Opening Address by Dr Koh Poh Koon, Senior Minister of State for Trade & Industry & National Development at the Manufacturing Productivity Technology Centre (MPTC) Annual Conference 2017 and Launch of Model Factory @ SIMTech

Your Excellency Dr Ulrich Sante,
Ambassador of the Federal Republic of Germany to Singapore
Dr Lim Ser Yong,
Executive Director of Singapore Institute of Manufacturing Technology (SIMTech) Distinguished guests,
Ladies and gentlemen,
Good morning.

Introduction

I am pleased to join you today at the Manufacturing Productivity Technology Centre (MPTC) Annual Conference and the launch of the Model Factory@SIMTech initiative.

I attended the MPTC Annual Conference last year, and am pleased to see that the event has consistently attracted strong attendance by industry. The range of industries represented has expanded, with attendees from the logistics, hospitality and  process industry attending this year’s event, in addition to manufacturing industry participants. Manufacturing is an important pillar of our economy, and Industrie 4.0 is fundamentally transforming the sector.

Manufacturing is an important pillar of our economy, contributing about 20 per cent of our GDP and accounting for 14 per cent of our total employment in 2016¹.

It creates good jobs for our people. Between 2009 and 2016, the real median income of local workers in the sector rose by 2.9 per cent per annum, surpassing the 2.6 per cent real growth in the overall economy. At the same time, manufacturing is a sector that has achieved good productivity gains, with productivity increasing by 6.4 per cent per annum over the same period, compared to the economy average of 2.6 per cent².

Manufacturing today is highly globalized and competitive. As I shared at the MPTC conference last year, technological advancements have opened up many opportunities for the sector, giving rise to the new paradigm commonly known as “Industrie 4.0”. Advanced manufacturing technologies such as robotics and automation, Industrial Internet-of-Things (IIoT), manufacturing data analytics and business intelligence capabilities will transform not only shopfloor operations, but also business models and entire value chains. New ideas such as the fusion of virtual and real world production, cyber-physical systems and dynamic production networks will also allow manufacturers to achieve higher quality, productivity, speed and flexibility in their operations than previously thought possible.

Globally, the face of manufacturing is transforming, with countries such as the United States and Germany launching national initiatives to boost manufacturing competitiveness. In Asia, manufacturing hubs such as China and Japan are also actively upgrading their capabilities. China, through its “Made in China 2025” plan launched in 2015, is seeking to drive innovation-led manufacturing, while Japan is driving industry collaboration and adoption of IIoT through the Industrial Value Chain initiative launched in the same year.

Singapore is in a good position to play a leading role in the region, with our established manufacturing base, skilled workforce and status as a leading logistics hub in Asia. To build on this, we need to expand the adoption of advanced manufacturing technologies amongst our companies.A large percentage of the local manufacturing businesses are Small and Medium-sized Enterprises (SMEs). This can be an advantage for Singapore as SMEs can be adaptable and nimble to capture the opportunities and benefits of Industrie 4.0. The Government is committed to supporting our companies, especially SMEs, in continually upgrading their technological capabilities. Platforms such as the Manufacturing Productivity Technology Centre (MPTC) and Model Factory@SIMTech will allow SMEs to adopt and co-develop digitalization technologies.

The Government is committed to supporting our manufacturing companies in upgrading their technological capabilities. Under the Research, Innovation and Enterprise 2020 (RIE2020) plan, the Government has committed S$3.2 billion from 2016 to 2020, to develop technological capabilities in the Advanced Manufacturing and Engineering (AME) domain. In particular, the AME strategy has identified Future of Manufacturing (FoM) technologies, including digitalisation, data analytics and automation, as key enablers to undergird the continued competitiveness of our manufacturing companies.

The efforts under RIE2020 are aligned with the Industry Transformation Maps (ITMs), announced during Budget 2016, in driving productivity and innovation. For example, the Precision Engineering ITM, the first roadmap rolled out for the manufacturing clusters in October 2016, includes plans to help our companies build capabilities to leverage opportunities from digital manufacturing, by growing complementary sectors such as robotics, sensors and advanced materials. The Electronics ITM, launched last month, will adopt a two-pronged strategy to grow and transform our Electronics industry. Firstly, the ITM will facilitate access to new growth markets such as urban mobility and healthcare, and secondly, by attracting new investments in high-value components such as those for sensors and power management. Through these strategies, we aim to achieve a manufacturing value-add of S$22.2bil for the electronics industry by 2020, and create 2,100 new PMET jobs.

Manufacturing Productivity Technology Centre (MPTC)

In order to translate our efforts into tangible benefits and impact for our companies, platforms such as MPTC play a vital role.

Launched in 2011 and hosted at A*STAR’s SIMTech, MPTC promotes the use of technology to enhance manufacturing productivity, and develops high-value products and services. Through MPTC, companies are given access to A*STAR technologies, tools and capabilities in automation, processes and systems.

Examples of key initiatives undertaken by MPTC include the RFID technology solutions used for tracking of inventory assets and personnel, as well as the Operations Management Innovation OMNI) training initiative that teaches participants how to identify and solve productivity issues. To date, MPTC has worked with over 1,500 companies, of which more than 90 per cent are SMEs, and completed over 2,600 projects. These industry collaborations have enabled companies to achieve at least 20 per cent gains in productivity. In some cases, companies had achieved up to 90 per cent improvement in productivity by automating paper-based processes through technology.

