The Southeast Asian Manufacturing Alliance, initiated by Singapore, is mainly characterized by orderly and divided industrial zone planning. Singapore is a market entry hub and a high-tech development center.
The Development Trend and Market Status of the Southeast Asian Manufacturing Alliance:
The outsourcing model that has been in use since the 1970s is currently facing huge challenges. Under the situation of rapid changes in the political and economic situation, the fluctuation of terminal demand information flows upstream along the supply chain, and the information transmission causes time-lagging, which causes the production of enterprises. The change of plan and the serious imbalance between supply and demand, and the problem of the capital backlog caused by excessive inventory, make the original advantage of outsourcing become an operational risk, thus prompting the rise of the "local production, local supply" revolution. Southeast Asia is one of the beneficiaries of the formation of the global regional market, especially Singapore.
The short-chain revolution is a topic of intense concern after the US-China trade war, and this revolution will bring about the transfer of enterprise production bases and even the entire supply system, forming several regional-based manufacturing centers. One of the beneficiaries of regional manufacturing is the ASEAN, but unlike in the past, the current ASEAN is not based on labor outsourcing, but gradually developed into a smart manufacturing center, and Singapore is the leader in this region. In the past, to save operating costs or improve efficiency, companies outsourced production capacity. The advantages of outsourcing include:
- The cost of land and factory setting is low.
- The overseas market has strong growth potential, which is favorable for overseas sales of products.
- The components with high capital intensity are handed over to the outsourcing factory for production, which strengthens the space for the capital utilization of the industry, and makes itself more focused on the development of core competitiveness.
- The East Asia/Southeast Asia supply chain spans multiple countries and can be quickly shipped to other markets.
- Professional foundries have a larger production capacity, which can be quickly adjusted according to the needs of the industry.
The Southeast Asian Manufacturing Alliance was established in 2020 by the ASEAN leader - Singapore and officially launched in March 2021. Through the spirit of the alliance, it integrates manufacturers from ASEAN countries, connecting Malaysia, Vietnam, and Indonesia. Aiming at foreign large-scale manufacturers and local manufacturers, it will form a close regional cooperation alliance to help manufacturers build a digital supply chain in more than 10 industrial zones and increase their market share.
The feature of the Southeast Asian Manufacturing Alliance is the planning of an orderly and divided industrial zone. For example, Malaysia takes electronic manufacturing as the axis of development, and Vietnam and Thailand, in addition to the original textile industry, have increased investment in electric vehicles in recent years. Singapore itself is the market entry. The hub is a high-tech development center. The clear division of labor makes it easier for foreign businessmen to form a clear layout strategy when entering the ASEAN.
Smart Factory Enhances Manufacturing Competitiveness for Singapore SMEs:
In the past few decades, the growing manufacturing industry has driven the growth of industries related to trade, finance, tourism, and professional services, and if we can rely on smart manufacturing, the spillover effect will be more obvious. The integration of digital technology and the demand of enterprises for consumers to master makes it easy for manufacturers to form a multiplier effect when investing in smart manufacturing. Which can better serve the end market, and the rapidly changing consumer market will have a greater impact on products from smart manufacturing needs. Therefore, smart manufacturing can not only help Singapore's manufacturing industry remain competitive but even create more new business models in the digital economy.
The advantage of SMEs in introducing smart manufacturing is to help them manage their daily business more efficiently and differentiate themselves from competitors through innovative mechanisms. A key element of smart manufacturing is obtaining real-time data from the manufacturing process for business decision-making and prediction/solving problems. Therefore, the use of sensors and software for equipment monitoring, defect detection, and predictive maintenance has become a consensus among enterprises. For example, raw material forecasting can reduce the cost of stockpiling goods, and at the same time, it can obtain production materials from suppliers faster. It can effectively manage production processes during low and peak seasons, improve supply chain efficiency, and ultimately generate higher revenue at lower costs. Some forward-looking SMEs can even apply digital clone technology to product production to simulate all relevant situations and shorten the possible risks of TTM (time to market) and TTC (time to cost) thresholds.
Although small and medium-sized enterprises in Singapore have spared no effort in investing in Information Technology (IT), even though they have accumulated and stored a large amount of data, their mining and application of data value are still incomplete. Electronic records, automated reports, and simple IoT devices are quite common in small and medium-sized enterprises, but they still face bottlenecks in data mining and corporate decision-making. These are all problems that manufacturers often encounter when building smart factories, and data is the first problem that Singapore's small and medium-sized enterprises must solve. Smart factory data collection includes static data and dynamic data. Static data includes factory design information, geographic information data, equipment feature data, factory internal structure, various documents, pictures, etc. Most of these materials come from factory designers, equipment suppliers, factory builders, and external partners. The factory dynamic data includes environmental protection and safety, production execution, equipment execution, quality management, energy consumption, business decision-making, warehousing and logistics, and the collection of sales and procurement information.
