Thai factories must embrace Industry 4.0

Manufacturers must embrace technological advances to convert their physical machines to digital control in the age of Industry 4.0, says a global software firm.

Moving towards full automation is essential to avoid direct competition from low-cost labour and achieve mass customisation in marketing, manufacturing and management, said Saj Kumar, vicepresident for the Internet of Things (IoT) at SAP Asia-Pacific.

“Thai factories have the potential to transform from Industry 3.0, the use of computer and electronics in production, to Industry 4.0, helped by their past digital transformation journeys,” he said.

Industry 4.0 can be attained through a software-driven transformation using the power of sensors and the IoT.

Mr Kumar said Thailand has a strong manufacturing base but faces challenges from lower-cost manufacturing countries.

“Local manufacturers must quickly shift towards value-based manufacturing models through digital transformation,” he said.

Moving away from the traditional service industry that relies heavily on unskilled workers to high value-based using knowledge workers is also a must. Thailand needs to start delivering more data scientists or data analysts to push the country towards Industry 4.0, Mr Kumar said.

Data scientists use their data and analytical ability to find and interpret rich data sources, manage large amounts of data despite hardware, software and bandwidth constraints, merge data sources, build mathematical models using the data and present and communicate the data insights.

Mr Kumar said the IoT through the use of sensors will play an important role in forecasting preventive maintenance that may reduce a business’s period of disruptions and restore normal operations as quickly as possible, improving the reliability of working machines.

Research suggests that sensors for predicting machine failure and predictive maintenance could lower maintenance costs by 15% a year, he said.

Mr Kumar said Industry 4.0 also helps new business models that take advantage of digital technologies by moving away from just selling products to selling new types of services.

“Customers these days are no longer buying products to own a physical product, instead they want to have effective customer service,” he said.

SAP has more than 1,300 customers in Thailand, with the manufacturing sector contributing the lion’s share of revenue.

Oil and gas, industrial equipment, construction materials, consumer goods and retail are among the early adopters of Industry 4.0.

To transform successfully, Mr Kumar said manufacturers must fully embrace the capabilities of the IoT to connect products, suppliers, employees and customers to create smart mobility organisations.

The proliferation of IoT, cloud computing and big data analytics is empowering Industry 4.0.

SAP has earmarked €2 billion (75 billion baht) to invest in the IoT by 2020, Mr Kumar said.