How SIRI can power your manufacturing transformation journey

While the need for manufacturing companies to embark on digital transformation efforts has never been more pressing in light of ongoing global pressures, a clear strategic roadmap and strong investment of human capital are core enablers that will eventually ensure the long-term success and sustainability of an organisation’s manufacturing ecosystem.

These were among some of the insights recently shared by manufacturing experts during a panel discussion as part of a webinar which also shed light on key findings from the Manufacturing Transformation Insights Report 2022, produced by the World Economic Forum (WEF) in partnership with the Singapore Economic Development Board (EDB).

The full panel line-up:

The report offers new insights and findings emerging from the Global Smart Industry Readiness Index (SIRI) Initiative, which seeks to build the world’s largest data sets and benchmarks on the current state of manufacturing globally by accelerating the adoption of SIRI as the international standard for Industry 4.0 benchmarking and transformation.

Following its maiden 2019 launch, the report’s second edition is an outcome of an 18-month WEF-EDB collaboration and draws on data from close to 600 manufacturing companies across 30 countries to outline the current state of industrial transformation across different sectors.

It presents detailed case studies on how different stakeholders – ranging from manufacturers to industry associations and governments – are actively leveraging the SIRI programme to accelerate their digital transformation journeys.

Key findings from the report showed that:

• Semiconductors, Electronics and Pharmaceuticals lead the 2022 Maturity rankings, with Logistics making gains
• A high level of diversity exists across various industry sectors; more tailored approaches are required to better support industry transformation
• The most digitally mature companies are seeking to integrate their already digitised processes and systems, while the average manufacturer is still looking to digitise existing operational processes
• Top companies have focused significantly on Connectivity to enable greater integration and insights generation
• Manufacturers should put more emphasis in refreshing and broadening their strategies for digitalisation and workforce retraining
• Productivity- and quality-linked KPIs are key focus areas of MNCs and SMEs, but flexibility and speed are fast-emerging areas of priority
• Data confirms SME-dominated sectors are less mature than MNC-dominated sectors
• MNCs and companies ahead of the maturity curve are more likely to plan for the long term

Don’t be obsessed with technologies

The proliferation of Industry 4.0 technologies such as Artificial Intelligence (AI), the Internet of Things (IoT), automation and big data and analytics have further given manufacturing firms stronger impetus to rethink their manufacturing blueprint.

Nonetheless, it is imperative for businesses to have a crystal-clear understanding of the problems they are seeking to solve and a relentless focus on user needs, before even considering how they can embark on their transformation journey.

“If you’re going to deploy Industry 4.0 technologies (as part of your manufacturing transformation efforts), you must have a clear understanding of what you’re trying to solve,” said Tian Chong Ng, Managing Director, Greater Asia, HP, during the panel session moderated by Oliver Tonby, Senior Partner at global consultancy McKinsey & Company.

“There needs to be less thinking of what technologies you need, and more focus on why you need this technology and what problems does it solve.”

Concurring with this view, Jacqueline Poh, Managing Director of EDB, stressed the need to focus on the customer.

“Singapore has been embarking on digitalisation as part our smart nation efforts and I’ve shared this to many companies when they embark on any digital transformation journey; always ask, what does the user need?,” she said.

“It always pays to understand this before you try to find for the right technologies.”

Patience is virtue when it comes to ROI

Vighnesh Balan, Director of Global Supply Chain of pharmaceutical firm Takeda, shared that it took a considerable amount of time for his organisation to chart its digital transformation roadmap.

“When you speak to people about what the roadmap is, everyone has a different view; level setting and contextualising that took some time, and the SIRI framework was a very credible and tangible way to do that and bring that across the organisation, which is fundamental in the journey to transformation,” he explained.

With HP’s diverse manufacturing footprint spanning across different regions globally, Tian Chong explained the organisation’s journey to automate its smart factories kickstarted amid “a thousand Industry 4.0 questions”.

“Our journey to automate our smart factory in Singapore started five years ago and my engineering colleagues told me that it began with a thousand Industry 4.0 questions to assess whether we were on track and that eventually led to the SIRI index, which simplified many things for us,” he added.

Both leaders agreed that companies must adopt a long-term view when evaluating return on investments from their adoption of Industry 4.0 technologies to transform their manufacturing operations.

Nonetheless, the panellists agreed that long-term investments will eventually be realised.

Vighnesh elaborated that Takeda’s investments in smart analytics and digital technologies has helped the company reduce the cost of goods and increase its yield.

“In terms of yield, our efficiency levels have increased more than 15 percent in terms of reducing the cost of goods,” he said.

HP’s Tian Chong shared his sentiments on ROI from two perspectives.

“From a qualitative viewpoint, digital transformation has made our supply chains more resilient, especially throughout the pandemic. We have taken advantage of the Industry 4.0 technologies we’ve deployed at our factories to not only improve performance and keep the supply lines running when labour was short when workers could not go to work; it was also to protect the health and safety of our employees,” he explained.

On the quantitative front, Tian Chong added that the implementation of the SIRI framework has helped his business reduce its manufacturing costs by 20 percent and improved productivity and quality by 70 percent.

“These are huge improvements and these have resulted in HP Singapore being part of the Global Lighthouse Network, which we’re very proud of,” he said, referring to the WEF’s global community of manufacturers that leverage Industry 4.0 technologies to successfully transform factories, value chains and business models.

Setting the stage for a successful journey

All speakers concurred that industrial transformation efforts must be complemented by other key factors.

For instance, HP’s Tian Chong cited that his company’s decision to set up its smart factory in Singapore boiled down to three important considerations: a stable government with forward-looking policies, a strong education system which has the ability to produce skilled talents across a range of fields, and a robust IP framework.

Tellingly, panellists agreed that human capital and the development of employees was one of the most critical elements in the overall process.

“Leave no one behind in the digital transformation journey,” explained Vighnesh.