The outbreak of Covid-19 may have started to impact Asian economies earlier than the rest of the world; however, with large populations and poor medical facilities, the worst is far from over.
Some countries that have successfully flattened the proverbial curve are now not only looking to gradually normalise their economies but also contemplating the landscape after the Covid-19 pandemic is more widely contained.
Fitch Solutions has discussed the six themes that will feature in Asia over the coming years following the Covid-19 outbreak—one being how manufacturing-heavy nations could have an advantage.
Manufacturing-Heavy Nations Could Have An Advantage
Even before the Covid-19 outbreak started, we had noted that reform in Asia was slowing as governments prioritised short-term growth wins over long-term sustainability. With Covid-19 pushing most countries in the region into some form of recession, it is likely that reforms will come to a halt over the short term.
However, we highlight that those countries that manage to restore a reform path quickly, will be able to take advantage of opportunities in the post Covid-19 world. For instance, many companies have already begun adopting a ‘China plus one’ manufacturing hub strategy since the US-China trade war began in 2018, with Vietnam having been a clear beneficiary of this trend. This trend is likely to only intensify following the ongoing crisis. Severe supply chain disruptions in the region as a result of Covid-19 containment-driven lockdowns in China in Q120 further highlights the importance of supply diversification, and we believe that businesses will have a greater impetus to set up some manufacturing operations outside of China going forward.
It is likely that economies with existing manufacturing capabilities and a conducive business environment, will attract more attention than others. With a lack of reform momentum, we could see a wide economic schism growing between preferred markets and those that are left behind.
That said, we have noted in a separate article that any manufacturing shifts away from China will be slow as that country still boasts an annual manufacturing output that is so large that even a group of countries would struggle to absorb even a fraction of it. For example, in 2018 the value of China’s manufacturing sector amounted to USD4.4trn, three times the size of the manufacturing output of 13 of some of the largest emerging markets (EMs) with major manufacturing sectors. However, expect countries in Asia to make accelerated efforts to boost domestic manufacturing capabilities not least to offset the debilitating impact that the Covid-19 outbreak will have had on employment.
We highlight that governments will be faced with a policy dilemma as they try to restructure their economies while also preserving livelihoods in the short term. It is likely that those that find themselves currently heavily dependent on a single large sector will face increased need for economic diversification.
For instance economies such as Thailand and Cambodia, which are heavily reliant on tourism for growth, the collapse in air travel due to Covid-19 will likely prompt the government to shift its economic focus into other sectors such as infrastructure and manufacturing. Such economic shifts are likely to be supported by reforms to the business environment to incentivise domestic resources into the targeted sectors and also to compete for foreign manufacturers looking to diversify some operations out of China. From a self-sustainability angle, countries such as Singapore, which are reliant on food imports, will likely see a push towards an expansion of food production, while the region as a whole will divert more resources towards domestic production of medical supplies to ensure reliability at the expense of higher costs.
Manufacturing business growth has continued to rise over the past year, but at a much slower rate than the previous 12 months. Despite challenging market conditions and the difficulty in recruiting and retaining skilled staff, there has been a marginal one percent rise in the number of businesses reporting growth. These findings are survey results unveiled today from the annual Global Growth Index by Epicor Software Corporation—a global provider of industry-specific enterprise software to promote business growth.
For those companies who have experienced growth, maintaining it hasn’t been easy over the past year. Fifty-three percent admit it has been challenging, whilst a fifth (23 percent) have found it stressful. Thirty-five percent of businesses cite market conditions as having a negative impact on growth, and 32 percent feel that staff skills and experience have also played a detrimental part in maintaining growth.
Political volatility and uncertainty also continue to be a common cause for concern across the globe. Fifty-five percent of respondents cited the China-US trade dispute as likely to have a negative impact on future business growth. A quarter of businesses (26 percent) stated that the uncertainty surrounding Brexit is also still a big threat.
“The manufacturing industry plays an integral role in our global economy and people forget that it is responsible for delivering important products we use every day,” said Epicor CEO, Steve Murphy. “As such, the health of the manufacturing industry is something we should all be concerned about. While it’s good news to see that growth in this industry is still taking place, we need to keep a close eye on what factors are contributing to this growth and what factors are causing a lag. The information in the Global Growth Index empowers businesses so they can make strategic plans that will best position them for the future.”
The table below shows the Global Growth Index results for 2019 across six key indicators, compared with figures from 2018 and 2017. Percentages represent the median average number of businesses that have reported growth in each of the key growth metrics.
Growth performance indicator
% reporting growth
Exports and overseas sales
Average % recorded across all six attributes
Index (year one=base 100)
“Investing in the right technology, such as enterprise resource planning (ERP) solutions, can help businesses better plan for change by improving visibility and insights into current operational workflows. This can help alleviate stress and enable people to deal with challenges more effectively, by providing the flexibility, agility, and adaptability needed to respond to market conditions and customer demands. Technology can also have a positive influence on other factors including work ethic and staff recruitment and retention,” concluded Reid Paquin, research director, IDC.
Zebra Technologies Corporation celebrates its 50th anniversary as it continues to empower the front line of business. Since the inception of its first printing prototypes in the late 1960s, Zebra has evolved into a trusted advisor to its partners and customers based on its legacy of innovation to help digitally transform the enterprise.
“We are proud to celebrate our half century milestone with our customers across the retail/ecommerce, manufacturing, transportation and logistics, healthcare, government and other industries,” said Anders Gustafsson, Chief Executive Officer, Zebra Technologies. “While Zebra has changed its stripes over the years, we are well-positioned to accelerate our strategy. With our network of specialized partners, we will continue to deliver industry-tailored solutions at the enterprise edge where there is an amazing amount of new growth and opportunities.”
When Zebra and its partners deliver a performance edge to front-line employees, nurses spend more time at the bedside with a patient resulting in higher quality care, and retail associates check inventory and complete transactions without leaving the shopper’s side. When Zebra integrates mobile printing and data capture solutions with cross-technology indoor location solutions, manufacturing plants and distribution centres become smarter environments in which production, fulfilment and shipping efficiencies are dramatically increased.
