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Singapore's role in the Fourth Industrial Revolution
A RACE is on globally to see which nations will lead on the digitised, Internet of Things-enabled and data-driven manufacturing front. The overall "readiness" of countries in Asia is relatively high, with digitally savvy workforces and national agendas ranging from Singapore's Smart Nation to China's Made in China 2025 putting a heavy focus on technology, not to mention the traditional Japanese edge on advanced technologies.
Singapore certainly has a role to play. One reason is that the future of manufacturing is unquestionably at a crossroads. It is about to change. The much-heralded fourth industrial revolution is upon us. As you know, during the first industrial revolution, industry discovered the power of water and steam to mechanise production; during the second industrial revolution, electric power was put to good use; and during the third, businesses learned to rely more upon electronics and information technology to automate production. Now, the fourth revolution hinges on the power of digital.
And Singapore has the power of digital. With high levels of education and a digital savvy workforce it is well placed to help reshape the landscape. This is one reason the Industrial Transformation Asia-Pacific is being hosted in Singapore - globally companies recognise that Singapore could be part of a digital manufacturing future.
This is particularly true for companies that are willing to try to make their manufacturing smarter. This can be done by connecting machines and products to collect data so that they can make more efficient, informed decisions, both about point manufacturing and on the full life cycle as well. A big step forward is provided by technology enabling the creation of digital twins of each product. The "digital twins" enable continuous updates and the ability to simulate - and perform - intervention on the actual product remotely. The engineers who enable this can be found in our schools here in Singapore.
Leveraging data effectively will be key to increasing efficiencies in manufacturing. With data sensors, for example, preventative maintenance decisions can be based on real time analysis of actual wear and tear of components; it also helps to better utilise increasingly precious human resources. This removes the guesswork of fixed maintenance intervals for machines and sharpen HR recruiting and training practices.
By analysing data, production planning becomes more flexible, the entire supply chain can be coordinated and inefficient processes (such as high-power consumption or unnecessary runtimes) can be avoided and workplace environments for production staff improved. By making data a key part of manufacturing, companies can re-imagine how and where their production needs to be based.
Imagination will unquestionably be a part of manufacturing of the future. That's because entirely new business models can and will be created in the future. New approaches are emerging in sales that would not be possible without data. For example, some suppliers of aircraft turbines today sell flight hours instead of individual engines at unit prices. The sensor data from the turbines provide information about when an engine needs to be serviced and how fuel consumption can be further reduced. The manufacturer does not sell a product but is responsible for its operation, maintenance, performance and cost-effectiveness.
Such as-a-service models are already in play in Asia-Pacific. Consider Chinese industrial company Shanghai Zhenhua Heavy Industries. It is reinventing its business model away from traditional equipment manufacturing to become a service provider of port solutions. As part of this transition, the company is leveraging an intelligent data retrieval and monitoring platform for its global fleet of machinery.
This has the power to fundamentally change entire industry sectors. Customers benefit because they have lower acquisition and maintenance costs and better predictability. Suppliers benefit because the more reliable their machines perform, the higher their potential revenues. Thanks to data analysis, suppliers can also customise their offerings to best suit customer needs.
In this race to lead the fourth industrial revolution connecting to the IoT and leveraging data is the first step. Platforms are the key building blocks because they are the basis of new digital business models that are not aimed solely at increasing the efficiency of existing processes. Rather, they are the lynchpin to building new revenue streams.
These new opportunities will be found in robust business ecosystems such as Singapore where platform partners are thriving, and a digitally savvy employee base already exists.
- The writer is group chief executive, growth markets, at Accenture