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M'sia will trail behind if it ignores Industry 4.0

7th January, 2017

KUALA LUMPUR: The Fourth Industrial Revolution, coined as Industry 4.0, is happening globally and Malaysia is bordering on danger of becoming a struggling economy if industries are not ready.

In fact, emerging economies like Vietnam, Myanmar, Laos and Cambodia could catch up and beat Malaysia through this industrial revolution.

KnowledgeCom Corporation Sdn Bhd Chief Executive Officer, S.T Rubaneswaran, said most of the Malaysian industries were still on the labour-based Industry 2.0 and would need to skip a level to get to 4.0.

While the first industrial revolution centred on the use of steam to power machines and the second on electricity to transform assembly lines, the third revolved the use of information technology (IT) to further automate production lines.

However, the fourth industrial revolution will see the Internet of Things (IoT) overhaul not only businesses, but nearly all aspects of daily lives.

It is the current trend of automation and data exchange in manufacturing technologies that create a “smart factory”, in which machines are augmented with web connectivity and connect to a system that can visualise the entire production chain and make decisions on its own.

Rubaneswaran said Industry 4.0 would be based on nine pillars—autonomous robot, simulation, system integration, IoT, cyber security, cloud computing, additive manufacturing, augmented reality, big data analytics, and horizontal and vertical system integration.

He said a PricewaterhouseCoopers’ survey on 20,000 companies in 29 countries from Asia, Europe and the US, revealed that in five years’ time, these companies would invest close to US$1 trillion a year to transform into Industry 4.0.

“This will help increase their revenue at an annual rate of 4.3 per cent and cost reduction of 3.4 per cent. “For manufacturing industries, those which manage to reduce cost by 18 per cent in five years, can eliminate competition easily as their margins are tight,” he said.

Malaysia’s economy is the fourth largest in Southeast Asia, after the much more populous Indonesia, Thailand and the Philippines, and the third richest by gross domestic product per capita values, after Singapore and Brunei.

However, Rubaneswaran said economists’ forecast pointed out that these could change soon when emerging economies like Vietnam, Myanmar, Laos and Cambodia beat Malaysia through Industry 4.0.

For the last 10 years, these were agricultural based countries with little industry, he said.

“Now as they are moving towards industrialisation, the competition lies because they are starting fresh with no legacy issue to apply the latest industrial revolution faster, in building their manufacturing and production infrastructure,” said Rubaneswaran.

In his view, the reason for the shifting of foreign investments to neighbouring countries was also not due to cheap labour factor but rather on the easier adoption of new industrial practices.

Hence the need for Malaysia to prepare its human capital towards this new technology to sustain and attract more foreign investments into the country, he explained.

Although Malaysia has undertaken measures towards moving into the technology, Rubaneswaran said more efforts were needed as the nation’s biggest challenge still lay in the lack of supply of technologically trained workers. “The country has three layers of workforce with three different technology and generations—the older generation (aged 40 and above), mid-, new generation coming out of the universities .

“So to transform all of them especially the mid- and the older generation to use new technology to go up and compete with the younger ones coming out from universities is a challenge,” he said.

KnowledgeCom, a homegrown IT training provider for more than 10 years has also evolved over the years from providing training of one technology, namely Industry 3.0 to Industry 4.0.

For Industry 4.0 training, Rubaneswaran pointed out that the company would focus on four pillars including cyber security, big data, IoT and cloud computing.

In an effort to upskill the current and next generation of workforce, he said the company had partnered with seven states with the support of the Federal government to open Centre of Excellence Training (CoET) in Kuala Lumpur, Selangor, Penang, Perak, Johor, Sabah and Sarawak.

KnowledgeCom has started its CoET programme in Penang and Perak and is expected to start operations in Sabah, Sarawak and Johor in January this year.

Through the collaboration, the company was looking at training and certifying 3,300 of Industry 4.0 certificated workers across Malaysia under the CoET programme by 2018, he said.

“The industries of the states will now have avenues to look into Industry 4.0 and start the training now, and the response was good, judging from the requests from industries there,” he added.

Moving forward, he said KnowledgeCom would leverage on the training programmes driven by Industry 4.0 to contribute significantly to the company’s growth.

The company’s revenue grew to about RM11 million as at March 31, 2015 from RM7 million a year earlier and is expected to continue growing at 30 per cent annually.

After focusing on local expansion in 2016, the company is now eyeing market expansion into ASEAN this year, particularly the Philippines and Vietnam. –Bernama

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