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

EXCLUSIVE How EDBs Smart Industry Readiness Index aims to empower Singapores manufacturing companies for implementing Industry 40 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 ConsortiumSociety 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 compel 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.”

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