By Larry Claasen
THE Localisation Support Fund (LSF), a private sector initiative started in 2021, as a way to help local manufacturers increase their capacity and improve their competitiveness, has assisted two companies in the retail- clothing, textile, footwear and leather (R-CTFL) sector.
The non-profit initially received R340-million in funding from Coca-Cola South Africa and Air assisted Liquide Green Thread Manufacturing factory and KARMA Clothing factory by partnering with BM Analyst and Dizani Consulting.
The goal of the LSF’s assistance was to improve efficiency and build capacity, optimisation their production lines, reduce Standard Minute Value (SMV), and review their processes.
Green Thread Manufacturing, which manufactures products for Cape Union Mart’s Old Khaki and Poetry ranges, was inefficient, with its average efficiency ranging between 40% to 50%, which in turn had an adverse impact on the factory’s minute rate.
This saw it incurring consistent and growing losses, which meant it had little room to reduce prices.
An analysis of what was behind its inefficiency found that its line balancing – the process of organising tasks on an assembly line – was the biggest contributor.
After remedial action was taken, its finishing efficiency went from 41% to 60%. The knock on impact of the changes saw a R10-million swing in profit when measured year-on-year for the first months, put it in a position to consider dropping prices, and built a case for possible expansion.
The other company the LSF assisted was KARMA Clothing, a maker of corporate wear and staff uniforms, which wanted to scale-up capacity by optimising its production lines, so as to increase current output by at least 25%.
This was difficult because the uneven demand it experienced put pressure on its capacity. KARMA Clothing was also not operating efficiently and had no formal operational process.
An analysis of its processes identified key bottlenecks, which led to the reconfiguring the factory layout, creating improved workflow.
This charge had a positive outcome as KARMA Clothing unlocked 28,7% more capacity.
The intervention in these two companies were part of the government’s R-CTFL Masterplan, which aims to grow employment in the sector to 330 000, increase local retail sales to R250-billion, expand local retail procurement of local CTFL products from 45% to 65%, and improve competitiveness, technology, skills and transformation.
The LSF’s role in this is to promote localisation by partnering with participants in the manufacturing ecosystem, on both the supply and demand side, to deliver on its mandate.
It does this by funding industry research and deploying technical experts and resources in an effort to accelerate or unblock opportunities for growth in the manufacturing sector.
LSF will measure its impact by the reduction of South Africa’s import bill and increase in exports, the growth in local manufacturing revenue and capacity growth, the rise in the jobs created in the manufacturing sector, and the long-term viability and sustainability of local manufacturing.
For more information: www.lsf-sa.co.za
