Thursday, 25 May 2017

FOURTH INDUSTRIAL REVOLUTION - Cyber security key for automotive industry growth

Earlier this month the world was rocked by the WannaCry cyber worm. Many of us, for the first time, heard of the term "ransomware". Most significant, it served as an eye opener for the ever-evolving threats we face as we move into the fourth industrial revolution - a future where connectivity is at the very core of our daily lives.
Today, a car processes a massive amount of data. Its electronic control unit processes fuel injection timing, engine torque and load, vehicle speed, spark plug firing, just to name a few.

If we take a look at mid to high range models in the market, consumers receive even more onboard diagnostics, including tyre pressure and fuel distance, not to mention automated safety features, such as lane departure warnings and blind spot detection.
Last year, 94 million cars were produced worldwide. Imagine this number growing, with each connected to the other – telematics, user behaviour, traffic flow patterns, engine operations and fuel consumption, all connected to servers around the world.
If we want to make connectivity our future, we must move the cybersecurity agenda now.
While organisations such as CyberSecurity Malaysia and the Malaysia Digital Economy Corporation (MDEC) have reached tremendous in-roads in enhancing cyber security within the country, keeping our cyberspace free of attacks is everybody's responsibility.
WannaCry is estimated to have affected 200,000 victims with more than 230,000 computer infected. With such massive damage, the public awareness litmus test is simple. How many of us were aware of the attack? Second, and most important, how many among us have installed the latest security patch on our operating system?
If the likely answer for most of us is a blank, then the way forward is quite simple – more must be done to raise public awareness of the need for cyber security.
While Malaysia Automotive Institute’s Industry 4.0 initiatives have taken cyber security as one of the main pillars, a key national agenda would be to increase participation of the public in online security initiatives.
Recent breakthoughs included adoption of strong multi-factor authentication, in which access is granted beyond passwords, requiring user to add another authentication layer such as fingerprints, retinal scans or voice activation.
With this in mind, local businesses now face new opportunities created from such demand for online security.
While our domestic industry has the competitive advantage of understanding the local market when it comes to security behaviour, I urge more parties to seize this opportunity to allow locally developed cyber technology to take centre stage.
Technology may be the security enabler, but at the end of the day, people are what matter the most.
The writer is the chief executive officer of Malaysia Automotive Institute.

Thursday, 18 May 2017

INTERNET OF THINGS - Bridging the gaps for SMEs to face Industry 4.0

In its previous article, this column discussed new frontiers of opportunities for small and medium enterprises (SMEs) by shifting business models towards global value chain thinking. In this article, we delve further into the implementation of such paradigm shifts.
It was 1876 when Alexander Graham Bell patented the first device that will eventually become the wired telephone. It took almost an entire century for Motorola to demonstrate the first handheld mobile phone in 1973.
The first smartphones were seen at the turn of the century, less than three decades later. In 2017, smartphones have evolved beyond this, making them our personal assistants, and also allow us to communicate visually with anyone around the world.
If it took a mere decade for the smartphone revolution to render copper-wire services obsolete, imagine what will happen over the next few years in an automotive industry that utilises thousands of components.
Disruptions will force businesses to reduce risk by focusing on specialisation, to ensure that the impacts of global disruptions are shouldered by many specialists in the entire work process. This chain of businesses will make up what will be referred to as the "Global Value Chain".
SMEs will need to develop expertise in a specific activity, or "values", in order to remain competitive in a future world where products and services require higher complexity, and this demand is expected to grow at an exponential rate.
As discussed previously, it would be a daunting task for SMEs, even large corporations, to maintain such capabilities in-house, under one roof. This is simply because global disruptions are expected to occur at a higher frequency than previously seen in earlier technology revolutions.
The silver lining is that a breakdown of specialisation is an advantage for SMEs, as smaller operations are much easier to realign to newer trends. The question that remains is - how this can be done with limited capital?
In embracing Industry 4.0, the government recognises that heavy investment is required to enhance digitalisation and connectivity.
Issues surrounding Industry 4.0 compatibility requires cloud connectivity and holistic processing of 3d collaborative designs, engineering simulation, manufacturing execution systems, logistics, telematics, aftermarket data and 3D printing.
Conventional processes will need digital upgrades, with the "Internet of Things" and Big Data Management becoming an increasingly ubiquitous feature to remain competitive.
To enable businesses, in particular SMEs, to bridge this gap, the Malaysia Automotive Institute (MAI) has developed such systems within its campuses, open for lease by all industry stakeholders. These systems, developed under MAI's Industry 4.0 initiatives, aim to assist businesses, academia and government organisations in building comprehension and integration with future business technology.
MAI's cloud computing servers have been set up to accommodate large amounts of data, connected to the systems mentioned above for use by the industry.
Coupled with MAI's human capital programs that cater to all industry needs within the manufacturing and aftersales sectors, this holistic system allows technology penetration into the SME workflow without risking high capital investments.
As these businesses grow with technological capabilities, we are more than happy to assist companies in developing in-house capabilities that are in line with the business needs of the future.
If you are a business owner, take a step into the future and contact us for more details.
The writer is the chief executive officer of Malaysia Automotive Institute

