After nearly four decades of supplying machines and tools to other companies, homegrown business Flexmech Engineering is branching out. Within three years, it will offer services to support various machines, including digitalisation to track productivity and flag issues. This will enable it to expand further globally. "We're evolving from an equipment supplier to an advanced manufacturing technology provider," says managing director Tan Ru-Jin, 40.
For Singaporean businesses aiming to make it big, how to scale beyond the little red dot has always been the question. As firms in the manufacturing sector - which makes up 21 per cent of Singapore's gross domestic product - seek to recover and emerge stronger from the Covid-19 crisis, capitalising on Industry 4.0 technologies could be the key to unlocking new markets.
Evolving to thrive
For Flexmech, having to pivot is a matter of survival, too. Mr Tan says: "We have been supplying machinery since we started our business in 1983, but this is not going to work in the long term. Our profit margins have been dropping in the past 10 years, because people can get their machines from other places in a globally-connected world. To grow, we have to find ways to show our customers the value of our business."
To prove its value, Flexmech has been working with German engineering firm Bosch Rexroth and the Singapore Institute of Manufacturing Technology (SIMTech) to develop new products and services. After learning of Bosch Rexroth's Regional Training Centre (BRRTC)
in Singapore, and its offer to collaborate with Singapore small and medium enterprises (SMEs) on proof-of-concepts related to advanced manufacturing, Mr Tan reached out with a pitch.
"Our idea was to use sensors to create a monitoring system to track legacy machines' tooling wear. Many of our customers replace their machines' parts on fixed schedules. If they can monitor and replace them only when needed, they could save a lot of money," he explains.
Part of the growing ecosystem in Jurong Innovation District, the BRRTC is supported by SkillsFuture Singapore, Singapore Polytechnic and JTC. Flexmech brought its expertise in machines to the table, and Bosch Rexroth advised on the sensors and other equipment needed for the proposed system.
Although the system they developed is still being trialled - by one of Flexmech's Malaysian clients, which could save over $200,000 every year by installing it on all of its machines - the partnership was a turning point for Flexmech.
Inspired by its work with Bosch Rexroth, the company joined forces with SIMTech to devise a simpler and more affordable version of the system for SMEs, targeted to launch commercially next year.
"I wanted to make something that costs four figures instead of the current six, so my fellow SMEs can have that first entry point into Industry 4.0, and understand the benefits of data. For SMEs, cost is the first thing that comes to mind," says Mr Tan. With both versions of the sensor system, Flexmech will be able to offer its monitoring services to firms of all sizes.
Flexmech is also extending its cooperation with Bosch Rexroth through other projects. These include more specialised monitoring systems for 3D printers, which it sells. One system will track moisture and temperature levels in 3D printers' material storage areas, since commonly used and expensive nylon-based materials degrade if they are contaminated with water.
The transformation within
Beyond expanding its value proposition, Flexmech has looked inwards too, to transform its processes and ensure it can continue to offer its many long-time employees a livelihood. "As a family business, we had some processes that were ancient," Mr Tan admits. "We knew that we wouldn't be able to stay competitive if we didn't do something."
In 2017, the firm launched a five-year digitalisation plan to increase efficiency. The changes included an e-service reporting system, implemented in 2018, for technicians to file and check electronic instead of paper records, improving the speed and quality of after-sales service.
With SIMTech's help, it also installed a sensor system in 2019 to monitor the efficiency of its factory floor production. Mr Tan says: "We connected our machines to sensors to know when the machines are running, how long they've been running for, and how long each operator takes to complete each process."
The project led to crucial insights such as which machines were being underused and which processes were taking longer than expected, leading to much-needed corrections. Equally importantly, it gave Flexmech's veteran employees the opportunity to take on less tiring, more high-value, and more rewarding work.
Production manager Chua Bok Siong, 62, is testimony to this. Since joining the company in 1988 as a production floor worker, he has been with it through the rise of email, the Internet, smartphone apps and, more recently, cloud-based systems and data analytics. Flexmech sent him for training at every stage.
Now, his job includes optimising Flexmech's factory floor production based on data collected by the sensors in the machines. Mr Chua says: "Things are very different now, but for the better. In the past, I had to go and look at the production itself to try and figure out what the problem was.
"Now, with the data, I know what the issues are, and what we need to do to solve them. For bottlenecks, we can come up with informed solutions, whether that's diverting production to less utilised machines or buying more of them to clear the bottleneck. I can go online at any time to see how the machines are performing, and easily retrieve data from months ago for comparisons and other purposes."
The long and global view
Looking back, Mr Tan shares that digitalisation has saved his company repeatedly. Soon after Flexmech installed the SIMTech sensor monitoring system to pinpoint inefficiencies, a vital machine on its production floor broke down, and could not be repaired for three weeks while parts were shipped from overseas. "Three weeks to us is tremendous. Work was not being produced, and it was a very difficult time for us," he recalls.
To ensure this would not happen again, Flexmech upgraded the system with the assistance of SIMTech's Innovation Factory, so that it could keep an eye on its machines' condition. "That investment paid for itself last year when the system alerted us to another situation of a major part wearing out. We ordered the part in advance and kept the machine's downtime to three hours instead of three weeks," Mr Tan shares.
The Covid-19 crisis has been another case in point. The company set up an e-commerce website in October 2019, just months before the pandemic started. This now contributes about 20 per cent of the firm's consumables business - the sale of machine parts that must be replaced regularly - and has been critical in procuring new overseas customers in markets such as Mexico, Russia, India and Europe.
Collaboration software installed in early 2020 also improved communication and data sharing among vendors and departments working on the same projects. Mr Tan explains: "When we sold Japanese equipment to a Malaysian customer, the training was done via video calls with parties from Japan, Malaysia and Singapore. That's just one example. Without the software, the impact of Covid-19 on our business would have been unthinkable.
"We had our e-commerce website, Microsoft Teams software and other digital infrastructure in place before the Covid-19 pandemic, and everyone was ready when it hit. We did not have a learning curve where employees were stuck at home wondering how to use this or that."
He adds that Flexmech will continue to embrace Industry 4.0 to ready itself for the future. It will set up a new department by the end of this year to market its own Industry 4.0 products, including the sensor systems it developed with Bosch Rexroth and SIMTech. These will enable it to build closer and more lasting relationships with customers, and expand its range of offerings to make it more attractive to a global market.
It will also seek out more partnerships. "Besides Bosch Rexroth and SIMTech, JTC has supported us a lot. We've been very privileged to be part of its Industry Connect webinar panels, where we shared our digitalisation experiences. These panels created so much publicity and awareness about what we are doing that other firms contacted ours to find out more and discuss how we can help them. That motivated us to keep moving in the Industry 4.0 direction," says Mr Tan.
"With Industry 4.0, we're finding new ways to improve ourselves internally, and adding new value to our services. We're offering not only the hardware but the software to reduce production costs and increase efficiencies, not just for customers in Singapore, but worldwide."
This is the first in a four-part series on how SME innovators are shaping the future of manufacturing. Find out more about JTC Industry Connect here.