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Industry 4.0: Are Businesses Stepping Up To Be Future Ready?

Industry 4.0: Are Businesses Stepping Up To Be Future Ready?

Vincent Chong, President and Chief Executive Officer of ST Engineering shares his views on the adoption of Industry 4.0 in Asia.

The inaugural Industrial Transformation Asia-Pacific (ITAP), a Hannover Messe event, concluded in Singapore recently. As business leaders, experts, government representatives and other stakeholders gathered to discuss Industry 4.0, what emerged clear to all was that technology adoption across Asia remained uneven.

Is this a case of change not happening? Far from so. Industry 4.0 is very much an evolution rather than a revolution. Even as we speak, industries are transforming. Today, it is not a question of whether businesses are future-ready; it is whether businesses realise the implications of not participating in the fourth industrial revolution when it will move on regardless of their actions.

Industry Evolution

Driven by the rising operational costs and a human resources crunch, the local industry in Singapore understands that it is imperative to adopt Industry 4.0.

Even for ST Engineering as a technology and engineering group, digitalisation of the workflow at the Aerospace business or the “Aerobook” occurred more than 10 years ago.

This began with the adoption of Augmented Reality/Virtual Reality (AR/VR) and robotics, with other advanced technologies progressing only when the business case became clearer. Other possibilities were also adopted to redefine the company’s value proposition such as customer participation and mobile interfaces in the digitised process, improved interaction via AR between engineers and mechanics to reduce the time taken for repairs; reducing turnaround time and minimising inventory stock-keeping of aircraft parts through additive manufacturing. These have all led to productivity improvements of up to 15 percent to date. Looking forward, ST Engineering will also be certifying the use of unmanned aerial vehicles for aircraft inspection, which, when implemented will help to improve efficiency and minimise workplace accidents.

Furthermore, with technological advances in the company’s aerospace business, the company is able to drive goals to improve productivity and capture efficiencies which are essential in order to operate in higher-cost locations like Singapore, Germany and the US. This augments the company’s competitive differentiators in quality and value.

Challenges Of Transformation

Government support is not lacking for Industry 4.0. In March this year, the Economic Development Board (EDB) announced that it would be funding 300 companies to undergo assessments using the Singapore Smart Industry Readiness Index, so as to accelerate the industry transformation of small and medium-sized enterprises (SMEs), large local enterprises (LLEs) and multinational corporations (MNCs) across various industries. This follows the launch of as many as 23 industry transformation maps, public-private partnerships like Tech Labs (ARTC and SimTech), Tech Access and Tech Depot to help SMEs test and experiment with advanced manufacturing technologies, translate research to applications and access technologies easily. There have also been numerous workforce transition programmes.

Even as the government invests time and resources to move the industry, business leaders remain pragmatic. The push to transform will happen only where there are strong drivers. Many will start on the digitalisation journey, but will invest only when they can see immediate value in doing so.

Indonesia’s Minister for Industry Airlangga Hartarto, has observed that millions of Indonesians in the workforce will require training to be digitally literate under the country’s Industry 4.0 rollout plans. Additionally, Dr. Gunther Kegel, CEO of Pepperl+Fuchs, Germany, has said that his company had spent hundreds of training hours to ready the workforce. He also added that even with buy-ins for change, it requires transforming processes from computer-assisted ones to computer-dominated ones, and changing the way people have been working for the past 20 years.

What tends to happen however, as Singapore’s Minister for Trade and Industry Chan Chun Sing pointed out at the panel discussion, is that many companies “often get stuck” at the application stage of technologies, and “they never really go to Stage 3, which is the re-engineering part”. He was referring to the four stages of the technology industry known as DART: Diffusion, Application, Re-engineering and real Transformation. His view is that the mere application of technologies will not lead to real transformation, as it was only “mechanising, robotising and digitising current processes”.

Transforming the organisation thus requires a mindset shift from leaders and staff alike. It is Worker 4.0 who would be critical in the success of Industry 4.0, as Senior Minister of State for Trade and Industry Koh Poh Koon, said at ITAP.

Firstly, from constantly thinking pragmatically on just which technologies are needed on hand, managers and employees need to think more strategically and with a future-oriented view to consider the opportunities that Industry 4.0 can bring, and how best the business can harness these. They need to build the business and economic case, and not pursue technology for technology’s sake.

With the production of more proven use cases, the adoption rate of technologies will grow. It will grow even more quickly if business cases are clearly in sight and it will require senior leaders to take a top-down approach to drive implementation and overcome barriers and resistance for transformation.

Readying The Workforce

Minister Chan additionally observed that Singapore will need to compress the learning cycle; the conventional model of using the school system to churn out workers is a bit too slow for tomorrow’s needs. He added that the frontiers of learning will need to be in companies where there is constant experimentation, even as we rely on conventional learning for building fundamentals.

Similarly, organisations will welcome the development of more industry 4.0-related talents through the institutes of higher learning (IHLs) in the future. In addition to degree courses, on-demand micro-learning modules in areas such as autonomous systems, robotics, data analytics and cyber security should also be offered. This is also an area where corporates, government agencies and IHLs can work together to co-develop.

ST Engineering’s approach to training and retraining of the workforce for Industry 4.0 is multi-pronged, with the company’s top 100 managers attending data analytics and cyber security executive workshops in order to ensure that a mindset shift occurs from the top. Additionally, engineers are also put through courses that are targeted at further enhancing domain expertise.

For instance, 70 of the company’s engineers have already been trained at ST Engineering’s Cybersecurity Academy, which is a professional cyber security training school. And 350 of the company’s engineers attended a technical course in robotics and digitalisation, made possible by ST Engineering’s strategic partnership with Singapore Polytechnic, to create a bespoke Digital Transformation & Robotic course. Moving forward, the another 1,000 employees will be trained in a customised data analytics programme over the next one and a half years at the National University of Singapore.

Strategic Technology Centres have also be established to develop deep capabilities in areas such as data analytics and cyber security, to provide group-wide support in further differentiating products and solutions. Lastly, extensive collaborations with external technology partners and IHLs through Corporate Labs, Corporate Venture and Open Innovation Labs have also been carried out.

Are Businesses Ready?

Industry 4.0 is a major shift for many organisations. Are business leaders prepared to redefine and re-engineer their business models and processes by drawing from technological advances for real transformation?

If having platforms and infrastructure in place at both the country and organisation levels are not good enough an impetus for change, perhaps the reality of being left behind by competitors is.

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