South African Manufacturing Industry Research Articles

The influence of artificial intelligence on the manufacturing industry in South Africa

Background: The adoption of artificial intelligence (AI) in manufacturing has the potential to considerably improve productivity, efficiency and sustainability. Artificial intelligence aids with tasks such as data processing and process monitoring, process modelling and optimisation, live fault detection, and process quality assessment in manufacturing processes.Aim: This study sought to obtain a full understanding of the influence of AI on the South African manufacturing industry by exploring how AI technology is impacting productivity, reshaping the workforce, affecting quality control practices and optimising supply chain management among other issues.Setting: Data in this study were obtained from 23 qualitative research publications that address the influence of AI on the manufacturing industry in South Africa published on ScienceDirect, Scopus, Springer, Web of Science and Google Scholar.Method: Multiple correspondence analysis was utilised to analyse associations among quality, productivity, supply chain and workforce transformation in the presence of AI in the South African manufacturing industry.Results: The findings demonstrate a substantial association between the usage of AI and a range of performance measures, suggesting that those organisations embracing AI technology can benefit from greater productivity, quality control and supply chain management. Additionally, findings emphasised the necessity of workforce transformation because of AI adoption.Conclusion: The adoption of AI technology positively influenced the South African manufacturing industry, contributing to increased productivity and quality, and optimising the supply chain.Contribution: This study makes a valuable contribution to the existing body of knowledge as AI adoption in the manufacturing industry in developing countries is only emerging.

Does industry 4.0 and environmental quality asymmetrically affect South Africa’s manufacturing sector? A fresh insight from nonlinear autoregressive distributed lag (NARDL) model

Owing to recent developments and implications inspired by fourth industrial revolution (4IR) technologies in the global manufacturing sector through the Industry 4.0 (I4.0) concept, this study was conducted to discover the impacts of I4.0 and environmental quality on the South African manufacturing sector, considering governance quality. To the best of our knowledge, no study has analysed the long-run and short impacts of I4.0, environmental quality and governance quality on the South African manufacturing sector integrating the bound test cointegration, Fully-Modified Ordinary Least Squares (FMOLS) & Dynamic Ordinary Least Squares (DOLS) and nonlinear autoregressive distributed lag (NARDL) estimations techniques. Therefore, this study attempts to bridge this gap using different econometric approaches. The data used spans from 2000Q1 to 2020Q4. The principal component analysis was used to create Industry 4.0 (I4.0) and governance quality components. In this study, utilising the dynamic NARDL, it is seen that the LCO2, representing environmental quality, possesses positive and significant relationship with the LMVA, but when in interaction with the governance quality variables (GOV, INS, POL & ECO), there exists a positive and insignificant relationship with the LMVA showing there exists a dearth of green innovative technologies in the South Africa manufacturing sector respective of its significance. Utilising the FMOLS and DOLS, the GOV, INS, POL & ECO which represents governance quality, mostly possesses negative but significant relationships with the LMVA, even when in interaction with the I4.0 variable proving the I4.0 technologies have not yet started to be impactful to the South African manufacturing industry at large.

Modeling the Barriers of a Circular Economy for Enhancing Competitiveness: An Interpretive Structural Modeling Approach

This paper aims to identify the critical barriers to the circular economy (CE) within South African manufacturing companies and further model the barriers. A literature review was done to identify the barriers of CE in the context of South Africa and used as an input in the interpretive structural modeling (ISM) technique. This study discovered that the key challenges to CE adoption in the South African manufacturing industry are a lack of proper communication of the CE objectives, which dramatically impacts the whole system, indicating that it should be prioritized. The removal of all the CE obstacles will enhance the firm’s competitiveness in the market. The unique contribution of this study is the alternate approach used in theory building. The CE barriers were identified in the context of South Africa and further the interrelationships among the barriers were presented. The findings will be helpful for managers and policymakers.

Leveraging the engineering ecosystem to prepare TVET graduates that the South African manufacturing industry needs

Leveraging the engineering ecosystem to prepare TVET graduates that the South African manufacturing industry needs

FACTORS THAT INFLUENCE WORLD CLASS MANUFACTURING ADOPTION IN DEVELOPING COUNTRIES

The prevailing global competitive environment requires continuous improvement approaches that integrate the entire organisation, from strategic management to operational performance. World class manufacturing (WCM) is a continuous improvement strategy that defines the logic, rigour, and detail of how organisations can achieve sustainable operational performance and customer satisfaction improvements. The paper investigates the factors influencing the successful implementation and sustaining of WCM in the South African manufacturing industry. A qualitative descriptive approach is employed to probe the views and opinions of WCM practitioners in a global manufacturing company with a footprint in South Africa and in other African countries, who were enrolled via purposeful sampling. The findings revealed that management commitment significantly influences achieving a successful WCM system. Furthermore, running WCM as a system could mitigate noticeable barriers identified in this study. The study could substantially enhance industrial engineering practice by revealing aspects to consider when implementing and running a WCM system.

