It has been a turbulent few years for South Africa’s manufacturing sector, although turbulence perhaps understates what many businesses have had to contend with. What has become noticeable through many conversations with leaders in the sector is that traditional playbooks, focused narrowly on incremental cost reduction, are now proving inadequate.
That raises an interesting question: if volatility has become a persistent feature of the operating environment rather than a temporary disruption to it, what does resilience actually look like for manufacturers today?
From Absa’s ongoing engagement with the sector, it is clear that this question is no longer theoretical but central to how manufacturers are reshaping their operating models in real time.
Manufacturers cannot eliminate every source of uncertainty, nor can they insulate themselves entirely from broader economic or infrastructure challenges. Yet many of the businesses adapting most successfully have recognised that resilience depends on moving beyond a cycle of reactive firefighting and towards a more deliberate approach to risk management and operational self-reliance.
That means making conscious decisions about where they remain exposed and where greater self-sufficiency is both possible and commercially justified, beginning with the operational dependencies that have the greatest influence on production, cost and business continuity.
When it comes to electricity, for example, while South Africa has now gone more than a year without load shedding, grid unreliability and escalating municipal tariffs remain a persistent risk to production schedules and margins, prompting many manufacturers to move from expensive diesel generators towards integrated hybrid energy systems that combine rooftop solar PV, commercial battery energy storage systems (BESS) and wheeling agreements to establish more predictable and sustainable energy baselines.
Others are rethinking their shift patterns and production schedules to align with peak solar generation windows or lower-tariff time-of-use periods, directly reducing input costs.
From Absa’s own engagements with clients, it is clear what is of greater concern now is water scarcity and its potential impact on the continuity of the manufacturing process. There has been notable uptake in closed-loop water recycling systems, on-site purification and borehole backup solutions to help safeguard wet-manufacturing operations from municipal disruptions.
Manufacturers, especially those who are import-dependent, are also contending with persistent bottlenecks at major ports and rail networks, making a strong case for reducing unnecessary exposure wherever practical.
A potential workaround is near-shoring: reducing reliance on imported raw materials where possible by developing a robust network of domestic, Tier-1 South African suppliers as a buffer against disruption. It may also require a more selective approach to inventory management and leveraging data analytics to maintain higher safety-stock levels, particularly where critical imported components have long lead times and no readily available local substitute.
Effective cash flow management is another critical safeguard given the financial pressures across the local retail and industrial sectors. Manufacturers should consider moving from static annual credit reviews to real-time credit monitoring of key customers and counterparties, while introducing resilience guardrails into procurement and funding strategies, accepting the slightly higher working capital required for domestic sourcing or energy hedges as a strategic investment in revenue continuity.
Technology also has a role to play, although in South Africa the case for digital transformation is often strongest when it is tied to practical operational outcomes rather than large-scale transformation programmes. Given the cost of replacing industrial machinery, many manufacturers are focusing on extending the life of existing assets through predictive maintenance tools that can identify wear patterns before failures occur. Others are investing in targeted digital dashboards that provide greater visibility into production performance and bottlenecks, or using digital replicas of production lines and supply chains to test the potential impact of disruptions before they occur.
However, the value of those investments ultimately depends on the people using them.
Building resilience requires a workforce strategy that views employees as participants in modernisation rather than casualties of it. We are seeing successful manufacturers use technology to augment human capability, automating repetitive or hazardous tasks while investing in the skills required to manage and maintain more advanced systems. At the same time, the transfer of institutional knowledge is becoming more urgent as experienced technical artisans approach retirement, placing greater emphasis on mentorship, skills development and succession planning.
Many of the pressures confronting South African manufacturers show little sign of easing in the near term.
Yet there is a growing recognition that resilience cannot depend entirely on external conditions becoming more favourable.
In many respects, it has become an operational capability in its own right, embedded in the choices businesses make every day.
