Malta’s manufacturing industry employs 11 per cent of the working population, making it the second largest sector. Malta’s best strategy is to attract more foreign direct investment while helping the current FDI expand and innovate.
A UK report clearly indicates that future manufacturing companies will be capable of rapidly adapting their physical and intellectual infrastructures to exploit changes in technology as manufacturing becomes faster, more responsive to changing global markets and closer to customers.
The Germans have coined the phrase Industry 4.0, which describes a ‘smart factory’ where production processes communicate digitally throughout the value chain. This includes research, development and innovation processes that create virtual digital versions of new products. The concept also takes into account increased digitalisation of the information network, allowing for decentralised production.
The best manufacturing set-up can now be prepared before through virtual technologies. These competences not only help those responsible for design and marketing but also those involved in manufacturing, to be fast and efficient. A quick manufacturing set-up changeover from one product to another introduces the flexibility crucial for a competitive range of products from the same manufacturing investment.
The smart factory will have an end-to-end digital horizontal integration of engineering across the entire value chain, ranging from design and inbound logistics to production, marketing, outbound logistics and service to after-sales service.
Small, specialised outfits can offer these specialised satellite services in different areas, including computational fluid dynamics, to ensure that plastic injection moulds work more efficiently. Other outfits can specialise in product virtualisation as physical prototypes will become less important. Others can provide IT systems for production control and manufacturing execution. Automation will be designed and commissioned virtually in one integrated process and through the collaboration of producers and suppliers.
The best manufacturing set-up can now be prepared before through virtual technologies
Customers can look forward to strong customisation of products from companies capable of highly flexible, mass production through the digitisation of the manufacturing processes. The introduction of artificial intelligence will bring about methods of self-optimisation, self-configuration, self-diagnosis, cognition and intelligent support of workers in their increasingly complex work.
It will also be easier for products and processes to be sustainable with built-in reuse, remanufacturing and recycling for products reaching the end of their lives. Closed loop systems will be used to eliminate energy and water waste and to recycle physical waste. Digitising manufacturing will also bring about opportunities for customers to buy a service rather than just a product. This concept is well accepted in the telecom business where the customer is provided with a mobile phone to encourage the use of the telephony and data service.
Rolls-Royce’s Total Care airplane engine programme offers airlines to pay by the hour for the use of jet engines, whereby the service fee includes maintenance, repair and overhaul. This new package guarantees a long-term relationship with their customers and generates more than 50 per cent of the company’s revenue.
This servitisation of the manufacturing model means that manufacturers need to redevelop their strategy to match customers’ increasing needs. Manufacturers need to bring in the costing of servicing their products during the full life cycle. This brings manufacturers long-term contracts with an all-inclusive service for customers.
Manufacturers need to access big data of the live performance of their products that significantly contributes towards designing better future products. Servitisation is highly dependent on the internet of things to provide field service data with tracking products remotely, so manufacturers can take preventive measures.
The implications of this digitising manufacturing for local manufacturing firms are substantial. Adoption of new technology and manufacturing techniques requires effort to succeed in a future world where greater opportunities will be balanced by greater competition. The quality and skills of the workforce will be a critical factor in capturing competitive advantage. There are opportunities for careers in manufacturing industries at all levels of education.
Parliamentary Secretary Aaron Farrugia launched a Business Enhance RD&I Grant Scheme, valued at €20 million. He said: “Research, development and innovation are the future, not just Malta’s, but the world’s. The future of work is already being discussed on a global level, and from what we can see there are certain issues such as automation that require solutions. In other words, we must be innovative if we wish to continue flourishing as an economic centre and as a country.”
This scheme is aimed at providing assistance through a grant to enterprises to part-finance eligible expenditure in investment in research, technological development and innovation. It also addresses priority areas identified in the Smart Specialisation Strategy, including advanced manufacturing and eHealth. Malta’s strong pharmaceutical and medical device sectors form part of the advanced manufacturing base.
Joseph Sammut is CEO, Malta Life Sciences Park.