Singapore Business Federation launches new programme to help SMEs digitise and transform

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The Industry 4.0 Human Capital Initiative (IHCI) Programme aims to help companies tackle operational pain points in implementing Industry 4.0 solutions and provide them with a tailored roadmap for a sustainable Industry 4.0 transformation. PHOTO: MCKINSEY & COMPANY

The Covid-19 pandemic has forced more companies in Singapore to think about how they can use digital technologies to raise operational resilience by improving business processes and upskilling workers.

But when it comes to rolling out digital solutions in a sustained manner, many still flounder.

Last year, 74 per cent of business leaders surveyed by global management consultancy firm McKinsey & Company reported that while they had trialled Industry 4.0 use cases, such initiatives never went beyond the pilot phase. One leading cause: These companies did not have the know-how to successfully implement changes at scale.

To help them address this, the Singapore Business Federation (SBF), with support from Workforce Singapore (WSG), has launched the Industry 4.0 Human Capital Initiative (IHCI).

The IHCI is the first programme in Singapore to promote digitalisation with an equal emphasis on technological aspects and human capital development. Working with consultants from McKinsey and Ernst & Young, participants will identify key areas to digitise based on business impact and tailor Industry 4.0 solutions directly on their shopfloor - all while undergoing change management and job redesign.

Since March 2020, 67 small- and medium-sized enterprises (SMEs) and large businesses have successfully completed the IHCI's eight-week-long Enabler programme. On average, they identified opportunities to improve productivity by 10 to 275 per cent, redesigning around 1,159 job roles in line with technological upgrades.

The programme commenced its fourth cohort in May this year with another 21 companies onboard.

"The IHCI Programme aims to support 300 companies in their Industry 4.0 transformation journey by 2022," says Mr Anderson Ee, director of WSG's Manufacturing Division.

Unlocking your capacity for more value-added tasks

Semiconductor equipment manufacturer AEM enrolled in the IHCI programme last year.

"We signed up to better understand how Industry 4.0 can be applied to benefit our staff in terms of redesigning and upgrading their job roles - and to enhance their job satisfaction while gaining productivity for the company," says AEM's quality director Lee Chee Kiong.

Before the pilot under the IHCI programme, a significant proportion of AEM's software engineers' time was spent on physically monitoring the test rigs and manually reconciling data for reporting. Through the pilot phase, data was collected from the programmatic logic controllers (PLC) of AEM's machines, enabling performance to be monitored and visualised in real time.

Without the need to do manual data aggregation, these engineers can now conduct higher value activities that require specific skills, such as condition-based monitoring and predictive maintenance, potentially contributing as a new revenue stream.

To support this progression, AEM conducted a skills mapping exercise to plot out new skills that would be required against the skills that their engineers currently possessed. The learning gaps were then matched to training programmes available in the SkillsFuture Training Exchange and incorporated into AEM's Learning and Development roadmaps.

"Harnessing technology to improve efficiency and effectiveness is crucial for us to stay competitive and provide a better working environment for employees," says AEM's human resources director Tay Cheng Hoo.

"This puts the company in a better position to attract good employees and retain these talents. With a stable workforce, we can also look into additional human capital strategies such as grooming employees for leadership roles, providing better incentives, and investing in upskilling and reskilling, as we progress on our Industry 4.0 journey," he adds.

"If anything, the IHCI programme has given them an exciting glimpse into the future of work."

However, the path ahead is not without challenges, as Mr Lee notes. "Exploring new ways to conduct operations and changing established, ingrained procedures, while still delivering business objectives and managing costs, is a tricky balance."

Conscious of the return of investment required, AEM ran its Industry 4.0 pilot with minimal financial risk to litmus test feasibility and business impact. This approach allowed the company to grow confidence in scaling up the company's Industry 4.0 efforts, he observes.

Making better decisions, improving processes

Original equipment manufacturer Completion Products (CP), which supplies equipment to the oil and gas industry, signed up for the programme to find opportunities for productivity growth and reduce reliance on outsourcing work.

By integrating digital technologies across their operations, businesses will be better able to improve machine effectiveness and productivity in their Industry 4.0 journey. PHOTO: MCKINSEY & COMPANY

"Just in the last two years, our accessories unit experienced an unprecedented 300 per cent growth, creating lengthy backlogs as we were not able to meet all our customer orders on short notice. As a result, we turned to subcontracting," says CP's general manager Anush Rajaram.

"Our biggest challenge in increasing capacity was the lack of reliable data to identify bottlenecks. Using IoT solutions, we can now accurately plan for our production capacity and maximise our efficiency" he adds.

Prior to this, CP had relied on manual barcode scanning to estimate production capacity, which was often counterproductive as this did not track data in real time.

During the pilot phase of the IHCI Enabler programme, Internet of Things (IoT) sensors were deployed on four out of eight most used CNC machines to study CP's actual equipment utilisation and identify performance gaps.

"Readings debunked prior estimates, showing an average of 40 per cent machine utilisation versus the 70 per cent we had originally calculated," says Mr Rajaram.

He adds that the data has enabled a focused effort led by line workers to increase the OEE (overall equipment effectiveness) by at least 50 per cent.

This visibility on utilisation empowers line workers to better communicate with their managers and plays an active role in driving productivity improvements. At the same time, it also allowed CP to balance the work capacity of existing workers and reduce outsourcing spend, generating savings that would benefit the workers as the company continues to sustain growth cost-effectively.

What to know about the IHCI Programme

1. You don't have to be in the manufacturing industry to benefit from it

Those in adjacent sectors such as logistics and construction will also find the Enabler Programme highly beneficial. Both large enterprises and SMEs can participate as the programme is specially tailored to each individual company's needs.

2. Expect a combination of experiential learning and actual trials of digital solutions

The IHCI Programme is conducted in five structured steps:

  • Awareness
    Participants first attend a three-day awareness bootcamp to boost their understanding of Industry 4.0 technologies and transformation tools while gaining insight into the best human capital management practices.
  • Build your IoT solution
    Consultants then conduct onsite diagnostics and interviews to identify bottleneck areas and install relevant IoT solutions to tackle the issues at hand without capital outlay from the participating company.
  • "See" it yourself
    Data collected will be analysed and used to identify productivity gaps and develop recommendations to streamline operational processes. Consultants will also review and redesign jobs, recommending training courses to equip workers with the right capabilities to drive and sustain transformation.
  • Do-it-yourself roadmap
    Finally, companies will receive a tailored roadmap based on the IoT pilot, allowing them to sustain their digital transformation after IHCI's Enabler programme.
  • Ecosystem to scale Industry 4.0 implementation
    After the pilot, participants have the option to be inducted into the Community of Practice pathway for the next 12 months, where they can work closely with solutions vendors on curated pathways to support their scale-up plans.

An affordable journey to Industry 4.0

The eight-week IHCI Enabler Programme provides a low-cost, conducive environment for companies to discover what it takes to achieve a successful Industry 4.0 transformation and a tailored implementation roadmap.

While the unsubsidised fee for the programme is S$63,250, it qualifies for funding support of up to 90 per cent from WSG. Further funding support can also be found under the SSG SkillsFuture Enterprise Credit (SFEC) scheme, as well as the SBF Rising in Support of Enterprises (RISE) programme.

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