Singapore Manufacturing Wakeup Call
The rapid rise of Singapore to the global stage is something that has astounded many and is the envy of others. From the explosive growth in the financial sector to manufacturing and fantastic infrastructure to a highly educated workforce, Singapore has shown that in half a century, an entire nation can be mobilized and transformed. When it comes to the manufacturing sector specifically, Singapore has excelled in SEA becoming the hub for a variety of industries ranging from pharmaceuticals to aeronautics and electronics to oil & gas. Singapore should be proud of its accomplishments and at the same time look at the next big mobilization and transformation to ensure competitiveness for the next half century.
Industry 4.0, Intelligent Manufacturing and Industrial IoT are some of the buzzwords currently being thrown around but are critical to manufacturing growth and productivity. With a highly educated population alongside well connected physical and IT infrastructure, Singapore has the perfect tools to become the global leader in manufacturing productivity and quality. Singapore has embarked on ambitious projects such as the SMART Nation Vision and provided tremendous support for SMEs and MNCs to modernize, upgrade and improve productivity and efficiency. However, this may not be enough to support Singapore through the next 50 years.
Just as Singapore set out to establish the infrastructure and framework to bring about the first wave of manufacturers to flock to the island nation, Singapore must now look at setting up the new digital and intelligent infrastructure and ecosystem to keep and attract the next wave. Individual SME and MNC support will not be sufficient to ensure the manufacturing sector as a whole remains competitive. Driven by market forces, price competition and ever higher quality requirements, manufacturers are faced with a host of new obstacles to overcome. Therefore, the need for an intelligent manufacturing ecosystem and mindset will be the make or break factor for the future.
The decline in manufacturing output along with the recent Q2 GDP report is an alarming notification and reminder that Singapore is not shielded from market forces. The advantages that it may have accumulated in the past may not be enough to sustain it moving forward. Manufacturing in general has been seeing sizable declines as many SMEs and some MNCs have started to move out or shut down due to a variety of factors ranging from labor and raw material costs to lack of foreign demand and quality issues. Manual labor will always be a significant factor in terms of costs for manufacturing operations and for Singapore that will be an extremely difficult factor to compete against. As a small nation lacking natural resources, the competition point that Singapore will need to differentiate on will center on flexible and agile manufacturing couple with high quality production. Automation and precision equipment will only do so much to offset initial labor and quality issues.
A fundamental mindset change with regards to how productivity, monitoring and production control is perceived will be needed. An ecosystem of expert solutions will need to evolve and grow to support rapidly shifting manufacturing operations. Industry 4.0 must come to Singapore first in its fullest extent. Germany and China has recently agreed to cooperate on digitization of industrial operations with the emphasis to leap ahead in pushing both nations towards bringing about the next wave of manufacturing innovations. It would be a shame to see Singapore with its well established backbone of manufacturing and its existing advantages go to waste and fall behind in this Industry 4.0 race.
Author: Willson Deng. Founder & CEO of Arcstone Pte. Ltd. To contact the author please email [email protected]
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