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The Impact of Industrial Revolution 4.0 on Shipbuilding and Ship Repair

Activities in Malaysia

Chapter · January 2020

DOI: 10.1007/978-981-15-0002-2_27

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Lecture Notes in Mechanical Engineering

Chun Lin Saw

Tze Keong Woo
Salvinder Singh a/l Karam Singh
Didi Asmara Bin Salim Editors

Advancement
in Emerging
Technologies
and Engineering
Applications
The Impact of Industrial Revolution 4.0
on Shipbuilding and Ship Repair
Activities in Malaysia

Mohd Naim Awang, Effi Helmy Ariffin and Arman Ariffin

Abstract The Industrial Revolution 4.0 has been discussed and debated all around
the world. Every country is preparing their strategies to address the Industrial Revo-
lution 4.0. The impact would be more significant than previous industrial revolution.
Global economics issue was impacting the marine industry. Unstable oil price creates
a substantial impact on country and industries that depend on oil price. In last decade,
the marine industry scaled down due to the oil crisis and the oil and gas industry
also facing the same problem. In this paper, a brief preparation of existing marine
industry status was discussed. A recommendation for the way ahead in Shipbuilding
and Ship Repair (SBSR) to confront the revolution was proposed.

Keywords Shipbuilding and ship repair · Industrial revolution 4.0

1 Introduction

In past few years, the Industrial Revolution 4.0 or known as IR 4.0 has become the
hot topic in the discussion of every domain related to the industries. In Malaysia,
some initiative and organisation have been established at various level (national,
state, and regional level) for both government and industry with the objective to keep
the industry remain relevant in future. Therefore, significant initiatives to support
and drive the identified element should be created to support and stay focus on this
industrial revolution.

M. N. Awang (B)
Politeknik Ungku Omar, Perak, Malaysia
e-mail: mnaim@puo.edu.my
E. H. Ariffin
Institute of Oceanography and Environment, Universiti Malaysia Terengganu,
Kuala Nerus, Malaysia
e-mail: effihelmy@umt.edu.my
A. Ariffin
Royal Malaysian Navy, Kuala Lumpur, Malaysia
e-mail: arman.ariffin@ensta-bretagne.org

© Springer Nature Singapore Pte Ltd. 2020 267

C. L. Saw et al. (eds.), Advancement in Emerging Technologies
and Engineering Applications, Lecture Notes in Mechanical Engineering,
https://doi.org/10.1007/978-981-15-0002-2_27

mnaim@puo.edu.my
268 M. N. Awang et al.

The Third Industrial Master Plan (IMP3), 2006–2020 serves as an important

planning instrument in expanding the sources of growth and positioning Malaysia’s
long-term industrial competitiveness. While the Government will centime to make the
investment environment conducive, through enhancing the institutional and infras-
tructure support, in particular, the regulatory regime and the delivery system, domes-
tic firms and private sectors institutions will need to be more committed, in undertak-
ing measures to enhance productivity, efficiency and competitiveness [1]. Transport
Equipment Industry is under the Chap. 13 of the IMP3; the industry comprises of
three sub-sectors: 1. Automotive, 2. Marine Transport, 3. Aerospace.
In IMP2 (1996–2005), the achievement of the sub-sector is development of capa-
bilities in marine engineering design and technology upgrading; construction of small
ships and boats, including leisure craft and yachts, as well as undertaking of ship
repairing activities, such s maintenance, and overhauling of vessel; and increase in
exports, comprising mainly small leisure and recreational vessels, as well as tugboats
and pusher craft. During IMP2, the total exports of marine transport products grew
from RM882 million in 1996 to RM2.2 billion in 2005 (see Fig. 1).
The major export destination was Nigeria Singapore and Myanmar. On the export
point of view, it was an increment by an average annual rate of 3.6 per cent, from
RM2.3 billion in 1996 to RM3.2 billion in 2005. The significant import items were
a cruise ship, ferry boats, cargo ships and barges, tugs, and pusher craft. The sources
of import were Japan, Republic of Korea and the Netherlands (see Fig. 2).
Based on the presented data, six identified challenges were identified which are:
1. Increasing global and regional competition, 2. Rising costs of raw material, 3.
Excess capacity, 4. A shortage of qualified personnel, 5. Inadequate technology and
6. Lack of infra-structure and support facilities. To overcome these challenges, five
strategies and policies have been set for the long-term viability of the marine trans-
port sub-sectors which are 1. Enhancing domestics capabilities in the building of