“Asia Pacific is a very important region for Zebra. We anticipate strong growth owing to the rise of e-commerce, an increasingly connected workforce, and the confluence of Industry 4.0. The recent Intelligent Enterprise Index study Zebra conducted last year revealed an encouraging trend – companies in Asia Pacific are moving the needle in the deployment and investment of the Internet of Things,” said Ryan Goh, Vice-President and General Manager, Asia Pacific, Zebra Technologies. “In Asia, we are making waves in the areas of retail, transport, healthcare, logistics and manufacturing. Our momentum continues in 2019 as we pride ourselves with the broadest product portfolio of any other solutions provider in the industry.”
A Frost & Sullivan study commissioned by Microsoft found that a cyberattack can cost a large manufacturing organisation in Asia Pacific an average of US$10.7 million in economic loss with customer churn being the largest economic consequence of a cyber breach, resulting in US$8.1 million of indirect cost. For mid-sized manufacturing organisation, the average economic loss was US$38,000. Furthermore, cybersecurity incidents have also led to job losses across different functions in more than three out of five (63 percent) manufacturing organisations.
While the impact of data vulnerabilities and breaches can be costly and damaging to the manufacturing organisations, its supply chain and consumers, the study uncovered that half (51 percent) of the manufacturing organisations in Asia Pacific had either experienced a security incident or were not sure if they had had a security incident as they had not performed proper forensics or data breach assessment.
The study further revealed that instead of accelerating digital transformation to bolster their cybersecurity strategy to defend against future cyberattacks, almost three in five (59 percent) manufacturing organisations across Asia Pacific had delayed the progress of digital transformation projects due to the fear of cyberattacks. Delaying digital transformation not only limits the capabilities of manufacturing organisations to defend against increasingly sophisticated cyberthreats but also prevents them from leveraging advanced technologies, such as artificial intelligence (AI), cloud, and the Internet of Things (IoT), to dramatically increase productivity, empower their workforce and deliver new service lines.
These findings are part of “Understanding the Cybersecurity Threat Landscape in Asia Pacific: Securing the Modern Enterprise in a Digital World” study launched in May 2018. The findings aim to provide business and IT decision makers in the manufacturing sector with insights on the economic cost of cyberattacks and to help to identify any gaps in their cybersecurity strategies.
The initial study surveyed a total of 1,300 business and IT decision makers ranging from mid-sized organisations (250 to 499 employees) to large-sized organisations (>than 500 employees), of which 18 percent belong to the manufacturing industry.
In calculating the cost of cyberattacks, Frost & Sullivan created an economic loss model based on the insights shared by the respondents. This model factors in two kinds of losses which could result from a cybersecurity breach:
Direct: Financial losses associated with a cybersecurity incident including loss of productivity, fines, remediation cost, etc; and
Indirect: The opportunity cost to the organisation such as customer churn due to reputational damage.
“The frequency and severity of cyberattacks targeting manufacturing organisations have increased significantly in recent years, underscoring the need to protect the ever-growing volume of data generated by and made available to manufacturing organisations,” said Kenny Yeo, Industry Principal, Cyber Security, Frost & Sullivan. “By integrating security into every digital process and physical devices, manufacturing organisations can not only mitigate the loss of intellectual property (IP) and customer data but also minimise downtime as well as remediation cost resulting from cyberattacks.”
Key Cyberthreats And Gaps In Manufacturing Organisations’ Cybersecurity Approaches
For manufacturing organisations that have encountered a security incident, data exfiltration, ransomware and remote code execution are the biggest concern as these threats have the highest impact and often result in the slowest recovery time:
Remote code execution is a unique threat that manufacturing organisations face, and it poses a grave threat to these companies as cybercriminals can remotely access and control their operations. This allows malicious actors to disrupt production and sabotage the business.
As manufacturing organisations need to adhere to tight schedules and strict deadlines, a ransomware attack – where cybercriminals encrypt files to restrict users’ access until a ransom is paid – can lead to production downtime and loss of customer confidence. Manufacturing organisations not only lose time and resources in dealing with the aftermath of the attack, but the entire supply chain will also be disrupted too.
Aside from external threats, the study also uncovered several key cybersecurity gaps in manufacturing organisations:
Complex security environment impeding recovery time: Contrary to the common notion that more security solutions will lead to greater efficiency, a large portfolio of cybersecurity solutions may not be a good approach to bolster cybersecurity. The complexity of managing a large portfolio of cybersecurity solutions may lead to longer recovery time from cyberattacks.
The study showed that nearly three in five (57 percent) manufacturing organisations with 26 to 50 cybersecurity solutions took more than a day to recover from cyberattacks. Conversely, only 26 percent of organisations with less than 10 solutions took more than a day to recover. In fact, 35 percent of them managed to recover from a security incident within an hour.
Traditional tactical viewpoint towards cybersecurity: Despite the growing sophistication and impact of cyberattacks, the study revealed that majority of the respondents (41 percent) hold a tactical view of cybersecurity – “only” to safeguard the organisation against cyberattacks. While only one in five (19 percent) viewed cybersecurity as a business differentiator and an enabler for digital transformation.
Security as an afterthought: If cybersecurity is not seen as an enabler for digital transformation, it will undermine manufacturing organisations’ ability to build a “secure-by-design” digital project, leading to increased vulnerabilities and risks.
The study revealed that only 26 percent of manufacturing organisations who had encountered cyberthreats considered a cybersecurity strategy prior to initiating a digital transformation project. The remaining respondents either thought about cybersecurity only after the commencement of their digital transformation projects or did not think about cybersecurity at all.
“Technology advances and innovations in intelligent manufacturing are delivering game-changing breakthroughs for leading businesses in every sector,” said Scott Hunter, Regional Business Lead, Manufacturing, Microsoft Asia. “As manufacturing organisations focus on increasing data-driven products and services to differentiate themselves in the global economy, building and maintaining trust within their ecosystem of partners and customers becomes an even bigger priority.”
