Strategy, Technology

Digitalisation – What this really means for Southeast Asia’s manufacturing industry

By Suryanarayana Tumuluri, Head of Digital Factory Manufacturing Design, Siemens Singapore

The stages of progress in manufacturing industries are gradual – from steam engines, to mass production and electricity, computer and automation and now Industry 4.0. It sees digitalisation in the form of an interaction of the real and virtual world to increase productivity, efficiency and flexibility. As digitalisation is a major trend and innovation driver, it allows the creation of completely new business and growth opportunities for companies.

Manufacturing industry outlook in Southeast Asia

With the promising economic outlook in Southeast Asia, manufacturing companies of all sizes are encouraged to adopt Industry 4.0 in order to remain competitive. Also known as the fourth industrial revolution, it signifies the gradual combination of traditional manufacturing and industrial practices with the use of digitalisation technology.

Countries such as Singapore and Malaysia have strong ecosystems that enable companies to adopt technology that drive favourable production outcome. Yet, the question remains if embracing digitalisation should be the next step for organisations still observing traditional practices.

Challenges

Adopting digitalisation is seen as a step forward to enhance processes and boost productivity. However, there are still concerns of whether application of new technologies will allow companies to reap the benefits they have long enjoyed with their long-established approach. Many manufacturing companies have been slow to adopt new technologies including digitalisation, as they are not comfortable with the complexity of the process and with the idea of having too many touch points handling data, amongst many concerns.

Most manufacturers are also unwilling to embrace digitalisation as they are not equipped with the knowledge, capabilities as well as infrastructure around big data analytics and would prefer their traditional ways. Additionally, adopting digitalisation would create panic among employees who are not well informed about the topic, that they would face job displacement with potential repercussions. Separately, training of employees to equip them with the required skills would also means additional costs incurred for the company.

Implementation of solutions

The strategy of change must come from top down, where decision makers should thoroughly analyse current processes, activities and tools, followed by research of available solutions on the market. They are also encouraged to assess the stages of implementing new technologies to their processes, to ensure that existing and new methods work well together.

There is also a common misconception that digitalisation means you need to completely throw out the old in order to bring in the new. This is far from being true. Depending on requirements, companies can adopt a gradual step-by-step procedure for digital transformation instead of a complete transformation on its first instance. Businesses must first achieve an end-to-end integration of their data as one of the first steps before going full steam on their digitalisation journey.

Adopting digitalisation ensures competitiveness and growth opportunities for the company. It also brings the opportunity to reconfigure the labour pool and train workers to be digitally-skilled, so that they can use their talent and knowledge on more high-level requirements.

As a global powerhouse and market leader, Siemens supports manufacturing companies in their digitalisation journey by offering solutions and services to suit their various needs. Two years ago, Siemens launched ZerOne.DesIgn™ Digital Factory Manufacturing Design Consultancy in Singapore to cater to customers in Southeast Asia.

A first of its kind, this manufacturing design engagement model supports customers in their digitalisation journey through comprehensive planning – assessing company’s current manufacturing setup, identifying their existing challenges then proposing technology solutions that would help optimise manufacturing process and better manage operations on a facility-wide level.

Siemens also works closely with the Singapore Economic Development Board to help local companies digitalise their processes. It also supports the Singapore government in its drive to make the country a “smart nation”, having launched the digitalisation hub alongside Prime Minister Lee Hsien Loong last year.

Conclusion

Stepping away from the traditional methods would allow manufacturing companies to reap the full benefits of digitalisation. With that said, the course to complete digitalisation should not be looked at one-time process and instead, as a gradual transformation, depending on the necessity of a certain process as digitalisation is not a one-size-fits-all formula.

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