Nerves of Steel – Challenges of the South African Metal Sector
The South African metals industry is in danger of being left in other BRICS (Brazil, Russia India and China) countries’ dust. Can technology provide the fuel they need to surge ahead?
South Africa’s manufacturing sector is a major contributor to the country’s GDP, as well as its ability to grow its economy, attract foreign investment and innovate. However there are worrying trends about which we need to be concerned.
According to a public Deloitte report, over 300,000 manufacturing jobs have been lost or exported since the beginning of 2008. Electricity costs have risen over 170 percent and the country’s business environment has worsened, making it difficult to compete against BRICS peers.
This is especially visible in the metals industry, where the BRIC countries play a dominant role in the global iron and steel industry. Meanwhile, South Africa was forced to import a record one million tons of steel in 2013. The country’s once stable metals industry must now operate in volatile spot-price markets driven by China’s rapid economic growth.
Companies operating in such challenging conditions cannot afford sub-optimal usage of their assets and resources. South African metal manufacturers in particular are feeling the pressure, as they face higher customer demands, market volatility, globalisation, and supplier consolidation, among other trends. What can these organisations do to weather the storm?
While global economic trends and government regulation are factors that are out of their hands, using new technologies to build a strong organisation and encourage innovative business practices is well within their grasp. The right in-class solutions can make a huge difference in efficiency.
Many metals companies struggle with supply chain visibility. There are gaps in their data network, and this can result in uninformed decision-making, misuse of assets and poor customer relations. Visibility is a huge factor in how well a business is run but this aspect is all too often neglected.
Switching to an integrated SAP system leads to a streamlined organisation that runs on real-time information. Organisations that have that amount of data at their fingertips are better positioned to run operations, secure supply, reduce overheads and manage assets.
In-Memory Data analytics from SAP allows management to predict problems before they happen and deal with them in real time. Automating and streamlining processes through the implementation of the SAP ERP and Industry specific solutions for Metals leads to less resource wastage and accelerated results. With such a transparent system in place, mismanagement of resources becomes an anomaly.
The metals industry could benefit greatly from the business-to-business collaboration offered by virtualised SAP cloud based platforms, and find itself in a prime position to lower production costs, manage demand and pricing, innovate new products and technologies, secure access to limited raw materials, and comply with environmental regulations.
SAP’s mobile solutions enable both decision makers to make informed decisions based upon real time data at any place at any time, and it further enables field staff such as sales or maintenance to access critical data no matter where they may be!
To put it simply, the right industry-specific IT platform delivered by SAP can supercharge companies’ abilities to compete and thrive, even in unfavourable business environments. And it shows – the majority of top steel companies use SAP business processes.
Can South African companies afford to be left out? NO!