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IMPACT

Impact on Business
Production/ Supply

Industry 4.0 will revolutionise manufacturing pushing down costs, expanding the market reach
to consumers as well as creating new competitors.
For Malaysia which is still currently depend heavily on foreign labour for its production, there
is a need for mindset change to embrace new technology to increase efficiency and productivity
and to expand markets through digital platforms. Malaysia may have the headstart especially
in our electronics, automotive and construction industries to enhance modern manufacturing
technologies towards industry 4.0.
With the emergence of regional economic clusters such as the ASEAN Economic Community
(AEC), Malaysia has the technology foundation to move up and capitalize on the wider
ASEAN markets including better access to Asian and European countries’ economies through
the implementation of free trade agreements.
Most ASEAN countries (such as Vietnam, Laos and Cambodia) have seen major progress in
the productivity and growth of their vast manufacturing industries from an agricultural-driven
industry making the transition from Industry 2.0 all the way to Industry 4.0.
In the last 2017 Budget announcements, there have been new incentives for companies to invest
in new technology and equipment and we hope to see more incentives made available in the
2018 Budget to help Malaysian companies to adopt new technologies towards Industry 4.0.

Consumers

Customers are increasingly at the epicenter of the economy, which is all about improving how
customers are served. Physical products and services, can now be enhanced with digital
capabilities that increase their value. New technologies make assets more durable and resilient,
while data and analytics are transforming how they are maintained.
A world of customer experiences, data-based services, and asset performance through
analytics, meanwhile, requires new forms of collaboration, particularly given the speed at
which innovation and disruption are taking place. And the emergence of global platforms and
other new business models, finally, means that talent, culture, and organizational forms will
have to be rethought.
Impact on Government
As the physical, digital, and biological worlds continue to converge, new technologies and
platforms will increasingly enable citizens to engage with governments, voice their opinions,
coordinate their efforts, and even circumvent the supervision of public authorities.
Simultaneously, governments will gain new technological powers to increase their control over
populations, based on pervasive surveillance systems and the ability to control digital
infrastructure.
Impact on Society
Industry 4.0 may re-shape society by the way we interact with one another and addressing
income inequality. While technology may open up opportunities for poor nations to move up,
the faster speed of adoption amongst rich countries can widen the gap between the rich and the
poor. Moving forward, Malaysia has to embrace the technological wave or else be left behind
developing countries. Investments in the right education must continue to develop the right
talent. Young and old generation must be ready to shift towards a knowledge-based economy.
Government and policies must gear toward implementation of technological advancements in
order to move a more sustainable and promising future.

BENEFIT
1. Enhanced productivity through optimization and automation

In other words: saving costs, increasing profitability, reducing waste, automating to prevent
errors and delays, speeding up production to work more in real-time and in function of the
overall value chain, where speed is crucial for everyone, digitizing paper-based flows, being
able to intervene faster in case of production issues and so forth.

It’s the low hanging fruit, yet important. On top of the research from Boston Consulting Group,
the signs that investments are done in these areas first are clear. Again, it’s not a coincidence
that, from a spending perspective, the number one use case in which manufacturers invest their
Internet of Things (IoT) budgets is manufacturing operations (a whopping $102.5 billion on a
total of IoT $178 billion across all manufacturing use cases in 2016). Industry 4.0 offers
various solutions to optimize, from optimized asset utilization and smoother production
processes to better logistics and inventory management.

2. Higher business continuity through advanced maintenance and monitoring


possibilities

When a key industrial asset, such as an industrial robot in a car manufacturing plant gives up,
it’s not just the robot that’s broken. Production is affected, costing loads of money and unhappy
customers, and sometimes production can be fully disrupted. It’s everyone’s worst nightmare
as business continuity is an extremely high concern.

On top of all the replacement/fixing work, resources and costs, reputation can be damaged,
orders can be cancelled and with each hour that passes money is thrown away. If industrial
assets are connected and can be monitored (health status monitoring, for instance) through the
Internet of Things and issues are tackled before they even happen the benefits are huge. Alerts
can be set up, assets can be proactively maintained, real-time monitoring and diagnosis
becomes possible, engineers can fix issues, if they do occur from a distance, the list goes on.
Moreover, patterns and insights are gained to optimize in areas where things seem to have
issues more often and a world of new maintenance services opens up as we’ll see. No wonder
that asset management and maintenance are the second largest area of IoT investments in
manufacturing.

3. Better quality products: real-time monitoring, IoT-enabled quality improvement and


cobots

When someone have everything in their production system and its broader environment hooked
up with sensors, software, IoT technologies, systems of insight AND the customer, they can
also enhance quality of your products. Automation definitely plays a big role here and so do
the typical components of cyber-physical systems and the Internet of Things whereby quality
aspects can be monitored in real-time and robots reduce errors.

On the flip side and one of the risks and challenges to tackle, as mentioned earlier: the more
you automate, the less work for people, in theory. And the same goes for other mentioned
benefits such as maintenance (the less you need engineers for support, the less support
engineers you need). It’s a dilemma and known issue which we’ll cover later. In the meantime
do know that robots are not going to take all human jobs over soon. Ample companies have
increased the usage of robots and at the same time hired more. The reason we mention it in the
context of quality is that this is certainly one area where you see cobots popping up (cobots is
a fancy term for advanced collaborative robots or put more simply: robots that fit a
collaboration between man and machine).

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