Start small, aim big
FOR most companies, the task of automating their operations may seem like a big undertaking, more so for SMEs.
While the benefits of automation is widely talked about, the uncertainty and risks of taking on such an effort tend to outweigh management’s decisions on the matter, particularly when the discussion around automation include big terms like artificial intelligence, robotics, Internet of Things (IoT), and, of course, cost.
No doubt, the prospect of going about these is daunting.
But industry observers and regulators are reminding businesses that automation, and the progress into Industry 4.0 is a journey.
“Transformation and automation are about making your operations smart. When we talk about Industry 4.0, people think that the whole company needs to be transformed. That’s not necessary. Take small steps. Change a small part of your operations first and see whether that is beneficial for you.
“What we want are small steps, with bigger outcomes,” says International Trade and Industry Ministry’s director of Sectoral Policy Division, Sectoral Policy 1, Vimala Murugan, at the recent 25th International Machine Tools, Metalworking and Automation Technology Exhibition.
Notably, SME Association of Malaysia president Datuk Michael Kang opines that most SMEs are too small to be able to afford sophisticated systems for automation.
“If we can upskill the small ones, maybe they can eventually adopt Industry 4.0. But let’s not talk about Industry 4.0 yet.
“I think the most important thing for a lot of SMEs is to digitise their operations. A lot of them are still very manual. For them, if they can go for digitisation, it is good enough. They can use some software to improve. From there, they can slowly scale up,” he says.
Kang notes that moving into high gear on automation may not fully benefit businesses – SMEs may not have enough markets to push their products to.
“So digitise first. Then maybe, you can look at reducing reliance on labour with some machinery and improve productivity. Then go for automation,” he says.
Nonetheless, the urgency for SMEs to take action is there.
Several of the global and leading manufacturing countries such as Germany, the United States, the United Kingdom, China, South Korea and Singapore have already embarked on their Industry 4.0 transformation and are in advanced stages of implementation.
Spot the gaps
Local companies would do well to take a look at their own operations to spot the gaps they need to close in order to be more efficient and competitive.
In recent times, there have been a slew of providers in the market offering companies with products and solutions to help them automate and improve on efficiency. These solutions cover a wide range of areas including energy efficiency, security, administration, payment systems and production. And with advancements in technology, a lot of these solutions come in a plug-and-play model which will enable companies to integrate them into their operations and adopt a gradual automation process rather than have a major overhaul.
The manufacturing sector, comprising 98.5% of Malaysian SMEs, serves as a major contributor to the country’s economy. In 2018, the sector contributed 22.4% of the gross domestic product (GDP) at about RM325bil.
According to an A.T. Kearney and Cisco study, Malaysia could reap growth in productivity gains of up to US$30bil (RM125bil) for its manufacturing sector over the next decade through Industry 4.0 adoption.
A research by Bis Research notes that the global collaborative industrial robots market is expected to grow at a CAGR of 63% from US$105.4mil in 2015 to close to US$2bil in 2021.