The report offers new insights and findings emerging from the Global Smart Industry Readiness Index (SIRI) Initiative.
The Singapore Economic Development Board (EDB), in partnership with the World Economic Forum (WEF), has launched the 2022 edition of the Manufacturing Transformation Insights Report, which offers new insights and findings emerging from the Global Smart Industry Readiness Index (SIRI) Initiative. The initiative aims to build the world’s largest data sets and benchmarks on the current state of manufacturing globally by accelerating the adoption of SIRI as the international standard for Industry 4.0 benchmarking and transformation.
The report is an outcome of an 18-month WEF-EDB partnership and draws on data from close to 600 manufacturing companies across 30 countries to outline the current state of industrial transformation across different sectors. It presents detailed case studies on how different stakeholders—ranging from manufacturers to industry associations and governments—are actively leveraging the SIRI program to accelerate their digital transformation journeys.
Jeremy Jurgens, Managing Director of the World Economic Forum, said, “The Global SIRI Initiative is one of our fastest growing initiatives, having scaled internationally to more than 30 countries over the last 18 months. Through this report, we hope to revolutionize the way by which the global manufacturing community approaches digital transformation; from one that is anecdote-based to one that relies on a standardized methodology and is supported by quantitative insights.”
“Our partnership with the Forum has established SIRI as an independent, international benchmark to accelerate the pace of transformation for the manufacturing sector around the world. The insights and real-life case studies presented in this report will provide public and private sector stakeholders with the ability to develop tailored interventions and uncover new opportunities that digital transformation can offer,” said Dr. Beh Swan Gin, Chairman, EDB.
To support the international scale-up of SIRI, a new non-governmental, not-for-profit organization—International Centre for Industrial Transformation (INCIT) – has also been established since May 2021. As a neutral, independent entity, INCIT will work with both public and private sector manufacturing-related organizations to catalyze and support industrial transformation across geographies and industries.
“We are confident that the findings from this 2nd edition of the Manufacturing Transformation Insights Report will modernize the way by which the global manufacturing community approaches digitalization,” said Raimund Klein, Chief Executive Officer, INCIT. “As we progress into the post-COVID new normal, we invite manufacturers—of all sizes and industries—to take decisive action by leveraging the SIRI Programme to set themselves on the right trajectory for transformation.”
1. Semiconductors, Electronics and Pharmaceuticals lead the 2022 Maturity rankings, with Logistics making gains
In spite of their frontrunning positions, these top three industries are not shielded from present-day challenges like the ongoing value-chain disruptions, global chip shortage and industrial decarbonization. These developments will reshape the global manufacturing landscape and companies from these leading sectors—as longstanding pioneers of innovation and adopters of new concepts and technologies—must confront these topics proactively to redefine them into opportunities for all.
The top five most digitally mature sectors in 2019 and 2022
2. A high level of diversity exists across various industry sectors; more tailored approaches are required to better support industry transformation
Governments and solution providers tend to apply “one-size-fits-all” approaches in supporting manufacturers on their digitalization journeys, such as state-level subsidies for the adoption of new automation equipment or industry-led forums that study use cases of global companies. The impact and efficacy of such blanket interventions has been limited.
3. The most digitally mature companies are seeking to integrate their already digitized processes and systems, while the average manufacturer is still looking to digitize existing operational processes
New digital and hardware technologies, coupled with integrative design principles, have opened a world of possibilities for manufacturers. Over the past two years, most manufacturers have taken first steps towards digitalization in response to pandemic-related challenges. Companies which have started earlier are now progressing to the next level of integrating their digitized processes.
4. Top companies have focused significantly on Connectivity to enable greater integration and insights generation
In today’s digital economy, connectivity is fast joining automation as a key driver of success. Top companies acknowledge the importance of Connectivity. Many have already established interoperable and secure networks within their production sites, where equipment, machinery and computer-based systems can interact and exchange information with few restrictions.
5. Manufacturers should put more emphasis in refreshing and broadening their strategies for digitalization and workforce retraining
With the advent of digitalization, job scopes and work arrangements are evolving rapidly. As manufacturers formalize their digitalization strategies to upgrade their manufacturing and enterprise processes, there is a need to also re-examine the way they organize their workforce and workspaces as remote working becomes more prevalent in the digital era.
6. Productivity- and quality-linked KPIs are key focus areas of MNCs and SMEs, but flexibility and speed are fast-emerging areas of priority
Exponential demand growth, changing consumer patterns and chronic supply-chain disruptions during the pandemic have prompted some groups of companies to shift their focus to flexibility and speed-related KPIs to strengthen adaptability and resiliency. Initiatives that demonstrate such shifts include efforts by manufacturers to reorganize their supply chains based on regional geographical markets, practicing dual/triple sourcing and adopting hybrid inventory management models that include elements of both “just-in-time” and “just-in-case” strategies.
7. Data confirms SME-dominated sectors are less mature than MNC-dominated sectors
The bottom five-ranked industries are dominated by SMEs. While this might not surprise many, the SIRI insights validate this long-standing narrative. Through the COVID-19 pandemic, SMEs continue to face intense short-term business pressures, limited expertise and tight resources, all of which hinder the adoption of new advanced manufacturing processes and technologies.
8. MNCs and companies ahead of the maturity curve are more likely to plan for the long term
Companies that are larger or further ahead in the digitalization journey tend to think more long term than smaller companies or those still early in the journey. In time, this will widen the maturity divide between those that are ahead and resource-rich and those that are not.