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Challenges slowing smart factory adoption in Thailand

Challenges slowing smart factory adoption in Thailand
The pace at which new factory automation solutions are being developed is staggering. Manufacturers need to adapt and catch up or fall out of the race. While companies around the world see this as a necessity, certain hurdles limit their adoption in Thailand.
The pace at which new factory automation solutions are being developed is staggering. Manufacturers need to adapt and catch up or fall out of the race. While companies around the world see this as a necessity, certain hurdles limit their adoption in Thailand.

Tidarat Chimluang, Head of Industrial Markets at KPMG in Thailand noted in a report that many companies in Thailand are struggling to keep up with the pace of change and making the necessary technological adoption to reach industry 4.0. This is especially true in the agricultural and food processing industry, a staple industry of Thailand.

“According to a study done by the University of the Thai Chamber of Commerce, less than 3 percent of small businesses and less than 5 percent of medium-sized businesses in the industry are considered part of the digitally-focused 4.0 era,” Chimluang pointed out. “The government’s Thailand 4.0 scheme will hopefully help push Thailand’s industry in the right direction. What is important is that companies need to realize they need to prepare for the future, envision a big-picture strategy that best suits their firm and make the firm agile for change”

Budget concerns

Some manufacturers that are more cost and cash flow conscious may not see investing in smart solutions as immediately beneficial or justifiable, according to Vuttipong Vongsankakorn, Industry Marketing Manager at OMRON Thailand.

Chotivate Pheanphobsuk, IIoT Sales Manager at Advantech suggested that to overcome budget concerns, starting in a small portion (3-5 production line ) would help. Evaluation could then be done from an ROR and ROI perspective. For the production output, the company suggests an evaluation by uptime and downtime processing, defective rate, etc., to know if the output is healthy.

“Next, due to the rising demand in this area, the demand for employees with such skills will also increase,” Vongsankakorn added. “Some manufacturers are still faced with resistance from employees who are not familiar with smart solutions like robotics technology and fear that their jobs are under threat.”

Awareness concerns

Chaiyot Piyawannarat, Country Managing Director at ABB agreed that the biggest challenge to building smart factories in Thailand is the lack of awareness of such technology. There is a need for government intervention to encourage its adoption.

“Today, companies in developed countries are pulling no stops in making their factories ‘smarter’, but the same cannot be said for developing nations like Thailand,” Piyawannarat said. “While the technology is already there, it is unevenly distributed and that’s where the government's action is needed. Attractive incentives such as tax benefits and providing technical training are some ways in which the government can help Thai companies, particularly SMEs, reap the benefits of smart factory technologies.”

According to Joyce Yeh, Deputy Director at the International Sales and Marketing Division of ICP DAS, if lack of knowledge is a problem, little knowledge is an even bigger problem. For instance, to many customers, the term smart factory solutions would seem too large scale to be applied to their work. Even though technologies like artificial intelligence (AI) provides unprecedented advantages to manufacturing, that is only the bigger picture. Industry automation is, in fact, a collection of solutions that attempt to solve small to big problems.

Lack of Skilled Labor
Training employees to work with robots or even to adopt robotics skills is necessary and effective in driving adoption, Vongsankakorn noted. Businesses looking to tap onto robotics technology can approach knowledge centers set up by industry experts. The Omron Automation Centre, for example, provides solutions and training to companies who are looking to explore advanced technology solutions.

Joseph Ngo Hong, Managing Director at Bosch Thailand added that Thai manufacturers need to understand the specific use cases that fit their needs to justify the upfront investments required.

“The skills gap and having the right approach, the appropriate framework, are two challenges to deal with,” Hong said. “A step-by-step adoption and incremental investment are required. Adopting an ecosystem perspective and talent mobilization help on the technology transfer to the locals. In Thailand, Bosch sees the government as taking action on these issues.”

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