Manufacturers in Kenya are tapping into technology to address supply chain constraints that were caused by the Covid-19’s global lockdown.
In 2020, governments around the globe imposed tough restriction measures such as local and international flights bans, movement restrictions, and working-from-home formulas to contain the spread of the virus.
Whereas these measures helped mitigate its spread, it had a negative impact on manufacturers and suppliers who were not be able to source raw materials to manufacture different products.
Latest report by Syspro, a South African software development company, report shows that 70 percent of businesses experienced material handling and supply chain disruptions while 60 percent were unable to engage with customers and suppliers.
To solve the problem, industry players have committed to digital transformation -initiatives,
with 48 percent building the digitisation strategy to keep the light on, 69 percent building a digitization strategy while 29 percent (digital transformation strategy).
“As businesses began to realize that the shift created by ongoing disruptions was long-lasting and innumerable, many geared up digital transformation,” the 2022 report states.
In their digital road maps, 58 percent have optimised operational processes that also include upskilling staff, improve customer services (48 percent), improve resource efficiency and cost reduction (46 percent) as well as improve internal collaboration (50 percent).
“The findings suggest that many businesses did not set up a solid foundation in their digital strategy by jumping straight to digitization or digital transformation,
“At the same time, many businesses feel that digital transformation is unnecessary as the way they have manufactured products has not changed in years,” Syspro head of product management Roger Landman said.
To execute digital strategies, businesses have made a number of technology investments such as investments to improve operations management, quality management and warranty management (34 percent), improving sourcing, procurement and inventory management as well as investments in product design and order configuration.
Key technology investments being internet of things and IIOT and sensors (47 percent), cloud computing (45 percent), collaboration platforms (27 percent), alternative sales and marketing digital channels (21 percent) as well as big data and analytics (20 percent).
Others include connectors and APIs (20 percent), none of the options (17 percent), virtual or augmented reality (seven percent), AI and ML (five percent), robotics and cognitive (five percent), distributed ledgers (five percent), other (four percent) and 3D printing (three percent).
Benefits accrued from digital transformation being cost efficiency (49 percent), improved employee engagement (35 percent), improved product quality (32 percent), improved customer satisfaction (26 percent), revenue growth (22 percent), none of the above (20 percent) and other (six percent).
Digital transformation plans over the next 12 months among distributors and firm being optimizing operational processes (66 percent), improving resource efficiencies and cost reduction (54 percent), improving customer service (53 percent), improving employee perfomance (44 percent), increasing internal collaboration (44 percent), among others.
In sectors, the report shows the biggest disruption in the automotive parts and accessories industry has been supply chain and material handling disruptions at 83 percent followed by engagement with customers and clients (58 percent).
“This can be largely contributed to the fact that a large portion of automotive parts are derived from the Far East.”
To address these challenges, 42 percent have invested in alternative sales and marketing channels such as e-commerce, investment in IoT and IIoT (41 percent), invetsment in big data and analytics (25 percent) and investment in collaboration technologies (eight percent).
Food and beverage industry also experienced a 77 percent disruptions on customers and suppliers engagements.
“Due to the fact that this sector also needed to consider new pandemic related hygiene requirements and the knock-o effect of supply chain disruptions, 45 percent of businesses experienced major internal operations disruptions,” it said.
However, the report indicates barrier to digital transformation as reliance on fleeting service advisor instead of long-term trusted advisors.
“To implement their digital strategy, 71 percent of businesses engaged with outsourced external service providers with no real understanding of core business challenges or everyday reality of what was affecting the business,” it adds.
Other barrier being lack of top management support and the skills gap.
“The study shows the true champions of digital transformation within businesses was middle management (60 percent), while only 44 percent of C-level management supports digital transformation. Top leadership support is imperative for business to digitally transformation.”