Manufacturing is on the brink of a new age – arising from the convergence of the physical and digital worlds. This new paradigm, commonly referred to as Industry 4.0, has the power to transform how products are created, how supply chains are managed, and how value chains are defined. For companies around the world, Industry 4.0 presents an opportunity to gain new competitive advantage through greater productivity, agility, and speed. For Singapore in particular, Industry 4.0 creates a window of opportunity to cement its role as a global manufacturing hub and to transform its manufacturing base.
The Singapore Smart Industry Readiness Index
To help manufacturers take the first step on their transformation journey, the Singapore Economic Development Board (“EDB”) launched the Smart Industry Readiness Index (“SIRI”) and its accompanying Assessment Matrix in November 2017.
SIRI identifies 3 fundamental building blocks of Industry 4.0: Technology, Process, and Organisation. All 3 building blocks must be considered to harness the full potential of Industry 4.0. Underpinning the 3 building blocks are 8 key pillars, which represent critical aspects that companies must focus on to become future-ready organisations. Finally, the 3 building blocks and 8 pillars map onto 16 dimensions, which are areas of assessment that companies can use to evaluate the current Industry 4.0 readiness of their facilities.
Industry 4.0 is now gathering momentum globally. According to the 2016 Industry 4.0 global survey conducted by PwC, nearly three-quarters of respondents foresaw a high level of digitalization in their companies over the next five years. However, in McKinsey’s 2017 digital manufacturing global expert survey, companies also pointed out that the lack of a clear vision, strategy, and a systematic roadmap were the biggest challenges hindering Industry 4.0 adoption.
The Singapore Smart Industry Readiness Index (“the Index”) is a deliberate attempt to address these challenges. Created in partnership with global testing, inspection, certification and training company TÜV SÜD and validated by an advisory panel of industry and academic experts, the Index has been designed as a comprehensive tool for all companies regardless of their size or the industry that they are operating in. The Index covers all three core elements of Industry 4.0 (Technology, Process, and Organization), and seeks to strike a balance between technical rigour and usability.
The Index is comprised of three layers. The topmost layer is made up of the 3 fundamental building blocks of Industry 4.0: Process, Technology and Organization. Underpinning these 3 building blocks are 8 pillars of focus. The 8 pillars then map onto 16 dimensions of assessment, which companies can use to evaluate their own facilities.
Businesses must start taking decisive action today
Companies seeking to embrace Industry 4.0 often come from very different starting points, with different capabilities and varying levels of ambition. Some will require a comprehensive transformation of their operations, processes, and business models. Others may need to expand their focus more and explore adjacent areas. That said, regardless of the starting point or the nature of the industry, companies of all sizes will benefit from Industry 4.0.
The Singapore Smart Industry Readiness Index offers a systematic approach for companies to start, scale, and sustain their transformation initiatives. Although the relative significance of the 3 building blocks, 8 pillars, and 16 dimensions will vary across different industries, the Index attempts to provide companies with a common language to boost internal alignment and co-innovation with external partners. With the Index, companies have the opportunity to take decisive action today by following the four steps in the LEAD framework – to set themselves on the right trajectory for transformation and growth.