News

Articles:

EXCLUSIVE – How EDB’s Smart Industry Readiness Index aims to empower Singapore’s manufacturing companies for implementing Industry 4.0 strategies

EXCLUSIVE – How EDB’s Smart Industry Readiness Index aims to empower Singapore’s manufacturing companies for implementing Industry 4.0 strategies

Singapore’s strength in manufacturing is probably one of the
city-state’s best kept secrets. Though the country is small in size and
population compared to the giants which come to mind when we think of
manufacturing, over the years Singapore has developed itself as an important
manufacturing centre in industries ranging from electronics
and precision
engineering
to pharmaceuticals
and biotechnology
and chemicals.
In fact, Singapore is the fourth largest exporter of high-tech goods behind the
US, China and Germany. Manufacturing is a key engine of the Singapore economy,
accounting for 20-25% of the GDP. 

Singapore has accomplished this through pro-business
policies, competitive taxes, a robust intellectual property (IP) regime, and an
educated, reliable, adaptable workforce. Singapore has positioned itself as a preferred
location for innovation and for development and test-bedding of new ideas and
solutions.

Hence, Singapore is uniquely poised to leverage the fourth
industrial revolution and technologies such as advanced analytics, artificial
intelligence, automation and robotics and 3D printing to enhance the
competitive of its industries and fortify its position as a destination of
choice for manufacturers. 

But like many big and small companies globally, companies in
Singapore too are grappling with the concept of Industry 4.0 (I4.0). They are
unsure of where to start in the broad array of interlinked concepts and
technologies which constitute Industry 4.0 and what steps to take to maximise
the potential benefits.

Hence, on November 14, the Singapore Economic Development
Board (EDB) launched a
world-first tool
, the Singapore
Smart Industry Readiness Index
(the Index), to help industrial
companies harness the potential of Industry 4.0 in a systematic and
comprehensive way. The Index was developed in partnership with global testing,
inspection, certification and training company TÜV SÜD.  

Post the launch event, OpenGov had the opportunity to speak
to Mr. Lim Kok Kiang, Assistant Managing Director of EDB and Dr. Andreas
Hauser, Director, Digital Service at TÜV SÜD, to
learn more about the development process of the Index, how the index fits into
other Singapore Government initiatives and the implementation plans.

Development of the Index

There are many ongoing initiatives in Singapore and worldwide.
Many of the big multinational corporations (MNCs) and different associations
have their own indices. So, what is the need for another index? Dr. Hauser
explained that many of the existing frameworks are too academic, too bulky to
apply or too shallow. They are not necessarily bad or good but there was a
niche for an index with technical rigour, which is also usable and brings
tangible value to the manufacturers. That is the gap this Index aims to fill.

Dr. Andreas Hauser, Director, Digital Service at TÜV SÜD

The process started with screening of the existing indices. The
framework was drafted by a small team, primarily referencing the Reference
Architectural Model for Industry 4.0 (RAMI
4.0
) framework, which was developed by Plattform Industrie 4.0. 

Then the team sought feedback from global thought leaders
and experts. The idea was to achieve some sort of a consensus and ensure that
the Index is not too localised to Singapore and is globally applicable. This is
necessary to ensure market acceptance and alignment to global initiatives such
as the Industrial Internet Consortium,
Society 5.0, Made
in China 2025
etc.

“If you just focus on Singapore, and don’t align to global
initiatives, it will remain a Singapore Index and for the many global players
here, that doesn’t help them because they think in global terms. So you have to
have an Index which meets global requirements. That’s why we have aligned it to
the global initiatives, and that helps Singapore manufacturers to compete on
the global scale,” Dr. Hauser said.

Following the
expert consultation, the Index was piloted with both small medium enterprises
(SMEs) and MNCs in Singapore. Dr. Hauser said that was when the real
reality check came, when they went to manufacturers and tried to apply this.

It was a steep learning curve for everyone involved but it
turned out that there was something the companies could take out of the Index.

Dr. Hauser said that the Index was continuously adjusted
according to the feedback. For instance, maybe the description of a term was
not clear. So it was made clearer. Throughout the pilot, the Index was steadily
refined.

All the feedback from MNCs and SMEs across industries such
as electronics, aerospace, chemicals etc. were incorporated into the Index. Finally,
a white paper was drafted, which went through many iterations.

