Institute of Labor Market Information and Analysis (ILMIA),

Ministry of Human Resource, Malaysia

TVET Today, 4th Industrial Revolution Tomorrow !

Muhammad Imran Kunalan Bin Abdullah
Principal Consultant

3rd May 2018 1

The Burning Questions!
 What does Industry 4.0 really mean? Is it Digital
Transformation?
 What does digitization entail for
manufacturing/services?
 How profound will its impact be on our value pools?
 What are the near-term business opportunities for
the organisation?
 What type of skills should we focus on?
 Whether the term is simply hype?

This myriad of mixed reactions reveals the intense

uncertainty associated both with what Industry 4.0
actually is and how government, companies and
individual should respond to the changing industrial
environment.
 Content

 Demystifying the 4th Industrial Revolution

 Industry 4.0 and Digital Transformation

 Industry 4.0/Digital Transformation: The Malaysian

Context

 Way forward – Skills for IR4.0

The 4th Industrial Revolution/ Industry 4.0
Cyber Physical Systems

A cyber-physical system (CPS) is a system of collaborating computational elements controlling

physical entities. CPS are physical and engineered systems whose operations are monitored,
coordinated, controlled and integrated by a computing and communication core. They allow us to
add capabilities to physical systems by merging computing and communication with physical
processes.
Key Drivers for IR4.0

 Opportunity to integrate and better manage horizontal and vertical

value chains.
 More than 18% higher productivity over the next five years.

 The digitization and interconnection of products and services (Internet

of Things/Services) ensuring competitiveness and promises additional
revenues of 2% to 3% per year on average.

 the newly emerging, often disruptive, digital business models that offer
significant additional value to customers through tailor-made solutions.
Building Blocks of Industry 4.0

Autonomous
Robots
Big data
Simulation
analytics

Horizontal
Augmented and vertical
Industry 4.0
reality system
integration

Industrial
Additive
Manufacturing
Internet of
Things
Cyber
Security
Industry 4.0: Combination of a Wide Set of Technologies

PRODUCT
DESIGN / 1
PROCESS MONITORING / 2
Monitoring, CONTROL
command
Virtual Traceability
industrialization Interconnected
machines & plants Flow
"virtual manufacturing Active sensors management
plant" digitalized, Remote monitoring,
production process mobile app, shared
simulation databases Thermal, hygrometric, Automated logistics / Precision
counting sensors... Internet of Things MANUFACTURING 3
CFAO Centralized "Smart" machine OPERATIONS
planning and Per piece Shared GPAO (self-correction)
management RFID tracking Automated Laser sensors, vibra switches, Flexibility
of machines corrective programs
Gravage laser, internal logistic Additive
PLM MES manufacturing
flashcode, GPAO, Precision 3D printing,
puces Intelligent Assist Cobotics
CAO,
PLM, engineering
Devices SERVICES
Numerical Batch RFID GV grinding,
IAO command laser cutting, Multi-support and (INTEGRATION, 4
mana- Digitalization
gement of order- Traditional HFwelding multi-operation
machines
Conditional MAINTENANCE)
flow techniques Transfer Big data, maintenance
Programmed / center télémaintenance
De-programmed Retrofit
machines SNC, programs,
Machine multi-spindle, etc. WORK 5
installation Augmented operator
Duty ORGANIZATION
organization Learning organization
Task specialization Lean Manufacturing

Available maturity / Emerging maturity / Future maturity /

Industrial diffusion Limited diffusion Precursors
Source: Roland Berger
 The Goal of Industry 4.0: Intelligent Factory
Characterized by adaptability, efficiency and a full digital integration
> Give sense to complexity
CYBERSECURITY BIG DATA > Creativity
CLOUD > Collaborative manufacturing
> Stronger protection for
internet based COMPUTING > Customer & marketing
manufacturing intimacy
> Technology products with > Flexibility
SENSORS > Cyber Physical Systems (CPS) > Perfect match with
longer life cycle ADVANCED > Numerical command
> Zero default / deviation MANUFACTURING customer's needs with
CLUSTER OF SUPPLIERS > Reactivity – Full automation production mass efficiency
> Traceability
SYSTEMS – Totally interconnected systems
SUPPLIERS > On demand manufacturing
> Predictability – Machine to machine
communication MASS

