HOW IS ASCCI
WORKING FOR
MANUFACTURERS?
SOUTH AFRICAN AUTOMOTIVE INDUSTRY SUPPORT
The South African automotive industry has benefited and continues to benefit from strong support from a number of agencies; aligning
these benefits to a common ambition is important to delivering maximum value to the industry
Un-aligned support efforts
SOUTH AFRICAN AUTOMOTIVE INDUSTRY SUPPORT
The South African automotive industry has benefited and continues to benefit from strong support from a number of agencies; aligning
these benefits to a common ambition is important to delivering maximum value to the industry
Aligned support efforts
Resultant need to:
1
Set the strategic direction for industry support activities
2
Coordinate and align activities in line with the defined strategic direction
WHY ASCCI?
Given the realities facing the South African automotive industry, industry stakeholders identified the need to establish a national structure
to coordinate automotive supply chain development activities
Industry recommendation to Minister Davies of need to establish a national steering
committee to:
1
2
Set the strategic direction for specific practically
oriented competitiveness improvement projects
•
Formulate a national competitiveness improvement strategy
•
Engage with local / provincial authorities on the development of
local automotive sectors and clusters
•
Prepare budgets for specific investigations and projects
Facilitate, coordinate and oversee supplier
competitiveness improvement activities
•
Monitor, coordinate and extend support to regional industries
•
Initiate, support and fund localisation research projects
•
Provide recommendations to the dti on appropriate service
providers
HOW ASCCI CAME ABOUT
In response to this need, stakeholders set about developing a business plan and governance framework to provide the structure to
delivering meaningful supply chain development activities to advance automotive industry competitiveness
•
Regional supplier
representatives
•
NAACAM
•
OEM Purchasing Council
•
NAAMSA
•
NUMSA
•
dti
Technical steering
committee established
to develop a business
plan
NAACAM
NUMSA
dti
NAAMSA
Collaborative initiative with a 3-year
business plan to provide the blueprint for
coordinating and aligning automotive supply
chain development initiatives
Automotive Supply Chain
Competitiveness Initiative (ASCCI)
WHO LEADS THE INITIATIVE
An Executive Committee comprising key representatives from Suppliers, OEMs, Government and Labour provides strategic
direction and oversight to the initiative
Stakeholder category
Suppliers
Industry
(OEMs)
NAACAM & Cluster representative
Current members
KZN supplier representative
1. Alex Holmes – MAHLE Behr *
EC supplier representative
2. Andy Dealtry – Ebor
GP supplier representative
3. Andrea Moz – Auto Industrial
WC supplier representative
4. Andrew Turner – Torre Automotive
NAACAM Executive Director
5. Robert Houdet – NAACAM
NAAMSA OEM
Purchasing Council
6. Theunis Rootman – TSAM
7. John Astbury – GMSA
8. Mkululi Mlota
Government
DTI
9. Renai Moothilal
10. Neo Bodibe
Labour
NUMSA
11. Tengo Tengela
* Chair
WHAT IT SETS OUT TO DO
ASCCI sets out to establish and coordinate a strategy to enable competitiveness, growth, employment creation and
transformation for the South African automotive industry via three strategic focus areas
Objective
Increase supplier Manufacturing Value Add (MVA) in support of producing
1.2m vehicles by 2020, increasing employment, enabling local supply chain
capabilities, increasing local content & advancing transformation
WHAT IT SETS OUT TO DO
ASCCI sets out to establish and coordinate a strategy to enable competitiveness, growth, employment creation and
transformation for the South African automotive industry via three strategic focus areas
Supplier capability
Objective:
Achieve comparable levels of supplier
productivity to leading cost countries
(as measured in Rand of MVA per Rand
of employee cost)
Localisation
Objective:
Increase levels of localisation as value of
vehicle sales ex-factory less all imported
content (base condition: avg. 41% local
content)
Strategic insights
Objective:
Increased local content and generation
of employment creation opportunities
Projects focus on:
• Base operating standards
• WCM best practice
implementation
• Shop floor skills
• Scarce skills
Projects focus on:
• Raw materials pricing and
beneficiation
• Tier 1 localisation
• Tier 2 localisation
• Investment in updated process
technology
Projects focus on
• Blockages and enablers to
competitive local supply
• SA market regulatory review
• Africa market regulatory
review
• Facilitation of buyer-supplier
* Chair
linking
HOW ASCCI IS RESOURCED
