Industry 4.0 poses an opportunity for manufacturers of any size to digitise and scale up operations. Willy Koh is CEO of Racer Technology, a 30-year-old global company in Singapore that designs and produces medical devices and lab equipment. He explains how Racer’s partnership with Singapore Institute of Manufacturing Technology (SIMTech) under Agency for Science, Technology and Research (A*STAR) empowered its management to take data-driven decisions, and create an agile enterprise. With ‘Future of Manufacturing’ (FoM) initiatives like Model Factory, A*STAR has assembled advanced manufacturing and prototyping facilities, and ready-to-go technologies for private companies to use.
Willy: We started our digital factory in 2016, and it has increased our efficiency by 50 to 70%. The main reason why efficiency is so important to us is because Racer had kicked off a strategy of high (customer) mix/low-volume. We currently have around 65 customers. It’s not such a big problem if the manufacturer is running a high volume for perhaps five to 10 customers. For us, we need to cater to a high mix of customers with growing volumes. The demand for shipment, construction, and so on is huge. And some of our products consist of 300 to 400 components, from capacitors to meta-stamping, injection moulding, etc.
Willy: Digitising our factories helps to improve transparency tremendously. We have a staff of 1,800 in eight factories across Asia. I now have real-time visibility of my production schedules, even those that happened just 30 seconds ago. I know what are the quantities produced, what is my machine’s efficiency, and even right up to the delivery status — for instance, whether the raw materials have been shipped to our Indonesian and Malaysian factories.
Willy: We had this idea two years ago, after visiting Germany which is the leader in smart factories and birthplace for the Industry 4.0 revolution. We wanted smart manufacturing in our facility. But it calls for total commitment from our management and good support that the Singapore government offers, through agencies such as A*STAR.
A*STAR SIMTech gave us a comprehensive suite to implement in Racer. It is difficult for SMEs like us to build a smart factory on our own. Fortunately, A*STAR’s Model Factory initiative caters to both small and medium enterprises (SMEs) and multinational corporations (MNCs). Their technologies are modular in nature. This gives us the flexibility to mix and match according to our needs and budget. For instance, an SME can select the module that it is comfortable with - typically, two modules. An MNC can choose up to five modules. We have taken up four.
Racer has implemented the modules for the first time in our Singapore facilities. We are in the process of installation in Indonesia and Malaysia. There are also Enterprise Singapore grants available to SMEs, like the Enterprise Development Grant and Productivity Solutions Grant, to help fund project costs.
Willy: The beauty of the Model Factory initiative is that I can send a lot of my staff for training, many of whom have been with me for nearly 30 years.
The A*STAR program has a staff training module, which helps to retrain existing associates. In fact, we did not dismiss any staff or recruit new employees for Factory 4.0. We deployed excess staff to a new line or project so that we can increase capacity.
The thing about Factory 4.0 is that operations are streamlined. A lot of the tasks are driven by technology such as RFID, automation and software. Today, data collected from the software helps us to manage the company better.
While Factory 4.0 was crucial in improving our operations, what I think is even more critical is growing our existing associates and staff. In the medical device industry, the experience is very important, and we need our existing associates and staff to aspire to grow and develop themselves in this field.
Willy: We were running a factory on three shifts in Singapore. After introducing Factory 4.0, we could identify why the second- and third-shift machines were not at full capacity: labour shortage, inadequate planning, and sick leave. It helped spot operational issues in real time like last-minute raw materials shortage, and delays in JIT (Just in Time) parts arriving. In layman terms, those two shifts were running at 60% and 40% efficiency respectively. The smart factory data drove our decision to get the same output in two shifts, instead of three, with a cost saving of 65% t0 70%.
Now, if my volume increases, I don’t create a new line. I will kick off the third shift. But the important point is training. How do you assess workers to see if they are good? In the past, you looked for 100% attendance. But that’s not reflective of how good or efficient they are. Now, you can assess performance because it’s captured by the systems. You can now understand the number of tasks or machines run by a certain worker in an hour. The data is now captured.
Racer Technology has designed a production strategy around its diverse customer base. Industry 4.0 makes its factories more agile—a change from the mass-manufacturing era.