Siemens set-up on Singapore's doorstep
07 January 2006
As many manufacturers move East it is not surprising that their suppliers follow. The latest is Siemens, who
has added to its service capabilities with the recent launch of a anufacturing centre in Singapore.
Tim Fryer was invited
to go and see the
new centre and visit
a couple of very
different customers.
In a slightly theatrical - yet still impressive - performance, Siemens rolled the first machine off its new production line one day and demonstrated it installed and working at its new home, Jurong Technologies, the day after. The new machine, a HS-60, was not built in its entirety at the new production facility - some key components like the placement head are manufactured in Germany (Siemens only other manufacturing location) - but it represents a major step forward for the Singapore facility.
If cheap production was Siemens objective in setting up its Asian operation then Singapore would not have been the obvious location - it has long since relinquished its low-cost geography tag compared to its Far Eastern neighbours. Instead Siemens looked to the 15 years of experience its R&D engineers had built up in Singapore along with its other capabilities in sales and service, before deciding it was the ideal location for the 'Siplace Center Asia'. A year and $50m later, and the new site is up and running with 130 staff and, four months early, the first HS-60 rolled off the production line.
"The Siplace team in Singapore with its pool of well trained and educated personnel, used to thinking and working internationally, was the ideal choice," commented Tilo Brandis, head of the global Siplace team. "An additional advantage was a network of competent suppliers locally and in the whole of Asia, whom we can access much better from Singapore."
Investment in technology, and the pool of expertise, are strong suits in Singapore's attraction for high-tech industries. Manufacturing contributes 28% to the country's GDP and within this the Precision Engineering cluster is the third largest sector, contributing S$19bn in 2004. So it is no surprise that companies such as Jurong Technologies are thriving.
Jurong Technologies, recipients of the first Singapore-manufactured Siemens placement machine - is a far cry from the image of a labour-intensive Asian sweat-shop. Having started out in marine engineering 20 years ago, Jurong soon moved into contract manufacturing and, with annual turnover in the region of $1.2bn, is now on the verge of breaking into the top ten global EMS companies. Its five plants in Asia, soon to be supplemented by one in Brazil, house 66 SMT lines, ten of which are in Singapore.
Around 60% of the company's production is lead-free including all of the output in Singapore. The company also placed in the region of 100 million 0201 components in the last two years and are currently conducting trials with 01005, although none of its customers currently use them. So the demands made on the production equipment are great. Lee Lok Fui, Jurong's President and CEO, said: "Here it has become apparent how important it is to work with strong technology partners." Along with MPM (for printers) and BTU (for reflow ovens), Jurong has teamed up with Siemens since 1999, when it started to replace some of its bulky chip shooters with smaller and more flexible Siemens S20s. Since then it has used a succession of the latest Siplace machines and anticipates moving onto the new X-series in the future.
Another investment has been the upgrade of all line computers. Each line has a computer running the latest version of Siplace Pro software and each plant has a server. Anthony Chia, Director of Corporate Quality Assurance, explained the benefits: "This will enable us to transmit programs to individual lines across great distances and to monitor the production at each plant down to the individual machine level. The goal is to significantly accelerate the ramp-up processes in the new plants and profit even more quickly from quality improvements and process optimisations at all plants." Since this upgrade also means that each plant can better synchronise its lines for more overall production efficiency, the new software promises significant productivity improvements. Pepperl + Fuchs
From the first customer for a Singapore-manufactured machine, I went to the first customer of Siemens in Asia, Pepperl + Fuchs. That first machine was bought nearly 20 years ago for the Singapore factory, which has recently expanded its factory space to accommodate its 620 employees. Apart from being an OEM rather than an EMS provider, Pepperl + Fuchs is a very different company to Jurong. Its process and factory automation products (or the boards for them) are manufactured in batches varying in size from one to 10,000, with the biggest runner being the 2.5m sensors the factory produces annually. And for all that there are 22m placements per month, Pepperl + Fuchs would also typically run 98 pilot runs and 93 prototype runs in the same period. It is no surprise then that the company's main consideration is flexibility.
"We typically changeover a machine every two hours," said Technical Director Klaus Maile, "so we want these changes to be seemless." To achieve this the SMT production area uses a flexible pool of machines and operators, rather than conventional SMT lines. This concept is supported by the Siplace equipment's offline placement features and flexible feeder architectures. But flexibility extends beyond the equipment to the suppliers themselves. Maile continued: "I need a true technology partner on site, not just a machine supplier. We must go in this new direction together so that production technologies will be developed, implemented and supported for us when we need them."
One example of this was the development of some customer specific feeders. Local Siplace engineers handled the specifications and modifications, coordinated with Munich to produce a solution that saved Pepperl +Fuchs having to do this project on its own. Another example was during the recent expansion of the facility, when Siemens and other suppliers were charged with dissembling, moving and reassembling all the production equipment to get it all fully operation within three days. "It was a logistical masterpiece," said Manufacturing Manager Yap Seng Thong. "We could start our production on schedule. The Siplace team's help with the move may sound like a banal example, but that is exactly the type of service I want and need."
Labour costs are not as cheap as they once where in Singapore, about S$800 a month are typical, and only a short stretch of water separates Singapore from both Indonesia and Malaysia, where these rates can be divided by four. But, according to Maile, the golden days of manufacturing in Singapore are far from over: "It is possible to do medium scale manufacturing in Singapore, but you need to customise your manufacturing to do so. Pepperl + Fuchs are proof that that can happen successfully."
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