MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY

EMBRACING INDUSTRY 4.0

An update of the National Industry 4.0 Policy

MiGHT, Cyberjaya
3 April 2018

‘Driving Transformation, Powering Growth’

 The Journey to the 4th Industrial Revolution
“Combination of the internet with a new ability to directly control the
physical world, including the machines, factories and infrastructure that
define the modern landscape” – WEF, 2016
c Industrial
th 4
revolution
Industrial
rd 3
revolution
nd Industrial
2 revolution
st Industrial
1 revolution

CYBER-PHYSICAL
SYSTEM

AUTOMATION
ELECTRICITY
STEAM t
Late 18th century Early 20th century Early 1970s Today and near future

2
 What is Industry 4.0?
“The technological evolution from embedded systems to cyber-
physical systems by adapting Internet of Things, Data and
Services. Decentralised intelligence helps create intelligent object
networking and independent process management, with the
interaction of the real and virtual worlds representing a crucial new
aspect of the manufacturing and production process” - The German
Trade and Invest (GTAI) Working Definition
“A domain of integrated processes and resources (cyber, The use of interconnected digital
physical and human) to create and deliver products and services,
which also collaborated with other domains within an enterprise’s
and associated technologies in
value chain and improves its performance aspects” – ISO &RAMI 4.0 industrial production that enables
“A confluence of disruptive digital technologies driven by
transformation in terms of people,
the astonishing rise in data volumes, computational power, and process and technology to enhance
connectivity; by the emergence of advanced analytics and business efficiency, productivity and revenue.
intelligence capabilities; by new forms of human- machine interaction,
by improvements in the transfer of digital instructions to the physical
world, such as in advanced robotics and 3-D printing” - McKinsey – Adopted from OECD (2017)
“Smart and connected manufacturing which includes
Industrial Internet, Connected Enterprise, Smart Manufacturing,
Smart Factory, Manufacturing 4.0, Internet of Everything and
Internet of Things for Manufacturing” - Deloitte

“Digitisation and integration of vertical and horizontal value

chains, digitisation of product and service offerings as well as digital
business models and customer interaction access” - PwC
 4th Industrial Revolution vs. Industry 4.0
4th Industrial Revolution
Total transformation of all industries’
sectors:
▪ Primary: Palm Oil, Rubber…
▪ Secondary: Production, Manufacturing..
▪ Tertiary: Services, Hospitality…
▪ Quaternary: Value Added Services e.g.
R&D…
into new system and/or way of life that will
change the way we do businesses.
Industry 4.0
Started from German Government’s
strategic initiative to transform the
secondary industry into modernized
cybernetic based manufacturing and
production system that are efficient and
more cost effective.
To establish Germany as a lead market
and provider of advanced manufacturing
solutions.
Other names:
• Smart Manufacturing
• Industry Internet of Things
 The Enabling Technologies of Industry 4.0
Technologies
Theimpacting
Enabling theTechnologies
industry are evolving over time.4.0
for Industry These nine
(9) technologies are just the start

Big Data Analytics

Internet of Things Cyber Security

Cloud Computing Augmented Reality

Autonomous Robots Additive Manufacturing

Simulation System Integrations

 Prospective Benefits of Industry 4.0

Higher flexibility given by small batches production

FLEXIBILITY
with the economies of scale of mass production

Higher speed from prototyping to mass production

SPEED
using innovative technologies

Optimised productivity and efficiencies due to lower set-

OPTIMISATION
up time and reduced downtimes

Improved quality and scrap reduction thanks to real

QUALITY
time production monitoring through advanced sensors

Higher competitiveness of products and businesses with

COMPETITIVENESS a level playing field through cooperation and
confederation of firms
 Key Challenges for Industry 4.0

Awareness

30
Best Practices High-scale
and Use
daysCases Investment

Skills and 90 Collaboration

Know-How days
Culture

Data and
Digital
Cyber Security
Readiness
Concerns

Source: Public Consultation, National Industry 4.0 Policy Framework, 2018

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 Updates on the Government Initiatives
Benchmarking
▪ Countries include EU, US,
China, Japan, Korea, India and
ASEAN member states.
▪ Visit to Germany, Feb 2018
Study
▪ “Future of Manufacturing” for the 3+2
sectors (E&E, M&E, Chemicals,
Aerospace and Medical Devices (MIDA)