Model Factory@SIMTech

The Model Factory@SIMTech is an important plank of the FoM strategy, which supports the adoption and co-development of digital manufacturing technologies by SMEs. As I had mentioned during the Committee of Supply (COS) debate earlier this year, the Model Factory will allow SMEs to experience digitalisation technologies first-hand in a learning environment, without affecting their existing business operations. This will enable participating SMEs to experiment and try out new ideas that could increase the competitiveness of their businesses.

The Model Factory@SIMTech will have a live pilot-scale production line as a key feature, with SIMTech’s advanced manufacturing technologies integrated within the production line to demonstrate how these technologies operate in a real-life production environment. These technologies, collectively known as Manufacturing Control Tower (MCT) technologies and similar in concept to an airport control tower, will enable the collection, consolidation and analysis of production data. The data will be reflected in a centralised MCT dashboard, enabling users to view all the data at a glance to make timely and informed business decisions. Live demonstrations of these technologies at the pilot-scale production line will be complemented by user training from SIMTech, where interested companies will have the opportunity to trial test the solutions prior to adoption.

SIMTech has started engaging the industry to adopt MCT technologies. I am happy to note that there are more than 20 early SME adopters to date.

i           One example is CKE Manufacturing, a local contract manufacturer specialising in precision machining services. I first learnt about CKE during the Model Factory preview at SIMTech, and noted that they had adopted MCT technologies to track machine yield and utilisation, which had helped the company utilize its manpower more efficiently by about 50%. I am glad to learn that CKE has since expanded its MCT technology adoption to include energy management solutions, that have raised its energy efficiency.

ii.            Another example of an early SME adopter is Racer Technology, a local medical device manufacturer that operates in a high-mix low-volume environment. Racer requires comprehensive visibility of its operations to make informed business decisions. Therefore, it decided to implement MCT technologies to help it track stoppages and efficiency of machines, automatically generate production schedules that can react to unplanned production changes, as well as run customised workflows on mobile devices for convenient and prompt status updates. These solutions are expected to help Racer improve productivity by at least 20 per cent in the respective areas.

iii.          In addition to the manufacturing process, there are also MCT solutions for other stages of the manufacturing value chain. For example, Impetus Conceptus, a document shredding and recycling management company, adopted a Vehicle Routing solution that can automatically schedule drivers for waste pick-up, as well as re-schedule accordingly when there are changes. Impetus is also looking at implementing the Smart Waste Management solution to automatically track the amount of waste within the collection bins, to further raise productivity. The adoption of these two solutions is expected to help Impetus improve utilisation of waste collection assets and manpower by up to 35 per cent.

Partnerships play an important role in reaching out to industry to leverage technology for transformation. We will continue to foster partnerships, both international and local, to accelerate the adoption of technology by local enterprises.

The Government cannot achieve industry transformation through technology alone. Partnerships, both international and local, are important to amplify the reach of our initiatives and generate more benefits for companies.

I am happy to note that SIMTech will be signing a Memorandum of Understanding MOU) with Germany’s TU Braunschweig, a member of the TU9 alliance of leading institutes of technology in Germany. Under this MOU, Model Factory@SIMTech and Die Lernfabrik@TU Braunschweig, which means “Learning Factory” in German, will become “twin factories” and allow visitors at each end to view the advanced manufacturing capabilities of both factories simultaneously. Learning materials will be developed by both factories for industry classes and demonstrations. Through this MOU, our SMEs will gain further insights into advanced manufacturing technologies developed by TU Braunschweig, and benefit from their experience in working with industry in co-developing and adopting such technologies. The MOU will also cover research collaboration to develop Model Factory-related technologies in areas such as energy management and industrial symbiosis, which can help SMEs achieve more efficient energy and resource utilization. 

SIMTech is also working in partnership with global consultancy firm Boston Consulting Group (BCG). Through this collaboration, BCG can leverage on the Model Factory facilities to help manufacturing companies transform their core business and operations, while SIMTech can tap on BCG’s expertise, from working with similar overseas model factories, to further enhance the Model Factory@SIMTech.

At the same time, SIMTech is partnering our Trade Associations and Chambers (TACs) to increase industry awareness of the Model Factory and its applications. I am pleased to note that SIMTech will be signing MOUs today with the Singapore Precision Engineering and Technology Association (SPETA) and the Print and Media Association of Singapore PMAS). SIMTech will work with the member companies of SPETA and PMAS to assess their current system capabilities and develop a digitalisation roadmap which will provide a strategic and systematic framework for the adoption of Model Factory technologies by these companies. The partnerships will enable A*STAR to reach out to a wider pool of industry players to build up the necessary capabilities for future competitiveness and growth.

Conclusion

To capture the opportunities from the new era of manufacturing, it is imperative that the public and private sectors work closely together to access, develop and deploy new technologies. I encourage our companies to adopt an open mindset, and tap on the technology solutions under MPTC and the Model Factory for business growth. The innovation efforts of our manufacturing companies will also be supported by the formation of Enterprise Singapore announced last month. Enterprise Singapore will take on the capability development efforts by SPRING, and also support the internationalisation efforts currently led by IE Singapore. I am confident that by working together, our companies will be able to respond more nimbly to the new manufacturing paradigm, and navigate effectively in the international manufacturing landscape. The Future Economy Council (FEC) promotes closer cooperation between different industries, and the formation of Enterprise Singapore is an example of these efforts.

I wish you a productive conference, and congratulate SIMTech on the launch of the Model Factory. Thank you.

¹  Source: Department of Statistics Singapore
²  Source: Ministry of Manpower