Are We Ready For Smart Manufacturing?

It’s business as unusual

Digitalisation, robotics, automation, Big Data and cloud computing in our personal and professional lives have resulted in us being connected often with our smart devices like our phones, cars, television, and other appliances.

Digitalisation isn’t just affecting end users like us; it’s also shaking up the world of business and manufacturing, turning it upside down and inside out.

‘Upside down’ because no one can really foresee what other disruptive technologies are coming our way or how we are prepared for these changes.

‘Inside out’ because it involves leadership from within the organisation to turn these challenges into opportunities for growth and innovation.

For the longest time, manufacturing has provided many job opportunities for non-skilled workers. It has been a critical force that has helped advance developing nations to become high-income ones.

Some of us still see loads of blue factory buses – the “Bas Pekerja” – on Malaysian roads every working day, as workers are picked up from designated spots to industrial sites.

We wonder if this sight will be a thing of a past in the near future as automation begins to take over some of the work we do.

A glimpse into smart manufacturing

“This is nothing less than a paradigm shift in industry: the real manufacturing world is converging with the digital manufacturing world to enable organisations to digitally plan and project the entire lifecycle of products and production facilities.” – Helmuth Ludwig, CEO, Siemens Industry Sector, North America

I had the rare opportunity last month to visit some of Germany’s leading manufacturing sites with a group of 25 media personnel from Malaysia under the K-Pintar-ESMT programme called “Industry 4.0 and Digitalisation Programme for Media”, thanks to Human Resources Development Fund and the National Press Club.

 
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Some of the smart manufacturing trends that I observed include:

1. Mass customisation

With data integration, players in the automotive industry are able to bridge the relationships between themselves, their suppliers and their customers to offer a more modular experience of producing unique car variants.

The Mercedes-Benz manufacturing plant in Stuttgart helped us catch a glimpse of the future automotive industry, as automation and robotics came alive and worked with ultimate precision on fairly flexible production lines.

The machines worked seamlessly with humans to transform metal and various components into a complete body of artwork as a Mercedes car, custom-made for customers from around the world.

2. ‘Servicification’ of manufacturing

EOS, an e-manufacturing solutions company in Munich, further wowed us as we witnessed first-hand how Additive Manufacturing technology is used to build complex components for heavy industries using 3D printers, providing ideal business-to-business solutions.

In this digitalised facility, the machines worked autonomously, until you observe what is truly happening inside each working unit.

One of the 3D printers, which uses Direct Metal Laser Sintering, showed us how a laser beam dissolves the metal powder and how it is solidified into a cross-section of the component.

According to our site coordinator, these machines ‘communicate’ with each other through cloud technology and industrial Internet of Things (IoT).

As a solutions provider, EOS technology is simplifying the design and production of complex parts for use in aerospace, medical and other fields.

It also enables its customers to benefit from its integrated services comprising consulting, training, research and development.

How ready are we?

Across the globe, Industry 4.0 seems to promise increased efficiency, reduced costs and greater customer satisfaction. In Asean, Singapore is ranked at the top of the World Economic Forum’s 2016 Networked Readiness Index, a key indicator of how countries are keeping up with the digital world.  

Meanwhile, a 2016 survey conducted by the Federation of Malaysian Manufacturers and Malaysian Institute of Economic Research shows that only 12% of the respondents were fully aware of the Industry 4.0 wave. About 41% were somewhat aware, 28% need more information and 19% were not aware at all.

Are we in danger of being left behind?

Malaysia’s low awareness and adoption of Industry 4.0 aren’t necessarily due to ignorance, but a real business decision on whether the market size or production is big enough for them to embark on these changes, according to Second Minister of International Trade and Industry (MITI) Datuk Seri Ong Ka Chuan.

Other industry experts have opined that our slow uptake could be due to industry players grappling with funding challenges, mindset shift and low expertise.

We are, essentially, still at the 2.0 level (mass production, assembly line) although the global manufacturing in the electrical and electronic sector, for example, is fast evolving with Big Data, IoT and cloud computing.

 
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What can we do to drive a digital mindset in the industy?

1. It starts with leadership

Interestingly, in Singapore, it’s the government that is driving digital innovation with initiatives such as Future Ready Singapore blueprint, Smart Nation programme and its e-Government Action Plan.

In many other countries, it’s mostly driven by the private sector.

Their integrated approach from the government, private and public sectors in a central committee aligns them towards various digitalisation efforts, and that includes participation from digital early adopters like Siemens and General Electric.

In a seminar on smart manufacturing and automation organised by the Malaysian Investment Development Authority (MIDA), Minister Datuk Seri Mustapa Mohamed said that MITI is consciously taking several strategic moves to spearhead the adoption of smart manufacturing and Industry 4.0 in Malaysia.

For example, the government is currently working with industry players on our very own National Industry 4.0 Blueprint, expected to be ready by the end of this year.  

2. Infrastructural support system

As both the manufacturing and services sector contribute to almost 80% of Malaysia’s gross domestic product, we need to build partnerships with international industry experts from Germany, Japan, Korea, China and Singapore to equip us with the technical know-how, and to collaborate on research and development.

MIDA, for one, is working with Rockwell Automation, a US-based industrial automation and smart technology provider to increase our competitive advantage.

Besides that, the Automation Capital Allowance, which was introduced in the 2015 budget through MIDA has helped various industry players optimise its automation initiatives. A case in point is a local clothing manufacturer which successfully increased its production volume by over 300%, while reducing defect rate by 80–90%.

MITI had also pushed for the inclusion of an incentive in the national budget to spur growth of the automation ecosystem among local manufacturers and accelerate the Industry 4.0 transformation in the country.

 
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Bringing it together

Smart manufacturing is a different ball game which requires deeper analytical thinking, partnerships, knowledge-sharing, communication and creative problem-solving.

Not jumping on the bandwagon of Industry 4.0 means the end of our manufacturing’s growth opportunity and innovation.

Our pace of Industry 4.0 adoption today doesn’t justify how or what we can achieve in the near future.

Steadily, with concerted efforts from all players to prepare Malaysia to enter the future of smart manufacturing, I believe we can all get there – and only if our belief corresponds with our willingness to embrace technology.

For now, let’s get our act together, and get moving!

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