THE SMART INDUSTRY READINESS INDEX

1 THE SMART INDUSTRYREADINESS INDEXC atalysing the transformation of manufacturing 1 The SMART INDUSTRY READINESS IndexAt a GlanceForewordExecutive Summary Introduction INDUSTRY is transforming manufacturingManufacturing: A Key Pillar of Singapore s Economy A national imperative for growth and transformation The SMART INDUSTRY READINESS Framework The 3 building blocks, 8 pillars and 16 dimensionsThe LEAD Framework A four-step process towards transformation The Way Forward Businesses must start taking decisive action today Assessment Matrix: The 16 Dimensions AcknowledgementsReferencesGlossarySingap ore Economic Development Board (EDB), a government agency under the Ministry of Trade and INDUSTRY , is responsible for strategies that enhance Singapore s position as a global centre for business, innovation, and talent.

2 We undertake investment promotion and INDUSTRY development, and work with international businesses, both foreign and local, by providing information, connection to partners and access to government incentives for their investments. Our mission is to create sustainable economic growth, with vibrant business and good job opportunities for Singapore. For more information, please visit Copyright 2020 Singapore Economic Development Board. All rights SMART INDUSTRY READINESS Index2 Catalysing the transformation of manufacturingBig data, robotics, and additive manufacturing are some of the technologies that are driving the convergence of digital and physical in every industrial sector, from production to logistics, from aerospace to utilities. This convergence, commonly referred to as INDUSTRY , holds immense opportunities for Singapore.

3 It will redefine the nature of manufacturing. Instead of standalone factories, INDUSTRY will create dense and interconnected networks of facilities, suppliers, partners, and customers. It will create new jobs of tomorrow, where man and machine work together to manage SMART facilities and global supply companies recognise the opportunities, many do not know where and how to start. The pace of transformation is also uneven across industries. The SMART INDUSTRY READINESS INDEX seeks to provide a common framework for all companies to participate in, and benefit from, this transformation. Developed by EDB in partnership with T V S D and validated by an advisory panel of experts, the SMART INDUSTRY READINESS INDEX will help companies determine where to start and how to scale and sustain their INDUSTRY importantly, we hope that the SMART INDUSTRY READINESS INDEX will be a catalyst for companies, industries, workers, and the Government to come together to prepare for and create Singapore s future in this new era of Advanced Beh Swan GinChairmanSingapore Economic Development Board2 Catalysing the transformation of manufacturing3 The SMART INDUSTRY READINESS IndexManufacturing is on the brink of a new ageManufacturing is on the brink of a new age arising from the convergence of the physical and digital worlds.

4 This new arising from the convergence of the physical and digital worlds. This new paradigm, commonly referred to as INDUSTRY , has the power to transform how products are created, how supply paradigm, commonly referred to as INDUSTRY , has the power to transform how products are created, how supply chains are managed, and how value chains are defined. For companies around the world, INDUSTRY presents an chains are managed, and how value chains are defined. For companies around the world, INDUSTRY presents an opportunity to gain new competitive advantages through greater productivity, agility, and speed. For Singapore in opportunity to gain new competitive advantages through greater productivity, agility, and speed. For Singapore in particular, INDUSTRY creates a window of opportunity to cement its role as a global manufacturing hub and to particular, INDUSTRY creates a window of opportunity to cement its role as a global manufacturing hub and to transform its manufacturing base.

5 Transform its manufacturing base. INDUSTRY is now gathering momentum globally. According to the 2016 INDUSTRY global survey conducted by PwC, nearly three-quarters of respondents foresaw a high level of digitalisation in their companies over the next five years. However, in McKinsey s 2017 digital manufacturing global expert survey, companies also pointed out that the lack of a clear vision, strategy, and a systematic roadmap were the biggest challenges hindering INDUSTRY adoption. The SMART INDUSTRY READINESS INDEX (SIRI) is a deliberate attempt to address these challenges. Created in partnership with global testing, inspection, and certification company T V S D and validated by an advisory panel of INDUSTRY and academic experts, SIRI comprises a suite of frameworks and tools to help manufacturers regardless of size and INDUSTRY start, scale, and sustain their manufacturing transformation journeys.

