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By Johan du Toit, Strategic Sales Executive for SYSPRO Africa
To succeed in today’s economic environment, manufacturers must find new ways to create and capture value. But how do they do this when South Africa is currently facing a massive energy crisis, with load shedding impacting production and grinding their operations to a halt?
As we know, manufacturing is one of the more energy-intensive sectors contributing to the South African Gross Domestic Product. Most industrial machinery and equipment used by our manufacturing sector is powered by either a direct current or an alternating current electricity supply. With the recent frequent power cuts caused by load shedding, operations managers have a difficult time trying to satisfy demand and maintain operations.
We have seen the data published by Statistics South Africa that truly reflects the adverse impact of load shedding and muted global economic growth on the manufacturing sector. The unfortunate reality is that the vast majority of South African manufacturers still lack enough working capital for them to purchase or hire backup generators. As a result, when power cuts occur, customer orders may be delayed owing to interruptions to scheduled tasks that require electrical power.
Production scheduling with uncertainty
In recent years, load shedding has slowly become a common operational disturbance that cannot be ignored. In these types of circumstances manufacturers must find ways to maximise their production capacity during the schedules with power.
The task of production scheduling involves assigning finite resources to complete orders over a specific time to optimise an aspect of system performance. Most production schedules in theory are prepared to assume that everything will go likely according to plan and be implemented perfectly on the shop floor. However, shop floor operational disturbances occur more frequently than expected, especially with high stages of load shedding occurring. This leads to manufacturers adopting a reactive schedule, rescheduling to run double shifts when the power is on to compensate for lost time.
This ensures the best use of available capacity to deliver reliably to customers faster and in the most cost-effective way during the load shedding.
Planning for the unexpected
South African organisations need to safeguard their operations financially by implementing comprehensive risk management procedures while load shedding is in effect for the foreseeable future. Adopting the right kind of business software enables them to generate schedules that consider constraints around people, machines, tooling, materials and flexible schedules to fit in with the electricity supply. Rescheduling to run double shifts when the power is on to compensate for lost shifts when it’s cut. Hence ensuring the best use of available capacity to deliver reliably to customers faster and in the most cost-effective way during the load shedding.
Given Eskom’s tendency to initiate load shedding at very short notice, often announcing power outages with immediate effect, planning for such interruptions remains a very real challenge. However, this is where an ERP system can assist manufacturers to be more agile, adjust and ensure they can successfully keep some form of production.
ERP software refers to the automation and integration of a company’s core business processes to help them focus on effectiveness and simplified success. Investing in an ERP system can help mitigate your organisation’s losses by planning and coordinating a number of processes, from procurement of raw materials to shifting production cycles, and distribution. ERP software allows production managers to adjust the production schedule in the real-time using system to facilitate quick schedule edits.
Bringing some light in dark times
Adopting more flexible manufacturing techniques and smart supply chains will enable manufacturers to provide products and services, reducing the time lost during load shedding. It is not a fool-proof solution, as predictions must be based on Eskom’s published load shedding schedule. However, it can alleviate much of the pressure that is currently on these industries.
Situations like this require a return to your business or ERP system to help ‘tighten your belt’ and maximise output from input. This means bedding down the planning stages in terms of inventory optimisation and making sure that you are driving the necessary policies to support this. ERP is designed for the good and the bad times, but during the latter, it’s the ultimate business tool for finding efficiencies in your organisation, and keeping the lights on.
While these are dark times for many industries, we must find a silver lining. When faced with adversities such as load shedding, enterprises of all sizes must become more creative in running their operations. If we can learn and be agile to find a way to succeed while working with load shedding, imagine what organisations will be able to do when it is finally gone.