ASCCI Cost Competitiveness

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Overview

The Automotive Supply Chain Competitiveness Initiative (ASCCI) was established in December 2013 to coordinate supply chain developments in the South African automotive industry. The creation of ASCCI was initiated jointly by the Department of Trade and Industry (dti), OEMs, suppliers and labour in the industry. ASCCI is thus a first in respect of facilitating such breadth and depth of collaboration to develop a successful and sustainable local automotive industry.

Vision, Mission and Objectives

ASCCI’s vision is to establish and coordinate a strategy to enable competitiveness growth, employment creation, and transformation in the South African automotive industry. This will be realised through its mission to enhance the strategy, planning and coordination of supply chain competitiveness improvement activities and initiatives. The key objectives of ASCCI include increasing supplier manufacturing value add (MVA); increasing employment; enabling local supply chain capabilities; increasing local content; and advancing transformation.

As a sector specific initiative, ASCCI aims to respond to six critical challenges within the South African automotive industry that were identified through an intensive stakeholder engagement process:

  • Uncompetitive operating efficiencies;
  • Uncompetitive input costs, and in particular material costs;
  • Limited investment in new process and product technology;
  • Inadequate economies of scale;
  • Limited economic transformation;
  • Unconducive policy and regulatory environment.

 

ASCCI has a mandate to coordinate, initiate and implement strategic activities that will drive supplier development and competitiveness improvement throughout the industry. ASCCI thus sets the industry out on a new journey in the interests of enhancing automotive supply chain competitiveness through coordinated efforts with value chain stakeholders.

Governance

The structure of ASCCI’s executive committee reflects the partnership between government, industry and automotive and component manufacturing support organisations, with the involvement of labour. Well represented by industry stakeholders, government and labour, the executive committee is accountable for strategic planning and direction, as well as effective oversight of identified projects, plans and policies.

 

This structure is mandated to perform the following functions:

 

  • Formulate a national competitiveness improvement strategy;
  • Monitor and coordinate support to regional industries;
  • Initiate, support and fund localisation research projects;
  • Engage with local and provincial authorities on the development of local automotive sectors and clusters.

 

The executive committee has appointed a service provider, B&M Analysts, to facilitate the activities of the executive function. Accountability for the delivery of projects and decision making, however resides with the executive committee.

Strategic Priorities

The objectives of ASCCI are supported by thee strategic priorities:

 

  • Supplier capability – activities focused on bolstering supplier production capabilities;
  • Localisation – activities to increase local content, spanning competitive local material inputs through to investment in new supplier process technologies;
  • Strategy – activities to develop insight into critical policy, regulatory & related issues that influence growth in supplier MVA.

 

Strategic Priorities

 

1. Supplier capability

The key objective is to achieve comparable levels of supplier productivity to leading cost countries. This will be accomplished by establishing TS 16949 as an effective indicator of base operating standards; implementing World Class Manufacturing interventions at 120 suppliers; developing shop floor skills though team leader and operator skills programmes; and supporting engineering and artisan skills programmes that demonstrate a sustainable impact on scarce skills availability and roll-out.

2. Localisation

This priority aims to increase levels of localisation (as value of vehicle sales ex-factory, less all imported content) by developing a cost advantage from the utilisation of locally available base commodity raw maw materials and through enhancing tier 1 and tier 2 localisation by the identification of technology gaps and associated opportunities, and the facilitation of investment in six designated technologies in each tier.

3. Strategic insight

This priority focuses on increasing local content and the generation of employment creation opportunities by developing a comprehensive understanding of blockages and enablers to competitive local supply; conducting a regulatory review of the South African market to provide policy recommendations to increase local producer share of the domestic vehicle market; conducting a regulatory review of the African market to develop trade policy recommendations directed at growing a viable, sustainable, large-scale African automotive market; and facilitating buyer-supplier linkages through the matching of enterprises to domestic localisation and export market opportunities. 

Going Forward

Based on the deployment of projects and initiatives aligned to one or more of these strategic foci, ASCCI intends to address constraints and impediments to competitiveness and enable supply chain capabilities, thereby enabling supplier growth.

The achievement of these specified objectives will assist the industry in addressing the broader economic challenges of growing industry employment, while at the same time advancing industry transformation. Given the influence of the national automotive industry, a key role of ASCCI will be to encourage and facilitate alignment of these projects with the broader industry supply chain development strategy.

Contact information

For queries related to ASCCI, please contact:

Tel: +27 (0)11 465 6911

Email: ascci@bmanalysts.com