Life in the industrial lane. For a real challenge, enter SA manufacturing

One of the pleasures of keynote speaking engagements are the introductions they provide to interesting people. Dr Pravin Thakur, who I met at a post-Budget presentation to the Durban Chamber of Commerce, asked some tough questions which he was encouraged to put down in writing. At the same function, entrepreneur Andrew Fenwick discussed some challenges SA manufacturing faces where it matters most – on the work floor. He shares his experience of life in the industrial lane. Andrew has offered to contribute regularly. I hope he does. After reading his insights, have no doubt you will too. – AH      

By Andrew Fenwick*

Napoleon Hill once said, "If you cannot do great things, do small things in a great way." Many small businesses are trying to do just that in South Africa.

I attended a funeral of the dad of a friend recently. These are obviously quite sad occasions, but they also get many of us thinking about what people would say at our own funerals one day.  I find it inspiring to hear what people have done with their lives and how many people they have affected. There have been many casualties in our industry in the last 10 years, the clothing, footwear, shoe and leather goods industry. If only we could have a funeral every time another manufacturing company dies. Perhaps we would appreciate them more, see more of their value to society.

As manufacturers, we face many challenges in South Africa.

When supplying the retailers, our payment terms are usually quite long. Not so with our suppliers, so cash flow is constantly under strain.

Our unions are strong and seem to negotiate every year with the same fervour of 20 years ago, when business was thriving. There are many casualties to this, as the cost pressures mount. This is not sustainable without serious interventions to improve efficiencies in the workplace.  While many of us are trying our best to become world class manufacturers, we unfortunately do this in a bit of a vacuum, the unions are not on board, in my experience. This must change.  Increasing fuel, electricity, security costs also weigh heavily on small manufacturing businesses.

As our sector has shrunk, so have the support companies around us. There are less technicians that can support us, there are less machinery companies, less suppliers of raw materials. That, in turn puts more pressure on manufacturers, because there is less competition and there are times when the skills cannot repair some machines.

It has been encouraging that the government has decided to buy from local businesses. I only wish this would have been implemented as well as the non-smoking in public areas laws were implemented. We have not yet seen much of an increase in sales to government departments. Perhaps some departments and municipalities will be named and shamed soon, for still not procuring goods locally?

The subsidy initiatives by the DTI have made a positive impact on our sector, and many of us have seen the benefits. For some businesses this was too little too late. We are grateful that we have been able to train our people and purchase some new machinery, using these grants.

If our larger retailers talked to us more about strategy, then we could plan better for the next few years. Many of them have seen the benefits of working with local suppliers, especially the ability for quicker turnaround times. We are fortunate to have an organisation called B&M Analysts, that help facilitate training companies in World Class Manufacturing and they facilitate discussion with the retailers. Through various trials, they have shown that it is advantageous to have quicker turnaround of orders. Indeed, the best retailers worldwide do this. Their results show the importance of this strategy.

While times are currently tough, some retailers are reducing orders for goods. This has put even more pressure on us manufacturers, leading to short-time and any other measures to survive. There may be more casualties of manufacturing businesses. It is a bit like mothballing power stations, then one day one needs to fire them up again. The difference is that manufacturing businesses cannot just be shut down and then started again in some future date when required. Skills are lost and infrastructure is not there anymore. It takes many years to get an industry going again. Especially in a country that is not as strong in training as other BRICS countries.

Our company has been in existence for 23 years. I am the son of the founder. My dad is still very much involved in the business, at 71 years of age. We have great people and we want to make a small difference in South Africa. The efforts of Proudly SA are important ones, where they are encouraging South Africans to buy local goods. Many of us want to make a difference.

I would encourage all small businesses to get accredited for BBBEE and to also see what government grants are available. I would be happy to take the mystery out of some aspects of these in future articles.

An initiative we support is called LIV Village, if I could please let others know about them. They are providing a fantastic solution to the millions of orphans our country has. See their website at www.liv-village  I look forward to a time when these villages are all over South Africa!

* After studying Mechanical Engineering, Andrew Fenwick joined a car manufacturer for 5 years, as  Production Engineer (1994-99). I studied part-time and completed an Advanced Business Programme, to better understand business. He then went to the UK to gain more manufacturing experience, choosing to return to SA after two years and join his father's business, Saddler Belts & Leathercraft (Pty) Ltd which has been in operation since 1990. He has worked in various roles, from delivery driver to Production. He was eventually appointed General Manager and two years ago, Managing Director. Follow him on twitter @andrewfdurbs