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 month, we hosted a session on Customer Experience in the Retail sector, and last week, a separate discussion on Resilient Supply Chains was conducted. Yesterday, we held an AIBP Insights Manufacturing discussion on Digital Transformation in ASEAN Process Industries, where we explored themes pertaining to digital transformation initiatives, driving innovation as a culture, and new technologies for the future.
In our 2nd session for Manufacturing, our panelists from Astra Daihatsu, Kalbe Farma, Mattel Indonesia, Mondelez International, Oracle, Republic Cement, Talend, Vinda SEA and Winmate came together to discuss and share their expertise and insights on digital transformation in their respective organisations.
Our esteemed panel discussed the adoption of industry 4.0 technologies and in essence, we explored the initiatives, challenges and future opportunities in the industry.
Key areas of discussion today were Digital Transformation Initiatives, Challenges Faced When Adopting Digitalisation, and Future Opportunities in the Industry.
Setting the stage for the discussion, Sue Yuin Ho, Vice President, Industry Platform, shared that ASEAN governments have acknowledged a fundamental shift that is taking place in the technological landscape and have been rolling out various schemes and policies to encourage enterprises in their countries to adopt industry 4.0 technologies. This highlights the increased opportunities that enterprises in manufacturing will have in collaborating with digital technology solution providers to take their businesses to a higher level.
Digital Transformation Initiatives
Twan Kersten, Director Digital Manufacturing, Global Supply Chain Excellence, Mondelez International, shared his experience in leading the Integrated Digital Factory (IDF) project, which involves enabling a standard and consistent network infrastructure, streamlining data collection methodology, and ensuring real time and automated quality data.
Kemal Hadid, Manufacturing and Lean Director, Mattel Indonesia, runs the Hot Wheels and Barbie plants in Indonesia. He believes that the roadmap for Industry 4.0 starts with organisation’s culture. Similar to Mondelez, Mattel’s connected factory focuses on real time line factory performance and monitoring, as well as data driven problem solving. As Pak Kemal phrased it, the processes and people are the ‘Yin and Yang of Industry 4.0’.
Nabil Francis, President and CEO, Republic Cement, shared that cement is the second most consumed product globally, behind water. He highlighted that within Republic Cement, they are moving from Intelligent Automation (IA) to Artificial Intelligence (AI), where predictive modelling is a key focus.
On the other hand, Danny Natalies, Head of Corporate IT, Kalbe Farma, shared that their focus is to strengthen their core competencies within online marketplaces. Apart from the ride hailing and financial disruptions that have emerged, Pak Danny is anticipating a healthcare disruption – a result of new business models.
Challenges Faced When Adopting Digitalisation
On the topic of challenges, Marcus Choy, Head of Digital and Technology, Vinda SEA, shared it is crucial to avoid falling into the trap of following trends; but instead, organisations should look deeper into the technologies that can really help them improve. He emphasized on the importance of prioritizing technologies as implementing too many technologies may congest the overarching strategy and divert organisations from it’s initial focus and this is something he keeps in mind while implementing the project to combine Vinda’s existing sites in Malaysia into a massive 27-acre plot.
Pak Kemal noted that maturity of cultures is important despite the relative ease of implementing initiatives. His biggest focus is aligning people with processes before addressing other potential issues. Nabil added that one of the biggest challenges he faces is to ensure that his employees are less resistant to change, by engaging and communicating with them and giving them a purpose. He acknowledged the importance of innovation and that failure is okay, to which he shared, “Optimism of action is better than pessimism of the thought”.
Akmal Kusumajaya, CIO, Astra Daihatsu, agreed with Pak Kemal and Nabil that there should be standardization of the processes before introducing other aspects of digitalisation. He further recognized the significance of cost leadership at Astra Daihatsu.
Referring to his work with clients, Jimmy Kwang, Regional Vice President, Talend, shared that most of them are looking to drive revenue, save cost, and stay compliant (especially when it comes to going digital) and some of the challenges which he tries to help solve are, ensuring the right view of the right set of data, and the availability of data.
Pak Danny then shared that data is a key priority in their digital roadmap, it can be used to identify pain points, with their end goal being to implement a control tower system. He added that the global pandemic has accelerated technology implementation and one of the objectives at Kalbe Farma, is to explore ways of utilising technology to bring down inventory levels from 3 months to 1 month which will result in cost savings.
Similarly, Michael Lim, GTM Leader, ERP & Digital Supply Chain, Oracle, shared about the shift towards a consumer-centric model and in some instances, organisations are turning into service providers. He further highlighted the complexity of operating in the FMCG and Process Industries, where he believes that the implementation of smart manufacturing will improve costs and increase the margins with speed and accuracy.
Based on global implementation experience, Twan noted that the adoption and results of the tools would differ when implemented in different sites, largely due to the differences in people and processes. He added that capabilities such as six sigma and lean need to be in-place and it is imperative to have servant leaders who are capable of leading towards the right direction. Twan highlighted that digital transformation is afterall a change management process and Mondelez introduced a tracker which scores the adoption of tools. To this, Pak Akmal added that Astra Daihatsu is focusing on change management and ongoing production processes are led by the Just In Time (JIT) system.
Future Opportunities in the Industry
Concluding the discussion, the panel shared some final thoughts on considerations for digital transformation.
Nabil’s vision for the future is for the systems to learn by themselves and for everyone to capitalize on the experience. Twan reiterated that digital transformation is about transforming the organisation with tools and processes in which people work.
Marcus views data as a new currency and that it is important to invest and diversify your ‘currency’ and data, for instance, knowing how to further tap on data and making sense of data. He added that employees need to reskill and upskill for everything to work in sync, while robots and RPA can be adopted to complement existing operations. Marcus shared that digitalisation is not an option; organisations have to know how to future-proof themselves. Practice makes progress over time, it is not something that will be perfect – nothing is predictable, hence, being agile is key.
With that, we look forward to the digitalisation projects that ASEAN enterprises will be implementing in the coming years.
Our upcoming session for this week’s AIBP Insights Manufacturing will be Maximizing Data Value in ASEAN Electronics and Advanced Manufacturing on 25th March. 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!