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Review on Implementation of Industry 4.0 Globally and Preparing Malaysia

for Fourth Industrial Revolution

Article in The Proceedings of Design & Systems Conference · January 2018

DOI: 10.1299/jsmedsd.2018.28.2203

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2203
Review on Implementation of Industry 4.0 Globally and Preparing Malaysia for Fourth
Industrial Revolution

Effendi MOHAMAD*1, Lukman SUKARMA*1, Nor Akramin MOHAMAD*1,

Mohd Rizal SALLEH*1, Muhamad Arfauz A RAHMAN*1,
Azrul Azwan ABDUL RAHMAN*1 and Mohd Amri SULAIMAN*1
*1
Fakulti Kejuruteraan Pembuatan,
Universiti Teknikal Malaysia Melaka Hang Tuah Jaya, 76100 Durian
Tunggal, Melaka, Malaysia.

This study aims to scrutinise the present trend of Fourth Industrial Revolution (4IR) that emphasises on the industry
and to appraise the initiatives espoused by the Government of Malaysia in view of this. Many research works have shown
that several advanced nations have begun deploying advanced technologies like artificial intelligence, robotics, Internet
of things (IoT) and nanotechnology. This study substantiates that Malaysia is the new entrant for the 4IR and goes ahead
to take measures for dealing with the challenges that come with it. The efforts taken by the government to endorse the
deployment of 4IR include offering allowances, training and education. This paper is split into two segments. The first
offers an assessment of the global 4IR trend in other nations. The second segment reviews the preparations by Malaysia
for facing the 4IR challenges. The study collected information through multiple sources such as Springer, Elsevier,
Research Gate, Google Scholar, and Institute of Electrical and Electronics Engineers (IEEE).

Key Words : Industry 4.0; Technologies of Industry 4.0; Malaysia for Fourth Industrial Revolution.

1. Introduction

As per the economic reports prepared by Malaysia’s Ministry of Finance, in 2017, the manufacturing and service sectors are
still the major contributors to the country’s economic advancement [1]. In the manufacturing segment, electrical and electronics
product exports are estimated to grow 4.1% this year, a bit higher than 4% in the past years [2]. Nowadays, manufacturing sector
[3-4]
is viewed as a key sector for driving economic advancement and generating jobs . Manufacturers have to espouse
modernisation for obtaining greater flexibility and efficacy. The assimilation of manufacturing infrastructure is possible through
the use of latest technology wherein automation is the major factor that drives the successful transition [5]. Economic historians
point out that there have been three epoch-making industrial revolutions, spanning nearly 200 years [6]. Table 1 shows the four
stages of industrial revolution.

Table 1: Industrial Revolutions

Revolution Time Period Technologies
First 18th and 19th centuries Water- and steam-powered mechanical manufacturing
Second late 19th century – Electric-powered mass production based on the division
1970s of labour
Third 1970s-Today Electronics and information technology drives new
levels of automation of complex tasks
Fourth Today Based on Cyber- Physical System

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The 4IR banks on the progresses made in the ICT. This is termed as the synthesis of cyber-physical systems (CPS) offering
totally new competencies for humans and machines [6-9]. The 4IR signifies totally new means of embedding technology within
societies as well as human bodies, as typified by the advent of new technological innovations like artificial intelligence, robotics,
3D printing, Internet of Things, and self-driving vehicles.

1.1 Industry 4.0

These days, researchers express their views and interpretations regarding how the world should respond and why the global
business culture should be concerned on the arrival of the 4IR [8-9]. The term Industry 4.0 was conceived as Industrie 4.0 by the
Government of Germany, denoting a project devised for the future of German industrial production [10]. The preliminary journey
towards a new technological revolution was evident with the announcement at the World Economic Forum (WEF) conference
in January 2016 that provoked a profound interest about the advent of 4IR [11]. Other than Industry 4.0, there are some other
terms which denote the same idea [12] for example, Industrial Internet [13], Manufacturing 4.0 [14], Smart Manufacturing [15-16]
and Smart Factory [17]. The further evolution of advanced technology, blending internet and technological gadgets/tools such as
sensors, intelligent robots, software data analysis, 3D printing, data storage cloud, and spread of wireless communication will
impact the makeover of the industrial sector [18].