6 This white paper introduces three frameworks and tools: the SIRI Framework, the LEAD Framework, and the Assessment Matrix SIRI Framework The SIRI Framework consists of three layers. The topmost layer is made up of the three fundamental building blocks of INDUSTRY : Process, Technology, and Organisation. Underpinning the building blocks are eight pillars, which represent critical aspects that companies must focus on to become future-ready organisations. The third and final layer comprises 16 dimensions that companies should reference when evaluating the current maturity levels of their facilities. The Assessment Matrix Referencing the 16 dimensions in the SIRI Framework, the Assessment Matrix is the world s first INDUSTRY self-diagnostic tool aimed at helping companies worldwide evaluate the current state of their factories and plants.

7 It is designed to strike a balance between technical rigour and SMART INDUSTRY READINESS IndexFigure 1: The SMART INDUSTRY READINESS INDEX (SIRI) Framework3 The SMART INDUSTRY READINESS IndexExecutive SummarySmart INDUSTRY READINESS IndexPr ocessTechnologyOr ganisationOperationsVer tical IntegrationHorizontalIntegrationLeadersh ipCompetencySt rategy & GovernanceInter- and Intra-CompanyCollaborationIntegratedPr oduct LifecycleWorkforce Learning &DevelopmentSupply ChainAut omationConnectivityIntelligenceTalentRea dinessStructure &ManagementPr oductLifecycleShop FloorEnterpriseFacility12347101315141658 116912 The SMART INDUSTRY READINESS Index4 Catalysing the transformation of manufacturing Learn the key concepts of INDUSTRY and build a common language for alignment.

8 SIRI enables this by offering frameworks that help increase the level of understanding of key INDUSTRY concepts and establishing a common language among individuals, business units, and partners. Evaluate the current INDUSTRY maturity levels of existing facilities: With a common understanding of INDUSTRY , companies can use the Assessment Matrix to assess the current state of their facilities. Through each dimension, companies can examine their current processes, systems, and structures and place themselves in one of six possible bands. It should be noted that while all dimensions should be taken into account, the relative importance of each one will vary depending on the company s needs and the INDUSTRY it is operating in. Architect a comprehensive transformation strategy and implementation roadmap: The SIRI framework acts as a checklist to ensure that all the building blocks, pillars, and dimensions are formally considered.

9 Additionally, the Assessment Matrix doubles as a step-by-step improvement guide, with the six bands within each dimension delineating the intermediate steps needed to progress to higher bands. This helps companies to identify high-impact initiatives and structure robust implementation roadmaps with clearly defined phases, targets, and timelines. Deliver impact and sustain transformation initiatives: Once a company has developed its transformation roadmap, SIRI s frameworks and tools also serve as a live blueprint that the company can use to measure and refine its INDUSTRY initiatives over a multi-year who seek to embrace INDUSTRY often have different starting points. Regardless of where they start from or the INDUSTRY they are in, all companies stand to benefit from INDUSTRY SIRI offers a suite of practical and usable frameworks and tools for companies to determine where to start, how to scale, and what they could do to sustain Way Forward4 Evaluate the current INDUSTRY maturity levels of existing facilitiesFigure 2: The LEAD FrameworkCatalysing the transformation of manufacturingThe LEAD Framework Transforming and upgrading a manufacturing facility is not a one-off exercise.

10 Rather, it is a continuous and iterative process. This is encapsulated in the LEAD framework a circular, continuous four-step process that all manufacturers can adopt in their approach towards INDUSTRY SMART INDUSTRY READINESS IndexThe fourth industrial revolution is upon us. Although the first three industrial revolutions of mechanisation, mass production , and computerisation have come to define the world we live in today, the fourth industrial revolution will usher in a new age of innovation and transformation. This is characterised by the advent of cyber-physical systems, arising from the convergence of the digital and physical new age, commonly known as INDUSTRY , represents a paradigm shift for manufacturing on multiple fronts. Once solely focused on the execution of pre-programmed logic, machines and devices are now part of intelligent, autonomous networks capable of communicating and interacting with one another.