Swedish Digitalization in Southeast Asia
A discussion on Sweden's experience with digitization and managing the required change in cultural mindset in the process.
Back in the year 2018, Monitor Asia team had the privilege of taking part in the Sweden-Southeast Asia Business Summit hosted in Kuala Lumpur, Malaysia. The summit was organized by the Embassy of Sweden in Malaysia and Business Sweden (jointly owned by the Government of Sweden and the Swedish business community). The event saw 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, the next (fifth) generation of cellular technology (5G), digitalization, and its impact on our lives both personally and within the industry.
The Monitor ERP team contributed to the discussion on digitalization and its impact on the industry. It was a knowledge sharing opportunity between the local Southeast Asian government, business community, and companies such as SAAB Aerospace, SKF bearings, Quant Industrial Maintenance Solutions, Ericsson.
Many interesting points were brought up in the discussion. A SAAB representative, Per-Olof Marklund, brought forward one of the points when he told the story of how their journey towards digitalization started back in the 1950s. He mentioned that the need to innovate emerged out of necessity. SAAB Aerospace was faced with the need to solve computationally intensive problems, in order to design and bring to market new aircraft structures, which are capable of withstanding heavy, performance-based loads over a prolonged period of time. They needed to figure out how to design the next generation of fighter jet structural technology without human calculators. Imagine the costs associated with having to allocate manpower to maintain large paper-based volumes of engineering data, derived from their design theories to eventually the testing phase, which requires physical materials costs in the process.
SAAB’s 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 and cost savings were sufficient for SAAB executives to decide if the investment was a worthy one. However, there was an additional challenge that presented itself in this project. The new challenge was - how to introduce the change into the organization so that it would be accepted culturally? How could the management introduce the concept of building its own computer which would be used to computationally automate the work of the human calculator? It would potentially be a disaster if it was not handled with care. As we fast forward to present day, we see SAAB as an organization that has evolved into a world-class leader in their respective field. We learned great lessons from SAAB and their evolution into an organization that found innovative ways to remain driven in a highly competitive global industry.
Businesses that are set to make the cultural change are able to transition swiftly and bring new products or services that respond to their markets favorably with new competitive advantages.
SAAB’s story of facing challenges that impeded innovation and growth reminds us of Monitor ERP’s own story. We have grown by realizing early the need to innovate in order to stay competitive. Our foundation is built on the production engineering business, where our founder, Åke Persson ran his own consultancy business in the 1970s, helping small and 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 wherewithal to acquire their own computers, let alone do SAAB. So, they built their own. In the early 1980s, that all changed with the advent of the microcomputer. Åke realized his opportunity right away and got to work with a programmer friend to digitize his formulas into what would become the first version of MONITOR ERP System. It goes without saying that there was little cultural resistance as a small start-up, however, he managed to pivot the business model and gained a new competitive advantage in the market.
Today, the subject of digitalization has taken on a new dimension. The notion of economies of scale have opened the door to 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 transition swiftly into the necessary change and bring new products or services that respond to their markets favorably with new competitive advantages.
Herein lies the challenge facing the manufacturing industry in Malaysia, Singapore, Thailand, Vietnam, Indonesia and other Southeast Asian countries. How quickly can they adopt the shift in cultural mindset and reinvent accordingly in order to keep pace with our fast-evolving global manufacturing marketplace?
Business Development Director
Monitor ERP System Asia