1.2 Technologies of Industry 4.0

Industry 4.0 pertains to a new domain encompassing interconnection between the IoT and CPS in a manner where the blend of
sensors, software, processors and communication technology plays a massive role in creating "things" to have the potential of
[19-22]
providing information and ultimately adds value to manufacturing practices . Nine technologies which drive the
transformation of present manufacturing processes to Industry 4.0 are IoT, Simulation, Horizontal and Vertical Integration,
Cyber Security, The Cloud, Additive Manufacturing, Augmented Reality, Big Data Analytics and Autonomous Robot [19, 24].

IoT facilitates interaction among humans, machines and equipment and concerning intelligent manufacturing through the World
[23]
Wide Web. CPS can enable real time communication and working with each other as well as humans . In 4IR, Vertical
integration encompasses the vertical digitisation of processes across the organisation, starting from product development to
logistics and services, whereas horizontal integration goes beyond internal operations, from supplier to consumer and all
partners [16]. The big data framework under 4IR enables a complete assessment of data collected from different sources so as to
[25]
aid real-time decision making, save energy, amplify quality of manufacturing, and improve equipment services . For
simulation, the virtual prototype can capitalise on real-time data to mirror the physical world which involves humans, machines
and products [19].

Under 4IR, robots will be more autonomous, flexible and cooperative. They will communicate with each other and work
securely with humans while also learning from them. The competencies of these robots will be wider compared to those
[19]
deployed in present manufacturing . Systems based on augmented reality will support a multitude of services, such as
[26]
selecting parts in a warehouse and transferring repair directives by means of mobile devices . In industry, the cloud
[27]
technology is termed as the notion of simulating an industrial unit online by utilising Web services . Cloud computing has
the potential to manage several virtual computing data and form resource pools for offering on-demand service for personal as
well as business users through different service modes online.

The limited volume of custom-made products can be manufactured by deploying additive production approaches that provide
development benefits such as intricate and lightweight designs. Optimal performance coupled with additive production systems
that are decentralised help reduce transportation distances and available stock [19]. 4IR can also increase the risk of cyber security.
Appropriate communication, access and identity management of users as well as machines are vital for detecting threats to
cyber security that could be amplified with the rise in connectivity and usage of standard communication protocols [24].

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2. Research Method

This study began with choosing the review topic, searching and examining the literature works. A wide-ranging number of
papers were obtained by forming a search string using the keywords ‘fourth industrial revolution’ ‘Industry 4.0’, ‘4th industrial
revolution’, ‘automation Malaysia’ and ‘internet of things’. An orderly search was carried out to determine academic papers
through the e-databases of Science Direct, Scopus, Institute of Electrical and Electronics Engineers (IEEE), Elsevier, and
Google Scholar. Furthermore, certain information collected from online sites as 4IR is comparatively new in Malaysia and not
many academic researches has been carried out on it. The 58 references comprised 36 academic papers and books and 22
information extracts from reliable websites. This paper was split into two segments. The first segment offered review on the
global trend of 4IR in other nations. The second segment offered a review on 4IR in Malaysia, focusing on the preparation to
deal with the challenges that come with it. Figure 1 presents the methodology of this review.

Figure 1: Process Flow of the methodology of the study

3. Review Analysis

3.1 Global Trend of Industry 4.0

Manufacturing countries such as United States (US), Germany, Japan, France, India and China have been developing
technologies in different fields to attain Smart Manufacturing in the industrial arena over the last few years [28]. Figure 2 depicts
the countries which have deployed Industry 4.0 in their production sector.

Figure 2: Countries that are part of the Fourth Industrial Revolution

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The Government of Germany announced ‘Industrie 4.0’ as the ultimate step towards establishing smart industrial units and
blend of projects encompassing the government, private sector, and academia [29]. According to Germany, the transformation
in industrial manufacturing and intelligent products generates more prospects to raise output, flexibility and quality in different
economic zones [8]. Industry 4.0 will be espoused by an increasing number of German firms during 5–10 years and will help
raise the output in all manufacturing sectors of the country by EUR90–150 billion [24].