Stakeholder Engagement Outreach

▪ HLTF led by MITI
▪ Regular Cabinet updates
▪ Stock-take various Industry 4.0 initiatives
▪ Online Public Consultation, 9 Feb – 9
March 2018
▪ National Industry 4.0 Seminar, 2 May 2017
▪ Industry 4.0 Seminar for Senior Government
Officials and SMEs, 15 June 2017
▪ Redesigning Higher Education for Industry 4.0,
24 – 25 Aug 2017
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▪ Seminar on the Dutch Approach to Innovation
and High Tech Development, 8 Feb 2018
 Global Benchmarking

Manufacturing
Innovation Industry

Industrie 4.0
Manufacturing USA
Made in China 2025

Industrial Value
Chain Initiative
Productivity 4.0
Thailand 4.0

Future of Manufacturing
Singapore
 Key Takeaways for Malaysia
SMEs ▪ Establish innovation intermediaries to promote collaboration between SMEs, large
firms and universities to carry out R&D and provide industry solutions in the
manufacturing sector
▪ Provide targeted incentives to SMEs in order to encourage technology adoption and
incentivise them to carry out own R&D
▪ Develop and carry out Conformity Assessment/ Smart Industry Readiness Index of
manufacturing firms to determine level of Industry 4.0 readiness
Human Capital ▪ Intensify partnerships between academia and industry to enable skill development for
& Talent students
▪ Review current curriculum of universities to incorporate necessary skills for Industry
4.0
▪ Set up talent centres to retrain and upskill existing workforce using existing facilities
and trainers
▪ Provide assessment of manufacturing workforce and certification of talent with skills
relevant to Industry 4.0
Technologies & ▪ Increase international collaborations with countries leading Industry 4.0 to allow
Standards technology and knowledge transfer
▪ Set up of taskforce to oversee standards related to new technologies

Digital ▪ Provide necessary digital infrastructure to allow ease of digital adoption among SMEs
Infrastructure
▪ Facilitate R&D institutes to act as testbeds and allow companies to experiment with
& Ecosystem
new technologies
Funding & ▪ Provide government support schemes to enable the development of SMEs in areas
Incentives such as talent, innovation, R&D, entrepreneurship, etc.
▪ Provide incentives for companies to adopt technologies associated to Industry 4.0
 Stakeholder Engagements
• TWGs will co-opt private
• The TWGs will identify sector members to ensure
challenges, analyse existing gaps recommendations are holistic.
and propose actions to be taken Digital
Infrastructure &
accordingly.
Ecosystem
• The TWGs will report to the
(KKMM) HLTF on a monthly basis.

Funding &
Skills & Talents Incentives
(MOHR & MOHE) (MOF)
HLTF
(MITI)

SMEs Standards &

(MITI & SME Corp) Technologies
(MOSTI)

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 Government as an Enabler to Industry 4.0
Need to…

1 Develop a comprehensive National level strategy on Industry 4.0

via NBOS principle

2 Improve infrastructure & ecosystem

3 Provide targeted funding and incentives

particularly for SMEs

4 Ensure adequate supply of

human capital and skills

5 Facilitate development of standards and

technology supply

6 Increase overall awareness on Industry 4.0

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 National Industry 4.0 Policy Framework
Strategic partner for
Malaysia’s vision for the smart manufacturing
Primary Total solution provider
manufacturing sector in destination for for advanced
& related services in
the next 10 years high tech industry technology
Asia Pacific
TheVision

Specific goals to guide and Labour Manufacturing

Innovation
measure the progress of Productivity Contributionto High SkilledJobs
Capacity
transformation Growth Economy
TheNationalGoals

Aset of shift factors that

need to be optimised in a
balanced manner
PEOPLE PROCESS TECHNOLOGY
TheShiftFactors

Specific enablers
SKILLS
that determine FUNDING INFRASTRUCTURE REGULATIONS &TALENT TECHNOLOGY
the strategies, Funding & Enabling Regulatory UpskillingExisting Access to Smart
Outcome-Based Ecosystems & Framework & & Producing Future Technologies
policies and Incentives Efficient Digital Industry Talents
Infrastructure Adoption
The Enablers action plans
 National Goals and Target
The specific goals and targets are in support of the national vision for the transformation of the
manufacturing industry. They guide and measure Malaysia’s progress in improving productivity,
strengthening the innovation capacity and capabilities, driving the shift to a higher skilled workforce, and
expanding the overall contribution of the manufacturing sector to the national economy.
Goals
Productivity of the manufacturing industry
To increase the level of productivity
per person
…………………………………………………..…………… in the manufacturing sector;
From RM106,647 to increase by 30%

