Bosch: The role of Singapore & APAC in the company’s Industry 4.0 vision
Bosch Software Innovations Asia Pacific Regional President also shares why the availability of top talent in Singapore sets it apart from other Industry 4.0 hubs.
Bosch Software Innovations has been actively shaping the Internet of Things (IoT) for nearly ten years. The subsidiary of the Stuttgart-based Bosch Group develops and operates software and system solutions on a global scale in the areas of mobility, smart city, manufacturing, agriculture, healthcare as well as smart buildings. The team, made up of IoT consultants, software developers, solution architects, project managers, UX designers, business model innovators and trainers, work with customers to bring their IoT ideas from strategy to implementation. With 700 experts worldwide, Bosch Software Innovations has 9 locations worldwide, including Singapore.
In the following interview, Thomas Jakob, Regional President Asia Pacific at Bosch Software Innovations with its head office in Singapore, describes the opportunities and challenges Industry 4.0 presents and what role the region and Singapore are set to play in this moving forward.
Thomas Jakob, Regional President Asia Pacific at Bosch Software Innovations.
“Industry 4.0”, or IoT, is firing the imagination of the economy. What importance do you place on this vision of the future – in general and for Bosch in particular?
Industry 4.0 is more than just a vision of the future. Linking physical objects with the virtual world using state-of-the-art technologies is already giving rise to new business models.
To give you a sense of how important this topic is for Bosch specifically: we have set ourselves the goal to achieve cost savings and efficiency improvements in the region of one billion euros internally by 2020 through Industry 4.0 solutions alone. We also aim to generate an additional billion in revenue.
Bosch took an early strategic step forward into the connected future. Have you also experienced setbacks along the way?
Of course. Bosch Software Innovations has designed, developed and operated more than 150 IoT projects to date. But despite all this experience, we are still in an experimental phase. It’s quite normal that some things work really well, while others don’t work at all. I would estimate that three quarters work and one quarter don’t – measured against the often strict benchmarks for the return on investment.
But even if the ROI doesn’t meet the stipulated 30 per cent or more within the prescribed time period, in many cases the “failed” experiments still help us and open up new avenues that allow us to make use of the knowledge gained.
How long does it take for an idea to be implemented?
We have projects that have taken us one-and-a-half years to transfer to production due to their complexity. Sometimes it takes even longer. For example, we are currently developing solutions for production planning that work with artificial intelligence. Being able to respond in real time and more dynamically to fluctuations in demand or the availability of parts and machines can enable production processes to be adapted without downtimes.
These solutions involve highly complex algorithms that would have been unthinkable until quite recently. We’ve been working on them for nearly two years now and in my opinion have made the breakthrough. But it’s likely to be another two years before we can bring the solutions to the external market as a workable product.
Can IoT also be applied to existing systems?
Yes. One example is the upgrading of old industrial machinery with the help of the IoT gateway program from Bosch, which allows even the oldest model years to be catapulted into the age of Industry 4.0. This retrofit solution, which consists of sensor technology, software and IoT-capable industrial control, takes the benefits of connected industry to operators of older production facilities, enabling them to monitor their machines in real time and thus optimise them.
This permits things such as predictive maintenance and reducing downtime while increasing productivity. Projects of this kind can be implemented on site within a matter of weeks. Talks are already under way with a number of manufacturers here in the region.
How important is the Asia-Pacific region for Bosch?
Hugely important. According to a recent study published by Frost & Sullivan, the IoT market in the industrial sector in Asia-Pacific is set to increase fivefold by 2020 compared to 2015, with annual growth rates averaging 37 per cent. That is why we are expanding our involvement here. We now have 110,000 employees here and generate almost 30 per cent of our global Group revenue in the region, in other words close to 21 billion euros.
What role does South-East Asia, or ASEAN, play?
An increasingly important one. The growing importance of South-East Asia, for example, for the automotive sector, the rising middle classes with ensuing higher purchasing power, urbanisation and infrastructure projects all present enormous opportunities.
In actual fact, Bosch has been active in South-East Asia since 1919 and today has around 7.400 employees in ASEAN region. Six years ago, this figure stood at around a third. In 2016, Bosch generated revenue in South-East Asia in excess of 770 million euros. As such, Bosch has correspondingly expanded its production and service competence in the ASEAN member countries in recent years and is expecting the region to continue its positive development in the future. We have also set up a separate company with a head office in Singapore.
Why Singapore? Are the conditions in Singapore generally advantageous for Industry 4.0?
As an established Industry 4.0 market, Singapore is definitely one of the locations in Asia that will continue to be of importance in the future. It makes an ideal hub for South-East Asia, with excellent access to the whole region.
The government is pursuing an extremely active industrial policy in this area. This really makes it easy for companies to take a big step forward and leverage modern technologies to enable them to leapfrog development phases and compete internationally.
Is it important to primarily employ a local workforce?
We attach great importance to our employees knowing the region and having their roots here. At the same time, diversity is an important aspect in developing the right kind of solutions for the regional or even global market. As a result, we are trying to establish a good balance between a predominantly local workforce and international talent in specific areas. Around 60 per cent are Singaporeans and 40 per cent from other countries.
Currently, Bosch has more than 900 employees in Singapore. Bosch Software Innovations has nearly 70 employees in the region with 54 of them living in Singapore. We are expecting this number to more than double by 2020.
Is it difficult to find well-qualified trained staff in Singapore?
Industry 4.0 solutions require highly skilled workers. In fact, there aren't many countries in Asia providing companies like Bosch a wider choice. For Singapore, its students are the world's top performers in math and science. Universities like the National University of Singapore and the Nanyang Technological University, are among the most highly ranked educational institutes in global terms.
In addition, Singapore also hosts a large community of international talent because of its high liveability factors. Therefore, the skilled labour situation in relation to the relevant industrial needs is far more ideal in Singapore than in other countries of the region.
What specific projects are you pursuing in Singapore today?
The projects we are currently implementing here in Singapore mostly relate to the fields of semiconductors and electronics. There is a strong industry for this in Singapore.
We concentrate mainly on two things. On the one hand, we have a development team here that together with our colleagues overseas and in Europe develops global services and global solutions. On the other hand, we have a team that is concerned with applying these solutions locally. This includes sales and marketing, as well as a professional service dedicated to customising these tools and implementing them directly at the customer’s premises, or providing standardised cloud-based solutions.
Do you also work together with local partners?
A relatively open ecosystem prevails here in Singapore. We traditionally work together with companies like systems integrators National Computer Systems NCS or ST Electronics, but also with others on a project-by-project basis. We also foster an intensive exchange with local state institutions to jointly consider projects we could meaningfully implement together. These include the Economic Development Board, the Agency for Science, Technology and Research or the Singapore Manufacturing Association, which represents the interests of the Singapore manufacturing community.