Due to the limited resources of small and medium-sized enterprises, they are less able to build a complete smart factory like large enterprises. The Singapore government proposes to capture what they need through a modular approach, and then build a more complete factory according to the needs. First, SMEs must integrate data technology and IT technology. Through the integrated data storage and analysis platform, it is ensured that the data of each department and operation process can be interacted with, and even simple artificial intelligence analysis software can make operational improvement suggestions. At the same time, sensors are installed in the factory, so that the management can understand the life cycle of the entire factory and equipment, which is convenient for replacing equipment or walking detection. As for advanced devices such as 5G, digital clones, edge computing, and automatic warehousing robots, they are supplemented according to the operating conditions.
In addition to the application of digital tools and the establishment of smart factories, we must also take net zero carbon emissions, energy conservation, and environmental protection as the basis for development, simultaneously improve the company's product service capabilities, and achieve customized production. Through the in-depth integration of advanced manufacturing systems and information technology achieved. At the same time, manufacturers have also strengthened cooperation with service providers to integrate the strength and resources of all parties in the industry.
Building Digital Talent and New Business Models:
The Singapore government's goal for the transformation of small businesses is not only to optimize operations but also to expect companies to make good use of digital technology to establish new business models. When enterprises are gradually able to optimize production parameters or integrate online and offline activities, the next step in transformation is to upgrade to the business strategy level. No matter what kind of transformation, the use of people is often the most critical. Therefore, Singapore is a small and medium-sized enterprise. Customize two assistance models, Chief Technology Officer (CTO)-as-a-Service, and Digital Leaders Programme (DLP) points.
- Chief Technology Officer (CTO)-as-a-Service:
The priority of the CTO is to measure the digital readiness of the enterprise and identify the gap between the actual implementation of the transformation and the desired goal. And refer to the successful practices of other small and medium-sized enterprises. In terms of actual tools, Singapore provides more than 450 digital transformation solutions for use, most of which are related to artificial intelligence, cloud, and data technology, and are certified by IMDA. In terms of digital talent cultivation, the Singapore government cooperates with specific consulting agencies, especially IT consulting, to reduce the risks of SMEs in transformation through the training of specific skills (such as information security).
- Digital Leaders Programme (DLP):
For companies recruiting digital transformation teams, the Singapore government provides financial assistance. The digital transformation team needs to include a leader (technical leader/digital leader) and a team of up to 5 digital talents (data scientists, cloud architects). For small and medium-sized enterprises, drawing a blueprint for digital transformation is as difficult as acquiring digital talent. Many industry players do not know where they belong and what their strategic plan will be in five years. The transformation plan still needs to cooperate with external networks, such as technical consultants, information services Industry players, strategic consulting companies, etc., can be perfected. Finally, DLP provides additional financial assistance to companies that develop new business models and provide digital services.
- SME Go Digital:
The SMEs Go Digital initiative SMEs Go Digital was launched in 2017. This policy is one of the key measures to enhance the digital transformation of industries in Singapore. The focus of the policy is to assist SMEs in systematically assessing the degree of digitalization and improving them according to the needs of transformation. IT and the introduction of related solutions such as the Internet of Things, information security, and data technology, and at the same time, different transformation blueprints are drawn according to the transformation status of each sub-industry. Since SMEs in Singapore account for 90% of the total industry, new start-ups and technology players are targeting this transitional market and actively deploying. The SME Go Digital solution has been transformed and designed for different sub-industry categories, such as food manufacturing, shipping, logistics, retail, precision manufacturing, etc. It is quite customized. For SMEs in Singapore, the cross-border integration of talents and organizations is the core of the development of smart manufacturing. The production process is a complex system, and the company faces challenges such as uncertainty and rapid changes all the time. The management level must establish a core system and integrate different talents such as manufacturing, IT, advanced technology, process operations, and finance as transformation promoters. The current shortage of teams and talents is extremely high. Therefore, Singapore companies actively invest in talent training, establish new service models, and establish a digital skills-oriented orientation, which are the keys to truly promoting the transformation and upgrading of enterprises' smart manufacturing. At the same time, these talents must also be oriented towards value creation. Through the integration of process, technology, system, culture, and organization, the goal is to improve production efficiency, reduce production costs, improve product quality, shorten product launch cycles, and reduce energy consumption to achieve smart manufacturing.