AIBP Insights is a series of closed-door regional roundtable discussions which are part of our ongoing engagement with enterprises in ASEAN to look at topics affecting digital transformation for their businesses. The purpose is to enable the exchange of ideas between industry stakeholders and spearhead creative collaboration across industries and countries.
Earlier this week, we hosted a session on Digital Transformation in ASEAN Process Industries, and yesterday, a separate discussion on ASEAN Manufacturing: Industry 4.0 In Action was conducted.
In our final session for Manufacturing, our panelists from Allegro Microsystems, Alliance Contract Manufacturing, Amkor Technology, Apacer, Beijer Electronics, Flex, Global Foundries, Kulicke & Soffa and PTC came together to discuss and share their expertise and insights on digital transformation in the electronics and advanced manufacturing industries.
Leaders in this industry discuss the adoption of Industry 4.0 technologies and how enterprises in this space are utilising big data analytics and other next generation technologies to drive transformation and innovation to satisfy increasing global demand.
Key areas of discussion today were Value of Data in Digital Transformation Initiatives, Role of Employees, IT as a Strategic Partner, and Determining and Evaluating ROI.
Setting the stage for the discussion, YY Fong, Vice President, Industry Platform, shared that manufacturing is an imperative and large contributor towards ASEAN’s GDP. In our AIBP Supply Chain and Manufacturing Survey conducted in the first quarter of 2021, 41.3% of our enterprise participants find that changes in buyer’s consumption behaviour will have the largest impact on their performance, while 31.8% of them believe that improving the ability to predict and adjust forecasts to align production with demand would provide the best opportunity to improve their performance.
Value of Data in Digital Transformation Initiatives
Dr. Muataz Hameed, Industry 4.0 and Intelligent Automation Lead, Flex, started off the panel discussion by sharing about their digital transformation journey in twofold: infrastructure and application. As part of their infrastructure, Dr Muataz designed and implemented a smart machine brain, Xander, that works alongside their machines to establish connectivity and securely collect data in real time. He is also actively working on defect localisation, where he looks at ways to identify which machines contribute to specific defects.
Tick Kwang (TK) Loh, Senior Director of Operations Engineering, Kulicke & Soffa, highlighted the importance of making sense of data, from harvesting to integrating scattered data. He added that it is important to make decisions with data, and that these data should be aligned with corporate goals. While corporate goals are lagging indicators, he said that it is equally important to identify leading indicators to get a better overview of performance and future outcomes. TK also added that he is looking at abnormality detection and predictive analytics, where bottlenecks and pain points can be identified.
Justin Hester, Senior Director, Digital Transformation Solutions, PTC, highlighted the importance of delivering the right information to the right people at the right time. He added that it is the engineers’ nature to consolidate every piece of data, however not everything that is collected may be useful. Instead, Justin emphasised on the importance of deriving insights from the data and detecting issues that can be adjusted for future usage.
Likewise, Dr. Jonathan Mondero, Head of Information Technology, Amkor Technology, agreed with Justin and added that his biggest challenge is harnessing the data – as he puts it, being a ‘data janitor’. TK added that with data, many engineers have difficulty understanding the purpose of data that has been collected previously and this creates a problem when they are trying to identify data which they can use to solve the issues(s) that arise. Hence, data becomes scattered and decentralised as engineers would have their preferred list of data.
Role of Employees
Rhett Ramos, Asia IT Director, Allegro Microsystems, highlighted the importance of getting humans involved. He added that it is important that the transformation journey should benefit the operators; defect free and easy for them to operate in a single or two clicks. This will make their jobs easier despite managing multiple lines, hence, as Rhett puts it, knowing what recipe to use can minimise human errors in the processes.
Erik Looi, Group Head of IT, Alliance Contract Manufacturing, faces similar challenges as Rhett, where the greatest challenge is the mindset of the people in the organisation. Erik strongly believes in retaining employees, building a lean team, and being agile to take on challenges.
TK believes that digital transformation is value-adding and believes that it is key in attracting future talent, which will serve as a platform to develop future growth within the organisation. Similarly, Glenn Hsu, Regional Sales Manager, Beijer Electronics, highlighted that connecting the people with technology would be the next step forward.
IT as a Strategic Partner
Manju Jalali, Chief Information Officer, Global Foundries, added that IT acts as a strategic partner in the transformation journey. She highlighted the importance of identifying the business outcomes before identifying how to go about achieving these business goals and outcomes. Subsequently, it is imperative to know the value framework and what can be given back to the organisation with regards to that initiative. From there, initiatives will get prioritised based on the perceived value. Manju believes that the digital transformation journey is not about upgrades, rather, it ensures that outcomes are tied to productivity, efficiency, time to market, and enables the business to align with projection from a growth standpoint.
Erik further shared about his idea of a bi-model IT; a combination of the core enterprise and being agile to welcome new innovations. He believes that it is important to look past trendy buzz words and make decisions based on initiatives that bring value.
Justin acknowledged the high cost involved if the data is not with the right people at the right time. He observes that many organisations are stuck in pilot purgatory mode, where projects are neither fired nor given additional funds. TK agreed that getting stuck in purgatory is very common and he believes that data visualisation could be key in getting projects pushed through. He shared that he begins the implementation process with low-hanging fruits that have large influence and the importance of being able to justify the ROI.
Determining and Evaluating ROI
Justin agreed with TK that starting with low-hanging fruits that can drive impact across the organisation is a good start, especially if it has potential for scalability. While discussing project implementations for his client, Frank Henville, Technical Product Manager, Apacer, believes that ROI is something that is difficult to measure initially until sufficient data is gathered after a period of time. Rhett agreed with that point but also highlighted that ROI is essential in measuring the gains upon delivery of a project.
Sharing her thoughts on justifying ROI, Manju added that partnering with other stakeholders to identify problems, opportunities, and desired value is essential whenever a new initiative is proposed. Subsequently, she suggested rethinking the role of IT in this initiative and always go back to answering ‘Why are you doing this?’. Dr. Jonathan agrees with Manju on justifying ROI and added that at Amkor, they measure success through KPIs in terms of quality, productivity, speed, cycle-time, cost, etc.
Justin believes that ROI is a holistic measure and should contribute towards the decision making process, however it is also crucial to take stock and understand if current initiatives are sufficient in driving the transformation journey.
Concluding the session, the panelists noted that while technology is still a critical underpinning of digital transformation journeys, there is an increasing understanding and alignment between technology and business stakeholders, which will help take transformation forward.
With that, we look forward to the digitalisation projects that ASEAN enterprises will be implementing in the coming years.
Stay tuned for AIBP Insights Government, and Banking and Finance which will be held in the next few weeks. Do reach out if you wish to find out more about our upcoming sessions!