Absolute contribution in Ringgit Malaysia (RM) To elevate the contribution of the

term from the manufacturing sector to the
national economy
manufacturing sector to the
…………………………………………………..…………… economy;
From RM 254 billion To RM 392 billion

Global Innovation To strengthen our innovation

Index ranking capacity and capability, reflected in
…………………………………………………..…………… the global innovation ranking;
From #35 To top 30 nations

Numbers of skilled workers employed in To increase the number of high-

the manufacturing sector skilled workers employed in the
…………………………………………………..……………
manufacturing industry
From 18% to 35%
*The targets for the goals are developed from the 2016 baseline figures
 Shift Factors
Malaysia’s transformation will require an approach and ecosystem that optimises and
balances the relationships between people, processes and technology.
Industry 4.0 adoption will only be as good as the processes that are implemented around it,
and the processes are only as good as the people who execute them.

People Process Technology

Improving both Technology

Given its criticality;
developing, upgrading
and retaining the
required talent and skills
are at the centre of the
new national policy.
manufacturing and
business processes is
important for Malaysia’s
transformation and the
policy aims to create a
favourable business
environment and facility
public-private
partnerships.
advancement is
increasingly propelling
global manufacturing
competitiveness and the
policy framework fosters
a seamless and
accelerated adoption of
Industry 4.0
technologies, especially
for SMEs.
 National Industry 4.0 Strategies

F I R S T

Enabling Ecosystem &

Financing & Outcome-
based Incentives
Strategy F1:
Provide outcome based
incentives, including tax
incentives to encourage
investments in, and adoption
of, industry 4.0 technologies
& processes.
Strategy F2:
Introduce dynamic and
innovative financial products to
encourage adoption of industry
4.0 technologies & processes.
along supply and manufacturing
Regulatory Framework &
Efficient Digital
Industry Adoption
Infrastructure
Strategy I1: Strategy R1:
Strengthen the digital Increase awareness of the
connectivity in and between need, benefits and opportunities
industrial, education and of Industry 4.0 technologies and
training hubs to remove business processes among
connectivity bottlenecks in manufacturing firms
adopting industry 4.0
technologies.
Strategy R2:
Create a platform and
Strategy I2: mechanism to help
Enhance the digitalisation and manufacturing firms,
integration of government especially SMEs, assess and
processes and infrastructure develop their Industry 4.0
capabilities
value chains.
Strategy R3:
Strategy I3: Improve data integrity,
Involve services providers for standards, sharing, and security
industry 4.0 and link them to to facilitate seamless
manufacturing firms to help integration of manufacturing
implement technologies, value chains and to support
processes and skill intra-ministerial coordination for
development. effective Industry 4.0
programs.
Upskilling Existing & Access to Smart
Producing Future Talents Technologies & Standards
Strategy S1: Strategy T1:
Enhance the capabilities of Establish digital/technology labs
the existing workforce and collaborative platforms,
through national development especially public-private
programmes specially partnerships (PPP), to create
designed for specific awareness and understanding,
manufacturing sectors and foster the adoption of new
support re-skilling and technologies, and facilitate the
upskilling. transfer of knowledge
Strategy T2:
Strategy S2:
Establish and implement
Ensure the availability of
standards for interoperability,
future talent by equipping
quality and safety for smart
students with the necessary
manufacturing and Industry 4.0
skillsets to work in the
technologies.
Industry 4.0 environment
Strategy T3:
Intensify Research, Innovation,
Commercialisation and
Entrepreneurship (RICE)
programmes and activities in
specific Industry 4.0
technologies and processes that
support and advance priority
sectors.
 Moving Forward
REGULAR PROGRESS ENGAGEMENT AND NATIONAL POLICY
UPDATES AWARENESS PROGRAMMES

• Updates on policy • Actively collaborating • Launch of the National

development progress with stakeholders on Industry 4.0 Policy
through various forum Industry 4.0 Framework by first half
implementation of 2018
• Inter-Ministerial and
private sector
collaboration in seminars
and workshops
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 MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY

Thank you

Menara MITI
No. 7, Jalan Sultan Haji Ahmad Shah, 50480 Kuala Lumpur, Malaysia
Tel: 603-8000 8000 | Fax: 603-6201 2337 | Email: webmiti@miti.gov.my | Website: www.miti.gov.my