Sustainability of Local Labour Market in South Africa: The Implications of Imports Competition from China

Using South African manufacturing and non-manufacturing industry employment, imports from China, growth in manufacturing and non-manufacturing industry, and workers’ earning data, we examined the impact of imports from China, growth in manufacturing and non-manufacturing industry on manufacturing and non-manufacturing industry employment and workers’ earnings. This study employed a Bayer and Hanck cointegration test to examine the cointegration among the variables, which found the existence of cointegration. In addition, the ARDL approach was employed to ascertain the long-run effect of the import from China, growth in manufacturing and non-manufacturing industry on the manufacturing and non-manufacturing industry employment and workers’ earning, while “Fully Modified Ordinary Least Square (FMOLS)”, “Dynamic Ordinary Least Square (DOLS)”, and “Canonical Cointegrated Regression (CRR)” estimators were employed for robustness. We found a negative long-run effect of imports from China on manufacturing sectors’ employment and workers’ earnings, while a positive of its effect was found on service industry employment. Moreover, growth in the manufacturing industry was found to have a positive long-run effect on manufacturing industry employment and workers’ earnings, while it has a negative long-run effect on service industry employment. As for the growth in the service industry, it was demonstrated to have a negative and positive long-run effect on manufacturing industry employment and non-manufacturing industry employment.

Trade and profit efficiency of manufacturing industries in South Africa

The relationship between trade and industrial performance has received a great deal of empirical attention over the past three decades. Much of this empirical attention has however focused on productivity, employment, and output growth oblivious of profit effects – the primary motive for manufacturers. Different from this literature, this paper contributes to the existing body of knowledge by testing the hypothesis that trade affects profit efficiency of manufacturing industries through its effect on technical and allocative efficiency. Using a panel stochastic frontier model based on 28 South African manufacturing industries observed between 1970 and 2016, evidence confirms a strong positive effect of export intensity on profit efficiency that operates mainly through technical efficiency. Import penetration appears to have improved allocative efficiency without having a discernible effect on profit efficiency. The former result lends empirical support to the long-standing view that outward-oriented policies have the potential to enhance industrial profit maximization while the latter result suggests that inward-oriented polices at worst promote suboptimal input allocation.

Industry 4.0 skills: A perspective of the South African manufacturing industry

Orientation: Industry 4.0 (I4.0) is causing significant changes in the manufacturing industry, and its adoption is unavoidable for competitiveness and productivity.Research purpose: This study investigated I4.0 skills using the views of professionals in the manufacturing industry and experts in digital transformation practising in South Africa.Motivation for the study: I4.0 was coined originally for the manufacturing industry, and skills availability significantly influences its successful adoption. Furthermore, I4.0 is relatively new in the South African manufacturing industry, and there is still limited empirical research on the subject.Research approach/design and method: A qualitative descriptive research design was used, and participants were enrolled using purposeful sampling via email, telephone and LinkedIn. Twenty semi-structured interviews were conducted face-to-face or telephonically, and thematic analysis was used to analyse the data.Main findings: This study found that I4.0 demands higher skills than in conventional manufacturing, and companies should take the lead in facilitating upskilling and reskilling of their employees to preserve jobs. Experiential training could enhance I4.0 skills development in the manufacturing industry.Practical/managerial implications: Agile changes in I4.0 require constant re-alignment of employees’ skills in the manufacturing industry. This requires companies to make the human resource (HR) management function an integral part of business strategy.Contribution/value-add: The study can help HR practitioners and manufacturing professionals in strategising and innovate technology to manage the evolving I4.0 skills requirements and preserve jobs. The study also asserts a foundation for further investigation of I4.0 skills competencies’ development in the South African manufacturing industry.

