production management model was developed. The factory work is severely labour intensive, with a relatively low degree of the adoption of technology. Therefore, it can be argued that the Biltong Factory represents a typical South African SME. The production management model that was developed for the Biltong factory used performance measurement data that were captured and analysed through various analyses. The model determined efficient process sequencing and worker allocation per process, while adapting to the types and number of orders received. The information obtained from the production management model assisted with informed decision making to achieve flexible and efficient operations, resulting in an increase of the Biltong factory’s throughput, which had a significant impact on the factory’s competitiveness. Subsequently, the generic approach towards increasing and maintaining competitiveness was validated with the use of a questionnaire. Industry experts indicated that the approach can be used in future endeavours, which substantiates the argument that there is a need for such a tool for South African manufacturing SMEs.AFRIKAANSE OPSOMMING: Wêreldwye veranderings in die vervaardigingslandskap beïnvloed Suid-Afrikaanse vervaardigings klein– en medium ondernemings (KMO) se mededingendheid, aangesien hulle met internasionale markte moet meeding. Om mededingend te bly word toenemend moeilik in hierdie immer veranderende landskap en 'n onderneming se sukses is in 'n hoë mate afhanklik van doeltreffende bedrywighede. Vir 'n maatskappy om hul doeltreffendheid te verhoog, is prestasiemonitering noodsaaklik. Om prestasiemetingsdata vas te lê, is daar klem op intydse data-insameling, veral met die aankoms van die Vierde Industriële Revolusie (waarna verwys word as Industrie 4.0) en gepaardgaande tegnologie. Industrie 4.0 sal uiteindelik die mededingendheid van ondernemings verander. Die aanneming van Industrie 4.0, dus ook intydse data-insameling, in Suid-Afrika (SA) is steeds relatief beperk in vergelyking met die res van die wêreld weens verskeie uitdagings wat verband hou met: (i) die ekonomiese omgewing; (ii) die aanvaarding van slim tegnologie; (iii) die samewerking tussen nywerhede, navorsingsinstellings en regerings; (iv) onderwys en bewustheid van Industrie 4.0; en (v) die hoë persentasie ongeskoolde arbeidsmagte wat in diens geneem word. Die werksomgewing in baie Suid-Afrikaanse vervaardigings KMOs is steeds uiters arbeidsintensief, wat aktief deur die regering toegeskryf word aan Suid-Afrikaanse beleidmakers en reguleerders wat probeer om werkloosheid te verlig. 'n Beduidende deel van die werkers in hierdie werksmag is egter ongeskoold, wat 'n uitdaging vir die KMOs is. Daarbenewens sukkel hierdie maatskappye ook om tegnologie tot hul eie voordeel te benut. Daar word aangevoer dat die oorgang na Industrie 4.0 in SA 'n geruime tyd sal neem voordat die regte grondslag en beleid in plek sal wees. Gevolglik, vir hierdie maatskappye mededingend te bly, is daar 'n behoefte aan 'n benadering om hulle te lei om doeltreffendheid te verbeter deur aktiewe prestasiebestuur. Om hierdie rede bied hierdie studie 'n generiese benadering wat tipiese Suid-Afrikaanse vervaardigings KMOs, wat nie tans Industrie 4.0 se beginsels en tegnologieë wil implementeer nie, kan gebruik om mededingend te bly in die immer veranderende landskap deur verhoogde prestasiebestuur. Die verfyning van die generiese benadering was gebasseer op 'n deurlopende proses wat gevolg is deur literatuur te gebruik om die gebruiksgeval, 'n Biltong fabriek, te analiseer waarvoor 'n produksiestuurmodel ontwikkel is. Die fabriekswerk is arbeidsintensief, met 'n relatief lae mate van die aanvaarding van tegnologie. Daarom kan aangevoer word dat die Biltong Fabriek 'n tipiese Suid-Afrikaanse vervaardigings KMOs verteenwoordig. Die produksiebestuursmodel wat vir die Biltong fabriek ontwikkel is, het prestasiemetingsdata gebruik wat deur verskeie ontledings vasgevang en ontleed is. Die model het doeltreffende prosesvolgorde en werkerstoewysing per proses bepaal, wat volgens die bestelling tipe en volumes aangepas is. Die inligting wat verkry is van die produksiebestuursmodel het die fabriek gehelp met ingeligte besluitneming om buigsame en doeltreffende bedrywighede te bewerkstellig, wat 'n toename in die deurvoer van die Biltong fabriek tot gevolg gehad het. Dus, het dit ook 'n beduidende impak gehad op die mededingendheid van die fabriek. Vervolgens is die generiese benadering tot die verhoging en handhawing van mededingendheid deur middel van 'n vraelys bevestig. Bedryfskenners het aangedui dat die benadering in toekomstige pogings aangewend kan word, wat die argument bevestig dat daar wel so 'n hulpmiddel vir Suid-Afrikaanse vervaardigingsondernemings KMOs nodig is