Speech by Dr Koh Poh Koon, Senior Minister of State, Ministry of Trade & Industry, at the launch of A*STAR’s Model Factory Initiative, on Thursday, 23 August 2018, at the Advanced Remanufacturing and Technology Centre (ARTC)

Distinguished guests,
Ladies and gentlemen,

Introduction

1. Good morning. And to our guests from overseas, a warm welcome to all of you. It is my pleasure to join you today at the official launch of A*STAR’s Model Factory Initiative.

2. The Model Factory Initiative is an important platform for companies across the manufacturing value chain to learn about advanced manufacturing technologies, and harness innovation to reinvent or improve business models, for greater productivity and competitiveness. A*STAR is implementing the Model Factory in two locations – ARTC and SIMTech. I had the pleasure of attending the opening of the Model Factory at SIMTech in October last year.

The continued shift of the global economic centre of gravity to Asia presents promising opportunities for Singapore as a globally competitive location for high-value manufacturing in this region. We are working to position Singapore as a “global Asia node of technology, innovation and enterprise”.

3. The world’s economic centre of gravity is shifting towards Asia, due to the rising middle-class and increased urbanization in this part of the world. By 2030, Asia is projected to make up more than half of the world’s middle-class population and dominate the global consumer goods market.1 Economic powerhouses such as China and India are making important strides in transforming their manufacturing sector. China, through its ‘Made in China 2025’ plan, is seeking to drive innovation-led manufacturing and India is pushing ahead with its “Make in India” initiative.

4. The emergence of new technologies will also play a major role in shaping manufacturing trends. Disruptive technologies such as additive manufacturing, robotics and artificial intelligence are ushering a new era of manufacturing, also known as Industry 4.0. These technologies will fundamentally change the way businesses operate, produce, and interact with their customers and supply chain, leading to enhanced business models, better product quality and higher productivity.

5. Against this backdrop, manufacturing will continue to be important for Asia’s growth; and Singapore is well placed to ride on this growth, to meet the growing demand for high-quality products and services in the region. Singapore is ranked among 25 countries leading the world in advanced manufacturing by the World Economic Forum.3 This attests to Singapore’s strengths as a world-class manufacturing hub, and is in line with the government’s efforts to grow and transform our economy for the future, and anchor Singapore as a Global Asia node of technology, innovation and enterprise.

The government is committed to the digital transformation of our manufacturing sector to help local companies seize opportunities to innovate, grow and scale up.

6. To ensure that our manufacturing sector is able to reap the benefits of digital technologies, the government is committed to supporting the industry upgrade 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 research and technological capabilities in the Advanced Manufacturing and Engineering (AME) Domain. Our efforts under the AME Domain are aligned with the Industry Transformation Maps (ITMs) in driving productivity and innovation in manufacturing sectors such Precision Engineering, Energy & Chemicals, Aerospace, Marine & Offshore and Electronics.

7. The Future of Manufacturing (FoM) Initiative, a key initiative under the AME Domain, was established in 2015 to support the digital transformation of the manufacturing sector. This is an inter-agency initiative developed by A*STAR in close consultation with MTI, EDB, ESG, as well as institutes of higher learning (IHLs) and key industry partners. The FoM Initiative comprises public-private partnership platforms which will support our local companies in the adoption of digital technologies. This complements the Singapore Smart Industry Readiness Index (SSIRI) developed by EDB last year, by providing a platform to demonstrate the key concepts and principles of Industry 4.0.

A*STAR’s Model Factory Initiative provides an applied test-bedding and learning environment to help manufacturing companies across the value chain deepen their capabilities, and achieve greater productivity and efficiency.

8. The Model Factory Initiative is a key platform under the FoM Initiative. It serves as a sandbox for manufacturing companies to experience and co-develop Industry 4.0 technologies in an applied learning environment.

9. A*STAR’s Model Factory Initiative is based on an ‘open innovation’ concept, bringing researchers and industry partners together to tap on complementary expertise in R&D and industry knowledge, so as to co-develop and transfer impactful technologies to the industry for greater productivity and efficiency. The Model Factory at SIMTech supports the adoption and co-development of digital manufacturing technologies, especially by SMEs. The Model Factory at ARTC taps on industry’s expertise, and A*STAR’s multi-disciplinary R&D capabilities to develop capabilities ranging from manufacturing data analytics, machine-to-machine connectivity, and digital solutions to complex manufacturing processes. The Model Factory Initiative, with its dual locations, will thus serve to meet the different technological needs and requirements of companies in the manufacturing value chain. So far, around 50 companies have participated in the Model Factory Initiative.

10. The key features of the Model Factory at ARTC include a Virtual Manufacturing Lab which mirrors actual production processes to allow companies to conduct virtual planning in product and process design and development as well as Digital Twinning; and a Manufacturing Intelligence Control Room that allows companies to visualise the end-to-end digital thread along the operations value chain, and more importantly, control and optimise production.

Harnessing Innovation and Technology for Business Growth

11. The digital manufacturing technologies here will help local companies innovate and create new and improved products and services, as well as optimise their operating processes. Local company, Abrasive Engineering, is an example of a company which has benefited.