Factors that Inhibit Sustainable Adoption of Industry 4.0 in the South African Manufacturing Industry

Industry 4.0 (I4.0) adoption in the manufacturing industry is on the rise across the world, resulting in increased empirical research on barriers and drivers to I4.0 adoption in specific country contexts. However, no similar studies are available that focus on the South African manufacturing industry. Our small-scale interview-based qualitative descriptive study aimed at identifying factors that may inhibit sustainable adoption of I4.0 in the country’s manufacturing industry. The study probed the views and opinions of 16 managers and specialists in the industry, as well as others in supportive roles. Two themes emerged from the thematic analysis: factors that inhibit sustainable adoption of I4.0 and strategies that promote I4.0 adoption in the South African manufacturing industry. The interviews highlighted cultural construct, structural inequalities, noticeable youth unemployment, fragmented task environment, and deficiencies in the education system as key inhibitors. Key strategies identified to promote sustainable adoption of I4.0 include understanding context and applying relevant technologies, strengthening policy and regulatory space, overhauling the education system, and focusing on primary manufacturing. The study offers direction for broader investigations of the specific inhibitors to sustainable I4.0 adoption in the sub-Saharan African developing countries and the strategies for overcoming them.

Toxic leadership: Effects on job satisfaction, commitment, turnover intention and organisational culture within the South African manufacturing industry

Orientation: The impact of toxic leadership on employees and organisations has only recently become the focus of certain research studies.Research purpose: The general objective of this research was to investigate the relationship between toxic leadership, job satisfaction, turnover intention and commitment. The aim further was to test whether organisation culture mediates the relationship between toxic leadership and certain job outcomes such as job satisfaction, turnover intention and commitment.Motivation for the study: Currently, no knowledge is available on the relationships between toxic leadership and job outcomes within the context of South African manufacturing organisations. Therefore, this study provides South African organisations and researchers with an insight into such a relationship and the mentioned mediation of organisational culture in the process.Research approach/design and method: A cross-sectional research design with a sample size of N = 600 manufacturing employees was used. Product–moment correlations, multiple regression and structural equation modelling were used.Main findings: The test results returned both direct and indirect effects for all the relationships, which indicated only partial mediation in all the tested relationships.Practical/managerial implications: The results provided organisations’ insight into the possible consequences of toxic leadership on employees and the organisations’ culture.Contribution/value-add: The improved understanding of toxic leadership and the relationship with certain job outcomes contributes to the body of knowledge on both the theory of toxic leadership and on employees’ experience of such leadership styles in the work environment.

The role of strategic supplier relationships in enhancing supply chain innovation: A qualitative study in the South African automotive manufacturing industry

Supply chain innovation is a mechanism that firms use to ensure efficient supply chain management through collaboration with external supply chain partners. The interaction between buyers and suppliers is especially crucial in fostering innovation resulting in modifications, improvements and development of new products and processes in a manner that improves overall efficiency. Understanding the role of the supplier in firm innovation is critical for cross-firm innovation. The automotive manufacturing industry faces increasing pressures to innovate due to the high demands from stakeholders and operating in a highly competitive market. This study aimed to explore the role of strategic supplier relationships for supply chain innovation in this particular industry. A generic qualitative approach, through semi-structured interviews, was used to gather data from ten middle to senior managers in six automotive manufacturing companies. It was found that only two manufacturers involve their suppliers in the pre-innovation phase indicating that there might be an untapped source of innovation for manufacturers. It would appear from the participant responses that the involvement of suppliers increases from low to high in the pre-innovation and post-innovation phases, respectively. Furthermore, despite the cost pressures in the industry, manufacturers stated the need for suppliers who are able to adapt and synchronize with their innovation initiatives. Additionally, a possible theoretical contradiction was identified. Because many manufacturers share suppliers, transparency might act as an inhibitor of innovation, mainly if the manufacturer aims to compete on the basis of differentiation. Finally, other factors that could strengthen the relationship and subsequently the potential for innovation include being intrinsically motivated to innovate and create synergies from a supplier’s perspective, along with incentives in the form of continued business from the manufacturer’s perspective.

Investigating the Factors Influencing Energy Intensity in the South African Manufacturing Industry

The study investigates the determinants of energy intensity in the South African manufacturing industry. The objectives are to analyse trends, to determine the drivers of manufacturing energy intensity and make policy recommendations. The study investigates the effects of manufacturing value added, foreign direct investments, energy prices and trade openness on manufacturing energy intensity. The study employs the Vector Error Correction Model on time series data for the period of 1980 to 2017. The findings of the study depict that manufacturing value added, foreign direct investment and energy prices are the most important determinants in explaining manufacturing energy intensity over the reviewed period. Manufacturing value added is found to be statistically significant both in the short and long run. Foreign direct investment is found to be statistically significant in the long run whereas, energy price is significant in the short run. In light of this, the study makes policy recommendations. With regards to total manufacturing value added, the study recommends that the industry be closely monitored. Government should subsidize energy efficient machinery and equipment and the use of old outdated technology should be banned. With regards to foreign direct investment, the study recommends that the FDI policy be reviewed such that it attracts foreign investors. The recommendation regarding energy prices is that government should encourage energy price reform and use subsidies to encourage energy saving enterprises.

