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Digitalisation Fast-Forwarded by Pandemic Disruption

ASPRI2122_ED04-Pix01Digitalisation has been one of the much-heralded top three business trends of the last few years. But companies in Singapore, especially small and middle-sized enterprises (SMEs), had been slow to fully embrace digital transformation (DX) until the pandemic in 2020 disrupted businesses.

Strategies well thought out months before Covid-19 became irrelevant, and businesses struggled to navigate uncharted territories. It was a clarion wake-up call for all.

Suddenly, technology has emerged as the saviour. Those who had some form of digital structures and processes in place fared better, while the less prepared straggled along.

Companies in Singapore were, perhaps, in a better position as the Government had been urging them to restructure and transform well before the pandemic hit.

Economic restructuring has been driven by the Future Economy Council, which launched the Industry Transformation Maps in 2016 to get industries to embark on their transformation journeys amid structural shifts in the global economy.

The Energy & Chemicals Industry Transformation Map was launched on 21 October 2017 by then Minister for Trade and Industry, Mr Lim Hng Kiang, to “steer Singapore’s future development as a globally competitive and leading Energy & Chemicals hub”.

In the same year, the SMEs Go Digital programme was launched by the Infocomm Media Development Authority (IMDA) to make going digital simple for SMEs. According to IMDA, more than 75,000 SMEs have adopted digital solutions from the programme.

Sector-specific Industry Digital Plans (IDPs) have been gradually rolled out “to provide SMEs with a step-by-step guide on the digital solutions to adopt and relevant training for their employees at different stages of their growth”.

Even before ASPRI formally embarked on its digitalisation initiatives to help members adopt digital technologies in 2018, it had urged members to take a hard relook at their operations to be better prepared for a disruptive future.

In collaboration with the Singapore Institute of Manufacturing Technology (SIMTech) and other organisations and trade associations such as SGTech, it sourced for available technological solutions that members could adopt for their onsite operations. ASPRI was able to help members automate some backend operations, such as Administration, Finance and Human Resource.

In 2019, it formed the Digitalisation, Innovation & Technology Adoption (DITA) Workgroup to help drive the DX journey as more member companies began to adopt digital solutions at their workplaces.

On 28 February 2020 it organised its first seminar “Digitalise Your Business for Higher Profitability” to help members better understand the need to transform and adopt digital-supported work solutions.

Over the next 12 months another six webinars, workshops and sharing sessions were organised for members. Among them were two “Harnessing Technology, Transforming Businesses” series on 28 November 2020 and 27 January 2021 where member companies shared their digital experience. Universal Solution Pte Ltd shared how it had used the Microsoft Office 365 Cloud to transform the way the company worked remotely during the pandemic while JEL Maintenance Pte Ltd (JML) spoke about the adoption of Virtual Reality (VR) and drone technology for the replacement of flare seal on top of a 150-metre stack at a refinery.

The pivotal event was an SMEs Go Digital validation workshop on 30 July 2020 facilitated by the IMDA to provide feedback on its IDP for the process sector. It provided the impetus for the DITA to begin work on an IDP for the process sector. Arranged by the DITA, the workshop was an important follow-up to an earlier IMDA-facilitated session on 27 July, conducted for the Process Productivity Council members to gather their views and inputs.

IMDA’s IDP consists of a 3-stage guide to digital adoption. Generally, most of the participants in the second validation session for ASPRI felt comfortable with the Stage One proposal. They agreed on those aimed at streamlining operations and enhancing capabilities, such as Digital Wearables for Workers’ Health and Safety, e-Permit-to-Work, e-Procurement, Equipment Management, Field Management, Project Management, Materials Management and Workforce Management.

On 26 August 2021, the Process Construction and Maintenance (PCM) IDP for the Process sector was launched by Ms Low Yen Ling, Minister of State for Trade & Industry and Ministry of Culture, Community & Youth (MCCY) at a virtual engagement session attended by more than 150 representatives from some 90 companies.

Developed with the support from Enterprise Singapore (ESG) and IMDA, the IDP provides members with a guide to assess their digital readiness and identify suitable digital solutions to accelerate their growth.

