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Revolutionising Singapore's industrial spaces

The government encourages and helps firms embrace Industry 4.0 initiatives to stay relevant and raise productivity

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Habitat by Honestbee offers a cashless checkout system where shoppers can skip the queue and automatically pay for their purchases.

ROBOTICS, artificial intelligence, Internet of Things (IoT) … these are not just buzzwords but some key technologies reshaping the way we work and live. And they are fast changing the way we conduct business, distribute goods and use our industrial spaces in this digital age. Amid the proliferation of online market places with new last mile requirements and the birth of new business concepts, policymakers are flexing some boundaries to accommodate the demands of the new economy.

Flexibility is key

Habitat by grocery start-up Honestbee is a case in point. Positioned to provide a multi-sensory, tech-meets-food grocery and dining experience, the 60,000-sq ft Habitat is set up within an industrial building after getting approval from the authorities for the ancillary retail area, ancillary event hall and industrial canteen use for a period of three years. Technological highlights include AutoCheckout, a cashless checkout system where shoppers can skip the queue and automatically pay for their purchases using beePay, and RoboCollect, a fully-automated robotic collection point.

And this is not the first time that the government has adopted a more flexible stance to support or drive new business concepts.

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In 2004, the launch of the Warehouse Retail Scheme (WRS) allowed retail activities which were previously disallowed within industrial or warehouse developments, and 'big box' retailers that typically occupy 100,000 to 200,000 sq ft, to set up their operations in Singapore. Today, the Tampines Retail Park is a popular shopping destination anchored by the 'big box' facilities of Ikea, Courts and Giant set up under the WRS.

In 2017, JTC Corporation announced the development of a new multi-tenanted building in Woodlands, on a site zoned Business 1-White, that will shift away from the conventional 60:40 rule. This is in recognition of the blurring lines between manufacturing and services activities. Manufacturing companies will thus be able to set up their service-driven activities such as research and development and after-sales support alongside their production operations. If successful, the industrial landscape could see the introduction of more of such flexible facilities.

In another unprecedented move, JTC will develop the upcoming Punggol Digital District (PDD) using one integrated masterplan approach for the entire Enterprise District, rather than having specified guidelines for individual land parcels. This allows for better integration and synergy among different uses and spaces within PDD.

Gearing up for Industry 4.0

Beyond these government initiatives, industrial landlords and owners should also pro-actively evaluate the suitability of their existing facilities. It may be time to upgrade or rebuild where necessary to cater to the digital economy so as to stay in or ahead of the competition.

Smart industrial facilities will need higher building specifications such as increased floor-loading capacity, higher electrical loadings, and fibre optic infrastructure to cope with the more demanding electrical needs and wireless connectivity.

In our most recent JLL report, Industry 4.0: Transforming Singapore's Warehouses, we discussed three options that logistics service providers, end-users and warehouse landlords can consider in gearing up their brick-and-mortar facilities to meet the demands of the digital economy.

However, there is no one-size-fits-all solution. Whether it is to upgrade or automate their existing warehouses, relocate to another facility with higher specifications, or undertake a complete teardown and rebuild, each option will have its merits and challenges that should be weighed against the company's long-term objectives and requirements.

For instance, automating or upgrading the existing warehouse would be relatively quick and less prohibitive in terms of cost and resources than the redevelopment option. But the latter provides the opportunity to build a customised Industry 4.0 facility with future proofing in mind.

We advise those considering transforming their business with new technologies to begin with the end in mind. For instance, are you automating one aspect of the business operation or are you looking at automating the entire manufacturing or warehouse process? Understand, too, that the latter entails a long-term investment with potentially high capital outlay.

It may thus warrant engaging the services of an automation expert and real estate adviser so that any real estate requirements arising from the automation process or the adoption of Industry 4.0 practices can be incorporated into the brick-and-mortar design early.

The road ahead

The government has reiterated its commitment to encourage and help firms embrace Industry 4.0 initiatives to stay relevant and to raise productivity. With more firms heeding that call, policymakers may once again be challenged to flex their policies to support new business processes and ideas.

The journey to transform Singapore's industrial spaces has only just begun.

  • The writer is director, research & consultancy, JLL Singapore