TVET Today, 4th Industrial Revolution Tomorrow !Muhammad Imran Kunalan Bin Abdullah Principal Consultant

13rd May 2018

Institute of Labor Market Information and Analysis (ILMIA),Ministry of Human Resource, Malaysia

The Burning Questions! What does Industry 4.0 really mean? Is it Digital

Transformation? What does digitization entail for

manufacturing/services? How profound will its impact be on our value pools? What are the near-term business opportunities for

the organisation? What type of skills should we focus on? Whether the term is simply hype?

This myriad of mixed reactions reveals the intenseuncertainty associated both with what Industry 4.0actually is and how government, companies andindividual should respond to the changing industrialenvironment.

Content

Demystifying the 4th Industrial Revolution

Industry 4.0 and Digital Transformation

Industry 4.0/Digital Transformation: The Malaysian Context

Way forward – Skills for IR4.0

The 4th Industrial Revolution/ Industry 4.0

Cyber Physical Systems

A cyber-physical system (CPS) is a system of collaborating computational elements controllingphysical entities. CPS are physical and engineered systems whose operations are monitored,coordinated, controlled and integrated by a computing and communication core. They allow us toadd capabilities to physical systems by merging computing and communication with physicalprocesses.

Key Drivers for IR4.0

Opportunity to integrate and better manage horizontal and verticalvalue chains.

More than 18% higher productivity over the next five years.

The digitization and interconnection of products and services (Internetof Things/Services) ensuring competitiveness and promises additionalrevenues of 2% to 3% per year on average.

the newly emerging, often disruptive, digital business models that offersignificant additional value to customers through tailor-made solutions.

Building Blocks of Industry 4.0

Industry 4.0

Autonomous Robots

Simulation

Horizontal and vertical

system integration

Industrial Internet of

Things

Cyber Security

Additive Manufacturing

Augmented reality

Big data analytics

Precision

WORKORGANIZATION

MONITORING /CONTROL

Traceability

2

MANUFACTURINGOPERATIONS

Flexibility

3

5

CAO, IAO

SERVICES

Retrofit

Machineinstallation

Task specialization

Duty organization

Augmented operator

Learning organization

(INTEGRATION, 4

MAINTENANCE)

CFAO Centralized planning and management of machines

Available maturity / Industrial diffusion

Emerging maturity / Limited diffusion

Virtual industrialization

"virtual manufacturing plant" digitalized, production process simulation

Monitoring, command

Interconnected

machines & plants

Remote monitoring, mobile app, shared

"Smart" machine (self-correction)

Laser sensors, vibra switches,corrective programs

Precision engineering

Multi-support and multi-operation

Additive manufacturing

Intelligent Assist CoboticsDevices

machines

Per pieceRFID tracking

Active sensors

Conditional maintenance

Flow management

Automated logistics / Internet of Things

Automated internal logistic

Future maturity / Precursors

PRODUCT DESIGN /PROCESS

1

databases Thermal, hygrometric, counting sensors...

Shared GPAO

3D printing,

Big data, télémaintenance

PLM MESGravage laser, flashcode,puces

Lean Manufacturing

GPAO, PLM, RFID GV grinding,

laser cutting,HFwelding

Transfer center

SNC, programs, multi-spindle, etc.

techniquesProgrammed /De-programmedmachines

Batch

mana- Digitalizationgement of order-

flow

Numerical command

Traditional

Source: Roland Berger

Industry 4.0: Combination of a Wide Set of Technologies

Factory 4.0 – Overview

SUPPLIERS

CLUSTER OF SUPPLIERS

CLUSTER OF PLANTS

PLANT OF THE FUTURE B

PLANT OF THE FUTURE A

3D PRINTING /ADDITIVE MANUFACTURING

SENSORS

NANOTECHNOLOGY / ADVANCED MATERIALS

> Zero default / deviation> Reactivity> Traceability> Predictability

> Scrap elimination> Mass customization> Rapid prototyping

> Smart value added products> Technical differentiation> Connectivity

ROBOT

CLOUD COMPUTING

> Stronger protection for internet based manufacturing

> Technology products with longer life cycle

– Full automation– Totally interconnected systems

– Machine to machine communication

LOGISTICS 4.0

> Fully integrated supply chain

> Interconnected systems

> Perfect coordination

CYBERSECURITY BIG DATA> Give sense to complexity> Creativity> Collaborative manufacturing

> Cyber Physical Systems (CPS)> Numerical commandADVANCED

MANUFACTURING SYSTEMS

CLIENTS

AUTONOMOUSVEHICLE

> Customer & marketing intimacy

> Flexibility

> Perfect match with customer's needs with production mass efficiency

> On demand manufacturing

MASSCUSTOMIZATION

INTERNET OF THINGS

> Object tagging

> Internet-object communication via low power radio

> Real time data capture> Optimized stocks> Reduced wastes

> Real time - Autonomy -Productivity

> Full transparency on datareporting

> Flow optimization> Increased security> Lower costs

RESOURCES OF THE FUTURE

WIND ALTERNATIVE / NON CONVENTIONAL SOLAR GEOTHERMIC

> Clean and renewable energies everywhere

> Energy Storage> Alternative raw materials

Source: Roland Berger

The Goal of Industry 4.0: Intelligent Factory

Characterized by adaptability, efficiency and a full digital integration

Positioning of different players for Industry 4.0 – Factory view

Client

Players1)