In his welcome speech, ASPRI President Charles Quek said that as the pandemic continues to challenge the process sector, members will need to adapt themselves and “be digitally enabled in our internal and work processes to stay relevant and capture future businesses”. He urged them to go through the PCM IDP and “get started on your digitalisation journey today!”

In her address to the members, Minister Low said, “Digital transformation is the key - not just to surviving, but to thriving in post pandemic world.” She encouraged members to take the first step in digitalisation, “if you have not already started on your journey”.

“To stay relevant and competitive amid a disruptive environment, companies need to be adept at harnessing technology for greater efficiency, productivity and optimal resources. That way, they can better position themselves for recovery and seize new opportunities for growth,” she added.

She cited three benefits of the IDP initiative:

First, the implementation of automation and streamlining of workflows, through the adoption of digital tools, can increase efficiency and productivity, and reduce costs.

Second, by leveraging on digital tools companies can enhance their product and service offerings. This is especially important in the process sector where safety at plant sites is of paramount importance.

Third, digitalisation creates the opportunity for companies to redesign jobs and make them more compelling and more attractive to younger Singaporeans.

The Minister also gave examples of two ASPRI member companies that have embarked on their digitalisation journey. She shared that Shing Leck Engineering Service Pte Ltd had in 2019 implemented an Inventory Management System which enabled them to digitise their asset tracking operations.

“In the past, they have to track it manually which involves a lot of time and manpower. By implementing this Inventory Management System (IMS), it gives them full visibility of their assets deployed across various locations and helped them better plan the procurement of replacements for key assets. By reducing time spent on manual asset tracking, Shing Leck’s employees were able to focus on delivering higher value-added services to their clients instead,” Ms Low said.

In addition to the IMS, Shing Leck had also adopted an Enterprise Resource Planning (ERP) solution to integrate all business functions spanning accounting, procurement, project management, risk management and compliance, as well as supply chain operations.

She said that with these initiatives, Shing Leck “is set to increase its current revenue and operating margins by over 30%. This is in addition to considerable manpower time savings gained from reduced paperwork”.

The second company highlighted by Minister Low was CYC International Pte. Ltd., which pioneered the use of robotic systems to automate tank cleaning and painting works.

“These robotic systems enhance worksite safety by eliminating the use of elevated platforms such as scaffolds. This has reduced their manpower needs for such works by about 60%, and project duration by around 20%,” she said.

Besides the robotic solution, CYC had also adopted a Human Resource (HR) and Payroll System to digitalise and track employee attendance. It has enabled CYC to automate payroll calculations with no errors, and improve the productivity of its HR department and its employees by up to 80%.

The company has also adopted a Workforce and Project Management Mobile Application to disseminate job schedules and provide project updates almost instantly. When the pandemic hit, CYC was able to adapt quickly to the new work arrangements and inform every employee of their work schedules in advance via the mobile application. By having an overview of its manpower allocation, it is able to better optimise resource allocation. As such, the company “has seen an improved business operations efficiency by up to 20%”.

Ms Low said, “We have seen the tangible benefits that digitalisation has brought to these companies. For businesses that want to stay competitive and relevant in the new normal, the time for embarking on their digital transformation is now.”

The IDP consists of 2 roadmaps & 3 stages
The PCM IDP comprises two roadmaps: the Digital Roadmap charts out different digital solutions SMEs can adopt at each stage of their development, while the Digital Training Roadmap offers a corresponding training roadmap for employees. The former includes specially curated solutions such as Human Resource Management System, Inventory Management System, Project Management and Job Scheduling Mobile Application.

As part of the SMEs Go Digital programme, the IDP provides a step-by-step guide on the digital solutions that SMEs can adopt at three stages of growth:

• Stage 1 gets SMEs started on their digitalisation journey, and lists the basic digital solutions that help to streamline operations and optimise the use of resources. Solutions that PCM companies can adopt include Workforce Management, Inventory Management and Project Management solutions.
• Stage 2 provides solutions for SMEs that are ready to scale up their digitalisation efforts. These solutions enable them to leverage IoT and data analytics to enable better planning decisions, thereby optimising the use of resources, be it manpower or equipment. An example is the integrated inspection system, which employs sensors and cameras to enable remote inspections at multiple plant sites concurrently. This increases efficiency and reduces the need for on-site manpower.
• Stage 3 identifies advanced technologies that SMEs can adopt to strengthen their competitive edge. For instance, robotic solutions can perform laborious and repetitive tasks such as blasting and painting, cleaning and disinfecting. This provides employees the opportunity to take on higher-value roles and reduce risk of workplace accidents.


