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Swedish Digitalisation in Southeast Asia

A discussion on Sweden's experience with digitisation and managing the required cultural mind-set change in the process.
Todd Abraham

Earlier this week the Monitor Asia team had the privilege of taking part in the 2018 Sweden South East Asian Business Summit hosted in Kuala Lumpur Malaysia. Organised by the Embassy of Sweden Malaysia and Business Sweden (The jointly owned Government and Swedish Business Community organisation), attendees from Southeast Asian countries such as Singapore, Thailand, Vietnam and the Philippines took part in discussing a multitude of important subjects together with Swedish Industry and thought leaders. Some of the subjects discussed were sustainability, future transportation systems, next generation information connectivity technology (5G) and digitalisation and how it's impacting our lives both personally and in the Industry.

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The Monitor ERP team contributed to the discussion on digitalisation and it's impact on industry. Meant as a knowledge sharing opportunity between companies such as SAAB Aerospace, SKF bearings, Quant Industrial Maintenance Solutions, Ericsson, and the local Southeast Asian business & government community, many interesting points were brought up.

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One interesting point was brought forward by SAABs representative Per-Olof Marklund who told the story of how their journey to digitalisation started back in the 1950s. Per-Olof told of how out of necessity the need to innovate emerged. SAAB aerospace was faced with the need to solve very computationally intense problems in order to design & bring to market new aircraft structures capable of withstanding heavy performance based stress loads over a prolonged period of time. To put another way, they needed to figure out how to design a next generation fighter jet structural technology but with only human calculators available from which to do so. Imagine the costs associated with people having to maintain large paper based volumes of engineering data from which to derive their design theories through to eventually testing which required physical materials costs in the process.

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SAABs solution was to build their own computer, and they did it. Imagine the investment required back then to build your own computer. Obviously the operational efficiencies & cost savings realised were great enough for SAAB executives to decide the investment a worthy one. But there was an additional challenge that presented itself, through endeavoring into this project. The new challenge was that of how to introduce the change into the organisation so that it would be accepted culturally. How would management introduce the concept of building it's own computer which would in turn be used to computationally automate the work of the human calculator? Potentially a disaster if not handled with care. Fast forward to present day SAAB, and we see an organisation that has evolved into a world class leader in their respective field. We can learn great lessons from the likes of SAAB and their evolution to becoming an organisation which has found innovative ways to remain competitive in a highly competitive global industry.

SAAB's story of facing challenges impeding innovation and growth reminds me of Monitor ERPs own story. We too have grown by realising early in our existence the need to innovate in order to remain competitive. Our foundation was built in the production engineering business were our founder Ake Persson ran his own consultancy business in the 1970s, helping small & medium sized manufacturing businesses analyze (manually) production processes in order to identify opportunities for improvement. Back then computers were prohibitively expensive and not many (if any at all) businesses had the financial where-with-all to acquire their own computer, let alone do as SAAB did and build their own. In the early 1980s that all changed with the arrival of the microcomputer. Ake realised his opportunity right away and got to work with a programmer friend to digitize his formulas into what would become the first version of the MONITOR ERP System. It goes without saying that as a small start up there was little cultural resistance that Ake had to face, so their ability to pivot their business model and realise a new competitive advantage in their market.

Today, the subject of digitalisation has taken on a new dimension. Economies of scale are allowing for new connectivity devices and software solutions to come to market at a price point more affordable and appealing to a broader globally dispersed market. Businesses that are culturally set to make the change are able to move swiftly with the necessary change and bring to market new products or services that respond to their markets favorably and with new competitive advantages.

So here in lies the challenge facing the manufacturing industry in Malaysia, Singapore, Thailand, Vietnam, Indonesia and other Southeast Asian countries. How quickly can they make the cultural mind set change necessary and reinvent themselves accordingly in order to keep relevance in our fast evolving global manufacturing market place?

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