Having Trouble With Your Digital Transformation Journey?

Monday, November 5th, 2018

The APFI team seeks the advice of Siemens on behalf of Southeast Asian SMEs that are struggling in their digital transformation journey.

A recent report from McKinsey highlights that while 96 percent of Southeast Asian manufacturers are aware of the benefits of transforming their operations digitally, only 13 percent of these manufacturers have taken the right steps to digitise their journey. Surya Tumuluri, Head of Digital Factory Manufacturing Design at Siemens Singapore, theorises a reason for this statistic: “While there are numerous digitalisation solutions available on the market, many businesses are simply not sure where these solutions will fit for them.”

The application and success of adopting particular technologies is highly business-specific. Mr Surya suggests that decision makers ask themselves:

  1. Is this technology relevant to my business?
  2. How will this improve my business operations?

Mr Surya: “As a practice, at ZerOne.DesIgn, we understand the business first, then identify the gaps where digitalisation can contribute the most, and subsequently, we come up with the right technology application and roadmap.

“It’s important to note that there is a holistic value chain that should be digitalised—isolated digital solutions rarely reap desire results. For food manufacturing, for example, the value chain begins at sourcing the right ingredients, and ends at the shipping stage of the final product. There are strong links between each part of the manufacturing process so we can’t simply change one machine or digitalise one part of the value chain and expect transformational results from that step.”

Providing end-to-end solutions is ZerOne.DesIgn’s area of expertise—the consultancy identifies areas of business for its clients in which technology can provide value. Understanding their client’s strategic business goals is at the core of their practice, or as Mr Surya quotes, “Business value before technology.”

In the ASEAN context, many SMEs are stuck in a traditional Industry 2.0 setting, but it is important to understand that they need not take the road most travelled—i.e. a gradual evolutionary process from Industry 2.0, to 3.0 and eventually, 4.0. If there is a good strategic direction, businesses can use the technology “lag” that they face and take a leap into the modern digitalisation age with the tools that exist today. Rather than being a disadvantage, this type of disruptive technology can be a game changer for companies that are lagging behind.

Mr Surya provides a simple example based on F&B retailers in India. “While most countries evolve from cash-based payments to card payments to electronic payments, due to certain political changes in India, retailers have progressed straight to electronic payments. In an industry where cash was always known to be king, electronic payments have now become the backbone for India’s F&B industry.”

At Industrial Transformation Asia Pacific (ITAP), held at the Singapore Expo from 16-18 October 2018, many digital solutions were on display from industry leaders. While each solution has its distinct benefits, as Mr Surya puts it, it’s important to analyse your business first and then look for suitable technology to improve your operational efficiency in the long run.