Here's how Singapore manufacturers counter rising costs

Today, manufacturers in Singapore are expected to do more with less. Businesses are buckling under the pressure of rising labour and property costs amidst a manpower and space crunch.

According to the Ministry of Trade and Industry Singapore, the manufacturing sector’s unit costs grew 19 percent between the third quarter of 2009 and the first quarter of last year. On top of that, industrial rents rose by double digits each year from 2010 to 2012, although expansion eased to 5 percent last year.

Since 2010, the government has also been tightening the tap on foreign labour – resulting in unit labour costs rising by 5.3 percent in 2012 and 3.1 percent last year.

As such, Singapore manufacturers are focused on lowering operating budgets, whilst maintaining efficiency and optimising productivity. One way to achieve these goals is to invest in a comprehensive asset management strategy – a disciplined, step-by-step approach that delivers tangible financial benefits.

If executed well, it can drive engagement and success through continuous advancement in multiple areas ranging from inventory reduction to obsolescence risk management. In addition, clever implementation can result in improved overall equipment effectiveness (OEE), greater return on net assets, and empowered and involved employees.

Successful manufacturers understand their process hierarchy to determine priorities and risks; scrutinising machinery serviceable components and their lifecycle status. They review their storerooms’ contents and identify all other locations holding spare parts.

This intelligence facilitates future decision making and allows immediate supplies optimisation. It also enables risk mitigation on the most critical fittings and provides the basis for future management of plant assets – including a top-notch preventive maintenance (PM) programme, storeroom management enhancements, strengthened machine-builder relations, and an escalated warranty-capture method.

The majority of these manufacturers design an asset management strategy, which often entails redesigning their storeroom management procedures; restructuring maintenance, repair, and operations (MRO) control systems; creating a reporting and dashboard platform; managing excess spare parts; and upgrading all aspects related to PM.

They know it is critical to launch best practices for parts overhaul or replacement. Minimising stock, fine tuning repairs and shaping a detailed reporting framework are prudent ways to maximise automation investment.

Some rely on their local distributor to help supply half of their parts from its available stock, so the manufacturer only has to manage the remaining half. Others initiate an on-site parts management agreement to avoid purchasing spare parts until they are required.

In addition, they ensure their asset management strategy records any PM activity change. Many hire vendor specialists with the resources to grow and sustain a PM initiative through pre-arranged service visits, fully warranted replacement parts, and 24/7 remote troubleshooting, so their personnel are freer to focus on manufacturing operations.

Finally, Singapore's savvy manufacturers try to utilise existing staff to realise simple, immediate point solutions, such as supplies disposition or burn off. However, when it comes to more complicated deployments or redesigns – such as storeroom or MRO redesign – many seek an external specialist to save time and effort.

The importance of plant-asset management is increasing worldwide, attributed to the pressures the manufacturing industry is subjected to – internally and externally.

Like their counterparts across the globe, Singapore businesses are facing the necessity of enhancing efficiency, curtailing manufacturing costs, and graduating towards sustainable manufacturing with a reduced asset-maintenance budget.