Malaysia is gearing towards a digitised future, with the government highlighting in Budget 2019 that a RM3 billion Industry Digitalisation Transformation Fund will be created to accelerate the adoption of smart technology consisting of driving automation, robotics and artificial intelligence.

Currently, Malaysia’s manufacturing sector as a whole varies in terms of where they are ranging between 2.0 (mass production) and 3.0 (automation), according to Malaysia's Ministry of International Trade and Industry. However, there are industry leads already in the process of moving towards Industry 4.0 or becoming Industry 4.0 compliant on their own, as evident in the electronics and engineering, aerospace and the automotive sectors.

In light of this, a recent study conducted by the European Central Bank (ECB) showed that the take-up of digital technologies among the 74 companies surveyed, is very high, with big data and cloud computing being the most widely adopted.

While most companies seem to be adopting some of the main pillars of Industry 4.0, the main obstacles they face include difficulty of adjusting the organisation of the company and the need to recruit and retain highly skilled ICT staff.

Despite the challenges, virtually all respondents regarded the easier sharing of knowledge within the company as being an important channel, through which digitalisation raises productivity. The overall effect on productivity was perceived to be overwhelmingly positive, with a stronger effect typically being reported in service sectors, particularly in business-to-business segments.

While digitalisation brings forth an improvement in productivity and creates a wealth of information to be shared internally in companies, the fear of job loss is inevitable.

About one in three of the respondents expect digitalisation to reduce employment in their company over the next three years, while around 20% foresaw increases in employment. Their responses showed that there was a fear of digitalisation replacing low and medium-skilled jobs, as opposed to high-skilled jobs.

Nonetheless, companies in Malaysia are combating these fears and obstacles in their on way, in preparation for a future of digitalisation.

To ease organisations' foray into adopting Industry 4.0, the Ministry of International Trade and Industry has crafted out a checklist for businesses:

Understand that there is no unanimous solution for all companies

There is no one size fits all solution in moving towards Industry 4.0 at the firm level as it depends on the aim of each company. Any improvements either incremental or leap frogging towards Industry 4.0 will result in positive improvements at the firm level in terms of productivity and efficiency.

Decide on end goal first

Each company must decide what would be its end goal before finding out the technological options available for use. More often companies would need to be convinced or test run solutions before they can run with its full implementation. They first need to be aware of where they are currently and to ensure that it has its value stream map/an overall mapping out of the whole production line from sourcing raw materials to production until products are shipped to the intended customers.

Utilise various platforms for technological solutions

There are various platforms showcasing possible solutions including at Penang Skills Development Centre and German Malaysia Institute that can be a starting point for companies to see possible technological solutions currently available.

ALSO READ: Equipping Malaysia’s manufacturing sector and SMEs for industry 4.0

Infographic / European Central Bank

Image / 123RF