SPEECH BY MR S ISWARAN, MINISTER FOR TRADE AND INDUSTRY (INDUSTRY), AT THE OFFICIAL LAUNCH OF JEP PRECISION ENGINEERING PTE LTD’S SMART FACTORY ON MONDAY, 13 NOVEMBER 2017, 9.30AM, AT SELETAR AEROSPACE PARK
Mr Joe Lau, Chairman, JEP Holdings
Mr Eric Zee, Executive Director, JEP Holdings
Mr Soh Chee Siong, CEO, JEP Precision Engineering
Distinguished Guests
Ladies and Gentlemen
INTRODUCTION
1. It is my pleasure to join you for the official opening of JEP Precision Engineering’s Smart Factory. My congratulations on this significant milestone for the company.
2. JEP has grown from its beginnings in 1990 to become a leading provider of high quality precision-machined products for the aerospace and oil & gas industry in the region. Today, JEP counts among its clientele leading global names such as aircraft landing and braking systems manufacturer Safran Landing Systems, Japanese machine tool builder Yamazaki Mazak, and American oil field services company Halliburton.
3. As a home-grown SME, JEP has set an example for its peers in the Precision Engineering (PE) industry. With support from A*STAR and SPRING Singapore, JEP has successfully transformed and digitalised its manufacturing operations. It is one of the first SME Digital Champions for the Smart Factory initiative under the PE Industry Transformation Map (ITM), taking a systematic and holistic approach to improving its overall productivity and reducing the amount of low skilled manpower. These important moves will enable JEP to remain competitive and unlock new growth opportunities in the future economy. I have just returned from Europe, in France and in many of the other economies, where this area of digitalisation continues to be the single most important point of focus for their respective manufacturing industries. So we are in good company and we are making good progress.
OUR COMPANIES MUST ADAPT TO THE CHANGING NATURE OF MANUFACTURING TO SEIZE NEW OPPORTUNITIES
4. Rapid technology advances and digitalisation are changing the complexion of manufacturing today. For instance, additive manufacturing is injecting greater speed, agility and flexibility into the product development and prototyping process. This has enabled shortening of supply chains, mass customisation and reduced time to market. At the same time, the Industrial Internet-of-Things (IIoT) allows real-time factory visibility, immediate and predictive equipment maintenance, as well as optimisation of energy usage across manufacturing value chains.
5. These Industry 4.0 technologies are changing the way companies compete and grow, enabling them to improve their productivity, build up new capabilities and provide new products and solutions to their customers.
THE PRECISION ENGINEERING SECTOR HAS MADE GOOD PROGRESS SINCE THE LAUNCH OF THE INDUSTRY TRANSFORMATION MAP
6. PE is the backbone for the manufacturing industry, as many of the technologies and skills needed to underpin advanced manufacturing are provided by this sector. In light of this, the PE ITM was the first manufacturing ITM to be rolled out in October 2016.
7. The aim of the PE ITM is to propel the sector’s output to S$42 billion by 2020 from S$32 billion in 2014. This will be done through pursuing new growth areas, adopting new digital technologies, and upgrading our workforce at all levels. The PE ITM will actively promote partnerships between MNCs and local SMEs, to build the latter’s capabilities and help them plug into the global supply chain. SMEs which are successfully qualified as core suppliers in such industries show markedly higher revenue growth.
8. The PE ITM targets to help 50 SMEs receive qualifications from MNCs as their core supplier in high-growth manufacturing industries by 2020. With 27 companies already qualified as of August 2017, we are more than halfway there. JEP is one of the SME beneficiaries from this Supplier Development Programme, now supplying key components such as landing gear systems and engine casings to the high growth aerospace industry in Singapore.
9. A key thrust for jumpstarting the transformation of the industry is the setting-up of smart factories enabled by digitalisation. The first smart factory was set up when the PE ITM was announced last year. Today, JEP officially marks the start of its own smart factory journey, bringing the total number of ongoing digital transformation projects in the industry to 10, of which three are MNCs, three are LLEs, and four are SMEs. This is the kind of spread of companies we want to support. We want the development and the growth in digitalisation to occur not just in our larger enterprises but across the spectrum, and most importantly, including the SMEs in our enterprise ecosystem.
10. I am heartened that companies at different stages of their development are embarking on such projects to strengthen their manufacturing competitiveness by building up in-house digital capabilities. Through these projects, it is expected that the companies will on average improve their productivity by about 30%. In the longer term, the digital capabilities of these companies would also serve as the backbone to enable innovation for new products, services and business models.
11. To support our industry in developing the capabilities needed for digital manufacturing, the Government has also set up Model Factories. Last month, A*STAR launched the Model Factory@SIMTech. The facility allows companies to experience advanced manufacturing technologies first-hand in a learning environment, as well as collaborate with stakeholders to test-bed and jointly develop innovative solutions. Through hands-on training in a real manufacturing environment, the Model Factory targets to train at least 700 PMETs in digital technologies by 2020. A second Model Factory will be established at the Advanced Remanufacturing and Technology Centre (ARTC) next year.
