Summary
- In the current world, a manufacturer worth its salt must have already integrated technology in its key operations.
- This is the only way out to remain afloat in an environment where technology has turned competition in every sector into a global affair.
- Adoption of the latest technologies is progressively becoming a matter of life-and-death for manufacturing firms.
In the current world, a manufacturer worth its salt must have
already integrated technology in its key operations. This is the only
way out to remain afloat in an environment where technology has turned
competition in every sector into a global affair.
Adoption
of the latest technologies is progressively becoming a matter of
life-and-death for manufacturing firms. For failing to innovate, some
companies have been rendered irrelevant and forced to shut their doors
forever.
A new study now underlines the urgency of
Kenyan companies to invest in automation ecosystems, right from sourcing
materials to the manufacturing floor if they are to continue operating.
The outbreak of Covid-19 has made the situation desperate for firms whose processes are wholly manual
The
report, a joint project of Strathmore University (SU) and software
developer, Syspro says firms can cushion themselves against the storms
of technological and pandemic disruptions through modernising tools of
operations and application of programming interfaces (APIs).
And shifting to technology front is not just a concern for big
companies. Small enterprises too have a lot to gain by going digital.
The
study urges medium and small enterprises to adopt automation to enhance
efficiencies associated with desktop APIs where a single worker can
direct multiple processes from a desktop dashboard. With machines
following commands as given, wastage, as well as delays and errors
associated with fatigue are mitigated.
“We have to
urgently seek ways to improve the level of automation in the sector,
develop appropriate technical skills for manufacturers and provide
opportunities for ease of access to capital financing to expand the
sector,” notes the report.
Strathmore’s faculty of
information technology associate professor, Ismail Ateya and Syspro
Africa managing director, Mark Wilson said Kenya will only benefit fully
from the manufacturing sector once automation is integrated in all the
processes.
Another study by the Overseas Development
Institute (ODI) and the Kenya Association of Manufacturers (KAM) avers
that manufacturers who defer automation risk being edged out by their
digital-savvy rivals.
The study, How to grow
manufacturing and create jobs in a digital economy: 10 policy priorities
for Kenya, said there is need for urgent collaboration between the
national and county governments, industry as well as academia in mooting
programmes that enhance uptake of digital technologies.
Professor
Ateya said the manufacturing industry is a crucial engine for
sustaining economic growth and development, job creation and poverty
alleviation but needs to modernise its value chain.
“The
poor state of the automation and software adoption, lack of technical
skills to fully support development and growth as well as the high cost
of capital financing have ensured the sector performs dismally all the
time,” he said.
Mr Wilson said access to the latest
technology solutions and financial resources to acquire the technologies
is key to lowering production costs thereby enabling Kenyan products to
gain a competitive edge in terms of pricing and quality in the
international market.
The Strathmore survey looked at
96 companies operating in three counties across 12 sub-sectors where
only 11 percent were found to have fully automated their operations
while 83 percent had semi-automated with the rest fully relying on
manual processes.
To achieve the required level of
automation, experts says the government and private companies need to
find ways to work together.
Digitalisation requires
public-private collaborations to provide long-term financing for Kenyan
manufacturing firms,” said ODI/KAM report’s lead author Dr Karishma
Banga.
The benefits of adopting the latest technology,
Dr Banga says, include product diversification, expansion into regional
markets, productivity improvements and lower cost of production.
Despite
Kenya’s quest for a 24-hour economy, the Strathmore/Sypro survey found
that only 46 percent of the companies operate for a full eight hours a
day with up to 50 percent running for three to five days a week. This
challenge, the survey notes, can be overcome by embracing digital
economy more.
The report called for infrastructural
modernisation at training institutes with tutors facilitated to acquire
new skills to enable them churn out “tech-ready” graduates.
Manufacturers
interviewed for the report lamented that digitisation is costly as they
have to buy IT equipment, software and conduct personnel training.
To
spur uptake of cutting-edge technologies, the research says Kenya needs
to set up a manufacturing credit fund to cushion small and medium
enterprises against the perils of short-term bank loans.
“High
cost of capital financing remains a major hurdle as most manufacturers
rely on self-financing- bank loans, invoicing and shares to expand
production hence lacking capital to acquire modern tech machines,” it
adds.
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