Smart Manufacturing Leadership Coalition (SMLC), a non-profit entity, offers its backing to the manufacturing sector by means
of commercialisation of smart manufacturing systems in the US [30]. SMLC is not essentially Industry 4.0; however, the mission
and vision are almost the same. Its vision states that the future holds a “fundamental shift in manufacturing processes toward
demand-dynamic economics, flexible factories, and demand-driven supply chain service enterprises” [31]. The SMLC vision’s
is multi-dimensional where it must be implemented vertically across planning levels and horizontally across the product life
cycle is to assimilate manufacturing ideas from leaders from the industry; confederations, academic world, and the government
for developing cloud-based, open-design production infrastructure and marketplace [31]. The US is at present actively pursuing
the R&D of major technologies such as big data analytics, IoT, system integration, CPS, sustainable production and additive
manufacturing. In France, “Industry de Futur” was introduced to reform the manufacturing, business model and organisational
setup through a new digital ecosystem [32]. This plan concentrates on nine primary markets: sustainable cities, new resources,
transportation of tomorrow, ecological mobility, health of tomorrow, intelligent objects, intelligent food, digital economy, digital
trust and intelligent food.

Korea has deployed the manufacturing Industry Innovation 3.0 approach which mirrors Industry 4.0, adopting automation and
[33]
data exchange which can enhance production technologies . This approach aims to endorse innovation in production by
deploying the concept of a smart factory and advancement of core technologies pertaining to 3D printing, IoT and big data. The
Government of Japan has taken actions to deploy the Industrial Value Chain Initiatives (IVI) that concentrate on IoT
technologies and Industry 4.0 conceptions [34]. For instance, at Shimane Fujitsu, a manufacturing line for the overall process,
right from assembly and testing to packaging is operated on the lines of a totally automatic assimilated line for a printed circuit
board. The complete communication between humans and data enables a mixed flow production through the deployment of
technologies like RFID tags and IoT [35]. Table 2 shows recent works and related technologies pertaining to the deployment of
Industry 4.0 in different nations.

In Southeast Asia, a country such as Singapore is embracing Industry 4.0 in Jurong Island Eco-industrial Park [36]. Emerging
countries in Asia are characterised by low wages, including India and China, have expressed their commitment towards
transforming their manufacturing industry. Some of the initiatives are ‘Made in India 2025’ and ‘Made in China 2025’ [23, 37].
“Made in China 2025” is a program started by the government to upgrade the country’s manufacturing sector and enable it to
advance like countries such as Germany and other emerging nations with lower labour costs [37]. The objective is to transform
[38]
China from being a manufacturing major into a global manufacturing player over a period of 10 years . The plan
concentrates on domains such as renewable energy automobiles, aerospace equipment, robotics, high-end computerised
machinery, and biological medicine. The Government of India launched ‘Make in India’ to make local and multinational firms
confident about manufacturing products within the country through a blend of industry and IoT [37] [39].

Table 2: Floating-point operations necessary to classify a sample

Country Author(s) Key Technologies / Methods
 Key Technology:  Sub-Technologies:
Germany Kang et al. Smart Manufacturing IoS, Broadband-Infra, Security and safety,
[29]
 Core Technology: Resource efficiency, Training and development,
CPS, IoT, Big Data, Sensor, Smart energy, Regulatory framework,
Cloud Computing Standardization and reference architecture

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[40]
Exoskeleton emulating the anatomy and physiology of the human hand. Wear as a
Wee et al.
glove and support straining manual movements
[30]
Ivanov et al. Dynamic model & algorithm in supply chain scheduling in smart factories

[13]
Apply latest software NX, Team center, Product Lifecycle Management (PLM),
Kuge et al.
SIMATIC controllers and SIMATIC IT, Manufacturing Execution System (MES)
ALLROUNDER injection molding machine and a free former for additive
Rauen et al. [41]
manufacturing are linked by means of a seven-axis robot monitor using tablet PC.
[8]
Kegermann et al. Intelligent autonomous machine and assistance system, CPS technologies, IoT
China
Chunxi [42] Digital factory, Big data, Cloud service, Intelligent robot

 Core Technologies:
CPS, IoT/wireless platform,  Sub-Technologies:
Reference structure, Robot system, Sustainable
Kang et al. [29] Big Data/data analytics, manufacturing, System integration,
United States Sensor, Cloud Computing, Interoperability, Multi-scale dynamic modeling
and simulation, Intelligent automation, Cyber
(US) Smart energy, Additive security
manufacturing
Additive manufacturing (AM)
Huang et al. [43]
 3D Printing
Kang et al. [29] Core Technologies:
South Korea
CPS, IoT, 3D printing, Big data Cloud Computing, Sensor, Smart Energy, Hologram
Additive manufacturing (AM)
Switzerland Schlaepfer et al. [10]
 3D Printing
 Cyber-infrastructure, high
performing computing  Big data
Singapore Pan et al. [36] (HPC)  Sensor technologies
 Eco-industrial parks (EIPs)  Semantic web technologies
data storage
Existence of Cyber-Physical Systems Innovation Hub Autonomous robots/machine
India Kegermann et al. [8]
and assistance system, IoT