ASSCI has a budget of R68m for its current 3 year project plan; of this R4.8 million in catalytic funding is provided by the 4 key
stakeholders for the executive function, while the remaining R63.2 million to be sourced for projects
Catalytic funding
1
Directly leveraged resources
2
Indirectly leveraged resources
Outputs
R 4.8m
R63.2m
R68.0m
Impact
2
Directly / indirectly leveraged resources
Catalytic funding
•
dti – 50%
•
NAAMSA – 22.5%
•
NAACAM – 22.5%
•
NUMSA – 5%
1
Figures in
Rand
million
Supplier
capability
Localisation
Strategic
insights
Year 1
Year 2
Budget
Secure
Budget
9.73
7.45
11.72
Secure
Year 3
Budget
Secure
12.77
From UNIDO, MERSETA, self funding service providers
9.59
4.00
8.17
8.17
41%
From dti
1.31
From dti
54%
0.82
1.15
0.60
* Chair
5%
WHAT HAS BEEN DONE? SUPPLIER CAPABILITY
The supplier capability focus area has recently launched a number of projects, the most substantial of
which is a programme to roll out WCM interventions at 30 suppliers in priority value chains
Key points
Key points
•
World class manufacturing interventions currently being launched in identified priority subsectors; interventions will be
deployed at 120 suppliers over the 3-year business plan period
•
Base operating standards has recently launched a project focusing on establishing TS16949 as a more effective indicator of
base standards of operation, particularly amongst lower tier suppliers
•
A shop floor skills project is currently undertaking to create the qualification for machine operators in order to ensure it is
aligned with the requirements of the role
1. FMCSA (15)
Tier 1
2. GMSA (17)
1.Metal forming/
pressing n=17
2.Components n=16
3.Plastic moulding
n=9
4.Autotrim n=11
5.Tyre / rubber n=3
6.Drivetrain n=2
7.Foundry/Forge n=2
8.Harnesses/
electronics n=5
9.Catalytic converters
n=1
10.Other n=2
3. NSA (14)
4. VWSA (18)
5. TSAM (20)
6. MBSA (11)
7. BMW (3)
1
Commodity
groupings
(suppliers n=98)
2
Standardisation
and integration
(suppliers n=68)
Tier 2,
aftermarket and
export
Initial Tier 1 suppliers will be
supplemented by Tier 2,
aftermarket and export
oriented firms over the period
3
Linking of multi-site
suppliers
(suppliers = 52)
Tier 3
4
Phase 1
(suppliers n=22)
Phase 2
(suppliers n=18)
Phase 3
(suppliers n=12)
WHAT HAS BEEN DONE? LOCALISATION
The localisation focus area has identified a list of priority localisation opportunities together with a list of key
blockages to localisation, which will be addressed with funding made available by the dti
Key points
•
Initial focus from a localisation perspective: broadening local content through increased use of existing capability
•
Workshops hosted with OEMs to determine specific localisation opportunities
•
15 priority opportunities identified together with list of key blockages to localisation (including tooling and investment costs,
technology availabilty, cost of testing, and supplier availabilty and capability)
•
Next step: dti has made available funding to implement projects to address identified blockages
3 broad areas of localisation
opportunity
Deepen through
new capability
(New local content to SA)
Broaden through increased
use of existing capability
(Build on existing local
content)
Retain local content through
process upgrading
(separate intervention area)
Focus: path of least
resistance
Difference between upper and
lower quartiles suggests
opportunity for localisation in
the sub-sector
WHAT HAS BEEN DONE? STRATEGIC INSIGHTS
The strategic insights focus area looks at opportunities for automotive market growth, increasing local
content and creating employment within and for the South African automotive industry
Key points
•
ASCCI commissioned research to identify key lessons for regional economic development support to the automotive sector;
findings are currently being shared with provincial and municipal authorities
•
Funding is currently being sought to undertake a review of the African market and regulatory environment with the view to
defining opportunities and mechanisms to leverage in respect of trade policy and other factors related to growing a viable,
sustainable large scale African automotive market
JOINT COLLABORATION
STRONG INSTITUTIONAL
STRUCTURE
MUTUALLY BENEFICIAL
OUTCOMES
DEMAND-SIDE
INFLUENCE
GOVERNMENT
PARTNERSHIP
SPECIFIC, TANGIBLE
SUPPORT
COST / BENEFIT
ANALYSIS
MEANINGFUL
INCENTIVES
CRITICAL MASS IN
COLLABORATION
ASCCI is a collaborative initiative driven and funded by NAACAM, NAAMSA, the dti and NUMSA.
The initiative is facilitated by B&M Analysts.
Julia Wedgwood
B&M Analysts
T: +27 (0)11 465 6911
E: julia.wedgwood@bmanalysts.com
A: 3rd Floor, East Wing, 158 Jan Smuts Avenue, Rosebank, Johannesburg