The Business Year

Malaysian manufacturing is undergoing a transformative process that will bring about Industry 4.0, making automation even more efficient.

Datuk Darell Leiking

Minister, International Trade and Industry

A strong manufacturing sector would pave the way to enhanced productivity, job creation, innovation capability, high-skilled talent pool, economic prosperity, and social well-being. The national policy on Industry 4.0: Industry4WRD was developed with four specific overarching goals, namely to drive growth in manufacturing sector’s GDP, increase national productivity, create higher skill employment opportunities, and raise innovation capabilities and competitiveness. Industry 4.0 will revolutionize the manufacturing sector by pushing down costs, expanding the market reach to consumers, and creating new competitors. Malaysia needs a change in mindset to embrace new technologies and increase efficiency and productivity, and to expand markets through digital platforms. Accelerating labor productivity and embracing Industry 4.0 are key to pushing Malaysia toward becoming a high-income nation. Ultimately, the policy will also drive Malaysia became a strategic partner for smart manufacturing and related services in the region, a primary destination for hi-tech industry, and a total solutions provider for advanced technology. The policy will create a platform for the country to transition into a more technologically advanced, open, and high-income economy that is able to compete globally. Industry4WRD is a pivotal step, as Malaysia seeks to strengthen its ongoing structural reforms to become a developed nation that is equitable, sustainable, and inclusive by 2025, or even earlier.

Dato’ Azman Mahmud

CEO, Malaysian Investment Development Authority (MIDA)

The national policy on industry 4.0, known Industry4WRD, is Malaysia’s response to calls for digital transformation of the manufacturing sector and its related services by facilitating companies to embrace Industry 4.0 in a systematic and comprehensive manner and be smarter and stronger driven by people, process, and technology. Industry 4.0 transforms how products are designed, fabricated, used and operated as well as how they are maintained and serviced. It will also transform the operations, processes, supply chain management, and energy footprint of factories by improving productivity; cost efficiency; enhancing organizational, management and production capabilities; enabling better quality monitoring; and developing innovators and producers of Industry 4.0 technologies. Some of the challenges faced in adopting Industry 4.0 technologies include shifting the mindsets of local manufacturers; addressing the lack of awareness and understanding of Industry 4.0’s impact and requirements; increased demand and expectations for customized and faster delivery of products; and industry and talent mismatch. Recognizing these limitations, the government is providing more opportunities for companies to move toward Industry 4.0 through various initiatives. These include, among others, funds to support the transition and migration to Industry 4.0, matching grants with a specific emphasis on promoting Industry 4.0 initiatives, and double tax deduction aimed at improving the employability of graduates.

Dato’ Wan Latiff Wan Musa

CEO, Dato’ Wan Latiff Wan Musa

In essence, Industry 4.0 adoption is a major shift toward propelling productivity and enhancing competitiveness. The growth of Industry 4.0 will provide greater avenue for Malaysian companies to accelerate the growth cycle, enabling businesses to grow quickly and access new markets by innovating new business models. Alternatively, they can move up the value chain by providing more customized products, through the use of existing experience and data as well as investing in machines and particularly in CAD technology. The economic impact of Industry 4.0 could be noticeably significant for Malaysia’s manufacturing industry, especially sectors that are involved in development and marketing of products, especially parts-related sensors, semiconductors, modules, routers, machineries, and equipment. Sectors such as chemical, medical devices, aerospace, automotive, transport, textiles, pharmaceuticals, and food processing and services will also benefit. The global outlook in 2019 remains modest in tandem with the projected slower global growth. The World Bank in its report has trimmed the global economic growth to 2.9% in 2019. MATRADE is committed to grow exports through its various trade promotion programs based on the targets of Mid-Term Review of the Eleventh Malaysia Plan, which envisions exports to reach MYR1.118 trillion (USD266 billion) in 2020.

Datuk Dr. Mohd Yusoff Sulaiman

President & CEO, Malaysian Industry- Government Group for High Technology (MIGHT)

Our core goal is to help the private sector get involved in the high technology sector. We nurture, expand, and build the high technology capacity and capability of Malaysian companies. The sector has been expanding every year, and we have contributed to foster significant changes. Our efforts to strengthen the high-tech sector were crucial in stimulating our country’s development. When one has technology, its ability to expand improves. High technology’s role will be critical in this respect, because it also translates into sustainable growth. We encourage an increasing number of companies, especially from traditional sectors, to venture into and apply high-tech. We are there to facilitate and coordinate companies’ efforts to change and need for knowledge integration. At the same time, we want to encourage the innovation ecosystem and ensure a continuous flow of new ideas and businesses. Through national projects, we aim to inspire young people to become engineers and designers and create new start-ups. The Internet of Things (IoT), 3D printing, biological gene sequencing, and artificial intelligence (AI) are all areas that will shape the future of younger generations. Cutting-edge technologies are all present in Malaysia. Our job is to connect these dots and integrate different disciplines and approaches. In the end, we will not only create new products, but new sectors as well.

Dato’ Palaniappan Joseph

Council Member & Vice Chairman, HRM Committee, Federation of Malaysian Manufacturers (FMM)

Three factors will play a role. First, it is vital to develop a common and true understanding of what Industry 4.0 means. At present, the general thinking is that it is something extremely sophisticated with factories driven by robots and sensors, but that is only the pinnacle of what it ought to be. The real challenge we are facing is how to migrate from 2.0/3.0 to 4.0. Some manufacturers feel resistance toward this change because they believe that since they have been doing well there is no need to transform, so this is a matter of changing mindsets. Second, we must factor in the economic cost of migration tied to technology acquisition, especially for SMEs that do not have the resources or knowledge. Third, the critical issue is that technology is adopted together with a skilled workforce to understand and expand the technology into a real practical scenario. Therefore, we need more widely available skilled and competent manpower. FMM is working hard to address the first factor of changing mindsets about Industry 4.0. We explain to manufacturers that they do not have to move immediately to a 4.0 scenario, but can migrate in an organic and structured manner. Working on small pilot cases can help the industry and SMEs at large to see the bigger opportunities.



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