“Cyber attackers are constantly looking for opportunities, so the more businesses know about their techniques and tradecraft, the better prepared they will be to build defenses and respond quickly. Building organisational resilience and reducing risk by adopting a security approach that includes prevention, detection and response can make a huge difference in the overall cybersecurity health of a manufacturing organisation,” he added.
Bolstering Cybersecurity Using Artifical Intelligence
AI plays a critical role in manufacturing organisations as they increasingly rely on machine learning automation to increase their efficiency and output by scale while reducing cost and downtime through predictive maintenance. AI is also a powerful tool that can enable manufacturing organisations to defend themselves against increasingly sophisticated cyberattacks. The study revealed that 67 percent of manufacturing organisations in Asia Pacific have either adopted or are considering an AI-based approach to improve their security posture.
Cybersecurity solutions that are augmented with AI and machine learning capabilities can autonomously learn what is normal behavior for connected devices on the organisation’s network, and swiftly identify cyberthreats at scale through the detection of behavioral anomalies. Cybersecurity teams can also put in place rules that block or quarantine devices that are not behaving as expected before they can potentially damage the environment. These AI-powered cybersecurity engines enable manufacturing organisations to address one of their largest and most complex security challenges as they integrate thousands or even millions of IoT devices into their information technology (IT) and operational technology (OT) environments.
Microsoft Asia and IDC Asia Pacific released findings specific to the manufacturing sector for the study, Future Ready Business: Assessing Asia Pacific’s Growth with AI.
The manufacturing sector, which contributes to a significant proportion of Asia Pacific’s GDP, continues to face rising competitive pressure due to growing costs and lower margins. Manufacturers are increasingly turning to emerging technologies to stay ahead of the competition. Those organisations that have started to adopt Artificial Intelligence (AI) believe it will nearly double their competitiveness (1.8 times) in the next three years.
“Manufacturers in Asia Pacific are slowly, but surely, seeing the importance of adopting a digital strategy and latest technologies. The study found that 76 percent of manufacturing business leaders agree that AI is instrumental to their organisation’s competitiveness in the next three years,” said Scott Hunter, Regional Business Lead, Manufacturing, Microsoft Asia. “To achieve supply chain excellence, and even develop new business models to address changing customers’ needs, integrating AI for their business is a must. Organisations which fail to adopt an AI-first strategy risk being left behind in today’s competitive market landscape.”
“However, 59 percent of manufacturers have not adopted AI as part of their business today. This is a worrying sign for the industry that needs to thrive on innovation,” added Hunter.
For manufacturers that have started their AI journeys, the top three business drivers to adopt AI include higher margins, higher competitiveness and business agility, as well as better customer relationships and outcomes.
They are already seeing business improvements in the range of 17 percent to 24 percent today, and further improvements are anticipated in three years by at least 1.7 times. The biggest jumps are expected in driving accelerate innovation (2.0 times), and higher margins (1.9 times).
One example is Piramal Glass, a leading glass packaging manufacturer in India, which has turned to AI, Internet of Things and advanced data analytics on the cloud to drive operational efficiency, enhance customer experience and generate new revenue models. Their in-house solution, RTMI, offers advanced insights in real-time that led to five percent reduction in defects, 40 percent reduction in manual data gathering and 25 percent improvement in employee productivity.
“The identified business drivers are a clear sign of how technology such as AI can create improved value by helping organisations gain insights, and better manage their operations in a highly complex environment,” said Stephanie Krishan, Research Director, IDC Manufacturing Insights. “In fact, according to IDC FutureScape for Manufacturing and Implications for Asia Pacific (excluding Japan), half of the top 10 predictions are driven by data and AI-centric solutions or use cases, such as creating new ecosystems for automation, or even to put data at the center of their processes to drive speed, agility and efficiencies. This only points towards the fact that the future of manufacturing will be built upon data in order to deliver scalable and accelerate growth for the industry.”
Asia Pacific’s Manufacturers Need To Focus On Its Culture, Strategy And Data Readiness
The Study also evaluated six dimensions contributing to the sector’s AI readiness. “The manufacturing sector is lagging behind in Culture, Data and Strategy, compared to Asia Pacific’s overall readiness. Business leaders must focus on those areas to stay competitive,” said Krishan.
Strategy: Manufacturers need to have an AI strategy in place, and support a more distributed workforce
“By adopting AI industry players will accelerate their transformation and enjoy higher benefits. To succeed in an increasingly digital environment, Manufacturers need to have an AI- strategy in place, including workforce transformation,” said Hunter. Close to half of business leaders polled see a shift towards a more distributed and flexible workforce due to AI in the next three years.
Data: Manufacturers need to work on availability, quality and governance of existing data
There is no surprise that manufacturers need to have a more robust data strategy in place in order to train task-based AI solutions. Today, manufacturers in the region are still dealing with a data structure where it can only be accessed by a centralised analytics team. The quality and timeliness of data are still major issues that are being addressed on an ad-hoc basis. There is also no extensive enterprise data governance program in place.
Culture: Traits required for AI adoption lacking in manufacturing organisations
More than half of the manufacturing workers, and nearly half of the business leaders polled believe that cultural traits and behaviors are not pervasive in their organisation today. For example, 63 percent of workers and 57 percent of business leaders do not agree that employees are empowered to take risks, and act with speed and agility within the organisation.
“Manufacturers in the region must work on better integration of AI into their existing operations, including how data is used and processed. They need to build an AI-ready workforce that is agile and empowered to innovate,” said Krishan. “Only when manufacturers nail down its strategy and skill capabilities, they can fully harness the full power of AI for their organisation.”
Dairy enterprise ACM’s newly opened high-tech milk processing and manufacturing facility in Victoria, Australia is leveraging state-of-the-art intelligent technology to better manage costs via a rich data approach. By introducing machine learning capabilities, ACM is able to reduce human errors from contaminating organic milk with conventional milk, which also minimises wastage. In addition, by introducing automation for production planning, logging and quality assurance; as well as factory maintenance with the help of CRM and AI solutions, ACM has been able to rein in weekend overtime costs of AU$100,000 annually.
