IR4.0: How It’s Going to Change Malaysian Manufacturing
Recently, HRDF signed two memorandums of understanding with the Penang Skills Development Centre (PSDC) to promote and train employers in the implementation of Industry 4.0 and also to form several Centres of Excellence in Technology (CoETs) to carry out Industry 4.0 programs.
SMEs need to stay relevant and need to keep up with the times – Dato’ Vignaesvaran
What Exactly is Industry 4.0 or IR 4.0?
“With this heightened utilization of automation and digitalization, workers will have to equip themselves to stay relevant.”
In the past, the first industrial revolution started with the use of steam and water powered machines that took over manual labour. The second industrial revolution happened with the discovery of electricity, which allowed the mass production of items and greatly contributed to expanding economies around the world. Soon, computers were used to control electrically powered machines, and this led to the third industrial revolution.
We are all currently living in the age of the fourth industrial revolution where big data and cyber-physical systems take centre stage. “The fourth industrial revolution is about bringing a heightened sense of automation and digitalization that would eliminate the need for manpower in routine and repetitive tasks” says Dato’ Vignaesvaran. He goes on to explain that “With this heightened utilization of automation and digitalization, workers will have to equip themselves to stay relevant.”
The fourth industrial revolution is yet to hit Malaysian shores but more and more industry players expressed interest in using cyber-physical systems. Hence, the Malaysian workforce needs to be trained to handle these new systems.
According to Dato’ Vignaesvaran, only 31% of the 15 million strong Malaysian workforces is considered skilled enough and this number has to be pushed up to 35% – 40% in order to keep up with industrial demands come 2020.
only 31% of the 15 million strong Malaysian workforces is considered skilled enough
With the IR 4.0 coming into industries, the increased automation would lead to lower demand on human workers to do repetitive tasks, as these will be taken over by machines. However, Dato’ Vignaesvaran stressed that instead of firing these factory workers, the HRDF is encouraging industries to upgrade their workers from doing routine tasks like soldering, into workers who are able to operate and supervise machines that will perform the soldering on their behalf.
Industry 4.0 involves several aspects, and one key factor is known as the ‘Internet of Things’ whereby machines are not just computerized to perform tasks but can communicate with one another through the internet and through cloud computing.
Dato’ Vignaesvaran very aptly gave the example of the manufacturing of cars, where IR 4.0 machines will be able to customize your car orders to more specific requirements and can request custom-made parts in the production line from other machines within its vicinity with a minimal need for human presence.
Raising Awareness about IR4.0 among SMEs
Among the important tasks for HRDF, according to Dato’ Vignaesvaran, is reaching out to SME business owners and letting them know the importance of embracing IR 4.0 and understanding how this fourth industrial revolution is going to affect them and their businesses. “SMEs need to stay relevant and need to keep up with the times,” said Dato’ Vignaesvaran. He adds that aiming for zero defects in production is one of the goals that SMEs can achieve with IR 4.0 technology, which will make them much more attractive to clients and customers alike.
SMEs will also stand to be more competitive as manufacturing operations can be done with a much smaller workforce than previously required. SME business owners need to realize that the fourth industrial revolution will eventually reach the country and they need to have the relevant training and information, as well as skilled employees to be able to adopt new technologies and keep up with the rest of the world.
65% of Malaysian could lose their current jobs by 2027
The Need to Re-Skill, Up-Skill and Multi-Skill Employees
Recently, Datuk Seri Abdul Rahman Dahlan, the minister in the Prime Minister’s Department mentioned that up to 65% of Malaysian could lose their current jobs by 2027 as technological advancements render people’s tasks redundant. Retrenchment could become the norm in the not too distant future as companies restructure skill allotments due to the adoption of IR 4.0 technology.
While Dato’ Vignaesvaran does not deny this possibility, he also states that the HRDF is committed to helping businesses and especially SMEs re-train their staff and upgrade them. One example of this is how the HRDF is working with a factory in Ipoh to train their operators to reach assistant engineer levels.
HRDF is also channelling funds to other training programs to encourage ICT adoption and the utilizing of Big Data by employees so that they not only know repetitive jobs, but are able to handle more complex systems when the IR 4.0 technology finally hits the Malaysian industrial scene.
Fears and Misconceptions about IR 4.0 Debunked
According to Dato’ Vignaesvaran, many people misunderstand IR 4.0 and think that it involves purely the automation of production processes. He stresses that this is not the case, as IR 4.0 technology involves the key aspect of ‘The Internet of Things’, whereby automated machines are now able to communicate with one another and transmit data from one machine to another.
IR 4.0 also goes one step further and has technology that will be able to make decisions on its own in an autonomous manner and therefore optimize production without the help of humans. Additionally, these machines will be able to perform tasks impossible or unsafe for human workers, meaning that they can reach formerly unreachable places and work harder and longer than humans ever can.
In addition to just having misconceptions, Dato’ Vignaesvaran also highlighted the two main fears regarding the advent of IR 4.0, the first of which is when workers fear losing their jobs to machines and the second by business owners who are afraid that keeping up with the times will mean spending more resources than they can afford in order to replace machinery, thereby endangering their finances and losing competitiveness.
For business owners, Dato’ Vignaesvaran stated that they don’t have to replace machineries completely, as HRDF is working with PSDC to come up with ideas on how to retrofit their old machines in an affordable manner. This is to adopt the new virtual IR 4.0 communication technology which is the hallmark of the ‘Internet of Things’ concept.
He also advises SMEs to adopt this technology as soon as possible; the earlier they’re prepared, the less they stand to lose when IR 4.0 actually reaches Malaysia.
As for employees that are afraid to lose their jobs, Dato’ Vignaesvaran urges industries to start re-training their employees, stressing that employees themselves must be on a skill level that is compatible with the IR 4.0 technology if they wish to stay employable and competitive.
How Prepared is Malaysia in the IR 4.0 and Big Data Race?
Dato’ Vignaesvaran mentioned that it is inevitable that IR 4.0 will reach Malaysia, saying that “it is not a matter of ‘if’ but ‘when’ – and that ‘when’ is already upon us”. He stresses that whether Malaysian business owners are prepared or not, they must take it upon themselves to adopt the technology or lose out in the long run.
He repeatedly stated that Industry players must not assume that IR 4.0 will not affect them, as even lorry drivers in the transport business will be affected. In developed countries, new technologies are being developed and tested whereby old machines and operation systems in transport companies are retrofitted with more intelligent technology which can record orders and direct autonomous vehicles to deliver stocks at the most opportune times, all without the need of human drivers, supervisors or stockists.
As IR 4.0 becomes less of science fiction and more of a reality, Indian business owners need to learn more about how to safeguard their trade from losing the competitive edge. The way to do this is to be educated via engaging with the HRDF training programs and other available programs to help SMEs face the coming challenge of IR 4.0
MIBrand would like to extend our heartfelt gratitude to Yang Berbahagia Dato’ CM Vignaesvaran Jeyandran, the Chief Executive of the Human Resources Development Fund (HRDF) for his invaluable insight and wisdom on the issue of IR 4.0 as well as the staff of HRDF for helping make this interview possible.