Justice Tshifularo
Not only has his blinds-making factory withstood the assault of cheap imports, but Ridwan Peer has been able to grow sales fourfold in the last eight years — much of it following productivity interventions that he put in place after joining a government programme.
He gets companies of different sizes to work together in the Workplace Challenge Programme and divide their own workplaces into various teams to compete against one another.
Peer owns The Blinds Syndicate, a manufacturing business in Verulam, KwaZulu-Natal. Since he joined the programme in 2008, he has reduced his product reject rate from 5% to 0.34%. Peer has also given talks to a number of other businesses about the programme and productivity improvements.
He has created 21 new jobs since he was runner-up in the National Productivity Awards for small, medium and micro-sized enterprises in 2009/10 and has 110 employees today.
Recently, a top German weaving company made him its exclusive distributor in the country.
“I’m pretty passionate about it. I think every company should be on it,” he says, adding that he believes every business that seeks funding from government should be required to join the programme before finance is granted.
Even though he faced stay-aways and antagonism from unions, Peer says the programme helped to radically improve employee-employer relations, while creating motivated and empowered workers.
Earlier this year recruitment and research company Adcorp revealed that with labour productivity defined as output per worker, per unit of capital had fallen to a 46-year low.
Adcorp also called for productivity-linked wages.
Peer said that although the programme had provided workers with standards against which to measure their own productivity, it is difficult to instate productivity-linked pay on his shop floor.
This is because of the different kinds of blinds he makes; some demand longer production times than others. Introducing productivity-linked pay would see few, if any, workers want to work on the lines that demanded longer lead times than others, he said. Instead, he ties bonuses to workers’ attendance.
Workplace Challenge
The Workplace Challenge Programme has grown considerably in recent years. In 2012/13 the programme supported 475 enterprises including 427 small businesses, up from the 187 companies that were helped in 2009/10.
The department of trade and industry oversees the programme and wants to support 900 companies through the intervention. At the same time the department is rolling out more in productivity-related incentives to business owners.
With economic growth slacking, productivity and competitiveness enhancements — such as better machinery, a more motivated workforce and more effective processes — will prove vital for small and medium-sized companies that want to stay on top.
The Workplace Challenge Programme, managed by Productivity SA, was initiated in 1995 to help meet the challenge of South Africa’s re-entry into the global market.
The latest results show that participants of the programme record on average a 55% improvement in quality, a 25% reduction in cost, a 16% improvement in delivery time, a 52% reduction in the number of accidents and a 30% improvement in attendance by staff.
Despite this success, the national treasury assigns only R8.7-million to the programme.
Much of the funding for the programme comes from the fees that companies pay to become members of one of the clusters. At present there are 11 clusters.
Justice Tshifularo, the programme’s director, said the annual cost for a company employing 50 employees is about R64 398. The department contributes R50 199 and the company contributes R14 199 towards this amount every year.
An upside for businesses
Businesses join the programme and become part of a cluster or user group located in the business’s area. They are then mentored by consultants for a three-year period.
Productivity SA also runs introductory workshops in productivity for small businesses and co-operatives through its productivity organisational solutions unit.
In 2011/12 the unit assisted over 3 700 business owners and co-operative members, including farmers involved in fresh produce, livestock breeding and poultry farming.
Tshifularo said two clusters recently helped 20 black sugarcane farmers in Kwazulu-Natal to improve their productivity and added that the South African Canegrowers Association is contemplating implementing it in other areas.
Cane begins to lose its sucrose within 24 hours of burning, and the sugarcane growers were losing thousands of rands because they took days to deliver cane to mills to be crushed.
When they realised how much they were losing, they created a burning platform to develop close links with their suppliers.
Some farmers managed to reduce the burn-to-crush delay from seven days to a mere 10 hours, meaning even with small yields their sales were higher than before.
Meanwhile the number of grants given out under the deprtment’s Black Business Supplier Development Programme, which provides cost-sharing grants to black-owned firms for machinery and enterprise support services, increased over fourfold between 2011/12 and 2012/13 — from 306 to 1 213, with approval moving from R96.6-million to R776.7-million.
The department attributed the 396% increase in approved applications to intensive marketing of the programme and an enhanced adjudication process. The programme offers grants of up to R1-million to black-owned enterprises, covering half the cost of machinery or equipment and 80% of the cost of business interventions.
Three years ago the programme was vamped up when the department increased the threshold of grants from R100 000 to R1-million. The number of co-operative incentive scheme grants disbursed in 2012/13 also increased significantly from 119 valued at R48-million to 199 grants worth R84.7-million.
Tumelo Chipfupa, the department’s deputy director general for The Enterprise Organisation, attributed much of the increase in grant disbursements to the industrial policy action plan, which came into effect in 2010.
The department is implementing an online system to improve the administration of incentives and aims to have this in place in the current financial year.
Chipfupa said some of the department’s incentives already included an online application process, but this would be expanded to include the full suite of incentives offered by the department.
This would improve turnaround times for applications, while making it easier to monitor disbursements. Business owners can also get assistance from the Seda Technology Programme to improve their businesses’ productivity.
The technology programme includes 42 business incubators and a technology fund to finance the purchase of machinery.
Siphiwo Soga, the programme’s acting executive manager, said a further three incubators were in the implementation phase, while another is still in the adjudication process for funding.
The programme supported 2 247 small businesses in the last financial year, some of which were based at incubators, including helping to set up 376 new enterprises. In total 2 161 jobs were created.
Soga said a rapid enterprise development programme is also under consideration. This will involve nine further education and training colleges spread nationally.
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