Competition is not for sissies, as many South African firms are discovering. The effects of global competition are being felt far beyond the headline-grabbing clothing and motor industries, in IT, electronics, engineering, and just about every other sector.
Indian and Chinese companies are beginning to win large tenders, often against local companies that probably believed that longstanding relationships constituted some kind of security. They don't.
This does not mean it's time for local manufacturers to shut up shop. But it does mean we need to get serious about exactly where our competitive advantage lies.
In the tyre industry, for example, local manufacturers are struggling against imports that meet all the SABS quality standards as well as being cheaper. In the consumer market, the battle is probably already lost - but the tyre market is a lot bigger than consumers. Where there is real economic value at stake - in mining, transport and agriculture, for example - it will still make sense for buyers to choose components from local suppliers if they can offer better service, quicker turnaround times and faster resolution of any problems that arise.
If you can't compete on price, in other words, you have to compete on something else - usually quality. Those who can afford it are always willing to pay a premium for goods of higher quality that will last longer.
This applies to T-shirts as much as it applies to tyres or hi-tech equipment. If South Africa's clothing manufacturers can't compete at the bottom by making t-shirts, perhaps they should make something else, like bespoke suits, and aim for the top. If tyre manufacturers can't produce car tyres as cheaply as they can be imported, there are still huge opportunities in agriculture, mining and other industrial markets.
The pattern is the same across many industries: if you're mass-producing a commodity that can be easily copied, you're in trouble. Far better to be making small volumes of valuable goods or machinery, to exacting specifications and with excellent service. South African manufacturers should be able to offer their local clients not only better quality and reliability than any import can match, but also the advantages of local knowledge, cultural fit and superb backup and service.
We should all be making more of the fact that we design local solutions, for local conditions. It's easy to overlook the lifetime of learning that lies behind some South African design solutions - around security, for example. Some of what seems blindingly obvious to us is big news elsewhere.
As local manufacturers, we also need to be more assertive in telling our customers the advantages of continuing to do business with us. Every piece of equipment fails eventually - it's only a matter of how long before that happens, and then how long before it will be fixed, and what the costs are in the meantime. If a critical piece of equipment lies idle for a month because a part has to be imported, how much does that cost? Quite often it turns out cheaper in the long run to pay a small premium for the knowledge that the part you need, and the expertise to install it, will be just down the road when the time comes - instead of halfway around the world.
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