Plant owners take the lead
Alongside this, the DITA Workgroup began working on a Digitalisation Readiness Index (DRI) using the BPPII to help members assess their existing level of digitalisation so that it could gain an understanding of their state of readiness across various business functions. It will help to benchmark companies against the industry level of digitalisation to assist them in their digitalisation plans and implementation.

As part of its concerted effort to drive outreach to members to tap on the IDP, the Association had earlier engaged a full-time programme manager, Mr Ethan Chia, to join ASPRI’s Secretariat team.

Before the launch of the PCM IDP, an online conversation was held with the Chairman of the Singapore Chemistry Industry Council’s Advanced Manufacturing (SAM) Committee, Mr Tom Madilao, to share his insights on some of the issues faced by the industry and what could be done to help bring member companies’ capabilities to the next level. He was joined on the panel by DITA’s two co-leads, Mr Danny Chua, Secretary, and Mr Steven Nah, Treasurer, of the ASPRI 13th Executive Council.

They shared their perspectives on the challenges facing ASPRI members’ digital journey, the existing state of development and what they hoped to see happen.

Plant owners have had a head-start in their DX journey. The Singapore Chemical Industry Council (SCIC) set the wheels in motion with the formation of the SAM in 2017 with Mr Goh Koon Eng, Vice President of Commercial for Chevron Oronite, as Chairman and sponsor.

Mr Madilao, Technical Services Manager at Chevron Singapore, is currently the SAM Chairman. He said SAM is trying to help ensure that the foundation in transformation is understood so that companies are better equipped to evaluate technology that may or may not bring them value.

He shared that many plant owners have been on this journey early because of the industry’s rapid changes that drives the need for DX. And it has been especially evident during the COVID pandemic.

He said the pandemic has laid bare the critical importance of digital technology in business sustainability. With border closure, digital tools have enabled specialists worldwide to perform troubleshooting and remedial tasks remotely.

“The Covid-19 pandemic has accelerated the use of technology in our work processes. We can have our technician in another location wearing smart glasses looking at the things that they typically look at physically. They go through the details and fix the problem. This is done during turnarounds, in projects for factory acceptance tests and in many other troubleshooting related areas,” said Mr Madilao.

He pointed out three important elements that have to be considered in a DX journey.

“The most important in my view are people and culture in any transformation. Second is the business processes and how we operate. And the third is technology.

“I never worry about technology per se, as it is an enabler and is easily available. I worry most about how we can change people’s mindset, how we can change culture. Because the transformation will impact a lot of the people in the industry,” he said.

Explaining why transformation touches a lot of people culturally, Mr Madilao gave an example of using the Best Productivity Practices Implementation Index (BPPII) tool. The tool is designed to assist in planning jobsite activities and making the data available on a dashboard to boost productivity in construction and maintenance.

He said, “Many of the things that took a couple of days to do with Excel can be accomplished in just a couple of hours by using BPPII. But if you don’t manage the people well, there will be this sense of fear that, ‘Oh, my goodness’, if I do this in two hours, what am I going to do for the next two days?’

Such fear can pose challenges for companies trying to adopt productive processes to improve the efficiency of their operations.

It’s not only about technology
Contrary to popular perception digitalisation is not only about technology. While we are often taken in by all the shiny new devices, like sensors, wearables and markers, DX should not begin with technology.

“The intent of digitalisation is sometimes easy to miss because we can be overwhelmed with just so many solutions that are out there. Where we want to make sure the members are in sync is really the intent. Why are we doing this? Is it because it’s fashionable or is it because there are some processes that can help member companies improve?” said Mr Nah.

ASPRI has been helping members to explore and expand their knowledge of digitalisation - what is digitalisation, why should companies adopt it, what is involved and what do they have to do to enjoy the benefits of digitalisation - even before looking at some of the digital tools that are available.

