A rising wave of automation and digitalisation is sweeping across Asia. Can Singapore stay competitive amid this growing shift towards smart manufacturing? In this post, Mr Anston Tan, Principal of iPlast 4.0, shares with us the key regional manufacturing trends in Southeast Asia and how Singapore SMEs can take these lessons on board to ride the wave.
These days, it seems that digitalisation is all we ever hear of. This is unsurprising, though, considering that much of the talk surrounding transformation and growth in the next decade is inherently linked to automating processes.
But embarking on the automation journey is never an easy one to take. After all, it requires heavy investment in terms of capital, resources, manpower and the like.
According to a survey by QBE Insurance Singapore, apprehension about digitalisation among SMEs in Singapore is causing them to fall behind in terms of preparedness for the future digital economy. In fact, this is a worrying trend, seeing as our competitors in the region have already embraced digitalisation as a way of life and are now ahead of the curve.
So if you’re an SME owner still hesitant at taking the next step towards automation, or struggling to justify your digitalisation investment — here’s how you can stretch the benefit of every dollar invested in digitalisation, and reap that promised ROI we have all been vying for.
“Digitalisation helps you sell an experience.”
Improve consumer confidence and industry credibility
If you’ve never heard of the ‘open kitchen’ concept, let me fill you in.
Originally introduced in a restaurant setting, the owner, wanting to demonstrate open innovation, invited restaurant patrons to her kitchen. She allowed customers to roam the kitchen and ask questions about the restaurant’s vision and processes, which eventually encouraged ideas to bloom and co-evolve.
Today, this concept has taken flight and is now widely understood to serve one core purpose: To take your customer on an experience.
Consumers today want to buy an experience, not just a product. If you think about it, it makes perfect sense. People make purchases based on feelings, and if you’re able to sell an experience, you’re more than likely able to sell your product.
A father who is able to customise the design of a running shoe with his son—decorated with his son’s doodles and favourite characters—ends up buying much more than a pair of shoes. He ends up buying that glorious, uninterrupted 15 minutes with his son, laughing and enjoying a shared activity together.
This concept has already been adopted around the world, and has even become a lucrative form of tourism. Industrial tourism is all the craze right now in Japan. Factories all over the country are opening up to the public, offering kojo kengaku, also known as factory observation or experience tours.
One such example is the Cup Noodles museum, which offers an interactive journey through the invention of instant noodles. Visitors even get a chance to create their very own Cup Noodles by designing their cup and personalising it with the flavor and toppings they like.
In South Korea, where the K-beauty industry is a huge market, cosmetic brand Etude House has opened its own Colour Factory — allowing shoppers to create customised, engraved lipsticks by hand at the factory and that are not sold on the market.
This concept applies even in the B2B industry. German automaker BMW has been providing a glimpse into the advanced manufacturing technologies adopted at several of its factories in Germany and the US. The company has been making use of collaborative robots, smart glasses, exoskeletons and innovative work gloves at its plants and they are not afraid to flaunt their smart factory technologies to the world.
These examples from the region teach us one thing: With digitalisation, comes the opportunity to show the world your digitalisation process. By opening your automated factory to the world and being completely transparent about your new processes, you stand to gain more consumer confidence and improve credibility in the industry.
As an SME owner, think about it. Opening up to consumers directly about your manufacturing process is a great way to let your digitalisation investment go the extra mile for you, bringing in the sales and then attracting the right business partners.
“Digitalisation takes smart manufacturing to the next level.”
Responding to a new wave of innovation
While we’re on the topic of consumers, it is important to note that increasingly, consumers play a big part of the manufacturing process. In fact, they are so essential that a new wave of ‘consumer to manufacturer’, otherwise known as C2M manufacturing, has been gaining traction.
Thanks to technology and its severe disruption to demand and supply forces, we are seeing a rise of C2M interaction between end-producers and end-consumers. First introduced by e-commerce giants in China, the C2M model is a specific phenomenon of niche demand aggregation, where the consumers are the initiator of demand.
In the C2M model, manufacturers can leverage consumer data to get real-time inbound feedback for demand of specific customised products. This allows manufacturers to understand consumer needs and preferences, cut cost and improve efficiency by reducing intermediate processes.
This new model is being referred to by some as the “Fourth Industrial Revolution”, and is expected to revolutionise the production and supply chain by prioritising consumers’ needs. Manufacturers are also starting to use crowdfunding platforms like Kickstarter and Indiegogo to test ideas directly with consumers. In fact, technology has already enabled small-scale manufacturers to do direct consumer selling, through platforms such as Taobao.
In China, a growing number of farmers have turned to live streaming on Taobao to ensure their fresh produce from village farms still made it to consumer tables. Taobao’s Foodie Livestream channel connects farmers across China with its 41 million followers. In the first three days of live streaming, 15 million kg of products were sold and the channel has been promoting farm-fresh produce daily ever since.
The advantages of the C2M model is clear: Manufacturers can make use of technology to gather information on scattered, individualised customer preferences. Big data and cloud computing can be used to match product data models to customer needs. This level of customisation brings smart manufacturing to a whole new level.
This in-depth extraction of user value represents a new wave of manufacturing innovation, and can only be done with automation, digitalisation and the Internet of Things.
“Digitalisation attracts young talent to the industry.”
Manufacturing: The future of ideas and creative minds
A new wave of manufacturing innovation calls for a new wave of ideas, and quite possibly, a new wave of talent. According to a report by the Committee on the Future Economy, smart manufacturing could help the manufacturing sector in Singapore maintain its share of about 20% of the country’s economy in the future.
As smart manufacturing continues to be a game changer for Singapore, SMEs should look at how they can fill this talent gap. Traditionally, the manufacturing sector is thought to be rather dull, old-school and a thing of the past. Some have even described manufacturing jobs to be ‘blue collar jobs’.
Growing up, our children have been taught to do well in school and get good grades to become doctors and lawyers — hardly anything to do with the manufacturing industry. It’s no wonder that Singapore is facing a shortage of talent that can facilitate companies’ transformation to smart manufacturing.
At iPlast 4.0, we have been on a journey to mould the future of manufacturing. This is done through an Education Revolution of enabling development and adoption before we can enable Industry 4.0. To start from the ground up, we first have to tackle the challenge of changing the mindset of youths, an integral step before discussing technical and vocational training.
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Download this guidebook from Schneider Electric “The SME Owner’s Guide to SG Budget 2020” to find out what are the available government grants for SMEs in Singapore
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