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Industry 4.0: How Asia Can Benefit From The Next Industrial Revolution

PROFESSOR ILIAN MIHOV, INSEAD

Developing Talent For The Global Marketplace

In the past 40 years, Asia has become one of the world’s most important regions for industrial manufacturing. This development started with comparatively simple manufacturing processes, i.e. of textiles and clothing. But this was only the beginning of a real success story. At breathtaking speed, Asia was able to set up a modern industrial infrastructure and educate successive generations of highly qualified engineers who contributed to competence and knowledge building. With this approach, Asia managed a thorough structural transformation within only a very short time. This combination of know-how, speed and a high degree of adaptability is the outstanding characteristic of the successful industries in Asia.

Today, leading Asian industries are well-known for their highly sophisticated products like computers, smart phones, TV sets, and cars which are benchmarked against global competition. More and more Asian economies no longer draw their competitiveness from low-cost labor but from the competence and know-how of the workforce. The reward for these efforts: fast-growing economies, increasing prosperity and higher standards of living in these countries. With more and more qualified jobs and higher wages comes the pressure to find new ways to differentiate and drive productivity in the highly competitive manufacturing industry. How can this development path continue to be followed in order to further grow the economy and achieve a higher standard of living for everyone?

The key trend is Industry 4.0. It is not only the next step in automation, but will also substantially change how we work: Machines are becoming more and more intelligent and will be able ? to a large extent ? to control and optimize themselves and the production process in which they are involved. The communication and collection of information, e.g. via the cloud, will drive this beyond the direct environment of the machine and along the value chain. Robots that cooperate with people will be able to learn and reproduce simple process steps simply by watching. Information will be available and processed in real time along the value chain. Products will provide data while they are being used in order to accelerate learning and build up knowledge, bringing additional dynamism from end to end through all processes.

It is obvious that Industry 4.0 is not only a revolution for the machine, but will also significantly change job profiles and the skills required. New players and new business models will emerge, while others will most probably disappear. This fundamental and necessary change cannot be driven by the companies alone. Governments must be ready to help businesses and citizens successfully manage the transition. This is what we learned from the previous three industrial revolutions which were likewise driven by the need for productivity gains.

For those who can lead or follow the change, Industry 4.0 is an excellent opportunity to gain or maintain competitive advantage. Let me give you an example from Infineon. In the final testing of our products, right before they are shipped to our customers, we not only check the functionality, but also record massively detailed data and use data analytics to optimize output, performance and quality by tuning individual process steps along the entire value chain ? a core element of Industry 4.0. In the past it took us a lot of effort to analyze the huge bulk of data as it had to be collected and evaluated manually. In addition, the data was not always complete and extremely difficult to allocate. In other words, a necessary, yet not very effective process. We have set up a project to retrieve all data from chip manufacturing to final testing, and can thus track the information down to a single chip. An automated analysis and reporting system across locations around the globe allows us to detect and address problems very quickly and at the same time continuously improve the complete production process ? in a way that would not otherwise be possible without this new approach. The advantages are obvious: faster ramp-up, higher quality, better understanding of processes and finally more know-how. This allows us to accelerate the R&D Roadmap, a key success factor in our industry and for products used in applications with high safety requirements such as assisted driving, where quality is fundamental to achieve “Zero Defect”.

Singapore has become a major center for our advanced final testing activities. Almost half of the testing for our automotive products is performed here, in connection and close collaboration with factories in Europe and Asia. In Singapore, Infineon benefits both from the strong manufacturing environment as well as the highly educated, diverse workforce.

When Industry 4.0 becomes a reality we will experience the next level of global competition. Infineon in Singapore has managed to develop a differentiating position in the international manufacturing network. It is built on local strengths and close collaboration with partners around the globe with real-time connectivity. This example shows how Asian industries can secure their competitive edge and remain an important player in the global value chain.

I am sure, with industrial knowledge and competence, but above all with agility, speed and adaptability to economic changes, that the leading Asian industries are today in an excellent position when the race begins.

Dr. Reinhard Ploss is the CEO of Infineon Technologies AG.

YOU MIGHT BE INTERESTED IN:

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No Ordinary Disruption: The Forces Reshaping Asia

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Mike Corbat, Citi

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Industry 4.0: How Asia Can Benefit From The Next Industrial Revolution

PROFESSOR ILIAN MIHOV, INSEAD

Developing Talent For The Global Marketplace

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