Skills For An AI-Ready Workforce
The good news is that majority of business leaders and workers in the sector believe that AI will have a positive impact on their jobs. 62 percent of business leaders and 77 percent of workers believing that AI will either help do their existing jobs better or reduce repetitive tasks.
However, according to business leaders, the skills required for an AI future are in shortage. Communication and negotiation skills, entrepreneurship and initiative-taking as well as adaptability and continuous learning are the top three skills identified in which demand will outstrip supply in the next three years. At the same time, business leaders believe that the demand for basic data processing, literacy & numeracy and general equipment operations and mechanical skills will decrease in three years. Those skills are broadly available today, and already now the supply is higher than the demand.
The disconnect comes with employers’ perception of their workers’ willingness to reskill. “Business leaders are aware of the massive reskilling efforts required to build an AI ready workforce. However, 22 percent of business leaders felt that workers have no interest to reskill, but only eight percent of workers feel the same. In addition, 48 percent of business leaders feel that workers do not have enough time to reskill, but only 34 percent feel the same way,” shared Hunter. “Business leaders in this space must prioritise reskilling and upskilling, dedicating employee’s time for this to address skills shortage. Even as it may result in short term productivity impact as building an AI-ready workforce will result in greater gains in the future.”
Asia Pacific Metalworking Equipment News is pleased to conduct an interview with Mr. Stefano Corradini, Group Director Sales & Marketing at Marposs regarding current trends in the metrology and manufacturing industry.
Could You provide us with an overview of the current trends regarding metrology in manufacturing?
In general, the trends in metrology follow those in manufacturing, so the most important trends are the increase of precision, flexibility and full process control. In the automotive sector, the new challenge presented by electromobility is shifting the focus to upgraded leak test controls to protect batteries and electric components from deteriorating conditions. Marposs provides a wide range of metrology solutions and is able to give answers to all above challenges.
With increasing digitalisation of the manufacturing sector, how has Marposs kept up with these trends to remain competitive?
IoT, smart factory and industry 4.0 focuses on the same objective: providing every possible information on the manufacturing process to the controller. Marposs provides measuring devices to be fitted on virtually every type of manufacturing line, including cutting and deformation machines, as well as die casting and extrusion lines; those provides electronic information to the machine controller which can be used to improve the manufacturing efficiency. Marposs also provides dedicated softwares to help customers elaborate, manage above data and improve production quality.
What are the main challenges faced by the metrology industry in Asia?
Asia is not much different from other part of the Industrial world as described in the first question. Compared with other areas, some countries in Asia have a bigger growth rate in the industrial sector. This makes improved production quality even more critical since it goes in combination with production increase, thus creating a bigger challenge for every player involved.
How can they be overcome?
The answer is much easy: investments! To be able to provide successful solutions and to be an appreciated partner for the manufacturing industry, it is necessary to invest in new technologies, solutions and in human resources to support the growing demand. Marposs has ventured into both paths by investing in both internal R&D and acquiring hi-tech companies providing solutions complementary with our traditional ones, thus increasing our proposal to the market as well as our organisation. Today, Marposs is a group of companies accounting more than 3,500 employees and is present in 80 locations across 25 different countries. In Asia, we are present in China (with more than 700 people and local production site), Japan (since 1970 and with 150 people), South Korea, India, Thailand, Malaysia, Singapore, Taiwan and also Vietnam since 2016, where the market is growing really fast. Almost 50 percent of Marposs sales per year are delivered to Asia.
Moving forward, where do you think the industry is headed in the next 5 to 10 years?
Really difficult to say, given the multiple uncertainties of these days. For sure, the trend moving towards increase electromobility will contribute to manufacturing challenges in the next few years, changing not only the life of people living in the big towns, but also the industrial paradigms in all sectors relating to automotive. Marposs is also ready to face the challenge, having developed dedicated solutions to improve manufacturing of main EV components such as batteries (modules, packs, trays, etc), drive units and ultra-light chassis components.
The government believes that diversifying and upgrading Indonesia’s manufacturing sector is essential to attain higher economic growth. Therefore, the government will be focusing on the development of the manufacturing sector for the next five years. The head of National Development Planning Agency (Bappenas) Bambang Brodjonegoro said that developing this sector would boost Indonesia’s potential GDP growth and maintain growth of the economy in the long term.
A joint report by Asian Development Bank (ADB) and the Bappenas analysed Indonesia’s growth prospects and estimates that Indonesia will see an average growth rate of 6.31 percent between 2020 and 2024. Furthermore, employment in the sector was set to increase gradually to 20 percent of the workforce by 2024. According to Statistics Indonesia (BPS) data from August 2018, Indonesia’s manufacturing sector makes up 14.72 percent of the labour force. The report states that transforming Indonesia’s economy in 2020 to 2024 and beyond should be of top priority.
Indonesia’s manufacturing sector is currently undiversified and depend largely on exports of simple manufactured goods or raw commodity-based exports which offers few linkages to other industries—mostly as suppliers of natural resources. As commodities are susceptible to price swings in the market, developing the manufacturing sector is vital in reducing this dependence which provides the Indonesian economy with a weaker platform. Bappenas stresses that the key manufacturing strategy should be to develop niches in value added complex manufacturing activities which would diversify its export products. According to Bambang, developing more downstream products would be the first step in driving growth of the manufacturing sector.
“The government can play an important role in revitalizing the manufacturing sector by working more effectively with the sector,” said Jesus Felipe, Advisor in the Economic Research and Regional Cooperation Department of ADB. “The government needs to initiate dialogue with the private sector to jointly identify and address obstacles to the development of a modern manufacturing sector. It is critical for policy makers and the private sector to collaborate in discovering those new and more sophisticated products that Indonesia could successfully diversify into,” he added. Besides collaborating with private enterprises, the government also needs comprehensive policies geared towards specific subsectors of the industry and attract new investments in the manufacturing sector.