Fig. 1 Exports of marine transport products. Source Department of Statistics

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The Impact of Industrial Revolution 4.0 … 269

Fig. 2 Imports of marine transport products. Source Department of Statistics

smaller vessel, ship repairing and maintenance activities; 2. Intensifying the upgrad-
ing of skills and engineering capabilities; 3. Strengthening infrastructure and support
facilities; 4. Strengthening the institutional support; and 5. Expanding activities in
the fabrication of offshore structures.
The Malaysian Industry-Government Group for High Technology (MIGHT) was
launched on 22nd February 1993. MIGHT is a market-driven technological part-
nership think-tank with emphasis on market intelligence initiative using foresight
practices and methodology to identify the technology and business opportunities to
be explored. In the report of Malaysian Ship Building/Ship Repair Industrial Report
2015/2016, the former Prime Minister Dato’ Seri Mohd Najib Tun Haji Abd Razak
reminded the challenge that oil-producing country such as Malaysia once again fac-
ing the impact of a significant drop of oil price. It negatively impacted the local oil
and gas as well as Shipbuilding and Ship Repair (SBSR) industries. The primary
action taken by giant oil companies by cutting down their expenditure inevitably
brings the market to a low peak [2].
The term “Industry 4.0” was initially coined by the German government. It
describes and encapsulates a set of technological changes in manufacturing and
sets out priorities of a coherent policy framework with the aim of maintaining the
global competitiveness of German industry. It is conceptual in that it sets out a way
of understanding an observed phenomenon and institutional in that it provides the
framework for a range of policy initiatives identified and supported by government
and business representatives that drive a research and development programme [3].
Since it was debated in European Parliament, other countries around the are preparing
their industry to be to date and competitive with this new revolution.

mnaim@puo.edu.my
270 M. N. Awang et al.

2 Background of Industry Revolution 4.0 and Malaysian

Shipbuilding/Ship Repair (SBSR)

The “Industry 4.0” is based on the technology. It describes the organisation of pro-
duction processes based on technology and devices autonomously communicating
with each other along the value chain. The Industry 4.0 concept takes account of the
increased computerisation of the manufacturing industries where physical objects
are seamlessly integrated into the information network. As a result, “manufactur-
ing systems are vertically networked with business processes within factories and
enterprises and horizontally connected to spatially dispersed value networks that
can be managed in real time—from the moment an order is placed right through to
outbound logistics.” These developments make the distinction between industry and
services less relevant as digital technologies are connected with industrial products
and services into hybrid products which are neither goods nor services exclusively.
Indeed, both the terms ‘Internet of Things’ and ‘Internet of Services’ are considered
elements of Industry 4.0.
In Europe, the Industry, Research and Energy Committees under European Par-
liament is preparing the EU industrial policy, shows a fuzzy picture permanently
striving for balance between the three main approaches, which are regulatory; finan-
cial and distributed policy [4]. The EU commission has identified some challenges
and associates must be confronted. There are five main challenges identified which
are: resource efficiency, access to digitisation, access to global value chains, skill
development and supportive regulation.
The past few years had become challenging years for the Shipbuilding and Ship
Repair (SBSR) industry in Malaysia. It is the impact of the continuing downturn in
the offshore market and low oil prices. The SBSR industry annual revenue dropped
33% from the high of RM8.35 billion in 2013 [5]. The Malaysia SBSR industry is
well clustered on both Peninsular and East Malaysia.
The SBSR in Malaysia has been around more than 100 years starting from the
establishment of Brooke Dockyard in Sarawak. Since then, Malaysia is capable of
exporting the Malaysian made vessel to another country worldwide. Unluckily, the
ability of SBSR industry was underrated and remain developing in a slow pace. IN
copping with the effect of downturn oil prices and scale down of the oil industry,
many giant shipbuilders making massive restructuring plan in a struggle to survive.
In 2008, only nine shipbuilders were survived compared to 28 shipbuilders in Korea.
Figure 3 shows the industry outlook during the low and high peak in SBSR industry
around the globe.

mnaim@puo.edu.my
The Impact of Industrial Revolution 4.0 … 271

Fig. 3 The industry outlook during the low and high peak in SBSR industry around the globe