Asked about the percentage of buy-in from member companies for DX, Mr Chua indicated that it’s about 50%. He said for the non-committal group of members, DITA may have to realign its strategy to get them on board.

By getting the entire community involved, it is ASPRI’s hope that someday digitalisation will be embedded in the PCM industry, much like safety.

“We take pride in our industry because we believe that our safety standards are a lot higher compared to other sectors. Safety has become second nature with every employee and every organisation, and we are well known for that. With digitalisation technology adoption, we are moving the same way as we have done for safety, building up that kind of culture. It’s not something that can be changed overnight. We have got to start in a very progressive manner. You start with one and hopefully that one will influence another two. This is the kind of progression that we are actually looking at. Perhaps, a kind of herd mentality,” said Mr Chua.

Adding, Mr Nah said, “The top six PCM contractors in Singapore are, perhaps, already the front runners in the DX journey. DITA is trying to encourage our larger members, which we can consider as the second tier, to emerge from the rest of the pack to join the front-runners. Perhaps, like a second wave.“

“So Danny and I are part of this movement that aims to help equip as many of these members as possible to step up to their potential.”

Having to wrestle with Covid-19 and the disruptions it has caused to manpower deployment and day-to-day operations may have forced many companies to put everything else on the backburner.

“This is something that we don’t encourage. In fact, we are telling our member companies it is because of such challenging times that you have got to relook at your business model, not to backpedal. You’ve got to continue to rethink your business model and see whether there are technologies available that can effectively provide a substitute or an alternative solution to your shortage of manpower,” Mr Chua added.

Pilot programme to gauge process sector readiness
In preparation of the PCM IDP, a pilot was conducted involving over 10 companies ranging in size from under 100 to 300 employees using two solutions identified for them to implement, namely project management and workforce management.

The aim was to find out about the readiness of these sample companies. It would require the companies to be indexed and categorised.

“We decided to use the Best Productivity Practices Implementation Index (BPPII) to gauge our member companies on where the companies were as far as technology or digitalisation adoption is concerned. With the index we can categorise the companies into level one, level two and level three.”

“Through the pilot we realised that different companies have different preferences stemming from the fact that they all have different needs depending on their trade or service,” Mr Chua said.

Developed by the CII (Construction Industry Institute) based in the University of Texas, the BPPII provides:

• A list of the essential practices that need to be planned and implemented in construction projects, maintenance activities, shutdowns, and turnarounds; • A checklist that determines the level of planning and implementation of these best productivity practices; and • A list of strategies to achieve higher implementation levels of best productivity practice.

With the index, DITA aims to bring more members on board and at the same time lift those at the lowest level up to a higher level. It is not a lineal progression. By doing this it can also offer specific solution recommendations for the three different levels in line with their requirements and capabilities.

“Although we have a three-stage approach, it doesn’t mean that every company must go through stage one before they go to stage two or three. It all depends on the individual company, where they are, what is their style, and how far do they want to go. There will always be solutions out there in the market for these companies to adopt,” said Mr Chua.

“With project management, we are looking at some type of tracking system where we can actually quantify the progress of each project or job. Going forward, we intend to gather data of more member companies and understand where the constraints are. So that with the feedback we will be able to plot them out and have a better understanding what is actually happening on the ground,” said Mr Chua,

With the data, companies will also be able to better understand certain concerns or issues, which will come in useful to prepare them for future projects. It will help them to take special note of or avoid areas that should be addressed. The data collected can also be shared with plant owners so that they too will have a better understanding.

As the BPPII is being used by major plant owners, “in the near future, we could all sing (sync) in the same code”.

On including workforce management in the pilot, Mr Chua noted, “It’s all about trying to plan and allocate the manpower resources in an optimum way. That means that we do not want to rely on hardcopy, writing down names for deploying people. Using digital technology, we will be able to broadcast to all employees to inform them where they will be working next week, so on and so forth, which area and which supervisor they are going to report to.”

The pilot programme has helped member companies to better appreciate digitalisation and the solutions available.

“We are spoilt for choice. Truth be told, there was even one point in time when I felt overwhelmed, because I was talking to different vendors who were trying to sell their solutions to us. That was a very good start. Our members are now fully aware that there is actually a lot of technologies that are available. It’s a question is whether you actually have the need and the willpower to want to implement them,” said Mr Chua.

