Smart manufacturing is important to small and medium-sized enterprises (SMEs) because such businesses account for between 95% and 99% of every major country’s manufacturing sectors, Manufacturing Enterprise Solutions Association vice-chairperson Dr Ananth Seshan said during the organisation’s year-end function on November 17.

As such, he said, it was vital for SMEs to implement technologies and processes of the Fourth Industrial Revolution (4IR), but highlighted several reasons why this was a challenge for SMEs.

“It is very fair to say . . . that if SMEs are not going to be participating in the smart manufacturing journey, or in the [4IR, then] what is the big deal of 1% or 2% of the entire manufacturing population participating in [4IR],” Seshan stated.

He noted that although manufacturers have been talking about 4IR for the past seven years, to date, few SMEs have entered the fray.

Having noted this disconnect between large manufacturers and SMEs, Seshan said that going forward, attention needed to be focussed on SMEs and their part in the 4IR for the sake of reviving the global economy, regardless of the Covid-19 pandemic.

“The pandemic has made it even more important. But even before the pandemic, it was important for SMEs to participate [in the 4IR].”

However, most SMEs are not using 4IR technologies because, Seshan said, “as usual” the larger players are the leaders in any revolution, and in the case of the 4IR, investments in excess of $5-trillion have been mainly made into machine upgrades, infrastructure, robots and automation equipment by large manufacturers.

As a result, he said, the productivity of labour forces improved, which means “labour has been retrenched and therefore the number of parts per labour has increased”.

“It is not because labour’s productivity has improved. The productivity of labour has improved because of the retrenchment of labour,” Seshan added. This has introduced structural unemployment in the short term.

Nonetheless, he said the investment in capital by the large players has also introduced a productivity gap between the large players and the small players, resulting in SMEs becoming less competitive as they have been “left wanting” in terms of productivity.

PROACTIVE SME PATH

However, Seshan said SMEs could leverage four gaps in unrealised capacity – ecosystem drag-along, leapfrogging, workforce empowerment and collaboration – what he describes as “handholding”.

Ecosystem drag-along is aimed at building capability in two ways – to create a platform for SMEs to do commerce globally and to create the capability to provide adequate technology to participate in the global supply chain.

Ecosystem drag-along is the concept of larger companies trying to “hand-hold” the smaller suppliers to upgrade technology, to become better and to adopt 4IR technologies by investing in platforms and workforce empowerment of suppliers to bring in new technology in SMEs, he said.

Leapfrogging involves implementing new technology off an analogue kind of foundation, thereby propelling companies using old technology into the 4IR with up-to-date and modern technology.

This includes going from processes using paper records to those using digital records; from silo-based manufacturing to a connected digital thread; delayed visibility to instantaneous visibility; uncertainty in decision-making to informed decision-making; and a reactive response to proactive response.

These were the various ways in which SMEs could leapfrog without making major investments, especially for labour intensive companies, said Seshan.

In terms of workforce empowerment, he pointed out there were three sides to this.

Firstly, Seshan said jobs were going to be lost. “The repetitive, manual tasks are being replaced by robots and automated systems. That is going to happen for sure. But then there are two other types of activities, the biggest chunk [being] cooperative activities where humans and machines are going to be collaborating and cooperating in manufacturing.”

He said that, as humans are replaced by robots and automation, it was critical to empower human workforces with digital attachments and wearables and ensure they found new machinery-relevant roles, such as programming and maintenance.

“All of these new automation and robotics seen in the market need to be managed, controlled, reprogrammed. You need special skills . . . creating new jobs,” said Seshan.