Asia Pacific Metalworking Equipment News is pleased to conduct an interview with Mr. Andrea Ceretti, CEO at Faccin S.p.A regarding current trends and outlook of the manufacturing and metal forming industry.
Could you provide us with an overview of the current trends regarding the manufacturing industry?
There will be an increase in the demand of metal formed products in the market, but due to the current geopolitical situation, the high volatility will push metal fabricators to be as flexible and as reactive as possible. The metal industry will attempt to standardise as much as possible with measures like industry 4.0 in order to maximise the production capacity of each equipment, to apply energy saving measures and lobby/demand the governments for more tax reforms and incentives to stay competitive and improve the workforce development.
With increasing digitalisation, how has Faccin kept up with these trends to remain competitive.
It is our core business to develop top technology to help manufacturers maximise from our machines and we realise industry 4.0 is one of the ways to capitalise on the technology we already provide. Our machines are ready for industry 4.0 thanks to SMART packages that offer features like systems diagnosis, teleservice, management control, drawing imports, rolling and production lot statistics and flexible network solutions between others, helping the manufacturers of today, face the challenges of tomorrow. Indeed, we have started thinking about industry 5.0 as our company attitude.
What are the main challenges faced by this industry in Asia
The fluctuations in the market and the struggle to find skilled workers are driving fabricators to replace their old equipment with high quality gear, principally looking for accuracy and automation to increase their production output, which is precisely what our group proposes. We focus in providing metal forming companies with equipment that is of the maximum quality, powerful, cutting-edge and most importantly, accurate.
How can they be overcome?
As steel prices increases and the margins grow smaller, accuracy is the answer. We design our machines to offer a return of investment centered on the accuracy of the forming process and avoidance of metal waste, always integrating powerful forefront technology that increases the output cycle and return of investment.
Moving forward, where do you think the industry is headed in the next 5 to 10 years?
The metal forming industry in general is subject to the cycles of the market economy like any other industry. In today’s world, these cycles are much shorter than in the past and companies that do not adapt and do not prepare beforehand with the latest technology will struggle when the markets fluctuate. Today, it is emerging regions and their rising demand in energy like Asia that are backing the global growth in the demand for the metal forming industry.
In 2018, we witnessed the rise of Southeast Asia’s manufacturing industry as the Trade War pressured manufacturers into shifting production from China to Southeast Asia. A trend that is expected to continue on in 2019 as Southeast Asia continues to develop its manufacturing capabilities and uncertainties over a US-China truce continue to loom. Through this market outlook series, eight industry leaders share their thoughts on how the regional market will grow and develop in 2019 amidst the changing economic background and the increased presence of disruptive and intelligent technologies.
Vice President, Asia-Pacific Area, MAPAL
2018 was a successful year for MAPAL and the company grew once again although growth in the Chinese market, which had previously been strong, flattened somewhat in the last quarter of 2018 due to factors such as punitive tariffs. For 2019, we have set a goal of generating a turnover of €650 million, and this will be achieved through free trade, the development of country specific expansions, the enhancement of digital capabilities and electric mobility machining capabilities.
Development Of Country Specific Expansions
For the companies under MAPAL Group in Southeast Asia, two new regional branches will be established in Indonesia where we are seeking to build a regional presence. While in the case of Malaysia, the country recently became our Southeast Asia production hub and has been equipped with a dedicated manufacturing facility. Additionally, we are actively investing in Malaysia and expansion is set to continue in Thailand too, where a new facility was established in 2017.
Enhancement Of Digital Capabilities
Digitalisation is a pressing issue globally, and in the face of increasing demands for efficient data management systems, we have identified this trend as a potential growth area. That was why we will be using 2019 to make further refinements to c-Com and to showcase the SaaS solution to interested parties as an open cloud platform for efficient data management.
MAPAL’s new tool management 4.0 is also based on c-Com. The interconnectivity that tool management 4.0 offers means that data can be provided consistently to all those involved – manufacturing, procurement, planning, tool managers and suppliers. That makes the overall process more efficient and digitalises tool management.
We also see great potential in our re-tooling service. Customers use this when they are setting up a new manufacturing facility for a part or re-tooling existing machinery to manufacture a new part, or when optimisations need to be made while production is running.
Electric Mobility Machining Capabilities
Alongside digitalisation, another significant trend at the moment is electric mobility and we have a diverse array of innovative machining solutions available for manufacturing the various parts within the different electric drives. The importance of the automotive industry is growing all the time, as is the number of vehicles being produced with electric drives.
Head of igus Asia Pacific, igus Singapore Pte Ltd
The Asia Pacific region will remain as the growth driver for us in 2019 but we may see regional differences in development. This is due to uncertainties related to tariffs and trade, Brexit discussions and regional tensions may cause some interruption on a global scale. However, in terms of long term sustainability, the opportunities in Asia far outweigh the challenges and we will continue to invest into new markets or expand existing manufacturing facilities.
Combining Digitalisation With Industrial Development
The world is changing faster than ever before, new trends are coming up and past solutions may disappear. Artificial intelligence, complete process automation, remote monitoring of machine performance, intelligent robotics and driverless vehicles are some of the trends in which we see a potential in. The clear objective for us moving forward is to concretely implement automated processes that range from online configuration to digitally supported manufacturing for all product categories. This is a difficult path to take because ready-made solutions usually cannot be bought but have to be developed individually.
Additionally, IoT continues to drive development. And igus as an early adopter, has developed the intelligent cable, energy chain and linear guide which are able to monitor their own condition during use and open up new possibilities of predictive maintenance.
Additive Manufacturing And Low Cost Robotics
Additive manufacturing would be another key trend to mention, with 3D or SLS printing being good examples of the technology. Also, low cost robotics are another trend to watch out for in 2019 and the igus robolink modular robotic system is an example of this.
Asia Pacific Regional Director, Hypertherm
2018 marked Hypertherm’s 50th year and we have grown from a manufacturer of plasma systems to a global provider of cutting solutions. Moving forward, our continued investment in research and development is part of our efforts to bring more breakthrough technologies to the market, such as the recently released X-definition class plasma system.
