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Industry 4.0: Are businesses stepping up to be future-ready?

Making a real transformation entails a mindset change. It's not an option, because the alternative is to be left behind.

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Launching the Industrial Transformation Asia-Pacific trade fair on Oct 16 were (from left) Deutsche Messe chief executive Jochen Kockler, DPM Tharman Shanmugaratnam, Germany's ambassador to Singapore Ulrich Sante and SingEx Holdings chief executive Aloysius Arlando.

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 - including me as a panelist of the Asia Industry 4.0 Dialogue - 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 EVOLVES

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

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Even for us as a technology and engineering group, we started digitising our workflow at our Aerospace business, in what we call "Aerobook", more than 10 years ago.

Our transformation was evolutionary, with the adoption of Augmented Reality/Virtual Reality (AR/VR), robotics and other advanced technologies progressing only when the business case became clearer. We also incorporated other possibilities to redefine our value proposition - customer participation and mobile interfaces in the digitised process, improved interaction via AR between engineers and mechanics to reduce 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 per cent to date. Our business is going further, and is certifying the use of unmanned aerial vehicles for aircraft inspection, which, when implemented will help to improve efficiency and minimise workplace accidents.

Our technological advances, in the example of our Aerospace business, are driven by our longstanding goal to improve productivity and capture efficiencies as we operate in higher-cost locations like Singapore, Germany and the US, to augment our competitive differentiators in quality and value. In the same way, business leaders should identify and prioritise their business cases.

CHALLENGES OF TRANSFORMATION

Government support is not lacking for Industry 4.0. In March this year, the Economic Development Board 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, my fellow panelist, observed that millions of Indonesians in the workforce will require training to be digitally literate under the country's Industry 4.0 rollout plans. Another panelist, Dr Gunther Kegel, CEO of Pepperl+Fuchs, Germany, said his company had spent hundreds of training hours to ready the workforce. He 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.

I do think that once there are more proven use cases, the adoption rate will grow. It will grow even more quickly if business cases are clearly in sight. It will require senior leaders to take a top-down approach to drive implementation, overcome barriers and resistance for transformation.

READYING THE WORKFORCE

Minister Chan additionally observed that we 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 our learning will need to be in our companies where they are constantly doing experimentation, even as we rely on conventional learning for building fundamentals.

I share his views. As I said during the panel discussion, organisations will welcome the development of more industry 4.0-related talents through the institutes of higher learning (IHLs). 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 an area corporates, government agencies and IHLs can work together to co-develop.

Our approach to training and retraining of our workforce for Industry 4.0 is multi-pronged. Our top 100 managers have attended data analytics and cyber security executive workshops, leading a mindset shift from the top. We also put our engineers through courses that are targeted at further enhancing domain expertise.

For instance, 70 of our engineers have already been trained at our Cybersecurity Academy, which is a professional cyber security training school. And 350 of our engineers attended a technical course in robotics and digitalisation, made possible by our strategic partnership with Singapore Polytechnic, to create a bespoke Digital Transformation & Robotic course. We are preparing for another 1,000 employees to be trained in a customised data analytics programme over the next 11/2 years at the National University of Singapore.

We have also set up Strategic Technology Centres to develop deep capabilities in areas such as data analytics and cyber security, to provide group-wide support in our efforts to further differentiating our products and solutions. Realising that we cannot build all capabilities internally, our group collaborates extensively with external technology partners and IHLs through our Corporate Labs, Corporate Venture and Open Innovation Lab.

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.

  • The writer is president and chief executive of ST Engineering and a board member of JTC Corporation. He is also a member of the Ministry of Trade and Industry's International Advisory Panel for Advanced Manufacturing & Engineering, and was a member of the government-convened Committee on the Future Economy, which in 2017 released its strategies and recommendations to chart Singapore's next phase of growth.