Asia, Europe See Opening in New Era of Manufacturing

Countries with strong manufacturing know-how, including Japan and Germany, have an opportunity to regain their competitive technological edge as big data ushers in the "Industry 4.0", era, Christian Brecher, director of Germany's Fraunhofer Institute for Production Technology, said Thursday at the opening session of the Nikkei Asia300 Summit 2018 in Singapore.

Noting that the US and China had dominated the consumer internet, he said Asia and Europe have an opening in this new era of manufacturing, Nikkei reported.

The one-day Singapore conference on Thursday was themed "Managing Disruptive Innovation". Brecher's session was followed by a panel discussion on "Transforming businesses in the new digital era," attended by executives from Singapore Technologies Engineering, Malaysia's Top Glove, and India's HCL Technologies.

"We have the benefit in Japan, in Europe and other parts of Asia of a lot of knowledge about manufacturing," Brecher said. "This is a strong opportunity we have. But the industrial internet is not so easy compared to the consumer internet."

He said once data is merged with cutting-edge production, technology such as robotics will bring about a revolution in the manufacturing sector.

Obstacles

But right now manufacturers are unable to utilize most of the data they generate in a way that brings benefits to their customers. "We have a lot of production knowledge all over the world, but we are not using the real actual data," he said in his remarks on Asia and the new industrial revolution. "We still wait for explosion of available data."

Tracking live data generated in the manufacturing process and analyzing it in the cloud will create huge gains in productivity, he said. By merging data together with production knowledge, manufacturers will have "chance to monitor quality in real time."

But the big obstacle right now is that "most of the data never reach the cloud", in part because the bandwidth cost is not falling as fast as the cost of storage and compute, as well as some industries prefer to store data locally for legal reasons.

Big companies, including Siemens, SAP, General Electric and Amazon have been investing heavily in the Internet of Production, he said, and many new companies are entering in the area.

You Can't Walk Alone

Companies, whether they are manufacturers or software providers, must speed up the process of transformation to survive the changes of the fourth industrial revolution. And to do that, they cannot walk alone.

That was the message from leaders of Asian companies speaking at the summit. The complexity of digital transformation is so great, they said, that companies will need to work hand-in-hand with external partners, startups or even their own customers.

Vincent Chong, president and CEO of Singapore Technology Engineering, said collaborating with an external partner with expertise is crucial. "Businesses are being challenged to solve problems which are multi-faceted and complex," Chong said.

Speaking about an autonomous vehicle project ST Engineering is focusing on as one of its future growth businesses, Chong said: "Look at the map and all the technology components we have to put together. Many of them require collaboration because you just don't have expertise."

The M&A Option

The second largest defense equipment maker in Asia by market capitalization, 51%-owned by Temasek Holdings, Singaporean state investment company, is pushing to expand its business into such areas like cyber security, autonomous vehicles and robotics for commercial use.

Mergers and acquisitions are another way to broaden its technology reach, as the company demonstrated when it acquired US-based Aethon, which makes robots that work in hospitals.

Swapan Johri, corporate vice president and head of APAC Business at Indian IT company HCL Technologies, stressed that the company is working closely with customers to speed up the business transformation process.

He says businesses have to be flexible when it comes to working with other companies if they are to compete today. "It's no longer possible to work in the classical manner," he said.

Legacy is one of the challenges companies must overcome if they are to transform, Johri said. Besides the legacy of technology and business processes, there is the legacy of the mindset. This is "the biggest challenge," he said, because it is tough to push people to think differently.