In 2019, Asia Pacific will continue to be a promising region for the industry due to rapid population and economic growth, industrialization and business-friendly measures introduced by governments. Besides the major markets in Oceania and Japan, the rapidly growing industrial manufacturing sector in India and Southeast Asia are also expected to contribute significantly to the region’s economic growth.
Change In Business Models In The Metal Cutting Industry
The metal cutting industry will shift from a demand driven model to a more competition driven model, where the key driver is automation and customers are increasingly looking to reduce reliance on labour. In fact, automation will continue to be the biggest development in the metal cutting industry as manufacturers in the region continue to balance technology with capacity and competitive demands.
Industry 4.0 Innovations
IIoT will continue to shape the manufacturing industry in 2019. Rising technologies such as machines, robots and other equipment on a production floor will be able to communicate with each other and gather data in the cloud for analysis. And with the data, a manufacturer will have greater insights which allows for predictive analysis to occur. This aligns to the shift in the industry from preventive maintenance to predictive maintenance.
In the future, fluctuating raw material prices will also impact the industry and transformations within the manufacturing sector will also be further propelled by the rapid evolution of technology. To achieve growth targets in the coming year, manufacturers will increasingly see the need to prioritize investments in technology that will enable them to improve their business agility.
Senior Vice President. EOS, Singapore
The additive manufacturing (AM) market is set to grow at a compound annual growth rate (CAGR) of around 27 percent between 2018 (USD 1.73 billion) and 2023 (USD 5.66 billion). In fact, AM in Asia Pacific is expected to have the highest CAGR due to the region having the fastest growth for the automotive and printed electronics sectors. This offers more opportunities for AM adoption in the manufacturing industry.
Decentralised, Distributed And Domestic Manufacturing Models
Rising protectionism and trade conflicts will increasingly push global supply chains towards decentralization and regionalization when it comes to manufacturing. And this, coupled with the digitalization of manufacturing and AM will serve as an enabler for distributed manufacturing. Businesses that adopt smart technologies like AM to 3D print parts and components will also be able to reduce production costs, processes, and time through part redesign and integration. This makes domestic manufacturing more practical than importing from abroad.
Continued Innovation And Adoption Of AM Across Industries
AM is reported to have a global economic impact of USD 250 billion by 2025 and the aerospace and defense industry is expected to continue leading AM adoption. Moreover, the global aerospace AM market is reportedly expected to register a CAGR close to 22.3 percent during the forecast period of 2018 to 2023.
In terms of the healthcare industry, AM adoption is expected to increase and with the aging population expected to rise, this trend is set to continue due to an expected increase in demand for personalized healthcare and treatments, as well as customized 3D-printed medical devices. For the automotive industry, AM’s ability to decrease production lead time, increase efficiency in logistics management, and ensure effective use of components/materials will result in its increased adoption. This trend is set to continue and the global automotive 3D printing market is predicted to be valued at over USD 8 billion by 2024. On the other hand, tooling and robotics are also expected to drive AM’s market share in APAC from 2018 to 2023.
President, Singapore Manufacturing Federation
The manufacturing industry in Asia is polarised into three categories – the “factories of the world”, the factories supplying to “factories of the world”, and the “middleman”, where most manufacturers in Asia are a part of. In Singapore, the industry is undergoing a two-part transformation – digitalisation and servitisation.
Due to Singapore’s relatively high labour cost compared to the region and talent shortage, the industry is also moving up the value chain and exploring the use of AI, IoT, robotics, automation and other digital tools to keep costs low and to increase productivity. Digitalisation itself is expected to quite significantly alter and remake the landscape of the industry.
Digitalisation Of Manufacturing And Supply Chains
To be digitalised is to implement these few technologies – additive manufacturing, AI, advanced manufacturing, blockchain, cloud computing, big data, e-commerce and future technologies (robotics, advanced automation, etc.).
Therefore, as manufacturing becomes increasingly digitalised, supply chain models must also become increasingly digitalised by implementing the above technologies. And this will lead to end-to-end integration. Furthermore, with this evolution of the supply chain model, shorter lead times, increased flexibility through real-time optimisation, increased efficiency and increased transparency and personalisation of services will be observed. A digitalised supply chain model is one in which processes are connected through a sensor network and managed through a central data hub and analytics engine.
Adopting The Right Technologies Amidst Economic Uncertainty
Due to the ongoing trade war, there is a fear that demand and investments will shrink. Protectionist attitude and interest rates are also on the rise. Thus, manufacturers can make use of technologies and innovate their business models to improve their productivity, efficiency and competency in order to overcome the adversities ahead. With the right technologies, the industry may even disrupt and affect other sectors, causing a ripple effect that could accelerate the advancement of businesses embracing Industry 4.0 sooner rather than later.
Automation Charter Chair, The Singapore Industrial Automation Association & Managing Director, Beckhoff
In 2019, at the mass market stage, enterprise digitisation will penetrate deeper into the manufacturing floor. This will cause enterprises to look towards obtaining data from as many machines and sensors as possible, which is a trend that has continued on from past years.
Overcoming The Barriers To Digitalisation
In order to digitalise more effectively, companies have more to gain from standardisation than competition. Currently, Germany is leading the effort to create common industry wide standards and they have done quite well as the VDMA is leading the machine standardisation for Germany. Countries in the ASEAN region may need to follow on their footsteps. Next, governments across the region should also help in funding digitisation initiatives and this is especially important for SMEs.
Finally, re-training and upskilling the workforce is needed. We are facing shortages in data engineers, data scientists, data analysts in the region and re-training and upskilling is especially important as older manufacturing jobs disappear and newer ones are created in their place.
The Importance Of Data Collection, ML And AR Technologies
On top of sending data over standardised communication protocol, companies will increasingly look towards getting standardised information from each machine type. This so called “information modelling” and is relevant to a production line today as there is hardly a “homogenous” production line containing the same machine model from the same manufacturer.
