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SMEs eye advanced manufacturing with curiosity and caution

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"SMEs look at it with curiosity and fear," said Jeffrey Chua, senior partner and managing director of The Boston Consulting Group (BCG).

Singapore

SMALL and medium-sized enterprises (SMEs) in Singapore are still eyeing advanced manufacturing with curiosity and caution. While most are excited by the possibilities and accept that it is inevitable, some are still taking the wait-and-see approach.

"SMEs look at it with curiosity and fear," said Jeffrey Chua, senior partner and managing director of The Boston Consulting Group (BCG).

"Curiosity is you look at all these interesting technologies that are coming up; lots of vendors out there showing the latest and the best software and hardware ... that to SMEs seem promising," he added.

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Fear, meawhile, comes from knowing that adopting advanced manufacturing is necessary. It requires capital layout, but there is no knowing if the technology will pay for itself.

Said Mr Chua: "When you talk about technology, the next thing they think about is capex (capital expenditure). To them, it may become like an arms race." Fear also comes from not knowing what will happen to them if they don't adopt these new technologies, noted Mr Chua.

There is also the possible misperception among SMEs that Industry 4.0 or advanced manufacturing is automation, which many have already adopted, Mr Chua said.

"Advanced manufacturing is a lot more than automation. Automation is about a single line, with lots of robots doing the same things. To some manufacturers, that is advanced manufacturing," said Mr Chua.

"In a really advanced manufacturing line, for example, you don't see conveyor belts - you see multi-directional flows. Things don't go in one direction, they can have cell-based work stations where parts of products don't move in one straight line. The robots can talk to each other so they can speed up or slow down depending on volume and bottlenecks, so that production lines are very seamless."

Production lines can also be reconfigured very quickly, and adjusted to produce a different product, unlike automated lines that need to be stopped and retooled to produce a different batch, added Mr Chua.

Raymond Siew, managing director of automation solutions provider Sankei Eagle Singapore, said that it has received overwhelming enquiries from SMEs, but orders are slow. Food companies, for instance, are reluctant to share their "secret recipes" and food tests cannot be replaced by technology.

Some business owners are also not willing to change as they feel that their current model is working and there is no guarantee that technology adoption will ensure the success of the business, noted Mr Siew.

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