3 Industry Revolution 4.0 in Shipbuilding and Ship Repair

Industry

The MIGHT as an agency under Prime Minister Office has presented their recom-
mendation for SBSR towards the Industrial Revolution 4.0. There is nine technology
trend should be addressed by each key player in SBSR to keep their organisation
relevant.
The nine technology trends are 1. Big data analytic; 2. Sensors; 3. Autonomous
System; 4. Robotics; 5. Advance materials; 6. Advance manufacturing; 7. Human
Augmentation; 8. Clean energy and 9. Blockchain. All technology trends should be
addressed in every element in SBSR which are started with Design, Engineering,
Workshop setup, Fabrication and assembly, Outfitting and furnishing, Testing and
last, is the Operation. In China, the Chinese Government already establish their long-
term plan to be shipbuilding superpower in 2020 as shown in Table 1. This plan had
registered in the State Commission of Science, Technology and Industry for National
Defense [6].

4 Recommendation

With the objective of keeping the SBSR in Malaysia be relevant, authors proposed
five main elements to be address related to Industry 4.0.

mnaim@puo.edu.my
272 M. N. Awang et al.

Table 1 Long-term plan of the Chinese Government (State Commission of Science, Technology
and Industry for National Defense) (units: 10,000 dwt; per cent) [6]
Construction quality Share Remarks
2004 800 14
2005 1000 16 2005 actual performance: 12 mil dwt,
18%
2010 Shipbuilding power 25 Sharing the markets in Japan, S. Korea
and China
2015 2400 35 China acquires the number one share
2020 Shipbuilding superpower China achieves world standards in
shipbuilding technology as well and
becomes the world leader in both, name
and reality

4.1 Development of Comprehensive Blueprint for SBSR

The comprehensive blueprint should consist of a contribution from government,

shipbuilder, a local company, and user. Local universities must be a member of each
level and process for determining the possible improvement could be implemented
for the upgrading or solving existing issues related to SBSR domain.

4.2 LNG Fuelled Engine

Liquefied Natural Gas (LNG) surge in popularity as an alternative fuel for ships
are visible these days because of its environmental friendliness. It has a very CO2
emission. This is aligned with the IMO Tier 3 requirement related to polluted elements
contained in the exhaust emitted by a vessel.

4.3 Solar and Wind Powered Ships

Development technologies to utilise renewable energy such as sun and wind. In

ship propulsion development, the use of kite is under the development, and it was
identified as a potential solution to optimise the clean and renewable energy.

4.4 Integrated Electric Propulsion

The system uses electric transmission instead of mechanical transmission which are
bulky and massive. The use of electric propulsion will eliminate the need for clutches

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 The Impact of Industrial Revolution 4.0 … 273

and reduce or eliminates the use of a gearbox. Integrated Electric Propulsion offers
an excellent operational envelope and may increase the availability of the vessel.

4.5 Shipbuilding Robotics

Robotics as a driver of efficiency along with a method to prevent workers from doing
dangerous tasks such as welding. The limited resource of high skill welder is also
one of the reasons t look upon robotics for carrying out welding, blasting, painting,
heavy lifting and another task in shipyards for high production rate.

5 Conclusion

Malaysian should be updated with the Industry 4.0. The move forward plan for SBSR
must be taken care of every contributor in this industry. The link in every network is
important to make sure each element in SBSR are well-addressed, and the mission
and vision of SBSR blueprint could be achieved.

References

1. MITI (2006) Third industrial master plan, 2006–2020: Malaysia, towards global competitive-
ness: IMP3. Kuala Lumpur
2. Zainal K, Nor AM, Intan SWTAR, Mahfar N, Jalil DSA (2015) Malaysian shipbuilding/ship
repair industry report 2015/2016
3. Smit J, Kreutzer S, Moeller C, Carlberg M (2016) Policy department a: economic and scientific
policy—industry 4.0. Brussels, Belgium
4. Gyorff M (2018) Policy department a: economy and scientific policy. Brussels
5. Sulaiman MY, Mohamad Z, Rahim RA, Ani Suzila A, Mohd Jalil IH, Ishak M, Mohd Nudri
MNA, Sullivan N, Mohd Emran N, Norsam NT, Mohd Razali NT, Mustafar NS, Annabel Anak
Bisop P, Hasan R, Raja Intan SWTA (2017) Malaysian shipbuilding/ship repair industry report
2017/2018
6. Chryssolouris G, Makris S, Xanthakis V, Mourtzis D, Ludwig T, Tholen J (2006) Towards the
internet-based supply chain management for the ship repair industry. Eur Met 17(1):1–49

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