Another focus for the metalworking and CNC world will be the use of AR technologies. While still a cutting edge technology today, this technology holds a lot of promise from speeding up operators to training, to advancing maintenance work. At the bleeding edge, we are seeing an increasing trend of ML implementation directly on a premise or machine. While this is on early stages, we feel that this would be the internal focus of many bleeding edge suppliers moving forward.
Managing Director and Vice President, Southeast Asia, Siemens PLM Software
The outlook in Asia Pacific continues to be favourable in 2019. With a dynamic economy and an extremely fast-growing internet population, Southeast Asian markets are good options for companies looking to diversify and add to their operations in China. Especially as rising labour costs and increasingly volatile market conditions in China cause more firms to relocate their production in order to spread out risk and gain access to new markets.
The Growth Of Mass Customisation Focused Technologies
The shift towards a knowledge-intensive economy in Southeast Asia is a by-product of the global movement towards a more individualized and personalized consumption economy. Therefore, the region is expected to transit from the age of mass-production, to one of mass-customisation which is a trend that has been highlighted at the ASEAN Summit. Due to this, we are expecting manufacturers to adopt and implement technologies such as cloud-based product lifecycle management solutions, as well as Digital Twin technologies, in order to be able to produce meet the level of rigour and scale that is required for mass-customisation.
The Development Of Disruptive And New Technologies
Disruptive technologies such as robotics, computer numerical control (CNC) machines, additive manufacturing, artificial intelligence, scanning technology and smart devices will persist and will be ubiquitous across the product value chain. In the case of additive manufacturing, markets such as Singapore, China and South Korea have already identified it as a growth potential and are actively investing in the technology to create high-end jobs and services.
Additionally, Dyson has also announced plans for its first electric car, to be built in a new automotive manufacturing facility in Singapore that is set for completion in 2020. The selection of Singapore as a site for this facility – which has not seen automotive manufacturing since Ford closed its factory 40 years ago – is a surprise for many. This investment which is part of Dyson’s USD 3.3 billion global investment drive in new technology, is a game changer for the electronics and heavy machinery industries in the region.
Regional Executive Director, UBM
In 2019, the ASEAN region will remain as an attractive area for investment. The ongoing trade war between China and the USA is creating problems and opportunities within the ASEAN region as although foreign investment companies are starting to relocate their manufacturing plants away from China, countries within ASEAN particularly Vietnam and Indonesia, are benefiting from the relocation of manufacturing plants into their countries.
The Rise Of Indonesia And Vietnam
Most of UBM’s trade shows have continued to grow, particularly in Vietnam where there are numerous opportunities in both HCM and Hanoi. Currently, the biggest problem for the organisation of events in Vietnam is the size of the venues in both HCM and Hanoi which restricts UBM’s expansion plans. However, this also reinforces Vietnam’s position as UBM’s strongest market since 2018.
In Indonesia, the economic growth in the short term will be modest due to the Rupiah depreciation as we all as the impact of the upcoming presidential elections in April. This will affect overseas investment as investors take a “wait and see” approach. Thus, investments will be halted for at least the first half of the year. For this reason, Indonesia is expected to rely on domestic consumption and household spending to drive the economy. However in the long term, Indonesia remains a strategic and lucrative market for investors as it continues to offer strong economic fundamentals to spur the growth of the middle class and fuel consumer spending which is a key driver of growth.
Growth Of Smart Factories And Smart Manufacturing In Southeast Asia
Southeast Asia’s main selling point can no longer be its low wages if it is to remain competitive. Implementation of new technologies are needed to help close the productivity gap. This means factories will need to integrate technologies such as robotics to maximise productivity, minimise human failure and prevent work-related accidents. Aside from that, companies could integrate AI and data analytics to make automation processes more intelligent and to improve efficiency.
A report by McKinsey & Company has highlighted that Southeast Asia needs to embrace Industry 4.0 to unlock its potential in manufacturing. Through this report, it is stated that disruptive technologies associated with Industry 4.0 would have an impact on productivity on a scale that is similar to the introduction of the steam engine had during the first Industrial Revolution. Globally, if the digital technologies of Industry 4.0 were to be embraced and integrated efficiently, it is forecasted that it could contribute between USD 1.2 trillion and USD 3.7 trillion in business profits. Meanwhile in ASEAN, the impact of Industry 4.0 could see productivity gains of between USD 216 billion to USD 627 billion.
2018 was one of the most successful years for Bystronic due to numerous product launches in the gold, silver and bronze segments of the market as well as international business expansions.
In 2019, the economy is uncertain because of market turmoil and currency slumps but sheet metal continues to have a wide application in industries that are set for growth such as the automotive, semiconductor and electronic industries. Additionally, governments across Asia are continuously building and developing infrastructure and new industrial areas which create indirect opportunities for the sheet metal fabrication market.
The Growth Of Automation
The industry is currently in the age of automation. This is because automation allows for shorter lead times, greater accuracy, higher quality and competitive pricing. In the field of laser cutting, automation makes it possible to process not only large series but also small batch sizes, while maintaining the flexibility that users require to always respond to changing order situations.
Implementation Of Networked Production
With automation drastically changing the outlook of the sheet metal industry, Bystronic is systematically driving forward the vision of “World Class Manufacturing”. This is based on a comprehensive range of new products and services with which Bystronic is gearing its users’ process landscape towards networked production. It features innovative solutions that go far beyond the conventional idea of a machine tool. It’s about fusing the individual processes relating to laser cutting and bending into a network of intelligent components.
With new solutions for sheet metal processing, Bystronic, a leading global provider of high-quality solutions for the sheet metal processing business, takes customers to the top of the competition at the EuroBLECH 2018 in Hanover, Germany.
At the most important sheet metal processing industry event, Bystronic presented comprehensive innovations for all aspects relating to cutting, bending, and automation. In the future, networked manufacturing processes, integrated automation, and digital service solutions will help customers to profoundly optimise the manufacturing of sheet metal products.
Bystronic is systematically refining the vision of “World Class Manufacturing”. This is based on a comprehensive range of new technologies and services with which Bystronic is gearing its users’ process landscape towards networked production. In this way, Bystronic accompanies customers step by step on their path towards the smart factory.
