The COVID-19 pandemic has disrupted the manufacturing industry on a massive scale. What will the “New Normal” be for manufacturers? What must SME manufacturers do to ride the digitalisation wave? Article by Dr Ahmad Magad, Secretary-General of the Singapore Manufacturing Federation.
In this post, Dr Ahmad Magad, Secretary-General of the Singapore Manufacturing Federation, shares with us the key mindset shifts that SME owners should adopt in order to build an agile and resilient organisation.
The disruption caused by COVID-19 has had far-reaching impact on our economy. For the manufacturing industry, supply chain disruptions and manpower restrictions have been significant issues affecting the manufacturing community since the on-set of the COVID-19 pandemic.
This year, our Budget 2020 heavily emphasises the need for digitalisation in transforming businesses. Our government has rolled out a series of grants and initiatives aimed at helping businesses along the digitalisation journey, which include the Enterprise Development Grant, Productivity Solutions Grant, SMEs Go Digital Programme, among others.
The Ministry of Trade and Industry has also released the Industry Transformation Maps (ITMs) which are essential guide maps to drive industry transformation based on the four pillars of productivity, jobs and skills, innovation, and trade and internationalisation.
However, just simply relying on governmental intervention is insufficient in seeing the manufacturing industry through these uncertain times. Businesses and individuals alike must be proactive and adaptable, requiring them to shift their mindset towards innovation.
“Change is the only constant”
1.Be open to change and recognise that business models of the past may no longer work
While manufacturing may typically be quite a conservative industry, COVID-19 has created many challenges that require manufacturers to innovate like never before. Manufacturers are forced to rethink risk management and contingency plans, workforce safety protocols and new ways of handling their manufacturing operations and activities. This requires a significant shift in mindset from traditional processes to more advanced manufacturing technologies.
Studying the art and science of business modelling no longer adequately prepares you for the future. In the past, business models were used to explore a range of complex decisions and identify essential elements that drive businesses. Today, however, when faced with a volatile, uncertain, complex and ambiguous (VUCA) world, manufacturers have to be open to change and be willing to embrace new ideas.
Evidence has shown us time and again that businesses that are unwilling to change and which are set in their old ways are likely to lose out to competitors and face the prospect of being phased out. As SME manufacturers, it is crucial for them to adopt a mindset shift so that they can begin to innovate and adopt new ways of working.
“Identify and bridge the skills gap”
2. Study the market and be quick to identify new and relevant skills
Once you are ready to embark on your digital transformation journey, the next step will be to identify the relevant skills needed in the industry of tomorrow. It comes as no surprise that there is a wide range of new skills that are required by the workforce to digitalise and transform. The challenge many manufacturers face is in identifying effective training and education pathways for their organisation’s employees.
As an SME manufacturer, it is essential to think about new industry trends along with where your market is heading for. With industry 4.0 set to exacerbate the speed of digitalisation, it is almost certain that manufacturing jobs of the future will require expertise in digital technologies and digital systems. It is therefore, imperative to improve your employees’ familiarity with IT hardware and software, digital networks and manufacturing-related digital tools.
To bridge the growing skills gap in the manufacturing industry, you should look into areas such as Digital Fluency, Data Analytics, Change Management, Cybersecurity, Problem Solving and other relevant soft skills. Identify the skills needed in your particular business, discern where the opportunity lies within your organisation and actively seek support to enable training opportunities for your employees.
“Invest in human capital development”
3. Train and retrain in a continuous cycle of improvement
Under the S$4.5 billion Industry Transformation Programme, about S$3.6 billion has been allocated towards training and reskilling of workers in the ever-changing business landscape. Our Deputy Prime Minister Heng Swee Keat’s Budget 2020 address has also highlighted the pressing need for reskilling and upskilling through schemes, such as the SkillsFuture Credit, SkillsFuture Mid-Career Support Package and SGUnited Jobs and Skills Package.
But here’s the catch: Employers should invest in human capital development, not just as a one-off training programme. What this means is the focus should be on Continuing Education and Training (CET), where employers should train and retrain staff in newly identified skills that are necessary for our volatile and unpredictable future.
As an SME manufacturer, besides catering to business needs and day-to-day core operations, it is also critical to look at whether your employees are equipped with the necessary competencies to embrace advanced manufacturing technologies and solve the challenges that your industry is facing in the future. The key is to look at skills training as a form of continuous improvement to meet the changing requirements of the industry.
“Manufacturing in the New Normal”
4. Build business resilience in an environment of adversity through digitalisation
Finally, the last catalyst for change lies in business resilience. This requires manufacturers to be agile and adapt quickly to new challenges and also identify new opportunities. In the manufacturing sector, this means accelerated deployment of Industrial IoT, including sensing devices, data visualisation, remote collaboration tools and AI-based insights across their operations.
In the near future, access to reliable, real-time data will become an even more important strategic resource. Companies that are able to embrace advanced manufacturing technologies enjoy greater predictability and flexibility in securing their supply chains and manufacturing operations. This gives them a higher degree of competitive advantage over their peers, and makes them more resilient to unforeseen crises, such as the current COVID-19 pandemic.
As an SME manufacturer, it is important to look into digitalisation not simply as a response to the COVID-19 crisis but also as the gateway to Industry 4.0. Measuring the ROI on digitalisation is no longer as straightforward as before. The cost of adopting new technologies should be seen as investments in transformation and growth – key components in keeping the business agile, relevant and resilient in an environment of adversity.
The way forward for SMEs
In Singapore, SMEs are extremely fortunate as the government has invested heavily in workforce reskilling programmes. We have had a head start in this aspect; as such, SME manufacturers should look into workforce retraining and the adoption of digital solutions in order to thrive in this rapidly changing global environment.
Here at Singapore Manufacturing Federation (SMF), we have the Professional Conversion Programme (PCP) Manufacturing and the PCP Regional to help mid-career Professionals, Managers and Executives (PMEs) reskill with the necessary competencies to take on new jobs in the manufacturing sector. This helps manufacturing companies to tap on additional sources of manpower to meet their manpower needs. We also have the place-and-train programme, such as the P-Max to assist SMEs to better recruit, train, manage and retain their newly-hired PMEs.
Jumpstart your digitalisation and automation journey through the SME Go Automation initiative. If you are still unsure what grants and support measures are available to you, find out more in the Schneider Electric Budget 2020 guide for SMEs or you may contact SMF. If you’re looking for subsidy of your digitalisation and automation costs, check out the Schneider Electric 17-page guide to find out how you can apply for government grants.
Check these articles out:
CLICK HERE FOR LATEST NEWS.
READ CURRENT AND PAST ISSUES OF IAA.
KEEP YOURSELF UPDATED, SUBSCRIBE TO IAA NOW!