Factory 4.0
CUSTOMIZATION

– Overview CLIENTS

3D PRINTING / NANOTECHNOLOGY / ROBOT AUTONOMOUS

ADDITIVE MANUFACTURING ADVANCED MATERIALS VEHICLE INTERNET OF THINGS
LOGISTICS 4.0
> Scrap elimination > Smart value added products > Real time - Autonomy - > Flow optimization
> Fully integrated > Mass customization > Technical differentiation Productivity > Increased security > Object tagging
supply chain > Rapid prototyping > Connectivity > Full transparency on data > Lower costs > Internet-object
> Interconnected reporting PLANT OF THE FUTURE A communication via low
systems power radio
> Perfect coordination PLANT OF THE FUTURE B > Real time data capture
CLUSTER OF PLANTS > Optimized stocks
> Reduced wastes
> Clean and renewable energies
everywhere
RESOURCES OF THE FUTURE > Energy Storage
> Alternative raw materials
WIND ALTERNATIVE / NON CONVENTIONAL SOLAR GEOTHERMIC

Source: Roland Berger

Data and communication will be the backbone of Industry 4.0

Positioning of different players for Industry 4.0 – Factory view

Client

"Virtual" Production
routing

Building automation

Factory 4.0
ERP System

MES System M

M
M
M

Controls & Automation

MES System
New players
ERP System MES System Sensors/Automation Building Automation 3D Data Big Data Services
Data/ > All transaction data > Shopfloor transaction > Sensor status like > Status of all building data, > Product 3D data > Storage capacity
Funct.1) > Asset data data pressure, position etc., e.g. temp., light, access > Factory 3D data > Algorithms and analytics
> Price/cost data > Machine data communication with other control, ventilation > PLM data > Connectivity
> Maintenance data sensors
> Logistic data > Machine control data
Players1)

1) Not exhaustive; examples only

MES= Manufacturing Execution System
Source: Roland Berger
Potential Industry 4.0 Solutions
Value Drivers of Industry 4.0

• Resource/Process
• Asset Utilisation
• Labour
• Inventories
• Quality
• Supply/demand match
• Time to market
• Services/After sales

Source: McKinsey
Indicative Quantification of Value Drivers – Impact of IR 4.0

Source : McKinsey
Global “Growth” /Industry 4.0 Initiatives
Produktion
2030
Made
Smart Difference
Industry Industrial Internet
Business Revolution
High Value
Manufacturing
Industry 4.0

Industry of the
Future Digital Manufacturing
Manufacturing for SME Innovation 25’
Renaissance Program
Fabricacion Produktionder
Avanzada Zukunft
Made In China 2025
Operational
Fabbrica Programme
Intelligente Make in India

Precision
Manufacturing
 Content

 Demystifying the 4th Industrial Revolution

 Industry 4.0 and Digital Transformation

 Industry 4.0/Digital Transformation: The Malaysian

Context

 Way forward – Skills for IR 4.0

Digital Transformation

“The investment in and development of new technologies,

mindsets, and business and operational models to improve work
and competitiveness and deliver new and relevant value for
customers and employees in an ever-evolving digital economy.”

Industry 4.0 is part of Digital Transformation!

