SMART MANUFACTURING IS MUCH NEEDED TO INCREASE MALAYSIAN MANUFACTURING COMPETITIVENESS IN THE GLOBAL MARKET
Petaling Jaya – The SME Association of Malaysia lauds the government commitment to drive Industry 4.0 adoption to increase the competitiveness of manufacturers and manufacturing-related services. Finance Minister, Tengku Zafrul announced in the Budget 2022 to allocate RM 45 mil as technological transformation incentives for SMEs as well as mid-stage companies in the manufacturing and services sectors, in line with Industrial Revolution 4.0 or Industry4wrd.
“The allocation is timely as more than 1,000 companies have gone through Industry4wrd Readiness Assessment Programme but unsure how to proceed further due to limitation in funds to invest in Industry 4.0 project. The Covid-19 pandemic makes it worse as many are surviving with no or limited cash flow to allocate as a development fund,” commented Yap Keng Teck, Chairman of Industry 4.0 Bureau and National Vice President of SME Association of Malaysia.
“Financial capability is the main reason why SMEs are not adopting Industry 4.0 according to a recent online survey Industry 4.0 Adoption Journey 2021 by MPC and a group of Industry 4.0 drivers. The budget allocation to the Industry4wrd Intervention Fund is insufficient as it can only support slightly over a hundred companies. We need a sizeable critical mass of manufacturers to drive the manufacturing sector forward. More funds need to be allocated.”
“We hope that part of the RM 45 mil allocation can be used to initiate a new grant programme which needs lesser time for approval. Presently, some applications can take up to or more than 9 months to get their grant approved from getting Readiness Assessment to application for Intervention Fund. Industry 4.0 is a journey, not an end to itself. It might not be a smooth journey for all. Manufacturers need to start their journey early, experience it, learn from it, improvise before they can truly get their ROI. The drive and momentum to adopt Industry 4.0 will drop when they waited too long. It is not only an opportunity cost for the SME manufacturers, it is an even greater opportunity cost for our nation to be positioned as smart manufacturing hub for Asia ”
“I strongly feel that financial incentives is just one of the key factors why SMEs has not embarked into Industry 4.0. The low level of understanding, the uncertainty of ROI and insufficient local case studies to increase their confidence are amongst other reasons stopping them. The government needs to work closely with the members of the Industry 4.0 ecosystem, aggregate resources, knowledge and experience to bring greater value to SME manufacturers. The allocation should be made to increase engagement programmes including workshops, visit to trade expos and study trips to local and foreign companies with successful Industry 4.0 adoption. SME Malaysia is committed to working closely with the government to make it a reality. MITI and its agencies MPC, MATRADE, SIRIM, MARII, MIMOS have shown their passion to drive Industry 4.0. I thank them for their dedication.” Added Keng Teck who is also a member of Industry4wrd Steering & Technical Committee for Readiness Assessment.