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Sizing Up Smart Manufacturing in Singapore

Arlene Wherrett, VP & Managing Director, Sage Asia [LSE: SGE]

Arlene Wherrett, VP & Managing Director, Sage Asia [LSE: SGE]

Manufacturers have continued to find ways to improve operations and processes to gain an advantage over the competition since the days of the first industrial revolution.

This drive towards enhanced efficiency and greater productivity is more pertinent now than ever in Singapore with the domestic sector facing a downward slump. In September, Singapore’s manufacturing output fell by 8% year-on-year on the back of sharp falls in electronics and precision engineering outputs, marking the worst on-year result since December 2015.

Industry experts have generally blamed this decline to slower growth in new orders and exports and factory output. The weaker purchasing manager’s index (PMI), a key barometer of activity in the manufacturing industry, is likely also be due to factors beyond our shores. This includes the slowdown in China’s growth, uncertainties from the trade conflict between the United States and China, slowing demand from China, as well as, the downturn in the global electronics cycle.

Manufacturing transformation

The Singapore Government, in recent years, has introduced many initiatives to encourage manufacturers here to adopt technology with its push towards smart manufacturing. These include the Smart Industry Readiness Index, an Industry 4.0 tool developed for the nation-wide transformation of industry sectors, and the Index Partners Network that is designed to assist manufacturers as they accelerate the execution of their Industry 4.0 initiatives.

Technology, just like in the early days of the Industrial Revolution, once again offers manufacturers an opportunity to be more competitive and level the playing field, while innovation offers manufacturers the rare chance to leapfrog the competition and gain an edge in the global race to success.

Digitalisation and technological advancement are driving transformation across every industry, including manufacturing. Innovation in automation and robotics, as well as digital technologies such as data analytics, artificial intelligence (AI) and augmented reality (AR) are creating Industry 4.0.

AI, in particular, has intriguing applications in this regard. McKinsey & Company pointed out in an article that manufacturers with heavy assets such as cement companies have successfully adopted AI-powered sensors to perform quality inspections.

AI can efficiently analyse the vast amounts of data collected by these systems, and detect abnormalities, or product defects, much more effectively than human workers can. As AI is self-learning, AI systems can automatically and constantly adjust and tailor processes for optimal productivity.

Industrial Internet of Things (IIoT) is another trend that has been sweeping through the manufacturing industry globally. IIoT brings to reality a concept of a factory floor where computers, machines, software and users are connected, enabling intelligent industrial operations using advanced data analytics for the transformational outcome. IIoT brings connectivity between manufacturing machinery to a whole new level. These days, IIoT also signifies machine-to-machine (M2M) communication and learning, where connected machines on the factory floor work together to deliver never before seen scale of automated collaboration.

IIoT and M2M manufacturing systems are not only interconnected but can communicate, analyse and use the information to make and drive decisions at every step of the manufacturing process. These systems have been known to reduce human errors and labour costs drastically. Many user cases have already pointed to enhancement in overall efficiency and productivity.

The adoption of technology is not limited to the factory floor. Successful technology-driven operations leverage technology to drive efficiency and enhance productivity across factory operations.

According to a recent Forrester report commissioned by Sage, manufacturers can realise up to 218 per cent returns on investment (ROI) within four months by implementing an effective business management solution. The total economic impact study also revealed that these manufacturing organisations gained strong improvements in financial management, purchasing sale management and inventory management.

Better faster cheaper

As product life cycles shrink, companies are finding it more important than ever to master the development of new products. Delivering the right product, at the right time and the right price with the use of specialist technology will help shorten the time-to-market, improve product quality, and increase customer satisfaction.

Smart manufacturing opens new doors for Singapore manufacturers as it allows technology-driven manufacturers to be more nimble in their approach. It gives manufacturers the ability to introduce well-designed new products in a timely fashion.

The advent of the digital age and new technologies allow manufacturers to meet the challenges of today’s fast-paced world and allow them to accelerate collaboration and reporting, providing real-time insight into costs and operational performance, and enabling companies to make smarter and faster business decisions.

Essentially, the manufacturing industry in Singapore is well-positioned to benefit from smart manufacturing. Manufacturers here operate in a stable environment of strong collaboration amongst employers, unions and the Government. They are also sitting on a financial, logistics and transport hub, that offers ready access to skilled local and foreign talents, as well as a rich ecosystem of technology support.

This is an opportunity for Singapore manufacturers to adopt a more innovation-based and high-value operational and production model. Manufacturers here cannot afford to be inflexible or static in today’s competitive and fast-moving business world. Consumer demands are dynamic while business climates shift at an instant, and manufacturers slow to adapt to change risk being left behind by their competition.