Monitor ERP System’s Haggmark says SMEs in Malaysia are ready to incorporate IR4.0 initiatives into their operations

By SHAZNI ONG / Pic By BLOOMBERG

Local manufacturing factories and companies, particularly those in the small and medium enterprises (SMEs) bracket, could save up to 80% on stockholding and overhead by incorporating Industry 4.0 (IR4.0) initiatives into their operations.

YGL Convergence Bhd CEO Yeap Kong Chean said the transition from traditional-styled operations to smart modules could be done through IR4.0, with each factory cutting its cost according to its nature of business.

“The savings in stockholding costs and factory overheads with a properly implemented system, could be at a minimum of 20% to as much as 70% to 80%,” he told reporters at a media briefing following the handover of memorandum of understanding (MoU) with several companies in Kuala Lumpur last Friday.

Monitor ERP System (South-East Asia) MD Daniel Haggmark, who was also present, said SMEs in Malaysia are ready to incorporate IR4.0 initiatives into their operations.

Based on his observations between his native country Sweden and Malaysia, he said changes can be seen once companies opt for the “smarter” solutions.

“We have been here for six years. When you talk about SMEs, earlier we saw many productions moved to Eastern Europe and China due to their ability to produce cheaper products as labour cost in Sweden is high.

“Now, we are seeing companies moving back to Sweden. Why? It’s because of automation. They are so focused to produce efficiently.

“All processes in the factories are at high efficiency. Now, in the new generation of production facilities, it will not really matter where the production is.

He said in the earlier days, Asian countries had huge competitive edge due to cheap labour.

“That, however, would disappear. I believe SMEs in Malaysia are aware of this and are improving a lot. There has been a huge difference today compared to six years ago,” Haggmark said.

Earlier, Yeap and Haggmark represented their companies that were among the nine collaborating partners in the MoU handover, which is aimed at driving digital transformation in the manufacturing industry in Malaysia.

The other partners are Ingram Micro Malaysia Sdn Bhd, Solara Systems (M) Sdn Bhd, Cognitive Consulting Sdn Bhd, Fast Track SBOi Sdn Bhd, Lava Protocols Sdn Bhd, SysArmy Sdn Bhd and Century Software (M) Sdn Bhd.

Digital solutions provider KnowledgeCom Corp Sdn Bhd (KCom), which spearheaded the partnership, has already assisted local SMEs that are involved in the manufacturing industry in the implementation of IR4.0 via smart factory transformation.

KCom group CEO ST Rubaneswaran said the company signed the MoU with nine local and foreign technology companies to drive digital transformation efforts among industry players in the country as digital technologies are powering a new era in manufacturing innovation globally. “If you don’t transform, you will lose out your market space. When you lose your market space, the country loses revenue. You will lose your export value and tax as well. Eventually, you will lose employment too,” Rubaneswaran said.

He added that competition comes from out of Malaysia including from countries such as Thailand, Vietnam, Indonesia and Singapore.

“All of them know that this is a problem not only in Malaysia, but across the region. The race is on for which country that can get it right first and fast.

“If you don’t compete with other SMEs out of Malaysia and transform fast enough, you will lose your market space. When you lose your market space, that’s where things (could) get out of control,” he said.

Rubaneswaran added that the strategic partnership would enable KCom Group and its strategic partners to help SMEs transform their factory operations into smart factories in line with the government’s intention to make Malaysia the leader of the digital economy in South-East Asia by 2022.

He said with the presence of intelligent factories, SMEs would be able to increase production and respond faster to changes according to the market’s demand.

“The SMEs are ready. We just need to tell them, how to speak to them, how to convince them that hey, it is not rocket science. It’s something simple.

“There are phases to it. You just got to follow the flow and see what is the problem in the company and how it can be fixed,” Rubaneswaran said.

He said most local SMEs are now geared towards enhancing the use of automation in their operations.

Rubaneswaran also added that the government has also been helping eligible SMEs in terms of funding to implement the IR4.0 technology in improving their operational efficiencies.

He said the cost to transform a traditional factory into a smart factory is between RM200,000 and RM500,000 and the transformation process is estimated to take between three and six months.

According to a survey by KCom Group, smart factories can enable Malaysian manufacturing industries to immediately increase their return on investment in overall productivity within six to 12 months, with a reduction in capital and inventory costs compared to traditional factories.

The survey also reveals that the advent of smart factory technologies will also speed up production and help manufacturers respond more quickly to changing market needs.

“All processes in the factories are at high efficiency. Now, in the new generation of production facilities, it will not really matter where the production is.

He said in the earlier days, Asian countries had huge competitive edge due to cheap labour.

“That, however, would disappear. I believe SMEs in Malaysia are aware of this and are improving a lot. There has been a huge difference today compared to six years ago,” Haggmark said.

Earlier, Yeap and Haggmark represented their companies that were among the nine collaborating partners in the MoU handover, which is aimed at driving digital transformation in the manufacturing industry in Malaysia.

The other partners are Ingram Micro Malaysia Sdn Bhd, Solara Systems (M) Sdn Bhd, Cognitive Consulting Sdn Bhd, Fast Track SBOi Sdn Bhd, Lava Protocols Sdn Bhd, SysArmy Sdn Bhd and Century Software (M) Sdn Bhd.

Digital solutions provider KnowledgeCom Corp Sdn Bhd (KCom), which spearheaded the partnership, has already assisted local SMEs that are involved in the manufacturing industry in the implementation of IR4.0 via smart factory transformation.

KCom group CEO ST Rubaneswaran said the company signed the MoU with nine local and foreign technology companies to drive digital transformation efforts among industry players in the country as digital technologies are powering a new era in manufacturing innovation globally.

“If you don’t transform, you will lose out your market space. When you lose your market space, the country loses revenue. You will lose your export value and tax as well. Eventually, you will lose employment too,” Rubaneswaran said.

He added that competition comes from out of Malaysia including from countries such as Thailand, Vietnam, Indonesia and Singapore.

“All of them know that this is a problem not only in Malaysia, but across the region. The race is on for which country that can get it right first and fast.

“If you don’t compete with other SMEs out of Malaysia and transform fast enough, you will lose your market space. When you lose your market