 Digitization of Everything

Source: McKinsey & Company: McKinsey Global Research Institute

 Extent of Digitization Varies by Sector Relatively low
digitization
Relatively high
digitization

MGI Sector Digitization Index Digital leaders within relatively un-digitized sectors
2015 or latest available US data
Assets Usage Labor
GDP Emplyment Productivity
Overall Digital Digital Digital share share growth, 2005–142
digiti- Digital asset Trans- Inter- Business Market spending capital Digitization % % %
zation1 spending stock actions actions processes making on workers deepening of work
Sector 6 1.5 6.4
ICT 2 1 4.2
1 Knowledge-intensive sectors,
Media 7 8 -0.6
1 highly digitized
Professional services 7 5 -1.2
Finance and insurance 6 4 0.6
Wholesale trade 2 Capital-intensive, potential to
3 2 2.1
further digitize their assets
Advanced manufacturing 4 2 0.7 -3.6
Oil and gas 2 0.3 0.4
Utilities 2
2 0.5 1.1
Chemicals and pharmaceuticals 6 4
3 Service 0.6
sectors with long tail of
Basic goods manufacturing
small firms having room to
1 0.3 -1.5
5 digitize customer transactions
Mining 13 4 0.3
Real estate 
3 3 -0.3
Transportation and warehousing 
1 2
4 B2B sectors
-0.8
with the potential to
3 digitally engage and interact with
Education 
6 10 0.0
their customers and users
Retail trade 
1 2 -0.2
Entertainment and recreation
6 12 -0.4
Personal and local services 5 Labor-intensive sectors with the
13 13

potential0.3to provide digital tools
Government
7 11 -0.1
and skills to their workforce
Health care
3 7 -1.0
Hospitality 
6 4 5 -1.5
Construction
1 2
6 Large, localized,
1.5
low productivity
Agriculture and hunting
could transform for productivity
and delivery of services

SOURCE: BEA; BLS; US Census; IDC; Gartner; McKinsey social technology survey; McKinsey Payments Map; LiveChat customer satisfaction report; Appbrain;
US contact center decision-makers guide; eMarketer; Bluewolf; Computer Economics; industry expert interviews; McKinsey Global Institute analysis McKinsey & Company
 Content

 Demystifying the 4th Industrial Revolution

 Industry 4.0 and Digital Transformation

 Industry 4.0/Digital Transformation: The Malaysian

Context

 Way forward
IMD Digital Competitiveness Ranking
Top 10
Countries
Digital Evolution Index -2017
Stand Out countries
are both highly digitally
advanced and exhibit
high momentum

Stall Out countries

enjoy a high state of
digital advancement
while exhibiting
slowing momentum.

Break Out countries

are low-scoring in
their current states of
digitalization but are
evolving rapidly.

Watch Out countries

face significant
challenges with their
low state of
digitalization and low
The Fletcher School, Tufts University momentum
Digital Around the World
IR 4.0 In Malaysia
Infrastructure
& Ecosystem

Funding &
Spearheading the Incentives

formulation a
national policy on
Talent &
Industry 4.0 Human Capital

Technology &
Standards

SME
Where are we on IR 4.0 Journey

Awareness

Industry
Consultation

Government
Talent initiated
Ecosystem Development
Policy Paper
WIP
 The Multinationals are
What’s the
leading the pack whilst
progress with the SMEs are still
Industry? struggling

Why
1.Lack of resources both capital & talent
2.Lack of Awareness
3.Don’t know where they are in the industrial revolution
continuum…..
IR 4.0 Digital Initiatives Clusters and Complexity

Source: McKinsey
What’s is needed to drive IR 4.0?
 Content

 Demystifying the 4th Industrial Revolution

 Industry 4.0 and Digital Transformation

 Industry 4.0/Digital Transformation: The Malaysian

Context

 Way forward
 Top 5 Challenges

 Employee Pushback
 Lack of Expertise to Lead IR 4.0 Initiatives
 Organizational Structure
 Lack of Overall Strategy
 Limited Budget
 Lack of Talent
IR 4.0 Readiness - Assessment
Sample Industry 4.0 Readiness Assessment Template
Top 10 Skills to be relevant in Industry 4.0
Categorisation of Skills
Change in Demand for Core-Work Related Skills
Important Qualifications & Skills for Industry 4.0
Creation of a Robust Vocational Education & Training
 22

THANK YOU

28th MSC Malaysia Implementation Council Meeting