Enhancing manufacturing: Are we ready?

Tuesday July 9 2019

By JOHN WALUBENGO
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Enhancing manufacturing is one of the pillars in the Big Four Agenda for President Kenyatta. Its main objective is to move the contribution of manufacturing to the country’s national GDP from nine percent to 20 percent by 2022 – which is two and a half years away.

It is always good for politicians to set national targets since this helps focus policies and resources towards achieving those targets. It is however better if other actors such as academia come in and interrogate those targets in terms of how realistic or likely it is that they would be met.

Strathmore University recently released preliminary findings of study titled ‘State of Manufacturing in Kenya’ which made interesting observations with regards to the achievability of the manufacturing objective in the Big Four agenda.

The study looked at a sample of industry players across the various subsectors, including food and beverage, energy, electrical and electronics and textiles and apparels.

Amongst other objectives, the study sought to find out the role and use of new technologies within the manufacturing sector.

It is obvious that new technologies or automation in manufacturing can increase efficiencies and productivity in the sector. Some specific intervention areas are automating the financial & inventory systems, the distribution system as well as the production or factory systems themselves.

GRIM STATISTICS

The study found that only 52 percent of the companies had automated their financial and inventory systems, 42 percent had some form of automated factory or production systems while only 36 percent had automated their distribution system.

This means that a whole 48 percent of our manufacturing sector is yet to adopt the basic ICT Systems – the standard electronic financial system that would better track incomes against expenditure for better decision making.

About 58 percent of the enterprises in the manufacturing sector had little or no automation within the production or factory operations. Finally, 64 percent of these enterprises were manually tracking their products from factory to distribution centers.

These are grim statistics for a country that is famous for being the most digital in the region and amongst the top five in Africa.

It is little wonder the contribution of the manufacturing sector to our GDP remains below 10 percent and at this rate it is unlikely to hit 20 percent by the year 2020.

Automation is simply the ability to do more with less.

If your competitors can tell his financial position at the touch of the button, while you have to wait for monthly reports from accounts, it means you have already lost in terms of making quick and informed decisions for your enterprise.

If competition has installed robotics for a large part of their factory operations while you rely 100 percent on manual labour, it means they will be ahead of you in terms of quality and number of units produced per month.

Finally, if they can track their products from the factory to distribution points all the way to the consumer, while you produce and simply hope that the market is responding well then it means you are flying blind with your products.

And competition in this case is not necessarily your neighbour in industrial area. It is actually all those enterprises within the region, the continent and indeed globally.

HIGHLY AUTOMATED

Global enterprises that our manufacturing sector are competing against are highly automated from their financials, through their factory plants all the way to their distribution networks.

It is not clear what the Kenya Association of Manufactures discuss but looking at their board committees, you notice they do not have one on ICTs or automation.

It does not matter how well the government addresses the external factors such as provision of cheaper power, better roads, tax restructuring and leave days if the enterprises remain highly analogue.

In this day and age of mobile money, mobile banking cloud services and cheap Internet of Things (IoT) devices, even mama mboga can automate her services and reap the benefits.

Can the Kenyan manufacturers pull up their socks and upgrade their factories as their contribution towards the big Four Agenda? That act alone can make us achieve the 20 percent manufacturing contribution to the GDP by 2022.

Mr Walubengo is a lecturer at Multimedia University of Kenya, Faculty of Computing and IT.

Email: [email protected], Twitter: @Jwalu