More manufacturers tapped technology to unlock potential.

Analysts say embracing technology is one way to increase manufacturing’s contribution to the economic pie. photo SHUTTERSTOCK

A continuing headache for Kenya’s manufacturing sector is how to increase its contribution to the economic pie.

For a long time, the sector’s share of GDP has stagnated at about 10 percent, and the government and stakeholders are looking for ways to unlock its potential and make it a catalyst for economic growth.

In the country’s Vision 2030, manufacturing is at the center of the economic transformation objective. So how to accelerate the expansion of production?

One way to realize this goal, say analysts, is to embrace technology.

The Kenya Association of Manufacturers (KAM) has been pushing for integration of digital solutions in the sector, noting that innovation is key to a vibrant sector.

“Our sustainability and self-reliance as a nation is determined by our ability to become a globally competitive economy, and the use of technology plays a vital role in growing our economy,” said Tobias Alando, CAM Acting CEO.

Using technologies such as Enterprise Resource Planning (ERP) allows businesses to better manage their internal operations, including procurement, production and distribution, and store this transactional information.

Many manufacturers have adopted digital systems into their operations to increase competitiveness and increase efficiency while reducing costs and waste.

This adoption has been particularly accelerated in recognition of the depth and breadth of business disruption caused by the Covid-19 pandemic.

A study by South African business management software provider SYSPRO underscores the importance of pandemic technology in business operations.

“Inspired by Kenya’s international peers, the imperative is becoming a rapid digital transformation. Change may happen slowly, but it must happen,” says the Manufacturing CFO 4.0 Survey 2021 by SYSPRO and the Institute of Certified Public Accountants of Kenya.

According to the survey, ERP adoption is yielding positive results in Kenya, with 44 percent of the companies interviewed expressing their willingness to invest and migrate to the new way of working.

“Warehouse Automation lags behind at 39 percent, followed by Business Intelligence at 38 percent,” the study found.

Xetova – a technology company that provides an interactive platform for the procurement ecosystem – in a recent study interviewed CEOs from various sectors from manufacturing to determine the scope of digital applications and the benefits or obstacles they faced.

The study, ‘The CEO’s perspective; ‘The State of Digital Transformation in Kenya, 2022’ shows that agricultural company Sasini has established an automation roadmap with a focus on “projects with the highest bottom-line impact”.

Sasini now uses ERP at a 95 percent “unused” rate and has achieved a 25 percent profit in just two years of implementation.

According to Xetova’s survey, a growing number of domestic manufacturers are embracing artificial intelligence to transform their operations – fully automating their production lines and allowing them to interact with customers and suppliers, taking a back seat to traditional customer service models.

As manufacturers embark on a digital transformation journey, the success of the program depends on execution.

Technology experts advise manufacturing companies to get their digital transformation right if they want to deliver on their promises, noting that digital transformation involves changing how enterprises use technology, workforce and business processes to improve performance and value for customers.

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