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McKinsey, A*Star's ARTC to train workers on Industry 4.0 (Amended)

McKinsey's Digital Capability Centre, opening in April, will help local firms harness emerging technological changes

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McKinsey & Company's new Singapore Digital Capability Centre (DCC), opening on April 11, will help local companies harness emerging technological changes - collectively known as Industry 4.0 - that are disrupting industries around the world, according to Oliver Tonby, McKinsey's South-east Asia managing partner.


MCKINSEY & Company's new Singapore Digital Capability Centre (DCC), opening on April 11, will help local companies harness emerging technological changes - collectively known as Industry 4.0 - that are disrupting industries around the world, according to Oliver Tonby, McKinsey's South-east Asia managing partner.

Mr Tonby said Industry 4.0 describes four broad disruptions. They are: increasing data availability and interconnectivity; analytics and business intelligence (BI) capabilities, including artificial intelligence (AI); advanced human-machine interactions such as cobots (a collaborative robot that interacts with humans in the workplace); and advanced production methods such as 3-D printing.

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All these are expected to transform the entire life cycle of a business' product, from customer order to after-sales.

The Singapore centre is part of a global network of five DCCs that McKinsey has around the world. The Singapore centre will be in partnership with A*Star's Advanced Remanufacturing and Technology Centre (ARTC) and, apart from Singapore, will also serve the South-east Asian region. McKinsey is spending US$15 million upfront in establishing the centre and will employ 10 new full-time employees. According to sources close to the project, McKinsey expects that more investments in the centre will be ongoing as it expands and increases its scope. Most of the money is likely to go into hiring more skilled personnel.

Talking to The Business Times, Mr Tonby noted that with manufacturing accounting for one-fifth of Singapore's economic output, "the facility is in line with the nation's push to become a regional hub for advanced manufacturing (AM)".

He added: "Singapore, in our view, is also uniquely positioned to become the home of smart manufacturing pilots. The DCC is also designed to be especially relevant to regionally important sectors including discrete manufacturing, semiconductors, oil and gas, electric power, and mining.

"We see DCC Singapore playing an integral role in the ecosystem, drawing on ARTC's state-of-the-art facilities and research and development capabilities across A*Star, ranging from manufacturing, data analytics, virtual process modelling, and digital solutions for complex manufacturing processes."

David Low, ARTC's CEO, told BT that his organisation would be jointly conducting manpower training sessions with McKinsey for companies to get an appreciation of lean manufacturing and Industry 4.0.

"These sessions will leverage DCC's learning modules across themes such as predictive maintenance, digitised performance management, procurement and supply chain. The DCC will utilise part of ARTC's Model Factory testbed that will be launched in the later part of the year," Mr Low said.

The Model Factory testbed will provide a learning environment for companies to experience advanced manufacturing technologies, so that they can acquire and deepen their knowledge and skills in such technologies, thereby reducing the risks involved in adopting AM in their own factories and processes

ARTC will also groom talent for Future of Manufacturing technologies through workshops and on-the-job training. At any one time, ARTC has at least 30 interns from the various Institutes of Higher Learning (IHLs) such as NTU (Nanyang Technological University), NUS (National University of Singapore, SUTD (Singapore University of Technology and Design), Singapore Polytechnic, Ngee Ann Polytechnic, Nanyang Polytechnic, Republic Polytechnic and Temasek Polytechnic.

As new technologies such as robotics, digitalisation, IoT (Internet of Things) and analytics come online, the manufacturing sector is changing dramatically. Advanced manufacturing is one of the areas identified by the Committee on the Future Economy (CFE) as a growth cluster. CFE noted that Singapore should augment its current base of complex manufacturing capabilities, and prepare its workforce to take on the jobs created by the integration and adoption of AM technologies.

Recently German semiconductor giant, Infineon Technologies, announced that it is spending 70 million euros (S$104.8 million) in five years till 2021 to develop a smart factory at its backend manufacturing plant in Singapore. Infineon said it would progressively increase the level of automation, connectivity and control within the factory. It added that Industry 4.0 "is not only the next step in automation, but will substantially change how we work; machines are becoming more intelligent and will be able - to a large extent - to control and optimise themselves and the production process in which they are involved".

McKinsey's Mr Tonby said the company's DCCs around the world will simulate different companies, depending on the needs of the region. "For example, the Singapore facility will feature a gearbox manufacturer whereas the German facility will feature a woven smart wristband producer. Ultimately, the realistic production environment is the biggest differentiator as all centres will feature similar capability learning modules which will be developed in synergy and then tailored to the simulated business."

He added that the Singapore centre will showcase applications beyond the four pillars of Industry 4.0 - data analytics, robotics, 3-D printing and connectivity - to "include technologies that can be adopted across the entire value chain encompassing product development, procurement and supply chain".

The Singapore facility will offer companies at different stages of their Industry 4.0 transformations with the following help:

  • For companies at the start of the journey, it will host workshops meant to increase awareness of Industry 4.0. This will help companies know what technologies are available and how they can articulate a company's digital vision, Mr Tonby said.
  • For companies who have an Industry 4.0 agenda but do not know how to get started, DCC will offer deeper capability-building workshops and programmes, dedicated to specific Industry 4.0 topics, such as digital procurement. These will allow leaders and mid-level managers to acquire the necessary skills to embark on a transformation programme and sustain it over time, the McKinsey official said.
  • Finally, for companies who are on their way in the digital journey, DCC will serve as a testbed for individual solutions before piloting them at their premises - for example new predictive maintenance algorithms.

Among the many technology showcases on offer at the DCC, one will be on predictive maintenance. "New technology today uses real time data to predict and prevent breakdowns and can reduce down time by 50 per cent. At the DCC, participants will learn about these new technologies and also pilot them on site, before applying them to their own setting. We think this approach can be transformational in the adoption of Industry 4.0," Mr Tonby said.

ARTC's Mr Low noted that Industry 4.0 is still a relatively new concept and not all companies are convinced of the value that these technologies can bring them.

Companies need to understand how they will be left behind if they do not adopt Industry 4.0, as the future of manufacturing will see a move towards the replacement of labour-intensive processes with disruptive technologies such as digital manufacturing, robotics and automation, he said, adding: "To remain relevant, companies must identify and learn about the types of advanced technologies which can make a significant difference to their businesses, and open up new revenue streams."

Mr Low added that with strong government support in this space, along with a well integrated ecosystem of relevant government agencies, researchers and the industry, Singapore is in a good position in the adoption of Industry 4.0.

Amendment note: An earlier version of this article stated that the Intellectual Property (IP) generated at the DCC would be jointly owned by ARTC and McKinsey. McKinsey has since clarified that it is unable to confirm who the IP would be vested with.