Creating a cooperative and open ecosystem for manufacturing
THROUGH the years, Singapore has established itself as a strong centre for manufacturing quality and excellence. Its physical infrastructure, government and agency support has enabled the manufacturing sector to mature quickly, achieving stability across many verticals.
The industry has since spent significant amounts of time, energy and money into improving efficiency and productivity - necessary in remaining relevant in a highly competitive field.
However, productivity improvements have plateaued and the industry has been struggling despite concentrated efforts in helping manufacturers weather the downturn. This is not a recent trend as productivity in general has been slowing in Singapore since 2012 . The manufacturing industry as a whole has been falling in growth year-on-year .
This can be attributed to several factors such as macro-economic trends and increasing regional competition. China's market crash is also rippling through the global economy, causing additional difficulties for the manufacturing sector.
For Singapore, the main challenge now is how to remain competitive despite being at a disadvantage when it comes to cost of labour, engineering talent and logistics for raw materials. How can Singapore maintain productivity growth in the manufacturing sector and be able to step out of this slowdown stronger than it was before?
Much of the focus on productivity has entailed modernising facilities: upgrading machinery, training management and engineers on traditional and new process, and implementing productivity techniques. When manufacturers have exhausted these options, a more proactive and forward-thinking solution will be required, and on a much larger scale. This necessitates a significant mindset change in order to lift Singapore's manufacturing industry forward as a whole.
The importance of continuous improvement in productivity and efficiency shouldn't be stopped, but these same principles can be easily applied in other regions that have additional compounding advantages. For example, purchasing cutting-edge equipment and applying the best policies for continual improvement in a plant in the Philippines can be more cost-effective and profitable than the exact same operations in Singapore due to issues ranging from labour constraints to real-estate costs.
This means that manufacturers in Singapore, especially SMEs, must look at productivity and efficiency not from an individual facility and manufacturer standpoint, but from an industry as a whole to stand a fighting chance.
In order to do so, a mindset change from individual improvement to industry-wide improvement will be required. Singapore must utilise its strong points to bring about a smart ecosystem for manufacturing.
Sharing real-time data
For a competitive manufacturing industry to remain healthy in Singapore, a cooperative and open ecosystem needs to be developed. This ecosystem must be one that is capable of sharing real-time data across different industries to help improve efficiency.
It needs to become a support platform that enables manufacturers with pain points to quickly implement modular solutions from any type of vendor without concerns about integration. The ecosystem must be quick to adopt and enable solutions providers researchers and new businesses to thrive.
One of Singapore's most powerful assets in the manufacturing space is the strong support from agencies such as Spring and the Economic Development Board (EDB). Grants and incentives ranging from the Productivity and Innovation Credit (PIC) to the Capability Development Grant (CDG) are available. Training courses offered by the Singapore Manufacturing Federation (SMF) and Singapore Institute of Manufacturing Technology (SIMTech) to improve manufacturing quality and productivity are covered by subsidies and are heavily encouraged.
Apart from agencies, manufacturing groups such as SMF, SIMTech, A*Star and the Singapore Manufacturing Consortium (Simco) have helped ensure a robust environment of support from training to research.
The focus of these groups now needs to turn towards the creation of the manufacturing ecosystem centred on data and industry visibility and transparency. SIMTech's push with its Manufacturing Control Tower is the perfect example of the spearheading projects needed for this type of smart manufacturing ecosystem.
Simco's efforts to join solutions providers in the hardware and software space to support the manufacturing industry through an integrated platform is another method to enhance the ecosystem. It is through projects and initiatives that are industry-wide that help connect, interact and share information that will enable a distinctive advantage for manufacturing in Singapore.
Imagine a manufacturing ecosystem where a new MNC wishing to set up manufacturing operations in Singapore can tap into a wealth of real-time information to help it excel. Company A can look into the ecosystem and see all available suppliers for raw materials to available SMEs that can fabricate/pre-assemble parts it needs. It will be able to see real-time raw material pricing. SMEs capable of producing parts for them will be able to show current and future available capacity in real-time.
After Company A has moved in, this same ecosystem will enable SMEs to stream real-time production data to them on the production rate and full quality control data of their parts to synchronise with their own processes. The information generated is then fed back into the same ecosystem, thus continuing the cycle of visibility for others.
Plug-and-play ecosystem
When Company A comes across a problem, solutions providers from hardware to software can quickly plug into the ecosystem's data and integrate their solutions directly. Aggregated real-time data will be utilised for benchmarking to allow manufacturers to identify areas for improvement and enables researchers and policymakers to find better ways to strengthen the industry. At the same time, this ecosystem will tie together the industry as a whole to allow for startups with brilliant new ideas and solutions to grow and deploy faster. This is the type of plug-and-play ecosystem that Singapore will be able to create to attract the best and brightest new startups and manufacturers that require precision, quality and efficiency for their entire production processes.
Creating a smart ecosystem for Singapore is one thing, training the next generation of talent to utilise, excel and innovate on this ecosystem will be critical to its success. Singapore boasts an exemplary education system capable of training forward-thinking engineers.
It now needs to shift towards creating innovative data-savvy engineers capable of leveraging research opportunities, solutions and new businesses from this real-time ecosystem. The industry needs engineers trained in related disciplines such as statistics, data management, operations management, and entrepreneurship.
Singapore's manufacturing industry sits at a very critical time in its advancement. It has matured to a stage where fighting alone on cost and quality may be a losing one based on surrounding competition and global trends. In this manufacturing slowdown, Singapore has the opportunity to transform itself into a data-connected manufacturing powerhouse. This can be brought about by setting up an ecosystem revolving around a real-time data infrastructure for manufacturers.
This means manufacturers can leverage for a competitive advantage, and enable new and exceptional solutions providers to quickly tap to provide boosts in productivity, cost reductions and quality improvements. Singapore has done an exceptional job in developing physical infrastructure from roads to ports and the educational infrastructure for providing exceptional talent. Now it is time to focus on the digital infrastructure needed to keep the nation competitive for decades to come.
The writer is the chairman and founder of the Singapore Manufacturing Consortium (Simco)
