• Tuesday, March 05, 2024
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Why manufacturers must re-engineer internal processes now


MTN, a major telecommunications network in Nigeria, inundates Nigerians with a text message that reads, “did you know that 65 percent of small- and medium-scale enterprises (SMEs) fail within three years of start-up?’’

If you think that it is a scheme or stunt, the Manufacturers Association of Nigeria (MAN) does not think so. According to MAN, manufacturing firms in the country have consistently failed to reach 50-year threshold.

Findings show that many external factors are responsible for such colossal failure. One is high energy cost, as major manufacturers and business operators spend huge sums on diesel and fuel for their giant-sized generators, owing to erratic power supply across the country.

Apart from power supply problems, there are also high pressure from a plethora of regulatory agencies, poor infrastructure and unbridled imports, among numerous others.

In spite of these, findings have shown that failure of Nigerian firms are basically internal, given that a lot of them are not built on models and processes but are usually woven around people, without which the corporations would fail.

In acknowledgement of this, MAN, in collaboration with Gold Elsh Unic Services Limited, a Lagos-based consulting and training firm, organised a workshop on Wednesday, February 12, 2014, aimed at placing Nigerian manufacturers on a strong competitive footing, with a view to making their businesses return huge profits and the manufacturing sector a large contributor to the country’s Gross Domestic Product (GDP).

The event was timely, given the approach of the Common External Tariff (CET) regime, which will ensure easy movement of goods and persons across the 15 Economic Community of West African States (ECOWAS) countries and uniform tariff. In essence, the regime, which will begin on January 1, 2015, could see manufacturers who cannot compete effectively go under.

Rasheed Adegbenro, acting director-general, MAN, said time had come for manufacturers to look inwardly and re-organise their businesses to place themselves on strong competitive platform.

“Many factors are responsible for inability of businesses to cross the 50-year threshold. They are weak internal processes; microscopic and undiluted ownership structure; building businesses around personalities rather than institutions; un-competitiveness of such type of businesses; limited access to markets; lack of innovation and near absence of corporate governance, among others,’’ he said.

Olukunle Taiwo, president/executive consultant, Gold Elsh, said in order to position the sector for future growth, there was need to focus on ways to support innovation, while driving down internal cost and wastages.

He stated that to grow businesses, emphasis must be placed on waste management, effective leadership communication, systemic evaluation and safety orientation and implementation, adding that any organisation that failed to train employees needed not blame them when they made mistakes.

“The main objective of this project is to make manufacturing industry process dependent, not people dependent,’’ he said.

In his submission, Yomi Sanya, legal adviser, Gold Elsh, said the benefits of the project to manufacturers included sustainability, accountability, productivity, profitability, safety and competitiveness, adding that businesses must be re-positioned for competitiveness to reap the gains of open borders.

Oluwakemi Olukoya, business development manager, Selfa Nigeria Limited, a participant, told Real Sector Watch that she had learnt the need for organisations to eliminate wastes, while concentrating on things that would move them forward.