Connections between the
Index and other Government initiatives

Mr. Lim Kok Kiang, Assistant Managing Director of EDB

Mr. Lim explained that the Index is a tool to help companies
better assess where they are, and it helps them think about the next steps they
can embark to make their plants more competitive and profitable.

The Index cuts across the three pillars of organisation,
technology and process. Underpinning these three are 8 pillars of focus. These
pillars then map onto 16 dimensions of assessment, which represent the key
components that any organisation must consider.

For each of the 16 dimensions, the Index
provides an assessment matrix which companies can use to evaluate their current
processes, systems, and structures within one to two days.

The 16 Dimensions of Assessment (Image from the Singapore Smart Industry Readiness Index white paper)

For example, in order for the companies to improve their
technology, they would sometimes need to work with research institutes.

Singapore’s RIEC
(Research, Innovation and Enterprise Council) plan
provides public funding of R&D at research institutes. The aim is to build capabilities
in the relevant technologies and support its adoption by the industries.  

“The Index’s framework helps companies to decide and
prioritise on the technology to invest in. Thereafter, companies can look towards
public R&D infrastructure to develop the technologies. For example, a few
months back, A*STAR (Agency for Science, Technology and Research) launched a
model factory for advanced manufacturing at SIMTech,” Mr. Lim explained. “The
model factory simulates production environments where companies can
experiment and learn new manufacturing technologies. With the help of public
sector researchers, companies can test these technologies before deploying them
in their factories.” 

The Industry
Transformation Maps
 
(ITM) provide
another example of how the Index fits in with other initiatives. The Government
is developing ITMs for 23 industries grouped into 6 broad clusters:
Manufacturing, Built environment, Trade & connectivity, Essential Domestic
Services, Modern services and Lifestyle.

An essential part of the ITM is skills training for the workforce,
which is covered by the Index’s pillar on ‘Talent Readiness’.

Mr. Lim said, “The training programmes that we will put in
place to support companies, will also be supporting the whole movement to
enhance our advanced manufacturing capabilities.”

Implementation plans

During the launch event, which featured speeches and an
industry panel discussion; the speakers stressed repeatedly that companies have
to leave their comfort zones and take a long, hard, objective look at where
they stand on all the parameters. It is not about obtaining a high score or the
highest score among peers. The Index aims to provide a baseline for
manufacturers to gauge where they stand, where they need to be and how they can
reach there.

To aid companies in using the Index, EDB and TÜV SÜD will be
conducting a series of four workshops in the next few months.

EDB will also work with the various trade associations and
chambers in Singapore to get the information and the knowledge out to all the
companies. EDB is also considering the accreditation of some companies and
experts so that they can help companies use the Index and do the analysis. This
could be announced  as early as next year.

Balancing breadth of
coverage with need for specificity

The Index is applicable for all manufacturers across all
sectors because it addresses the fundamentals of each organisation: technology,
process and organisation. It might sound generic but companies have to prioritise their future
course of action and that will compell
them to think in terms of specific needs. Where the different manufacturers and
different industries prioritise depends on where the industry is heading. That
is the customisation part.

“If you think about the ITMs, they are tailor-made to an
industry such as electronics, energy and chemicals and so on. Each industry
will have different growth drivers, which will influence the area of focus for
Industry 4.0 implementation. The Index however, provides a common framework for
everyone to engage about Industry 4.0,” said Mr. Lim.

Mr. Lim gave an example, “You have to make an assessment and
decide what is your immediate focus. Is it going to be training the workforce
for Industry 4.0? If it’s training, what is the type of training your company
requires? The demands of the workforce in electronics will differ from that in energy
and chemicals, and therefore the nature of training will be very different.”

EDB will support the companies to ensure that the Index does
not just remain an assessment tool. Assessment is just one part of the journey.
After assessment, the companies have to decide what to do next. Then they can
come back and use the tool to help track if they have made improvements and obtain
guidance on the next steps.  

We asked Mr. Lim if he expects the Index to be modified
going forward. He replied that it is fixed for now, while adding, “If a few
years later, we get feedback that things have changed, then we may have to amend
the Index. It really depends as technology doesn’t stay still. It keeps moving.
So, I wouldn’t discount that maybe a few years down the road, we may have to refine
the Index. For now, our focus is on scaling the use of the Index.”