Singapore’s manufacturing industry sets sights on digital transformationBy Arthur Fernandez
The manufacturing industry has been the engine of Singapore’s economic growth since its inception. In 2018, the city-state was singled out as one of the best positioned countries for Industry 4.0 by the World Economic Forum with manufacturing contributing to 21.9% of Singapore's nominal gross domestic product (GDP).
Over the past few decades, Singapore has continued to transform into a world-class hub, recognised for its high-value manufacturing, with deep engineering and innovation capabilities. Ongoing shifts in technological advancements around the world have also led the Singapore government to not only embrace Industry 4.0 or X.0, but strengthen its position as the leading ecosystem for companies worldwide.
The COVID Elephant in the Room
With the global COVID-19 pandemic continuing to affect businesses of all sizes, labour-oriented sectors such as manufacturing and wholesale trade have especially been negatively impacted by the fall in demand, and supply chain disruptions. Many were forced to quickly adapt to ensure business continuity and job security for their employees.
Though the sector may still be facing significant challenges, 2022 looks to be a promising year. In the recent Budget announcement, Ministry of Trade and Industry not only announced that Singapore's economy expanded by 7.6% in 2021, but that the GDP growth forecast will be maintained at “3.0 to 5.0%” for 2022.
As we move forward and fully settle into the new normal, Singapore will still look to continue investing in technology, digital transformation, as well as research and development (R&D) institutes that work directly with companies to develop cutting-edge solutions to solve today’s most pressing issues.
Evolving Tech Trends in Manufacturing
For many manufacturers around the world, the immediate reaction to COVID-19 was to fully digitalise operations – and this momentum is still growing. In fact, Gartner predicts that by 2025, the top 50 consumer goods manufacturers will have successfully invested in artificial intelligence (AI), embedded technology in their products, and integrated innovations with their respective technology and R&D teams.
This trend goes beyond incorporating an additional service to current operations, but the ability to instill a new digital business model where manufacturers can maintain a connection with their customer base exactly where they are today: online.
This rapid digitalisation within the manufacturing industry also creates large amounts of data. As a result, data monetisation, or the process of generating measurable economic benefits from data sources available, has become one of the largest and most important emerging trends. Indeed, half of global heavy asset manufacturing organisations will succeed in monetising their data by 2024, according to Gartner. This gives manufacturing leaders the ability to obtain revenue from digitising their products and services and sharing data across the ecosystem, ensuring continuous revenue, even when the business is disrupted by external factors.
A Strategic Response to Economic Disruption
While the pandemic has provided a difficult lesson in how susceptible our world is today to economic disruption, it has also facilitated better global collaboration, data transparency, and digital transformation at the highest levels and speed.
For businesses with plans to expand operations in the Asia Pacific and establish a more diverse pool of talent to serve customers in the manufacturing industry, here are some tips to help build a strategic response to dynamic developments in the economy.
First, select the correct ecosystem. Singapore’s skilled and adaptable workforce, for example, proves a key aspect for many companies to build their base and, subsequently, grow their operations. The vibrancy of its manufacturing space has led companies to build not just production facilities, but the full suite of headquarters, R&D, and supply chain management functions to serve the region.
Second, prepare for an increasingly uncertain future with flexibility. Ensure that the solutions and systems currently in place allow the business to pivot as quickly as market environments change. From sales to supply chain management, it is key to implement business models that are adjustable and scalable to withstand future market shocks.
Lastly, always be on the lookout for new trends within and beyond the manufacturing sector to stay ahead of the curve. Sustainability, Internet of Things, and cloud-based solutions in relation to the manufacturing sector, are some of the key business trends to improve top-line growth in the years ahead. Manufacturers today look for a complete cloud-based solution across enterprise resource planning, customer relationship management, human capital management, and eCommerce among others, to lower up-front costs than traditional on-premise software options and maximise operational efficiency in the long run.
While most sectors will continue to be affected by COVID-19, we should not lose sight of the silver linings, including new opportunities that come with the rise in demand for online channels and digitalisation. As the situation remains fluid in the months or years ahead for some countries across the region, let us embrace this high degree of uncertainty and leverage innovation to maintain the trajectory of the recovery in the global economy.