By Brien Chua
In 2021, Singapore was reported to have installed 605 robots per 10,000 employees in the manufacturing industry, showcasing the nation’s remarkable progress in automation. This high robot density reflects our nation’s commitment to embracing advanced technologies and leveraging them to enhance productivity and efficiency. With an average annual growth rate of 27% since 2015, Singapore has emerged as the second most automated country globally, only second to South Korea.
Singapore’s forward-thinking approach to automation aligns with the projected growth of its e-commerce sector. Experts estimate that by 2027, the e-commerce industry in Singapore will reach a staggering US$19.6 billion, representing approximately a 120% increase from the US$9 billion recorded in 2022.
As the e-commerce sector continues to expand, the integration of robotics and automation technologies will become more of a necessity than a desire for businesses. By harnessing the power of robots, businesses can streamline order fulfilment processes, improve inventory management, and meet the growing demands of online consumers efficiently.
All aspiring startup owners wish to stand at the top ranks in the industry. But in efforts to scale operations and achieve this, more needs to be done to address some of the biggest challenges currently faced by many SMEs in automation.
Upskilling employes and future-proofing businesses
Manpower distress is increasing amongst small and medium-sized enterprises (SMEs) in Singapore, following constant technological revolutions within businesses. According to a survey by the National Trades Union Congress (NTUC), 44% of retail employees plan to leave the sector in the next year, which is further compounded by the poor views that Singaporeans hold regarding the logistics industry.
As such, it is imperative that businesses look to offload labour-intensive tasks and create more opportunities for employees to explore upskilling and growth opportunities. Sheldon Global’s automation system, for instance, bears the brunt of production workloads and handles repetitive, labour-intensive tasks such as loading, unloading, and transporting of fragile and heavy products. This allows our employees to take on supervisory roles and engage in more opportunities to upgrade by acquiring new technical skills on the job.
Furthermore, the country’s rapidly ageing population and shrinking birth rate is also contributing to the supply of labour in the manufacturing and logistics markets. The integration of robotics across SMEs can then offload the demands of manual labour from elderly workers, allowing them to acquire new skills in operating automated machinery and maintaining their relevance in the evolving job market.
For Sheldon Global, we have also taken the step to partner with Bizlink to offer more employment opportunities for the elderly and physically challenged in Singapore.
SMEs workforce woes
That being said, it is evident that businesses are already aware of the advantages of integrating robotics into their workforce. Manufacturing and logistics companies, in particular, view this integration as a transformative step forward, enabling them to efficiently handle labour-intensive tasks and providing their employees with the opportunity to upskill and transition into supervisory roles.
However, for smaller businesses, this phenomenon poses a huge roadblock in attempts to keep up with the market’s rapid growth.
The substantial investment costs associated with procuring the necessary robotics technology and establishing a robust back-end system pose significant financial burdens for small scale companies.
Many startups and SMEs are also unaware of the resources and support available to them, such as automation grants from the Economic Development Board (EDB), which hinders their ability to explore and leverage financial assistance for implementing robotics solutions.
Nonetheless, the correct guidance and exposure to various incentives could be the silver lining for SMEs to take their business to the next level. For example, leveraging a six-figure grant from Enterprise Singapore, Sheldon Global managed to integrate robotics into our operations during the pandemic to overcome the dire shortage in manpower.
This has not only saved us from the decline but has since improved our overall productivity by 50% and scaled our portfolio of brands to more than 9 brands today, including our latest sustainable home and living brand: EcoHOUZE.
The integration of automation and robotics into the operations of SMEs, particularly in the logistics and back-end sectors, is not just an option anymore – it is necessary to accelerate business growth in the 21st century. With the manpower crunch and rising labour costs, businesses must leverage technology to streamline operations, enhance efficiency, and reduce reliance on manual labour.
Determining this critical mass requires careful analysis of business operations, market demand, and growth projections. SMEs need to assess the stages in their business as well as processes, where automation becomes financially viable and strategically advantageous for their business model and target markets.
As the e-commerce industry in Singapore continues to experience robust growth, with a projected Compound Annual Growth Rate (CAGR) of 11.69 percent from 2023 to 2027, it is time for businesses to seize the opportunities to meet the increasing demand.
Automation and robotics integration are crucial elements in solidifying their foothold in the e-commerce industry for years to come. By embracing automation technologies, SMEs can efficiently manage order fulfillment, optimise inventory management, and provide seamless customer experiences.
This not only positions them as industry leaders but also enables them to scale their operations, expand their market share, and stay competitive in the ever-evolving e-commerce landscape.
Brien Chua is the CEO and founder of Sheldon Global