Manufacturing Industry The implementation of smart factory solutions enhances asset efficiency, labour productivity, product quality, and significantly reduces costs while prioritising safety and sustainability within manufacturing operations. Smart manufacturing encompasses various technologies and solutions, including AI. Augury, a provider of industrial AI solutions enhancing machine and process health, recently released its The State of Production Health 2023 report. This study surveyed over 500 US and Europe-based manufacturing executives, primarily from organisations representing consumer packaged goods, food and beverage, paper, building materials, cement, wood, mining, oil and gas, and chemical industries, with global revenues exceeding US$100 million. Globally, manufacturers, including those in the ASEAN region, are progressively delving into digital technologies within the framework of Industry 4.0
Against this backdrop, PRA queried Raimund Klein, CEO of Singapore-based International Centre for Industrial Transformation (INCIT), about how the Asian manufacturing sector is adapting to global trends such as Industry 4.0/5.0 and the Internet of Things (IoT). Klein emphasises that, both in ASEAN and globally, the implementation of Industry 4.0 across processes, technologies, and organisations is still in its early stages. On a global scale ranging from 0 to 5, the aggregated digital transformation data stands at "1.55," signifying the early phase of this transition, he explained. Klein also touched on Industry 5.0 and the encryption of physical systems, highlighting the necessity of establishing communication protocols among collaborative robots (cobots) for effective cooperation. Regarding IoT connectivity, he noted a deficiency in products, especially in supporting SMEs and mediumsized companies. Despite these businesses prioritising automation, Klein emphasises the strategic importance of measuring the impact of their technologies. Enabling IoT is crucial to drive productivity and visualise the real impact of these advancements, he said. Consequently, it is evident that ASEAN manufacturers need to catch up in seizing the vast opportunities presented by these technologies, avoiding the risk of overlooking potential benefits. Rise of smart manufacturing with AI According to audit consultancy Deloitte’s 2024 manufacturing industry outlook, the majority of surveyed manufacturing executives believe that smart factory solutions will drive competitiveness in the next five years. Deloitte’s research consistently demonstrates improvements in cost, throughput, quality, safety, and revenue growth through smart factory technologies, combining capabilities in IoT, cloud and edge computing, AI, and vision systems, among others.
Augury's report shows divided views: while tech adoption aids workforce upskilling, full Industry 4.0 implementation remains a goal for few global manufacturers
The report indicates a mixed sentiment regarding the manufacturing direction. While most executives believe that technology adoption will positively impact workforce upskilling efforts, the goal of implementing Industry 4.0 remains for only a fraction of manufacturers globally. External factors such as supply chain disruptions, workforce challenges, environmental crises, and impending regulations are accelerating the industry's need to adopt technology rapidly. Regarding AI investment, the report signals a surge in commitment, with only a small fraction planning to reduce AI spending in 2023 (3%), while a substantial majority (63%) plan to increase their AI budgets. However, despite widespread AI use, there's considerable variability in quantifying its impact, leaving leaders uncertain about its overall value. The report identifies upskilling the workforce as the primary objective for leveraging AI in 2023, followed by increasing capacity and streamlining supply chain visibility. In terms of AI applications, the report emphasises production health—integrating insights from machines, processes, and operations—as a key area, ranking closely behind supply chain optimisation. DECEMBER 2023
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