A Comparative Study on New Product Development Projects: Supplier-client Partnerships in Manufacturing Industry

This paper was to investigate, explore and gain an understanding of the factors that enable and support supplier-client collaboration in New Product Development Projects (NPDP) within the South African manufacturing industry. This study was based on two case studies where two NPDP within South African on two different firms were studied. The predominant focus of this report studied the supplier involvement and relationship factors, supplier selection factors, and cultural environment and collaboration factors. The main data used was collected via interviews and internal company documents. The collected data was then analyzed and the outcome provided insight into the factors and relationship between these factors. This study noted that firms can enter into collaboration to accelerate the product development process. This includes enhancing the ability of the firm to respond to key customer needs. Firms can make use of the collaboration advantage where they see a market opportunity where their teams have less to no expertise and skills required to capture the opportunity. In addition, research and development costs stand to be reduced significantly, where the collaboration partner is chosen effectively. This study concludes by seeing it as beneficial to firms to collaborate with their suppliers under proper management.

Understanding energy use in the South African manufacturing industry

Abstract Manufacturing industries have objectives of improving productivity and economic growth while simultaneously reducing energy consumption and lessening environmental impact. Energy is a vital resource for the manufacturing industry. However, environmental impacts are a major concern for energy use in manufacturing. It is important to control and manage the way energy is consumed to reduce costs and carbon emissions. This research focused on the energy consumption and carbon emissions for the manufacturing industry in South Africa from 1999 to 2015. Index decomposition analysis (IDA) and historical trends analysis were used to analyse drivers of manufacturing energy consumption and to understand rebound effects respectively. Sub-sectoral analysis alongside the index of energy effectiveness (IoEE) was formulated which analysed and ranked selected manufacturing sub-sectors in terms of its effectiveness in energy use. Index decomposition analysis (IDA) has shown that the reductions in energy consumption within manufacturing was predominantly driven by reductions in energy intensities for the period of interest. Further analysis of changes in energy effectiveness against production changes also support the evidence that production output increases has not wiped out energy effectiveness gains, displaying little rebound effect. Pareto and sub-sectoral contribution analysis revealed that (i) the manufacture of basic iron and steel and (ii) the manufacture of refined petroleum products, chemicals and chemical products contribute 80% of the aggregate energy consumption and are amongst the least effective in energy use. The combined analysis in this study is aimed at policymakers, government and industries to inform energy reduction strategies.

Can the motor vehicle manufacturing industry be sustainable? Exploring the relationships between profitability, the green economy and environmental sustainability in South Africa

This paper discusses the applicability of environmental sustainability initiatives within the motor vehicle manufacturing industry in South Africa. Sustainability principles remain contested because of divergent interpretations although several studies have suggested the concept refers to using resources to meet intergenerational societal needs, whilst ensuring ecological conservation. The South African manufacturing industry which houses vehicle manufacturing has been identified as a suitable industry for pursuing sustainability principles, largely because vehicle industries yield resources and power that can facilitate mainstreaming a green agenda under the 'green growth path' the country has adopted. Using secondary and primary data collected through an extensive literature review and a pilot study, this paper discusses how the automotive industry can align itself with environmental sustainability principles within regulatory structures on a national, regional and global scale. This has been analysed vis-a-vis current debate on the relationship between the 'green economy' and sustainable development, emphasising on environmental sustainability.

METHODOLOGY TO PRODUCE A WATER AND ENERGY STREAM MAP (WESM) IN THE SOUTH AFRICAN MANUFACTURING INDUSTRY

The increasing demand for water and energy in South Africa, and the capacity constraints and restrictions of both resources, have led to a rapid increase in their cost. The manufacturing industry remains South Africa’s third-largest consumer of water and second- largest consumer of national energy. The improvement of water and energy efficiency is becoming an increasingly important theme for both organisational success and national economic sustainability. This paper presents the ‘lean based water and energy stream mapping framework’ developed for the manufacturing industry, with the specific objective of decreasing its water and energy intensity. As with the traditional value stream mapping tool, the water and energy stream mapping focuses on eliminating water- and energy-specific wastes within a process. Water and energy waste categories that will be used in conjunction with the framework will also be discussed. The key objective of this paper is to detail the process of creating the water and energy stream mapping, and the statistical forecasting methodology used to develop the baseline water and energy demand data. The outcome of the implementation of the framework is the future state water and energy stream mapping, which is effectively a blueprint for increased water and energy efficiency within a studied process.

