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.