12. I am pleased to share with you that EDB has launched the Singapore Smart Industry Readiness Index today, in support of this larger digitalisation effort. The Index, developed by EDB in partnership with global testing and certification company TÜV SÜD, is a first-of-its-kind Industry 4.0 tool globally, designed to help manufacturers across all industries and sizes harness the potential of Industry 4.0. The Index provides a common framework to help companies deepen their understanding of Industry 4.0 concepts and evaluate their existing facilities, so as to support their efforts to deliver transformation initiatives in a systematic and comprehensive way. JEP was one of the companies that participated in a pilot, to ensure that the Index strikes a balance between technical rigour, usability and practicality.
13. Another key component of the PE ITM is to support our PE companies in their internationalisation plans. To support this, IE Singapore recently launched the Singapore Manufacturing Innovation Centre (SMIC) at the Sino-Singapore Guangzhou Knowledge City with Ascendas-Singbridge. PE SMEs that are keen to venture into China can consider tapping on the SMIC, which is a unique go-to-market platform that helps SMEs tap China’s rising demand for advanced manufacturing solutions.
14. To date, the SMIC has brought five Singapore SMEs with complementary capabilities together, enabling them to offer turnkey solutions and undertake larger projects in partnership with each other. The SMIC also provides dedicated business development support and leverages IE’s extensive market networks in China to identify business opportunities for our SMEs.
JEP’S SUCCESSFUL TRANSFORMATION HAS ENABLED IT TO REMAIN COMPETITIVE IN THE FUTURE ECONOMY
15. The launch of JEP’s Smart Factory showcases some of the key transformations we are targeting to implement across the PE sector. When JEP first started out almost two decades ago, its production floor space was only 10,000 square feet and it relied primarily on manual operational processes. In 2014, JEP made a key decision to relocate from Changi South to its present premises here in Seletar Aerospace Park, to be in closer proximity to potential customers. It also took the opportunity to expand and transform its business operations.
16. The new Smart Factory we are standing in today has a manufacturing floor space that is 20 times bigger, and is equipped with various smart technologies ranging from automated equipment and robotic systems that increase productivity and quality, to smart factory software which enables JEP to make data-driven decisions. In fact, some of the technology solutions developed under the Model Factory@SIMTech, such as the Overall Equipment Effectiveness Monitoring System (OEEMS), are implemented here in JEP. By monitoring and analysing the performance of all of JEP’s 90 machines, the OEEMS enables the company to improve machine utilisation by close to 30%.
17. Another technology implemented by JEP, in collaboration with Yamazaki Mazak, is the Flexible Manufacturing System (FMS) – a group of automated Computer Numerical Control (CNC) machines which are connected through a central control system and an automated transport system. The FMS has enabled JEP to reduce set-up time and machine downtime by approximately 25%. Many of JEP’s customers have been impressed by the new digital systems deployed at its smart manufacturing facility. This has in turn helped JEP secure higher value contracts with major aerospace Original Equipment Manufacturers (OEMs) for the production of flight-critical aircraft parts.
18. With the adoption of digital technologies, jobs in JEP now require deeper skillsets and have become less labour intensive. To meet this need, JEP is actively upgrading the skills of its workforce. Technicians are undergoing a series of in-house training sessions led by JEP’s production leaders to build the necessary capabilities to apply and operate smart factory technologies. New professional roles have also been created. I understand that JEP has groomed a team of roboticists who will be placed in charge of implementing and managing the robotic systems at its Smart Factory.
19. Ultimately, all this is about creating opportunities for our businesses and our people. One example of a JEP employee who has upgraded and upskilled along with the company is Mr Kenneth Koh, who joined JEP as a machinist in 1992 equipped with a National Trade Certificate qualification from ITE. Having excelled in his work, Kenneth worked his way up to become an Engineering Manager in 2008. In 2012, JEP enrolled Kenneth in the Workforce Skills Qualifications (WSQ) Specialist Diploma in PE under the Master Craftsman Program. He has since been promoted to Senior Manager and is in charge of managing productivity improvement tools and techniques in the Smart Factory.
20. I want to summarise by saying that we have an important national effort to transform all our industries through the Industry Transformation Maps (ITMs). And through the ITMs, we will enable our companies to sustain their competitiveness and growth by adopting key technologies and processes, as well as to create sustained and attractive job prospects and careers for our people. We look forward to working closely with all industry players in order to realise this vision for our economy in the years ahead.
CONCLUSION
21. Once again, my deepest congratulations to JEP on the launch of the Smart Factory today. JEP’s Smart Factory will serve as a showcase model factory for other SMEs keen to harness digital and advanced manufacturing solutions for themselves. The Government remains committed to supporting our companies in their journey of transformation and internationalisation. And with the formation of Enterprise Singapore, which will bring together the strengths of SPRING and IE, with a more holistic and integrated effort to support our companies, we believe we will be able to achieve significant progress.
22. I look forward to more success stories arising from the transformation of our companies, through leveraging innovation for long-term competitiveness.
23. Thank you.