The Uptake and Utilisation of Electronic Business Technology: A Case of Selected South African Small Manufacturing Industries

This paper presents the findings of a study undertaken to explore the uptake and utilisation of e-business technology amongst small manufacturers based in Polokwane, South Africa. The aim of the study was to establish the integration of e-business technology in the operations of small manufacturers as well as the utility of the adopted technologies. The study was conducted as a quantitative enquiry, with a population of N=12. A survey was conducted, with self administered questionnaires as the data generation instrument. Data were analysed utilising the Statistical Package for Social Sciences 21.0, with descriptive statistics as the primary approach to data analysis and presentation The survey found that although most surveyed companies had adopted e-business technologies, the majority had moderate utilisation of technology, with the financial benefits of adopting e-business technology being low to moderate. As a result of the survey it also emerged that small manufactures also perceive e-business technology can make a significant positive impact in areas of customer services, market research and distribution cost reduction. As a result the key recommendation of the study is the need for small manufacturers analyse the push and pull factors with regards to their innovation and integration of e-business technology in order for small manufacturers to be able to effectively utilise technology within their operations. DOI: 10.5901/mjss.2014.v5n20p454

Investment promotion in the South African manufacturing industry: incentive comparisons with Malaysia and Singapore

South Africa needs to increase its inward foreign direct investment in order to achieve economic growth. The purpose of this article is to explore which intervention could be launched in the short term to enhance the country's attractiveness for foreign investors. The findings of the literature review demonstrated that incentives, as a determinant of investment, are the short-term intervention with the most significant potential to attract additional foreign direct investment. A comparative study, which provided insight into the incentives that are currently offered to the manufacturing sectors of three countries (South Africa, Malaysia and Singapore), assisted in identifying two additional incentives that the South African government could introduce and three existing incentives that could be amended. The introduction or modification of these incentives could ensure that South Africa has a competitive advantage to attract investment from foreign investors and thereby increase South Africa's inward foreign direct investment in the manufacturing industry.

Recorded fatal and permanently disabling injuries in South African manufacturing industry – Overview, analysis and reflection

Studies on occupational accident statistics in South Africa are few and far between, the most recent paper on the manufacturing sector was published in 1990. Accidents in South Africa are recorded in two systems: Exhaustive information is available from the insurance system under the Workmen’s Compensation Commissioner (WCC) but to access it on a timely basis is difficult. The legislative system under the Department of Labour (DOL) provides coarse but timely recordings. Interpretation is not simple however; both systems have seen changes to reporting formats and inclusion criteria over time, which hinder trend analysis. Also, the recordings of the two systems are not comparable due to major scope differences. This paper examines the relationship between the recordings in the two systems. Juxtaposing data from both systems the recordings of fatal accidents are found to be in agreement, somewhat less so for permanently disabling accidents/incidents. The paper examines if effects of the popular practice of replacing permanent workers with contract workers is visible in the WCC statistics – firm conclusions cannot be drawn however, due to data shortcomings. Data inaccuracies are reviewed and it is argued that WCC registrations may comprise industries outside the Standard Industrial Classification (SIC) scheme for manufacturing. The quality of accident reporting in official publications began to deteriorate by mid-1990s. The largest problem, however, is that reporting has come to a standstill, by mid-2012 the most recent WCC statistical publication covers 1999.

ESTIMATING THE SUBSTITUTABILITY OF AFRICAN AND WHITE WORKERS IN SOUTH AFRICAN MANUFACTURING, 1950–1985

ABSTRACT In this paper I estimate the elasticity of substitution between African and white workers in the South African manufacturing industry during Apartheid. I find that the elasticity of substitution remained fairly high despite changes in the technology used in manufacturing, despite changes in the allocation of jobs to African and white workers, and despite the increasing skill differential between white and African workers. The elasticity of substitution for production workers declined from 9.81 in 1950 to 4.64 by 1985. This result shows that African and white workers were substitutes throughout Apartheid notwithstanding legislation restricting the types of jobs that African workers could do.