12. Abrasive Engineering designs and produces automated abrasive blasting and shot peening machines, and provides engineering services that strengthen and prolong the lifespan of metal components. The company worked with ARTC to develop an innovative digital process which enables real-time monitoring of machine health, and performance of the shot peening process, providing the user with insights to perform maintenance before any failure occurs, and optimise performance to ensure quality results. Abrasive Engineering is in the process of integrating this solution in its machines, and expects to increase its sales by 20 per cent this year. The company aims to achieve $12 million in sales revenue by 2021, targeting customers in the metal working and aerospace industries.

13. Another example is manufacturing execution system solutions provider Arcstone, a technology provider whose solutions allow SMEs to harness the power of real-time data, to monitor production efficiency and control processes, and manage their operations effectively.

14. Since 2016, Arcstone has worked with ARTC to test-bed its solutions in the Model Factory, and develop a fully configurable, flexible and cost-effective solution which could be easily implemented by SMEs on their factory floors. As a result of its collaboration with ARTC, Arcstone has doubled its customer base and revenue. It has also helped its customers, the majority of which are SMEs, achieve about 20 per cent gains in productivity, and up to 90 per cent reduction in equipment downtime.

Forging Strong Partnerships to Anchor High-value Manufacturing Activities

15. ARTC is Asia’s first centre for test-bedding and developing advanced manufacturing and remanufacturing technologies. It has forged strong partnerships with over 60 consortium member companies, comprising global leading companies in the heavy engineering sectors.

16. SMEs participating in the Model Factory here will therefore have the opportunity to tap on ARTC’s wide global network to gain insights to the needs of market leaders, and position themselves as solution providers of advanced manufacturing technologies.

17. ARTC has also embarked on new partnerships with Nestlé, Procter & Gamble (P&G) and Shell, and we will also witness the signing of their membership agreements with ARTC shortly.

18. Nestlé and P&G’s memberships represent ARTC’s expansion beyond the aerospace and machinery sectors to serve the Fast Moving Consumer Goods (FMCG) sector, which is increasingly looking at adopting digital technologies to improve their operations, products and services.4 By partnering ARTC, Nestlé and P&G will be able to develop advanced manufacturing solutions such as robotics and automation technologies, to improve productivity and efficiency of their production operations in Singapore. Shell will work with ARTC to test-bed advanced and digital technologies, with the aim of applying them extensively in its operations in Singapore and the region.

19. Also joining the membership signings today is Singtel, which is upgrading its membership from Tier 2 to Tier 1. It aims to deepen its commitment to developing capabilities in communication technologies for smart manufacturing. These technologies include open-interface command & control systems and advanced analytics. As a service provider, Singtel will be well-equipped to support manufacturing companies as they work towards developing a more networked and intelligent production environment.

Building a Future-ready Workforce Through Training

20. For the digital transformation efforts in our manufacturing sector to succeed, a strong pipeline of skilled workforce will be key, and the Model Factory Initiative will play a role in supporting the development of our workforce. The training programmes developed by SIMTech, in partnership with SkillsFuture Singapore and Workforce Singapore, can be supported by the learning environment at the Model Factory at SIMTech. SIMTech is providing close to 10 training programmes in smart manufacturing such as digital transformation & innovation, manufacturing data analytics and machine learning. Through these training programmes, the manufacturing workforce comprising professionals, managers, engineers and technicians can harness cutting-edge technologies in a data-driven manufacturing environment, and build up their knowledge in industry’s best practices.

21. ARTC has also recently developed a training course on digital lean transformations in collaboration with McKinsey & Company, and supported by SkillsFuture Singapore. The course runs in a hands-on, experiential learning environment of a production line at McKinsey’s Digital Capability Centre. It aims to equip companies with the skills to manage resources effectively, and drive business performance in a smart factory environment.

22. ARTC will also provide Digital Cultural Training for companies which are already adopters of digital technologies, and committed to digital transformation. The training is customisable to companies’ needs, and provides a thorough introduction to adoption strategies for manufacturing digitalisation. The training modules were developed together with McKinsey, and the first workshop was delivered to P&G’s plant managers in the region including Singapore in June this year. Feedback has been positive.

23. The Model Factory Initiative will also serve as an ideal training platform for our trade unions, and I encourage our manufacturing workforce to tap on this opportunity to acquire the requisite capabilities for Industry 4.0, and remain relevant in the future economy.

Conclusion

24. Singapore is well-positioned to seize the economic opportunities presented by the economic shift towards Asia as well as technological trends; and position itself as a Global Asia node of technology, innovation and enterprise.

25. The government will continue to drive the digital transformation of our manufacturing sector and help our local companies such as SMEs succeed, through our investments in R&D, and forging public-private partnerships.

26. I encourage you to experience the exciting technologies demonstrated by ARTC and its industry partners later on the workshop floor, and learn how these technologies can benefit your businesses.

27. Let me close by congratulating A*STAR on the official launch of the Model Factory Initiative, and wish all of you a fruitful time at this event.

28. Thank you.