The automation level among manufacturing firms in the country has remained low, but the Department of Trade and Industry (DTI) said that various initiatives are in place to help local firms catch up.
Trade and Industry Secretary Ramon M. Lopez divulged a study at the Manufacturing Summit 2020 which showed that technology utilization of manufacturing enterprises in the country in 2019 remained low.
According to the DTI study, most are still making the transition from Industry 2.0 to 3.0.
Among the study’s key findings were: 44% had no maintenance system; 35% collect and manage data through paper documents; 46% have no established cybersecurity; and more than 50% had no manufacturing equipment connected to a network.
From the private sector, D & L Industries, one of the most diversified manufacturing firms in the country engaged in the production from food and non food, said it has not reached the Industry 4.0 automation level yet.
Franco Diego, Lao Group Supply Chain Director of D&L Industries who was also a resource person on the session “Accelerating Technology Adoption and Innovation Among Philippine Enterprises” at the third day of the Manufacturing Summit said his company is spending almost at equal footing for product innovation and manufacturing innovation.
Aside from these two, Diego said the company is also building up other aspects of the supply chain from warehouse to logistics and other core systems.
”We will be linking everything all these initiatives and investments together, and that will be our 4.0,” he said.
Diego noted that while D & L is innovating, they don’t have the latest technology yet adding that companies would be encouraged to upgrade given government financial support or fiscal incentives. Obviously, he said, when companies invest in automation in their line they do expect a payback to justify the expenses.
He said that D & L is looking at a timeframe of four to five years to attain Industry 4.0, although this will depend largely on the improvement of business confidence.
Lopez, however, said that the pandemic’s disruption of business and the use of digital tools have pushed the emergence of significant innovation among Philippine enterprises.
He cited a Microsoft-IDC study which showed that 88 percent of business decision-makers in the country now say that innovation is a ‘must.’
Furthermore, while significantly more organizations in the Philippines found innovation to be hard (or 77%) before COVID-19, they have since changed perceptions with significantly less organizations (or 44%) having this sentiment at present.
To further accelerate the digital transformation of Philippine industries, he said DTI is continuing the implementation of our Inclusive Innovation Industrial Strategy.
The aim of strategy is to grow globally innovative and competitive manufacturing, agribusiness, and services industries. “Our industrial strategy relies on the strong collaboration between and among government, industry, and the academe at the national and regional levels,” he said.
To better enable MSMEs for the Fourth Industrial Revolution, he said, DTI is working on various Industry 4.0 initiatives. In partnership with the United Nations Industrial Development
Organization, DTI is updating industry roadmaps for agribusiness, aerospace, automotive, and electronics industries to incorporate Industry 4.0 adoption and utilization.
DTI Undersecretary Rafaelita Aldaba added that DTI is also conducting a feasibility study for the establishment of an Industry 4.0 Pilot Factory in the country to serve as a venue to demonstrate various 4IR technologies.
An Industry 4.0 SME Academy will also complement the pilot factory by providing relevant training and capacity building activities.
Together with Siemens, DTI will carry out a firm-level assessment using the Smart Industry Readiness Index to assess the digital readiness of enterprises, as well as develop a digital transformation roadmap for selected firms.
DTI will also be implementing the Strategic MSMLE and Startup Link (or SMART Link) project, which aims to match startups with commerciable products to Micro, Small, Medium, and Large
Enterprises (MSMLEs).
DTI is also in the process of developing the Philippine Skills Framework to reskill and upskill Filipino workers for Industry 4.0 technologies in cooperation with Skills Future Singapore.
Next year, Lopez said, DTI will launch an Artificial Intelligence (AI) Roadmap for Industry, covering the agribusiness, manufacturing, and services industries.
To prepare for the future of mobility, DTI is proposing an Electric Vehicle Incentive Strategy (EVIS) that aims to provide comprehensive fiscal and non-fiscal support to enable the traditional
motor vehicle industry to shift to EV. It will also jumpstart the development of the country’s EV manufacturing industry.
The payoff from digitalization is expected to be significant. The 2020 Asia-Pacific Small and Medium Business Digital Maturity Study commissioned by Cisco Systems reveals that Philippines can increase its annual domestic output by at least $26 billion to $28 billion by 2024.
“This can be achieved through the digitalization of our small and medium enterprises,” he concluded.