• Madani Sahari

INDUSTRY 4.0 - Understand market forces and anticipate changes

On Tuesday, the Ministry of International Trade & Industry (MITI) hosted the Latin American Business Day to bridge business, trade and investment ties between Malaysia and the Latin American nations.

I had the privilege to share my thoughts as a panel speaker for the Automotive track. I talked about the direction country’s automotive industry, in particular the expansion beyond our region. The bigger honour, however, was the opportunity to gain insights from those around me. I would like to share what i had learned.

One of the key evolutions we can expect to see in future business deals is the way transactions are conducted. In the past decade, the world saw tremendous gains in e-commerce activities, exemplified through the emergence of giant entities such as Amazon and E-bay.

These cyber-businesses transformed retail beyond purchasing convenience, and revolutionised purchasing decisions, behaviour and mindset.

Consumers grew to be more informed on the choices they had.

While the playing field became more accessible and transparent, it also gave birth to the logistics nightmare of door-to-door retail – consumers didn’t need to leave their houses to receive their purchases.

Such is the tide of the Fourth Industrial Revolution (Industry 4.0). When immersive connectivity is thrown into the business foray, even large companies can dissipate without any signs.

The next mile of Industry 4.0 would most likely shift to the supply chain. We are seeing signs that global sourcing will soon find its way to the same revolution. Imagine a future where carmakers source for components in an Ebay-style bid.

At the Latin American Business Day, I learned that the importing of automotive spare parts through e-commerce channels have gained popularity among workshop owners.

In anticipation of the future, the Malaysia Automotive Institute (MAI) and International Trade and Industry Ministry are addressing nine core thrusts to allow Malaysian businesses to flourish. These thrusts form the fundamental structure of the MAI Intelligent Technology Systems (MITS).

One of the key challenges is the management of big data. Businesses will need to quickly respond to various consumer, manufacturing and after sales data.

MAI has set up a High Performance Cloud Computing server in its headquarters in Cyberjaya, as well as connected servers in Kuala Lumpur and several locations around the world.

Big Data will encompass the entire breadth and depth of supply chain activity. The computing power mentioned above is connected to several systems that cater to the difference disciplines that make up the automotive industry.

Process development is now made more responsive through MAI’s System Integrator and Manufacturing Execution System. The need for quicker decision making in Production planning, procurement, sales, marketing and financial management is addressed through MAI’s Enterprise Resource Planning and Integrated Industry Information System.

Consumer behaviour can now be understood better through MAI’s Telematics program. Motorists also participate through applications developed by MAI such as MAGIS, Carbengkel and MyAutoApp.

To date, eight out of nine Industry 4.0 thrusts have been developed. The ninth - Augmented Reality - is expected to be implemented next year.

Malaysia’s automotive industry is merely around three decades old. For me, the biggest lesson we have learned is that resisting change and market forces is a last thing we should do. We should focus on predicting and anticipating change before it happens.

The future is essentially about understanding market forces. To compete, we must know our customers’ needs and reflect them quickly in our supply chain.

The only thing that is constant is change. True power is in those who know what will change and react quickly.

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