The Sunday Mail
Given the smaller size of most of the plants in our manufacturing sector, compared to those found in highly industrialised nations, we can surely afford to do HMLV value addition, especially in the food processing sector.
Beer prices slashed! Mobile voice tariffs down! Uniform prices fall! Fuel prices going down!
Other things down too; collectively moving people’s real consumption levels upwards, regardless of their rigid incomes. Good thing.
Just not so good when you compare the prices of the majority of our locally manufactured products with global ones and reconcile with our inherent need to penetrate the global market as we seek to foster export-led economic growth.
Exports, please note, are the biggest source of liquidity in this dollarisation era.
But we have to also make sure that we are exporting sustainably. We have a responsibility to the future generations.
We have to make sure that we meet our present needs without compromising those of the future generation, from whom we borrow the resources.
This means that there has to be a paradigm shift, from the current situation where raw materials dominate export receipts.
Primary products, apart from being vulnerable to frequent shocks, do not give full return for our resources.
That indispensable transition will require a manufacturing sector that is ready to provide products that do not have difficulty in accessing the international market. Dynamic products! Schweppes is one example of the remnant Zimbabwean companies whose presence is still visible beyond our borders. The National Trade Policy also supports this idea, when it says that “greater emphasis will be put on the production and export of processed goods in all sector of the economy”.
Sadly the policy will breathe its last next year with nothing much to show for it.
Given the antiquated nature of the majority of the machinery that is being used in the manufacturing sector, can we expect to beat the sophisticated and mass producing machines that are being used in developed nations?
Our utilities too are expensive. Electricity is not only erratic, but the second-most expensive in the Southern African region – with the Global Competitiveness Report pronouncing the remainder of our high production costs narrative. That explains why, for instance, the price of a day old broiler chicks in Zimbabwe was at some point equal to that of a ready to slaughter broiler in Brazil.
I remember attending an Industrial Taskforce Committee meeting of the National Economic Consultative Forum, a few years back, when one industrialist was bewailing that their cooking oil was not being bought even though they were putting a very little mark-up of five percent.
Even if you are to put a paltry mark-up of one percent on a two-litre bottle of cooking oil whose production costs add up to US$10, I guarantee you that nobody will buy your cooking oil.
What’s so special about that US$10 cooking oil that has the same ingredients to the imported variety?
We have to find ways of avoiding direct competition with the highly industrialised, while still managing to export manufactured products.
But how does that happen, given the seemingly impossible state of affairs in the manufacturing sector?
There is always the good side about every bad. This is where I feel high mix low volume (HMLV) manufacturing comes into play.
This is a production process whereby any job in planning or production can be uniquely mapped to an existing customer order.
Products being made also vary in application, lot size and production process.
HMLV is a niche that many highly industrialised nations abandon and tapping into it might bring wonders to our economy.
As economies get more industrialised, they tend to focus on mass production, which often takes the low mix high volume stance.
The goods produces are usually similar because of their huge machines.
Tomato sauce can be made using mass production, with tens of thousands of bottles being made per day by a single plant. However, for a small section of consumers who like tomato sauce with garlic, the same company in mass production cannot accommodate such order even with their sophisticated machinery.
Highly industrialised nations have machines that are customised not to produce variety, since they produce similar products in bulk.
If they are given orders with many varieties, they simply can’t do them because it would be expensive for them to shut down the entire plant and recalibrate their machines for that small special order.
You cannot kill a mosquito with weapons of mass destruction and that is where we come in.
Given the smaller size of most of the plants in our manufacturing sector, compared to those found in highly industrialised nations, we can surely afford to do HMLV value addition, especially in the food processing sector.
Calibrating our machines for a different order won’t be that expensive.
Again, you don’t have to shut the entire plant since it is already small.
The plant can therefore be entirely dedicated for that particular order.
You don’t always have to join them if you can’t beat them, when joining seems difficult as well.
You can still beat them by focusing on their weaknesses vis-à-vis your strengths. HMLV production is an opportunity that happens to be an albatross for the big brother, highly industrialised nations that is. If we can’t beat them in mass production, and can’t joint them too, then let’s make customised goods in small quantities on demand.
Something Big Brother can’t do!
The good thing about HMLV manufacturing is that being price competitive is a secondary consideration!
The primary issue is delivering up to spec what is wanted.
So, despite our poorly ranked doing business and competitiveness environments, we can still produce products that can penetrate the international market and bring enormous returns, if we take the HMLV route.
It is important for every manufacturing concern to start exploring the opportunities for HMLV orders in the regional and international markets.
This is also a very sustainable niche.
If you ask me, I will tell you that people probably do not like the bread that is being sold on the shelf in the manner in which it is being baked today.
This is because it’s being mass produced and compromises the differing tastes and preferences of consumers.
With HMLV, you are guaranteed a market as you will be producing for a targeted niche that want your product exactly as it has been produced.
You will be fully satisfying the consumer, as opposed to mass production.
What is also key to note is that HMLV manufacturing is also very compatible to the economic architecture that we are fast transitioning into where the SMEs dominance is becoming the new normal. Firms in the SMEs sector should pioneer the revolution for HMLV manufacturing, as they can manage to do small customised orders profitably, given their strategic size.
At the rate at which individuals are getting bank loans to get cars, we sure can be a successful HMLV manufacturing economy if we are to switch our priorities to acquisition of small manufacturing machinery to support this cause.
This will be further abetted by the advantages that we already have, such as being endowed with a quantum of natural resources as well as a wide skills base. Zimbabwe should give HMLV manufacturing a chance.
We cannot wait for the day when there is going to be enough liquidity for the manufacturing sector to full capitalize and be able to compete with highly industrialised nations in mass production. Let’s be innovative in working with what is there to optimise the export of manufactured products, while waiting for that kingdom to come!