3.2 Industry 4.0 prospects in Malaysia

Today, Malaysia is taking steps to improve competitiveness, particularly in manufacturing exports which concentrate on frontier
or high-value commodities. The country is quite dependent on the deployment of smart manufacturing practices as well as
technologies to make sure the manufacturing sector would continue to expand at par with other emerging nations [44]. As per
Global Manufacturing Competitiveness Index 2016, Malaysia stood on the 17th position in the world and its index score was
59.0 out of 100 [45]. The list was topped by China (100), US (99.5) and Germany (99.3). A vital strategy to raise competitiveness
is by espousing advanced technologies like smart products, IoT, smart production through 4IR [45]. Malaysian Government also
has acknowledged the significance of digitalised technology for its economic sector, particularly the industrial segment.
Furthermore, the government has recognised the significance of future manufacturing systems which intend to lend flexibility
and enhance output in the industrial sector as pursued by governments [46].

As per the “2016 GE Global Innovation Barometer” report, a huge number of business executives in Malaysia are quite keen
to be part of 4IR. About 76% of Malaysian executives were confident against 61% worldwide. Meanwhile, 72% of Malaysian
[46]
executives were confident compared to 60% globally . According to these statistics, Malaysian executives are optimistic
about transforming their present manufacturing systems to the new technological advancement driven by Industry 4.0. However,

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their eagerness is not always supported by know-how and technology for deploying Industry 4.0. At present, countries such as
Japan, Germany, US, India and China are deploying Industry 4.0 as major attributes of their economies. Being ready for the
competition is vital to draw investors. With the advanced technology, Industry 4.0 holds the ability to draw increasing number
of investors to invest in Malaysia.

3.3 Malaysia’s initiatives to encounter Industry 4.0 Revolution

At present, Malaysia is preparing itself for Industry 4.0. Among the many initiatives taken is Economic Transformation
Programme (ETP). By 2020, this program intends to transform the country into a high-income economy [48]. Under the ETP,
projects will be initiated with the aim of providing a catalyst for the country’s economy and becoming a platform to augment
the usage of automation in its sectors [49]. Moreover, the focus on smart manufacturing was stated in the 11th Malaysia Plan [50-
51]
. This plan also endorses the usage of ICT, particularly in supply chain management, business operations, and delivery
systems, while proceeding with the application of the Technology Commercialisation Platform (TCP) to improve productivity
by means of innovation and automation. Automation Capital Allowance (ACA) was launched as part of Malaysia’s Budget
2015, marking it as one of the initiatives to stimulate transformation of the manufacturing industry. The Malaysian Investment
Development Authority (MIDA) has sanctioned 24 applications since its execution. With this automation, it is possible for
firms to attain, on average, a rise of 20–30% in manufacturing volume [51].

For embracing Industry 4.0, a key aspect is to bring on board individuals with specific talents to handle the integration of
automation and ICT in several applications. As per prior study, Industry 4.0 would drive a reduction in low-skill tasks and a
[52]
rise in high-skill tasks, including implementation of control and IT related activities and automation . At present, the
production, agriculture, and construction segments in Malaysia employed more than 30% of foreign labourers, the majority of
them being low skilled [50, 53]. Thus, a key focus of the 11th Malaysia Plan is on raising the efficacy of the labour market to
speed up economic progress. The main strategies involve improving labour output and decreasing reliance on low skilled
labourers. Malaysia’s Economic Planning Unit (EPU) too has designed a five-year exhaustive blueprint that aims to improve
output and decrease reliance on labour and capital inputs.

