Is automation just a digital panacea for Asia’s manufacturers?

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One much-noted impact of pandemic lockdowns is the upswing in the digitalisation of daily life as well as many industries in Asia. According to various industry watchers, the region’s manufacturing sector is pursuing automation as a priority in its survival gameplay, and to advance positive digital disruption.

Vincent Tang

Hong Kong-based Vincent Tang, regional vice president, Asia, Epicor, a provider of industry-specific enterprise resource planning (ERP) software for some 30,000 customers in the manufacturing, distribution and services industries, spoke to Disruptive.Asia of some of the barriers in terms of digital adoption.

“Covid-19 has to light the importance of digital transformation especially as businesses change their operations to remote working environments in order to cope with the challenges presented by office closures, restricted movement and supply chain interruption,” said Tang.

“There has been an accelerated push for digitalisation for all industries, regardless of the size of the business, as companies look for alternative ways to keep their businesses operating,” he said.

Unfortunately, at the same time, many businesses have had to shut down completely, especially those that could not quickly move their operations to a digital environment, Tang noted.

Surviving the coronavirus crisis

As an example, he pointed to one sector, which has lagged in the digital adoption stakes. “Under the ‘new now’, we do expect to see more businesses moving towards digitalisation, particularly the SME sector, which is becoming more reliant on technology to keep their operations going.”

“SMEs need to have digital strategies in place and also take advantage of the technology tools that are available, such as ERP systems,” he noted. “This will help SMEs ensure that they are still able to cater to their customers, strengthen relationships with customers by being able to support them even during this new now, enhance customer experience and build mutual trust.”

Taking Malaysia’s SMEs as an example, SME digitalisation could add between RM79 billion to RM99 billion to the country’s GDP by 2024 and contribute to economic recovery post-COVID-19, according to IDC’s 2020 Asia Pacific SMB Digital Maturity study.

Interestingly, IDC maps out four stages of digital maturity – Digital Indifferent, Digital Observer, Digital Challenger and Digital Native – experienced by SMEs across Asia Pacific.

“However, one of the key benefits of having the right technology in place is that organisations can remain connected and continue operations,” he added.

When turning to the manufacturing sector, Tang explained that in tandem with companies implementing work from home arrangements for office-based staff, lockdowns and other restrictions have pushed most factories to operate under limited capacity.

Why automation is vital

The global health crisis has certainly highlighted the value of having an integrated automation system, Tang continued.

“Data gathering and analytics is one of the benefits of having a cohesive automation system. With a system in place, data gathering across the business will be much easier. Real-time and accurate data provides insights that can help leaders make timely decisions, especially in times of a crisis.”

 “For example, attracting and recruiting talents is a challenge traditional manufacturing companies in Asia face. Businesses in the manufacturing sector are still following manual and tedious processes. For younger talents, the technology and systems being used in a company are factors when deciding to join a company,” he said.

“With an ERP system in place and tools that help people work more efficiently, employees are not impeded by manual and repetitive tasks. Employees are empowered to contribute more to the organisation if more time can be devoted to innovation and less time on tedious tasks.”

Tang said companies need to ensure that they have the digital capabilities to succeed in this ever-changing market.

“The increase in the adoption of technologies affirms that now is the best time for innovation,” he said, adding that Epicor’s ERP and MES solutions seek to provide the integration and technology that businesses need to do more with less.

The capabilities provided by industry 4.0 technologies such as artificial intelligence (AI), machine learning, analytics, and the Internet of Things (IoT) must be embedded in a platform to help companies make better, faster decisions, and even to identify potential opportunities for growth.

“A company’s transformation journey starts with an objective assessment of their current state,” Tang noted. “This will dictate the steps needed in order to achieve the goals that the company has set. Engaging an external management consultant can help organisations understand what they truly need and help define goals and objectives.”

Looking ahead, he believes that digital workplaces will be the next “trend” to hit the manufacturing sector.

“Today’s workforce, especially the new generation, welcomes technology such as AI and robotics, as part of the modern digital workplace,” Tang said, adding that the company has developed an AI solution in response to this trend. Once it is integrated within the operations, the solution is ‘like a smartphone to a manufacturer.’

The technology is designed to assist a manufacturer through a built-in virtual voice assistant. A production line member can ask for the number of items in sales orders and receive the information in real-time through this solution – Epicor Virtual Assistant (EVA). With these capabilities, employees can make quick decisions and adjust production based on the requirements.

Tang summarises: “Technology is instrumental in driving growth and boosting productivity. Companies in the manufacturing sector should tap the power of automation to keep a competitive edge. Choosing the right ERP solution tailored to their business needs is a critical first step.”

While panacea may be deemed an emotive word, automation is undoubtedly a much-needed digital initiative in an uncertain scenario.

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