German semiconductor giant Infineon Technologies is spending 70 million euros (S$105.2 million) in the five years to 2021 to develop a "smart factory" at its backend manufacturing plant in Singapore.
The plant will develop a smart enterprise programme entailing digital, horizontal and vertical integration of its manufacturing value chain, guided along by the principles of Industry 4.0.
Industry 4.0 is marked by extensive automation, digitalisation and data exchange in manufacturing technologies; manufacturing is carried out with intensive use of Internet of Things (IoT) technology, cloud computing, smart messaging, robotics and computers.
Andrew Chong, president and managing director of Infineon Technologies Asia Pacific, said Infineon will use its real-time global production network, end-to-end digital integration and manufacturing automation in its Singapore operations.
"Singapore is our choice location as a pilot site, as we already have the foundation and cross-functional competence in smart manufacturing. We can leverage a conducive research and development (R&D) ecosystem and supportive policies for high value-added manufacturing in Singapore."
He told The Business Times that if the pilot phase for horizontal integration (involving the Singapore location and five partner sites) is successful, the company will bring the rest of its partner manufacturing sites under its global production network.
He noted that the company's Singapore operation is the first backend manufacturing site to integrate vertically.
"We will progressively increase the level of automation, connectivity and control within the factory, where we can gain the most in terms of productivity and quality."
Mr Chong added: "Industry 4.0 is not only the next step in automation, but will substantially change how we work; machines are becoming more intelligent and will be able - to a large extent - to control and optimise themselves and the production process in which they are involved.
"The communication and collection of information via the cloud, for example, will drive this beyond the direct environment of the machine and along the value chain."
He said robots that co-operate with people will be able to learn and reproduce simple process steps simply through observation.
"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."
Noting that the first robotics and Automated Guided Vehicles (AGVs) were recently deployed in Singapore, Mr Chong said robotics and automation will also be introduced in Infineon's loading and unloading, and packing processes.
The German company has had a long association with Singapore, which is its Asia-Pacific headquarters.
Incorporated in Singapore as Siemens Components Pte Ltd in 1970, the company was renamed Infineon Technologies Asia-Pacific Pte Ltd in 1999.
It has around 2,000 people on its Singapore payroll, and specialises in automotive, industrial power control, power management and multi-markets, chip card and the security segments of the semiconductor industry.
Its Singapore operations contributed 3.3 billion euros - nearly half - of the company's global revenues in the 2016 fiscal year.
Mr Chong noted that digital integration began with the introduction of a paperless manufacturing execution system and real-time equipment monitoring.
An automated scheduling and dispatching system improved overall equipment effectiveness while also eliminating manual and repetitive tasks.
Connected mobile devices, recently introduced, push real-time notifications to materials operators and help eliminate error-prone verbal communication and unnecessary movement on the shop-floor.
Mr Chong said smart manufacturing initiatives have directly affected the job scopes of engineers, technicians and operators.
The introduction of new workflow, technology and robotics for example, requires new skillsets in trouble-shooting and operating a variety of man-machine interfaces.
This lean, fast-paced production means employees have to think on their feet, be technically competent to make the right calls and to have an aptitude for continuous learning, he said.
Mr Chong told The Business Times that introducing smart-factory initiatives has paved the way for the elimination of non-value added and error-prone manual tasks.
"This changes the workers' job scope from labour-intensive work to working with machines and IT systems. Through on-the-job training and coaching, our workers acquire new and valuable skills. They are also able to allocate more time to qualitative matters such as producing ideas for improving quality and problem solving."
Lim Kok Kiang, assistant managing director of the Singapore Economic Development Board, said his organisation was excited to partner Infineon to develop a global, connected smart factory with Singapore as the lead location for its semiconductor test manufacturing operations.
"The adoption of advanced manufacturing technologies is a critical next step for Singapore, and a key enabler will be our workforce.
"We are therefore working closely with companies such as Infineon to identify the skills and training required by Singaporeans to ensure they can take on good and exciting job opportunities as we transform our manufacturing sector," he said.
This article was first published on March 15, 2017.
Get The Business Times for more stories.