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