Companies also need not worry about training for their staff. ASPRI has a workgroup that looks after skills training for member companies, with the objective of “bringing members closer to share, learn and grow together”. Furthermore, the ASPRI-IPI training integrated centre has the capability to provide the necessary support. There are also many Workforce Skills Qualifications (WSQ) programmes available, in addition to vendor training support.

Digital service model – better for projects
While it would appear that the digital service model would be more appropriate for maintenance since it is repetitious rather than projects, the DITA co-leaders differed.

“With projects, the opportunity is greater, because there’s a continuum of work involved from beginning to end. And so you kind of know the boundaries in terms of the timeframe. And you can actually execute your work more smoothly and successfully from the start of the project to the end with an effective digital system. So, I actually think that the opportunity is greater for us to digitise, to automate, to transform when you talk about new projects,” said Mr Nah.

For Mr Chua, it is both a yes and no. “When I say yes, you have probably answered that question because of certain repetitive jobs. Now, the reason why I say sometimes it is no, it’s simply because even though the nature of the job sounds similar and repetitive, in actual fact, during the execution, different sets of problems can arise.”

“So it’s not a one size fits all, I give you an example of the trade that I am in. We are doing cleaning, right. So of course, cleaning is very generic and seems very easy. But then again, the structure of the tank, the products inside the tanks, these are the kinds of combination that make the job very complex. Fundamentally, you can eradicate a lot of uncertainties, or simplify the complexities while doing maintenance, but there will always be certain elements of uncertainty that can kind of like throw you off balance.”

Data collection and data sharing
One of the key advantages of digitalisation is the ability to share data instantaneously. While sharing of data between sub-contractors and plant owners can be mutually beneficial, what data should be collected and who it should be shared with have broad implications especially with increased scrutiny over security with the recent spike in high-profile cyber-security attacks.

“Companies like Danny’s will now digitise in the sense that they will collect data to do two things, one to help improve their internal processes, and two, to actually have meaningful discussions with the plant owner representatives on how they can jointly do better.”

So, I think there is an opportunity for both contractors and plant owners to agree that the data that has been collected can be used jointly. We don’t want instances where contractors collect their own data and plant owners collect their own data, but we don’t talk, we don’t discuss,” Mr Nah.

As to what data can be shared, Mr Madilao suggested that it would likely be operational data - things related to planning. “If we want to plan for turnaround, of course, the plan will be shared with contractors. But there are certain data that is unique to us that under our data protection policy, we cannot share.”

Leadership is key
There will always be solutions in the market for companies to adapt to adopt.

“Tom has rightfully pointed out that the challenge here is changing the culture and the mindset of our member companies or the plant owners,” said Mr Nah.

But in any organisation, nothing moves without the boss saying “go”. For truly transformative digitalisation to succeed, the C suite has to drive the buy-in from its people, he added.

Sharing his view, Mr Chua said, “You can have the best manager who comes and tell the leader at the top, ‘I want to adopt this.’ But if the boss says forget about it, nothing will be done. But if you get somebody at the top who says, ‘I want to see it tomorrow, I need to get this implemented’, then people will move because that’s what the boss wants.”

With this in mind, DITA has brought together business owners in small groups to coax them, “Hey, this is something that we all need to move towards. I need your support.”

Digital ecosystem to foster development
Singapore has a digital ecosystem that companies can leverage in their digital journey. “We are lucky that we are in Singapore with EDB and other government agencies. We have a good digital ecosystem that we can tap into. And there are all the vendors, developers and, in some cases, even the local educational institutions are sub-contracted by the authorities to help the industry to make progress in digital transformation,” said Mr Madilao.

Singapore Polytechnic has been appointed by the Ministry of Education under the SkillsFuture initiative to be the Sector Coordinator for the energy and chemicals industry. At its campus in Dover Road, is Singapore’s only one-stop Energy & Chemical Training Centre (ECTC). Opened in July 2019, the 1,430-square metre facility has a virtualisation room equipped with virtual reality technologies, a suite of chemical engineering laboratories and key unit operations. The facility allows students and industry practitioners to conduct experiments, build prototypes and operate equipment.