Furthermore, it is necessary to concentrate on uninterrupted learning, education and training to get the labour force ready for
prospective qualification prerequisites of Industry 4.0 technologies. This is vital to evade unemployment. The Government of
Malaysia has launched multiple programs so that the youth is ready to take up jobs. These include offering training through
initiatives like 1Malaysia Skills Training and Enhancement for the Rakyat (1MASTER), National Dual Training
[50]
System (NDTS), and 1Malaysia Skills and Employability Programme (SKK1M) . Furthermore, the government believes
that the Technical and Vocational Education and Training (TVET) segment is a major means of supplying highly skilled labour
force that would also be a main driver of the economy for emerging high-income countries [54]. Furthermore, TVET will be a
[55]
crucial enabler for ensuring a successful Economic Transformation Programme (ETP) . The existing labourers would get
several opportunities for improving and upgrading themselves such that they can continue to be relevant with economic
transformations.

The 2050 National Transformation (TN50) roadmap is another effort by Malaysian Government to feature in the top 20 nations
of the world by 2050 with regards to economic advancement, citizen welfare, and advances in science and technology [56].
Furthermore, TN50 is an extension of Vision 2020 which grooms Malaysia for prospective technological progresses and
economic challenges, to be at par with economic giants such as United States, China and Japan [57]. This can be achieved by
espousing automation that can propel the country’s economy [56]. When launching the TN50, the prime minister of Malaysia
said that the digital economy would aid in uplifting the country’s economy to RM8.8 million or USD2 trillion in eight years
from the current value of USD1.3 trillion [58]. TN50 will concentrate on the young generation to build Malaysia’s future. Thus,

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to deal with 4IR, young individuals are being inspired to take up technology-based courses, particularly robotic and engineering,
to aid in building industries by means of automation [56].

Malaysian Digital Economy Corporation Sdn. Bhd. (MDEC) is a government agency set up in 1996 to kick off the makeover
of the country’s digital economy [59]. The key areas are IoT, big data analytics (BDA), data centre & cloud, and e-commerce [60].
MDEC intends to achieve this transformation through different means such as by initiating the National BDA Innovation
network to promote BDA in the country. Participating firms include SAP, Dell, Telekom Malaysia, IBM, Microsoft, HP, Oracle
and SAS. Furthermore, MDEC issues product development and commercialisation funds (PCF) to five local entities for
successful BDA development, propelling its further advancement and commercialisation [61].

For promoting IoT, the Government of Malaysia has come up with the National IoT Strategy Roadmap. The goal behind this
is to set up a national ecosystem that enables the propagation of usage as well as industrialisation of IoT which can speed up
economic advancement. Three long-term IoT approaches have been formulated: Open Community Data Framework, Open
Innovation Framework, and IoT Malaysia [62]. MDEC had joined forces with MDT Innovation and Vitrox Corporation as part
of its IoT deployment program.

4. Conclusions and Future Works

The Government of Germany has identified Industry 4.0 as one of the 10 future schemes which constitute the High-Tech
Strategy 2020. This paper offers an appraisal of the global 4IR trend in other countries and how Malaysia can prepare itself to
deal with the 4IR challenges that its industry might face. Since the advent of ICT, the economies of certain counties of the world
have improved as their business organisations are able to compete by means of the execution of automation and CPS. Thus, it
can be said that Malaysia is now one of the new players of Industry 4.0, wherein it has implemented few of the nine Industry
4.0 technologies such as automation, IoT, robotics, and big data analytics. Several preparations have been made by its
government to espouse Industry 4.0. However, if there is not much response to the programs from manufacturers and
organisations, the execution of 4IR will be tougher in moving forward. Thus, more education and acquaintances are required
to draw manufacturers towards Industry 4.0. In the challenging economic environment of today, it is certainly advisable to
espouse Industry 4.0 as its technological advancements to attract more investments and trade prospects for the existing and
newer industry in the country by raising FDI otherwise, Malaysia would lag behind other advanced countries such as China,
the US, Japan and Germany as the competition in today’s marketplace is mostly centred on cutting-edge technology systems.
Not many paper reviews regarding Industry 4.0 are available in Malaysia. Thus, this paper is expected to fill the gap and offer
more ideas regarding the deployment of Industry 4.0 in the country. The study would also scrutinise the readiness of
manufacturing industries in Malaysia to implement Industry 4.0 concept and also offer a new framework as a reference tool for
Industry 4.0 which would prove to be advantageous to manufacturing industry.

5. Acknowledgements

The authors would like to thank the Malaysian Government and Universiti Teknikal Malaysia Melaka (UTeM), for their
financial support.

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