Challenges in the Manufacturing

SectorSrini SrinivasanCEO, LUMIUM Design

• Manufacturers are building closer ties with customers to deliver “more value”.

• PLM strategies are more global, multi disciplinary, innovative and customer focused.

• Critical investments in Supply Chain technologies

• Higher Plant floor IT Investments to increase productivity

Global Manufacturing Trends

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Challenges of Manufacturing industry

• Globalization!• Sustainable growth as an Industry• Heavy international competition• Technology, Knowledge and manpower• Logistics of Supply Chain• Govt. tariff and other road blocks• Inverse ratio of costs: inputs vs. outputs

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Global Manufacturing Competitiveness

Source: 2013 Global Manufacturing Competitiveness Index by Deloitte Global Services LimitedLUMIUM

Drivers of Manufacturing Competitiveness

Talent-driven innovation

Cost and availability of labor and

materials

Energy cost andpolicies

Supplier network

Local market attractiveness

Economic, trade, financial and tax

systems

Physical infrastructureGovernment investments

in manufacturingand innovation

Legal andregulatory system

Healthcare system

ManufacturingCompetitiveness

Government Forces

Market Forces

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Manufacturing in South African MarketSouth African ranking as to the importance of each factor of competitiveness

LUMIUM Source: 2013 Global Manufacturing Competitiveness Index by Deloitte Global Services Limited

SCOR Manufacturing Model

Plan

Return

Source Make Deliver

Supp

liers

Customers

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Distributed Manufacturing ModelThe distributed manufacturing model eliminates locational constraints to find the best talent at best price. The network allows for a specialist factory to fill excess capacity, whilst keeping manufacturing local to the clients destination.

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• Reduced Logistics Costs• Best Available Resources• Agile Manufacturing Supply Chain• Distributed Workload, Reduced

Risks• Make use of excess capacity• Better speed, Efficiency and

Quality

Policies that affect or influence Mfg.• IP policies (protection, punitive measures)• Labor policies (Unions, collective bargaining acts)• Government intervention (ownership)• Immigration policies• Environmental Policies• Energy policies• Health policies• Corporate Tax policies (Tax holidays)• Import/protection policies (customs/import duty)• Fiscal policies

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What does a “Design Policy” aim for?

Design

Policy

Educate the

market, law makers

Bring about the

Design Thinking

Enable a uniform policy

Create better

products

Improve standard of

living

Stay ahead of the

competition

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What “Design Policy” can do to help manufacturing industry?

• Influence better quality design/engineering education– Trained manpower is the most significant resource needed– 82% of manufacturers have shortage of qualified manpower

• Influence the Govt. policy makers to bring about policies to support mfg.– Single window clearance of Mfg infrastructure set-up

• Land, Power, water, labor, logistics– Favorable financing models through banks– Concessions on import duty of components

• Domestic consumption• International re-export

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What can be done?• Proactive engagement between

government, labor and business leadership• Regulatory adjustments to provide greater

flexibility to industries• Invest in a better standard in education• Implementation of current Manufacturing

initiatives, subsidies for localization & import protection

• Industry collaboration to coordinate and fund cross-border infrastructural projects

• Improved quality of life Better wages and job creation LUMIUM

How it can be done?

Identify pressing Design & Manufacturing industry issuesDiagnose underlying causes and pain points

Design feasible policy solutions based on discussions & evidence

Implement and Test solutions with rigorous evaluation

Monitor Policy continuously and refine as per industry feedback

Create DesignPolicy

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Thank you!

srini@lumium.com

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