Thursday, 11 May 2017

SME INTEGRATION - Need for specialisation to join global value chain

One of the important talk points from recent economic tides is the integration of small and medium enterprises (SMEs) into the Global Value Chain (GVC).
Traditionally, participation into the global economy was based on supply chain models, i.e. as a business entity, specialising in specific products and services and offering them to the global markets.
Supply Chain models often require overall ownership of processes, from product development, logistics, operations and even marketing. This means that companies aiming to compete globally requires them to master all the above, despite not having the comparative advantage to do so.
On the other hand, value chain thinking focuses on value addition to the sub processes within the entire supply chain. This allows companies to develop specialisation to a specific process that adds value to the entire product development and delivery cycle.
For example, a steering wheel module requires numerous specialisation to complete its supply, including plastic injection, steel forming, air bag module assembly, and leather stitching.
Within these sub processes, specialisations are required on each level, including research and development on both product function and materials selection, marketing knowledge, process expertise, logistics, and perhaps even prototyping capabilities.
This need to develop a wide range of specialisation has, for quite some time, deterred SMEs from entering the global market, handicapped by massive capital risk and talent needs.
Trends show that this thinking will change, most likely resulting in a migration of supply chain models to a global value chain model.
This opens opportunities for SMEs to start penetrating the global markets through the specialisation of specific processes, reducing capital expenditure and focussing on processes they are best at.
If the region has learned anything from the 2011 Tohuku earthquake and floods in Thailand, it should be that supply chain models often result in single sourcing, which is extremely vulnerable to disruptions such as the natural disasters.
Original equipment manufacturings (OEMs) around the world are now realising there can never be sustainable without sustainable value chains.
Therefore, it is high time that Malaysian businesses start looking into new business models.
Firstly, we must start recognising that cheap labour, which used to be our competitive advantage some decades ago, has been replaced with many over qualified graduates seeking challenges in a high income economy.
This means that we have reached the point where we cannot be consumers of technology, but technology based innovators - possessing the abilities and capacities to bridge technology readily available around the globe and utilising them to breed and create new value-adding activities.
OEMs around the world are sourcing their parts and services from around the globe. At the same time, the fourth industrial revolution has allowed a level of communication and process digitalisation that has paved the way for more SMEs to be part of the global value chain.
If there is such a time for our domestic industry to breach its glass ceiling, that time is now.
The writer is the chief executive officer of Malaysia Automotive Institute.

Thursday, 4 May 2017

HIGH-VALUE EMPLOYMENT - It's time for holistic planning and implementation

On Monday, Malaysia, along with many nations celebrated International Worker’s Day.
For many, it was an opportunity to take a break from work, especially since we were fortunate that this year, it coincided with the weekend.
While we celebrate the achievement of our nation’s workforce, it is equally important to spend some time pondering the future. In this case, the future source of livelihood for the millions in need of quality jobs and career advancement to further enhance the standard of living for all Malaysians.
As the world moves through its fourth industrial revolution, it is important for the nation to address the future employment needs.
The future of products, businesses, manufacturing and services within Industry 4.0 needs no introduction. This column has discussed the possible scenarios extensively in previous articles.
With respect to the automotive industry, the major talking points specific to employment and career advancements will most certainly revolve around job scope evolution and talent development.
It is said that throughout all the industrial revolutions, including this fourth one, manufacturing is the first sector to feel the impacts. The culmination of the first three revolutions, which foresees rapid advances in connective automation, will not only disrupt blue collar jobs, but also the while collar positions that manage them.
Even before Industry 4.0, the last few decades have seen the global disappearance of jobs that require both precision and repetition, replaced by multi-axial robots that have taken over jobs such as welding, machining and assembly.
While this phenomenon was more apparent in developed countries – Malaysia, will most likely face the same issues, as the cheap labour commodity contradicts with our ambitions for high income status. Imagine now, the disruption to higher level jobs due to enhanced connectivity and data analytics, synonymous with Industry 4.0, paired with current automation technology.
Industry 4.0 may sound like a scary outlook. For me, negative impacts can be managed with positive takeaways. Disruptions affect everyone – but they are also opportunities, as this very disruption also resets the game, paving chances for those who reach up to remain strong players.
It is best to note that while some jobs will be reduced because of Industry 4.0, new jobs will be created – it is not meant to eliminate livelihood, but rather a shift and remodel in workplace demands.
In conclusion, what must take place is the holistic planning and implementation of human capital development programs that shift towards the demands of the future. After all, it is for this very reason the automotive industry was created – to spur high value jobs through the participation of Malaysians in an industry that demands technological prowess.
It is my hope that by the first day of May of next year, we are closer to this goal.
The writer is the chief executive officer of Malaysia Automotive Institute.