By Tennille Bell, General Manager: Sales at Programmed Process Outsourcing (PPO)

According to staggering recent statistics, more than a quarter (26%) of each day in 2023 has been spent without any power, compared to 10% in 2022, and 2.1% in 2021. With the average South African having already experienced just over 655 hours of total blackouts this year alone - the equivalent of 27.3 full days of outages - load shedding is an unyielding challenge for businesses in every sector. Manufacturing and warehousing businesses are no exception. Given that there are still at least 200 days of load shedding predicted for 2023 by the South African Reserve Bank, businesses simply cannot afford any more downtime. While it feels like the circumstances of these rolling blackouts are beyond our control, we can control how we respond to such circumstances. What does this mean? Businesses in the manufacturing and warehousing industries can take charge of their response to incessant load shedding by partnering with a Business Process Outsourcing (BPO) provider. A BPO partner can assist in developing contingency plans that include the creation of optimised work schedules to improve efficiency and reduce downtime. 

Knock-on effects of rolling blackouts

Focusing on the manufacturing and warehousing industry, the outlook appears grim. Load shedding causes massive delays in production and service delivery. Loss in production and consistent downtime, results in diminished efficiencies and effectiveness, which leads to a reduction in revenue. Increased power outages have led to an increase in operating costs, and ultimately a loss in business profits, which damages the competitiveness of businesses as a whole. 

Paying for load shedding with jobs

Many companies have tried to overcome this, increasing their costs by purchasing and running generators and hiring more resources in an attempt to maintain their standard operating levels. The inability to produce a range of products or services at an expected level is further affecting the economy. A survey conducted by ESI Africa earlier this year revealed that a devastating 66% of small businesses have had to cut jobs due to the effects of load shedding on their business. Along with job losses is the risk to manufacturing machinery posed by power surges when the power is restored after an outage. For warehouses with large volumes of valuable stock, security is a major concern, with security systems being compromised during extended blackouts. 

Sharing the load with a BPO provider

BPO is a practice where a company contracts out specific business processes or operations to a third-party specialised service provider, shifting the model from a fixed employment cost to a variable cost. In bringing on a BPO, businesses can move from paying people who are unable to work during load shedding, to paying a BPO provider a service fee that is linked to productivity and output. Additionally, BPO providers bring in best practices and economies of scale that can improve the overall efficiency of the manufacturing operation. While the unpredictability of load shedding stages affects the planning capabilities of small businesses, this is not a stress they have to carry alone. It’s a stress that can be outsourced. By partnering with a BPO provider, businesses can immediately gain the agility and scalability to respond to schedule changes. The BPO provider can make contingency plans around the load shedding schedule, pushing productivity hard when the power is on, and staffing up or down by the schedule. BPO providers concern themselves with operational efficiency, which comes from improving productivity. 

Maximising productivity with limited resources

One of the biggest reasons to partner with a BPO through these trying times is their ability to achieve more, using less. BPO providers help businesses to mitigate risks of production losses, implementing optimised work schedules and improving business cultures. There is a total commitment to reaching productivity goals, despite the many hurdles the industry is currently facing. This means chasing targets at a quicker pace, in a way that's based on mutual benefits. This is achieved through practices like business process re-engineering, improvement and optimisation, which results in a BPO provider’s ability to decrease waste. Less wasted time and material increases efficiency. With the right implementation of systems and processes through a BPO provider, it is possible to increase efficiencies and productivity to counter the effects of load shedding.

Partnering for survival 

Essentially, businesses will continue to be affected by load shedding for many years to come. If they haven’t already, now is the time to start putting plans in place to ensure that they can operate optimally without compromising on production capacity. It’s a matter of survival. Business owners need to move into the mindset of ensuring that their operations are now leaner, faster, and smarter. One of the most effective ways to achieve this is through a BPO provider, who is legally compliant to ensure that productivity and efficiency are prioritised in a way that achieves risk mitigation on all fronts.