World Class Manufacturing goes far beyond the conventional idea of a machine tool. The focus lies on digitally networked production, which combines the individual processes related to laser cutting and bending to form a network of intelligent components. Users thus achieve a higher degree of flexibility and transparency in their production environment. Both are important prerequisites in order to manufacture products faster, more cost-effectively, and more intelligently than ever before.
Production Line: Fully Automated Laser Cutting
With the Production Line, Bystronic presented its highlight in terms of laser cutting automation. Within this fully automated manufacturing solution, sheet metal parts are pre-processed, cut, transported, and sorted according to orders. The heart of the Production Line is the ByStar Fiber laser cutting system. Powered by a 10kW aggregate, this is where the speed of the entire production process originates.
The ByTrans Cross and BySort loading and unloading automation is connected directly to the fibre laser. It handles the entire material flow between the laser and the integrated storage system. The storage system supplies all the raw metal sheets required for the cutting jobs: steel, stainless steel, aluminum, and non-ferrous metal sheets in thicknesses ranging from 0.8 to 25mm with a maximum overall capacity of 24 tonnes. It also returns finished cut parts and residual sheets to storage.
Bystronic presented a showcase at EuroBLECH to demonstrate a solution that will enable the Production Line to be expanded in the near future. ByFlex, an additional integrated system, drills holes and cuts threads into sheet metal parts prior to the laser cutting process. In addition, a labelling function marks the parts that are to be cut with a code. This allows all the information about the sheet metal parts that are being produced to be scanned in at the downstream processing stations.
Bending Cell: The Fully Automated Bending Centre
The Bending Cell automatically bends the cut sheet metal parts. For this, Bystronic expands the high-end Xpert Pro press brake with an agile robotics system. A 7-axis robot picks up the sheet metal parts that are to be bent, places them with high precision on the Xpert Pro for bending, and subsequently sorts them according to jobs. The Bending Cell can handle sheet metal parts up to 270kg.
With high precision, the robot also automatically sets up the press brake with the appropriate tools. To achieve this, Bystronic has integrated a tool magazine into the Bending Cell that keeps a range of required bending tools on standby. Thanks to a maximum press capacity of 320 tonnes, the bending automation solution can process a wide range of sheet metal products. The Bending Cell is ideally suited both for the efficient processing of high-volume repetitive jobs and for changing lists of jobs with small batch sizes.
Bystronic MES: Transparency From The Incoming Order To The Finished Part
The Bystronic MES is the navigation system for sheet metal processing. An intelligent software solution that helps users manufacture and ship sheet metal products with precisely defined costs and deadlines. The Bystronic MES determines the ideal path on which sheet metal products are guided through the processing stations for cutting and bending. This optimises throughput times and costs in the sheet metal production chain. And it helps users to perfectly attune all the process steps, machine systems, and workstations within their production environment.
Shop Floor Control System: The Digital Guidance System For Production Lines
In the future, how will users control and monitor production lines in which automated production cells and individual machine systems are networked? With the Shop Floor Control System, Bystronic showcased a newly developed software solution at EuroBLECH. Networked with sheet metal processing stations, the Shop Floor Control System assumes the centralised control function and helps users to always maintain an optimal production flow. The system also provides information about potential bottlenecks or downtimes within the production line. This enables scheduled production times and delivery deadlines to be adhered with a high degree of reliability.
ByStar Fiber: Laser Cutting With 12 Kilowatts
Bystronic projects promising prospects for fibre laser cutting: With 12kW, the high-end ByStar Fiber laser cutting system will soon feature a new performance level. This will boost the profitability and speed of the cutting process right up to sheet thicknesses as high as 30mm. This will provide customers with an almost unbeatable competitive edge in the competition for jobs. In order to optimally integrate the higher laser power into the cutting process, Bystronic has rigorously enhanced the design of the ByStar Fiber’s cutting head. Thus, users always achieve outstanding cutting results in a wide range of materials.
BySmart Fiber: The Fiber Laser For A Flying Start
The new generation of BySmart Fiber is already available now. Bystronic has fundamentally redesigned the entry-level solution for fibre laser cutting and expanded it with numerous features. The result is a versatile cutting system with up to 6kW of laser power and matching automation solutions. Thus, Bystronic is opening up the full potential of fibre laser technology to users in growth industries: high parts output, a broad spectrum of applications, and automation for optimised material handling.
Xpert Pro: Bending Technology For The Highest Demands
With the new Xpert Pro press brake, Bystronic is taking the successful Xpert product line a step further. The Xpert Pro supports demanding users with maximum flexibility and performance for the bending process. A variety of configurations are available for a wide spectrum of bending applications.
Features such as dynamic crowning and the patented pressure reference technology ensure consistently high bending quality on the Xpert Pro. On top of this, the Xpert Pro boasts intelligent assistance functions, such as the material curve generator and the LAMS angle measuring system. These enable users to achieve maximum precision from the very first bent part.
APMEN’s exclusive interview with Norbert Seo, Bystronic’s Senior VP Market Division Asia & Australia. By Ahmad Alshidiq.
What’s new from Bystronic in EuroBLECH 2018…
We have many new features on Industry 4.0. We have the full set of automation solutions with integrated software which allows you to combine automation with intelligent systems to monitor production schedules, machine status as well as to analyse the storage.
Bystronic’s main market in SEA…
Vietnam is our main market in Southeast Asia. We established our new demo centre in Ho Chi Minh last year. We call it the “Experience Center”, where we placed a laser machine and one bending machine. Malaysia market is looking interesting as well and we are looking at investing more in the country, in Thailand as well as Indonesia.
Industry outlook for 2019…
Business perspective is quite uncertain, however, we are looking at the demand of our customers and monitoring closely on where is necessary to expand our products and technologies.
What to expect from Bystronic in 2019…
We are launching a new series of BySmart Fibre from 2kW to 6kW which gives a lot of opportunities to the high-sensitive market. We are also attending seven exhibitions and are having five in-house shows in 2019.