Why digital manufacturing will simplify customisation to ‘great levels’
EY leader Atul Chandna says that the digitalisation of the industry offers immense potential for the future.
The future of manufacturing will see most equipment connected with each other, creating an era where artificial intelligence (AI) and machine learning are used to make it easier to adapt to changes in the business landscape.
This is what Atul Chandna, Asia-Pacific Supply Chain Leader and ASEAN Consumer Consulting Leader at EY believes.
Chandna possesses a deep knowledge of sales and supply chain functions in the Asia-Pacific region's consumer goods, retail, and chemicals sectors. He also has strong experience in advanced supply chain analytics and process consulting.
He has supported numerous local and multinational clients, from conceptualisation to the final delivery of large-scale turnaround programmes, including business strategy, process re-engineering, and technology architecture.
At the same time, Chandna has led innovation engagements on the adoption of digital supply chain ideas and brought them to life with prototypes that incorporate robotic process automation, analytics, mobility, and AI.
He has also led many advanced supply chain analytics and process consulting initiatives and designed and implemented supply chain control towers in Europe and Asia-Pacific.
Looking into how digital transformation has affected the growth of the manufacturing industry, Chandna said having myopic expectations from the process is still a common risk that companies face in such an undertaking.
“It is important for exporters and manufacturers to explore and keep an open mind in terms of the possible benefits when considering any transformation initiatives,” he said.
Chandna spoke with Manufacturing Asia about Southeast Asia’s digital transformation roadmap, what businesses should focus on as they recover from the impacts of the pandemic, as well as expanding their reach on new export markets.
As an industry leader, what can you say about the digital transformation of the manufacturing industry in Southeast Asia? What do you think is the edge of digitalisation for manufacturers?
The digital transformation of the manufacturing industry offers immense potential for the present and the future. Besides the immediate benefits of improved productivity and cash flow, reduced lead time, and working capital, digital manufacturing will simplify customisation to great levels.
Over the past decade, Southeast Asian economies have seen major manufacturing diffusion of specialised industries like electronics, textiles, automotives, agricultural, and petrochemical products. Technologies like artificial intelligence, the Internet of Things and big data have continued to influence and help to advance manufacturing processes. However, its adoption has been uneven across the Southeast Asian economies.
In the future, it is expected that most of the equipment will be connected to each other via a network, and all the data will be embedded in a central system. It will be a self-organisation process where the entire line would no longer stop even if a particular manufacturing station fails. Machine utilisation will be higher and consumption of resources will fall. Digital manufacturing will optimise factory processes and benefit small manufacturers given the cost-effectiveness.
Against the global geopolitical uncertainties, Southeast Asia has already positioned itself to become the next destination for manufacturing and production. Hence, there are opportunities for manufacturers in the region to adopt digital transformation technologies to stay ahead of the curve.
Since the COVID-19 pandemic affected every industry around the world, what do you think would be the trends companies need to focus on to maintain their relevance in the industry?
Given the challenges and global uncertainties, the manufacturing industry is moving in several directions.
For a start, business decision-makers are focusing more on long-term returns instead of short-term cost reduction. This development, with digitalisation technologies being well-proven and loaded into use, has led to more companies exposing and utilising technologies such as automation by robotics, contactless delivery by drones and product traceability enabled by digital tokens on an industrial level.
Another trend that we are seeing is that more companies are looking at their supply chains through a sustainability lens. With global leaders and businesses turning the spotlight to net-zero and sustainability practices, a focus on sustainable supply chain will not only allow companies to adhere to current and upcoming regulations related to sustainability but will provide new opportunities for growth and enhanced value to consumers and stakeholders.
What are the challenges that companies are facing since the pandemic?
Companies have been facing various challenges in their end-to-end global supply chain since the pandemic. The global talent shortage due to the Great Resignation is well discussed. The talent shortage is not a new challenge, but it will likely take a longer time for companies to how to get their workers back, and executives will also need to look at how to react when another major disruption occurs again.
Global geopolitical uncertainties have also impacted the supply of resources, goods and equipment. Companies have benefited from globalisation in the past decades and enjoyed the ease of transfer of goods and materials. However, against the current uncertainty that may extend for a longer term, it is necessary to consider diversity in sourcing and even risk hedging to ensure the stability of supplies and pricing.
Since innovation is shaping trends in the export industry, how can companies develop and improve to expand their business reach in new export markets?
Having experienced the unexpected disruptions that impacted supply chains, organisations have become laser-focused on resiliency and sustainability. To this end, organisations are adopting decoupling of their supply chain activities to enhance business performance.
Notably, industrial companies are reimagining their global supply chain architectures to be competitive for tomorrow. The EY Industrial Supply Chain Survey demonstrates the extent to which companies are already responding to global disruptions by transforming their supply chains, with significant decoupling of existing supply chains underway. For example, 53% of global respondents said they have already near- or re-shored some of their operations in the last 24 months, and 44% said they are planning new or additional near-shoring activities in the next 24 months. To increase geographic diversity and reduce risk, 57% say they have established new operations in one or more additional countries in the last 24 months and 53% are planning to do so in the next 24 months.
In the digital era, how can exporters and manufacturers overcome the risks of transformation?
A common risk that companies face in their digital transformation is having myopic expectations from the process. Such myopic expectations run the risk of limiting innovation opportunities. Therefore, it is important for exporters and manufacturers to explore and keep an open mind in terms of the possible benefits when considering any transformation initiatives.
Another risk is a lack of the necessary skills. During a digital transformation, businesses risk trying to implement digital solutions, which may not have a directly relevant use case. The implementation partners may not have the relevant skills to provide the business solutions without impacting the core unique selling proposition of the business. Hence, companies need to evaluate the pros and cons of the transformation so that all bases of risks are covered, and mitigation measures are in place.
Lastly, companies need to be mindful of losing the sense of their core purpose. Often, as companies rush to push through the transformation initiatives, they sometimes lose their core values and purpose. This results in a business that may be digitally transformed but has lost its core identity.
As a judge in the Asian Exports Awards, what are the factors that you look for in choosing the winners?
Some of the key factors that I am looking for include: How have the nominees performed as a collective group? If the company was nominated last year as well, what and how has the company done differently this year? If they had a plan declared last year, was it successful in implementation? What differentiated and innovative practices did the company adopt to enhance their offering? How digitally applicable or replicable are the company’s initiatives?
