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 FOURIER E
 

Junk Status and the Manufacturing Industry

June 7, 2017

The ripple effect from Standard & Poor’s and Fitch’s downgrading South Africa to junk status is sure to affect each and every South African, from the guy on the street to leading CEOs. This will not happen overnight but in the months to come, the downgrade will lead a weaker rand and in turn less disposable income for each and every one of us.

 

Manufacturers will feel the pressure from both sides. Firstly, higher living costs will disturb customer demand and thus sales volumes or prices. On the other side, raw material prices (especially imported materials) as well as labour will increase and result in increased cost of goods sold.

 

The Investment potential of the South African manufacturing industry will also decline as a result of less favourable business climate where the risk will outweigh the reward and returns on investment will show less enthusiastic returns.

 

Thus, there is no better time to unlock hidden manufacturing potential, whether it is additional capacity, capability, reduced costs or alternative markets. One way to identify improvement opportunities is by means of a manufacturing benchmark exercise. A typical benchmark exercise should investigate performance, best practices and costs to understand how one compares to one’s competitors around the world.

 

 

Fourier-E has access to the world’s foremost authority in benchmarking and data sets and has completed dozens of both performance and practice benchmarks. Feel free to contact us to see how we can help you to explore opportunities in this volatile times.

 

 

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