Industry4WRD, Tapping Underutilised Data for Operational Excellence – Takeaways from AIBP Insights Malaysia
We had the pleasure of hosting a focus group discussion on Industry 4.0 development in Malaysia - this includes a number of updates from the Malaysian Investment Development Authority (MIDA), latest initiatives and plans from the local enterprises such as FGV Holdings, Proton, and Alliance Contract Manufacturing, and insights from Magnifi Machines and Talend who have been involved in global and regional enterprise digitalisation projects.
This session also kicked off AIBP Insights, a series of country-specific discussions held online which brings together ASEAN stakeholders to discuss topics related to enterprise technology adoption, that will be happening for the next 5 weeks (see agenda).
ASEAN Industry 4.0
Manufacturing is a key sector for ASEAN countries as it remains to be the largest contributor to most of ASEAN countries' GDP. Governments across the region have put emphasis on scaling up this sector through digitalisation. Various schemes and policies have been introduced to encourage local enterprises in their countries to adopt Industry 4.0 technologies.
In Malaysia, manufacturing contributed 21.6% of GDP(2018) and the government introduced Industry4WRD in 2018 to provide a comprehensive transformation agenda for the manufacturing sector. As shared by Ms. Choo, Executive Director of MIDA, the Malaysian government rolled out schemes to assist local enterprises to upscale their business through Industry 4.0 technologies. This ranges from a readiness assessment to capital allowance and grants. Through this, the government hopes to increase labour productivity by 30%, achieve RM392B contribution to GDP by the manufacturing sector and have at least 35% high-skilled workers in the manufacturing sector.
Malaysian Enterprises' Take on Digitalisation
Erik Looi, Group Head of IT of Alliance Contract Manufacturing, mentioned that the role of IT has changed over the years, and currently, it has to find its relevance to the business' bottom line and topline. He currently adopts an approach called Bi-modal IT: one of the focus is on supporting the core business while the other focus is on innovation and potentially new opportunities or revenue streams.
The panelists agreed that Covid-19 has somewhat accelerated enterprises digitalisation with enterprises are being forced to leverage on technology to operate their business in this new normal. Both En. Wan, Chief Risk Officer of FGV Holdings, and En. Yusri, Sr Director of Corp Strategy & Risk of Proton, shared that digitalisation has become a necessity for enterprises currently. The ability to collect, integrate, and make use of data across facilities, departments, and subsidiaries would mean a lot for their decision making processes, especially in assessing risks and coming up with future plans. However, it is easier said than done, as on the ground, they have faced numerous challenges including data integrity and security.
Another hurdle that is commonly faced by enterprises would be the justification of investing in technology, the return on investment (ROI). Charles, Head of Advanced Research & Tech of APM Automotive, suggested that enterprises should take a step by step approach when pursuing digitalisation. He believes that by focusing on a specific aspect of the business and launching small scale proof of concept projects, enterprises can reap better ROI with minimal risk at the end of the day.
Both Janet, Product Marketing Lead, APAC, of Talend and Sulaiman, Chief Marketing Officer of Magnifi Machines, agreed with Charles on taking small steps to realise ROI. Another point that was brought up is that ROI might take time to be realised and in a lot of cases, it's not very apparent. Janet also mentioned that adopting a Software as a Service (SaaS) model might be a good option for enterprises who wish to start a project. On top of flexibility, it also allows them to see whether the solutions bring an impact with a minimum investment. Sulaiman echoed this notion by sharing that he has observed a shift in the preferences of many enterprises in the region where OPEX model is increasingly preferred over CAPEX.
All in all, it was a great discussion and it was encouraging to see that despite the challenges all the participants are bullish on Industry4WRD in Malaysia. You may watch the full discussion here.
We have 2 more discussions in Malaysia this week:
- Managing Assets and Portfolio Performance in Scale
- The New Consumer - Rethinking User Experience
Drop us an email at email@example.com if you are interested to join the upcoming AIBP Insights discussions.