Industry 4.0 is set to transform Singapore’s manufacturing industry. Companies large and small, local and global, are equipping their Singapore facilities with advanced manufacturing technologies and reaping returns.
Precision engineering company Feinmetall Singapore is on track to double its revenue by 2020 — largely thanks to investments in advanced manufacturing.
The company officially unveiled a S$6 million (US$4.5 million) digital manufacturing facility in 2017. The 623 sq. m facility features advanced manufacturing technologies that allow the company to analyse machine data, develop measures to minimise stoppage and plan machine maintenance schedules effectively.
These capabilities help Feinmetall, which specialises in the design and manufacturing of wafer probe cards for semiconductor wafer tests, eliminate manual and paper-based tracking that is time-consuming and prone to errors.
“The objective is to move away from manual and low value-added work, so we can have fewer operators”, says Feinmetall General Manager, Sam Chee Wah.
“We want to upgrade operators into programmers, so we can pay them higher salaries. Their jobs are not being replaced, but they now need different skills to work more closely with machines.”
Digital technologies transforming factories
Feinmetall Singapore is among a growing number of manufacturing companies hopping on board a new wave of technological change. Factories of the future will make use of artificial intelligence, real-time data collection and collaborative robots building a wide range of products on the same assembly line. This “fourth industrial revolution”, also known as Industry 4.0, is on track to transform Singapore’s manufacturing industry and open up new opportunities for growth and innovation.
Industry 4.0 refers to advanced manufacturing that combines machines with digital technologies like data analytics and artificial intelligence, to create what is known as a “smart factory”. These manufacturing systems are not only interconnected, but can also communicate, analyse, and use information to drive decisions. Companies can receive real-time information about their production lines and even anticipate when machines will need to be serviced.
In addition to its new advanced manufacturing facility, Feinmetall also has plans to launch an e-portal in May to help clients troubleshoot and maintain products remotely using instructional videos. This will reduce the need for its service engineers to make overseas trips to clients’ offices to solve common issues.
The company has about 60 staff, up from a five-man team when it was first set up in 2007. It has invested more than S$1.5 million (US$1.12 million) into research and development over the last decade and has seen its revenue grow six-fold over the same period.
Mr Sam says the company’s revenue rose 14 per cent in 2017, putting it on track to double sales by 2020. “We have some expansion plans and are starting to hire more in phases”, he adds.
Clearly, the fourth industrial revolution is set to transform factories. Research by the Boston Consulting Group showed that advanced manufacturing could boost labour productivity by approximately 30 per cent and create 22,000 new jobs by 2024. The move could also boost average wages by up to 50 per cent and add S$36 billion (US$26.9 billion) in total manufacturing output and revenue for companies in Singapore.
Industry 4.0 driving productivity growth
Manufacturing accounts for about a fifth of Singapore’s economy and employs more than 400,000 workers, or about 14 per cent of the workforce. Although the sector is set to remain a key pillar of economic growth, factories here are increasingly under pressure from mounting regional competition, rising business costs and a tight labour market.
Despite these challenges, productivity growth in Singapore’s manufacturing sector has remained robust. Productivity in manufacturing — measured in terms of value-added per hours worked —soared 14.4 per cent in 2017, making the sector the strongest performer that year.
Manufacturing has been a key driver behind overall productivity growth, which surged to a seven-year high of 4.5 per cent in 2017 — a significant improvement from 2016’s 1.8 per cent. Much of this improvement could be attributed to a pick-up in global economic growth and stronger demand for Singapore’s manufactured exports. But companies’ efforts to implement advanced manufacturing technologies and reduce their reliance on labour also had a part to play.
Singapore ̶ Asia’s advanced manufacturing hub
The take-up of advanced manufacturing technologies in Singapore has expanded rapidly among firms large and small. Some of the biggest names in the industry globally, such as Swiss robotics company ABB, and German electronics giant Siemens, have established a presence here.
A number of multinational firms have equipped their Singapore facilities with advanced manufacturing capabilities. German-headquartered automation and sensor technology manufacturer, Pepperl+Fuchs, opened a S$65 million (US$48.7 million) global distribution centre in 2016, featuring an intelligent warehouse management software system and an automated storage and retrieval system enabled by Internet of Things capabilities. Meanwhile, German semiconductor giant, Infineon Technologies, announced in 2017 that it is pumping about S$105 million (US$78.7 million) over five years into its Singapore plant to turn it into a “smart factory”. Its facility here will be linked in real-time to production sites elsewhere in the world and the assembly line will also be increasingly automated.
Another company beefing up its Industry 4.0 capabilities in Singapore is precision engineering firm, Makino Asia, which in 2017 launched a new “smart factory” next to its existing facility in Gul Avenue.
The new facility will help the company boost productivity, improve quality and increase capacity without needing to hire more manpower, said Makino president, Shinichi Inoue.
“By using robots and automated carriers, the manufacturing process of machine tools will be automated. We are carrying out everything from management of the operational status of machine tools to predictive maintenance remotely, realising a factory where production is possible 24 hours a day even if there is no one there,” he said at a dialogue session organised by the Singapore Economic Development Board.
The company also aims to offer support services — such as preliminary notice maintenance — by monitoring the status of customers’ machines using sensor technologies. In addition, the company intends to help customers raise productivity and reduce their defect rates using data analytics.
“As needs diversify, the era of supplying a mass volume of a single product is a thing of the past”, Mr Inoue noted. “Now, the key to growth is being able to promptly respond to needs.”