“With the polytechnic’s help, SCIC has been able to put together packages to help the industry progress in the digital journey, starting with design thinking,” said Mr Madilao.

He said design thinking is the fundamental, because it helps companies to know what their pain points are before they embark on their DX journeys.

“It will help you to know specifically what your needs are,” he added.

Incremental steps in digitisation journey
While digitalisation adoption is expected to be low initially, ASPRI expects the pace will pick up in a couple of years once the pandemic has been contained. Every incremental step is an improvement.

“This to me is significant even though it’s a small baby step because we are on the right path in helping to change the culture of an individual, and then of an organisation.”

“What we are trying to foster here is the culture so that we don’t have to tell individual companies what to do. They will eventually understand and be able to take care of their needs with digitalisation,” said Mr Chua.

Nevertheless, ASPRI plans to step up the pace by trying to understand the concerns of those who are still wary about the implications of digitalisation.

“We are saying to companies, look, you are not going to do this alone. We are prepared to go through this journey with you, even if we have to buddy you to help you take your first step,” he added.

With digital transformation, there’s really no ideal time to do it but Mr Nah reckons, the best time really to get started – in view of the pandemic circumstances - is now.

“People talk about Covid as a period when time seemed to have stood still. I see it as an opportunity, where we can reset, we recalibrate, and we emerge much stronger,” he added.

It’s already picking up steam in other sectors
Two other sectors that are reliant on migrant workers, the marine/offshore and construction/facilities management sectors, have already embarked on their digitalisation journeys.

The IDP for the marine and offshore engineering sector was launched in May 2021 and news reports said that some 1,000 members were keen on streamlining operations and maximising productivity through DX.

Smaller firms in the sector could use an online self-assessment system to find out about their digital readiness, and the mature ones to identify gaps in their digital capabilities.

It has two digital roadmaps - one providing digital solutions for adoption at various stages of business growth, and the other looking into training for employees to acquire the relevant skill sets.

The Construction and Facilities Management IDP launched in March 2020 is a step-by-step guide on the digital solutions and necessary skills to adopt at each stage of business growth.

A survey by The Business Times of industry experts said Singapore’s construction industry “is generally ahead of its regional peers in terms of digitalisation, and nudges from the government have spurred companies to adopt new technologies”.

The newspaper’s report said “industry fragmentation, compressed margins and the lack of skilled labour” continue to be an obstacle to its digitalisation efforts.

Nevertheless, digitalisation has already benefitted SMEs that have embarked on the DX journey.

A recent survey of SME leaders found that “those who are in the midst of implementing digital initiatives projected that their investments would deliver 23.5% in cost savings and 26.5% in revenue gains”. This showed a slight increase from 22% and 26%, respectively, from the last survey two years ago.

The 2020 SME Digital Transformation Study produced jointly by Microsoft Singapore and the Association of Small & Medium Enterprises (ASME), surveyed 400 business owners and key IT decision makers of Singapore SMEs from across 15 industries from March to June.

It found that 83% of SMEs in Singapore have digital transformation strategies in place, while more than half (54%) reported delays in their digitalisation plans due to Covid-19.

Despite higher adoption of digital transformation, only two in five companies (39%) surveyed perceive their digital implementation to be successful – a slight improvement from 28% two years ago.

It said more than three-quarters (80%) of Singapore SME leaders are now aware of the term ‘digital transformation’, up from 57% since the last study in 2018.

The study revealed that cost remained a top barrier, with just over half (56%) of the SMEs saying that they found it too expensive to digitalise due to high implementation costs. Other factors mentioned included “digital skills gap, and low awareness of government initiatives to support firms in their digital transformation journeys”.

In another survey conducted by Microsoft and IDC Asia-Pacific in September 2020 showed that 73% of Singapore SMEs “had accelerated the pace of digitalisation in response to the pandemic”.

In contrast, the ASME-Microsoft study found that only 30% of SMEs indicated that they were forced to digitalise due to Covid-19, with most reporting delays in their digital transformation plans.

Meanwhile the Singapore Government has continued to urge industries to adopt digital solutions for the sustenance and growth of their business in the face of more challenges expected in the on-going pandemic and in the new normal.