1) Not exhaustive; examples only

Data/ Funct.1)

ERP System MES System Sensors/Automation Building Automation 3D Data Big Data Services

> All transaction data> Asset data> Price/cost data

> Shopfloor transaction data

> Machine data> Maintenance data> Logistic data

> Sensor status like pressure, position etc., communication with other sensors

> Machine control data

> Status of all building data,

e.g. temp., light, access control, ventilation

> Product 3D data> Factory 3D data> PLM data

> Storage capacity> Algorithms and analytics> Connectivity

M

MM

Controls & Automation

MES System

New players

Source: Roland Berger

MMES System

Building automation

Factory 4.0

ERP System

"Virtual" Production routing

Data and communication will be the backbone of Industry 4.0

MES= Manufacturing Execution System

Potential Industry 4.0 Solutions

Value Drivers of Industry 4.0

Source: McKinsey

• Resource/Process• Asset Utilisation• Labour• Inventories• Quality• Supply/demand match• Time to market• Services/After sales

Indicative Quantification of Value Drivers – Impact of IR 4.0

Source : McKinsey

Manufacturing Renaissance

Global “Growth” /Industry 4.0 Initiatives

Industry of the Future

High ValueManufacturing

Smart Industry

MadeDifference

Produktion2030

Industrial Internet Business Revolution

Industry 4.0

Innovation 25’ Program

Made In China 2025

PrecisionManufacturing

Operational ProgrammeFabbrica

Intelligente

FabricacionAvanzada

Digital Manufacturing for SME

Produktionder Zukunft

Make in India

Content

Demystifying the 4th Industrial Revolution

Industry 4.0 and Digital Transformation

Industry 4.0/Digital Transformation: The Malaysian Context

Way forward – Skills for IR 4.0

Digital Transformation

“The investment in and development of new technologies, mindsets, and business and operational models to improve work

and competitiveness and deliver new and relevant value for customers and employees in an ever-evolving digital economy.”

Industry 4.0 is part of Digital Transformation!

Digitization of Everything

Source: McKinsey & Company: McKinsey Global Research Institute

McKinsey & Company

Relatively low

digitization

Relatively high

digitization

Digital leaders within relatively un-digitized sectors

Extent of Digitization Varies by SectorMGI Sector Digitization Index2015 or latest available US data

Sector

Overall digiti-

zation1

GDP Emplyment Productivity share share growth, 2005–142

% % %

6 1.5 6.4

2 1 4.2

7 8 -0.6

7 5 -1.2

6 4 0.6

3 2 2.1

2 0.7 -3.6

2 0.3 0.4

2 0.5 1.1

6 4 0.6

1 0.3 -1.5

13 4 0.3

3 3 -0.3

1 2 -0.8

6 10 0.0

1 2 -0.2

6 12 -0.4

13 13 0.3

7 11 -0.1

3 7 -1.0

4 5 -1.5

1 2 1.5

Digital spending

Digitalassetstock

Trans-actions

Inter-actions

Business processes

Market making

Digital spending

on workers

Digital capital

deepeningDigitization

of work

ICT

Media

Professional services

Finance and insurance

Wholesale trade

Advanced manufacturing

Oil and gas

Utilities

Chemicals and pharmaceuticals

Basic goods manufacturing

Mining

Real estate

Transportation and warehousing

Education

Retail trade

Entertainment and recreation

Personal and local services

Government

Health care

Hospitality

Construction

Agriculture and hunting

SOURCE: BEA; BLS; US Census; IDC; Gartner; McKinsey social technology survey; McKinsey Payments Map; LiveChat customer satisfaction report; Appbrain;US contact center decision-makers guide; eMarketer; Bluewolf; Computer Economics; industry expert interviews; McKinsey Global Institute analysis

1

2

3

4

6

5

Assets Usage Labor

1 Knowledge-intensive sectors,

highly digitized

2 Capital-intensive, potential to

further digitize their assets

3 Service sectors with long tail of

small firms having room to

digitize customer transactions

4 B2B sectors with the potential to

digitally engage and interact with

their customers and users

5 Labor-intensive sectors with the

potential to provide digital tools

and skills to their workforce

Large, localized, low productivity

could transform for productivity

and delivery of services

6

Content

Demystifying the 4th Industrial Revolution

Industry 4.0 and Digital Transformation

Industry 4.0/Digital Transformation: The Malaysian Context

Way forward

IMD Digital Competitiveness Ranking

Top 10

Countries

Digital Evolution Index -2017

The Fletcher School, Tufts University

Stand Out countries

are both highly digitally

advanced and exhibit

high momentum

Stall Out countries

enjoy a high state of

digital advancement

while exhibiting

slowing momentum.

Break Out countries

are low-scoring in

their current states of

digitalization but are

evolving rapidly.

Watch Out countries

face significant

challenges with their

low state of

digitalization and low

momentum

Digital Around the World

IR 4.0 In Malaysia

Spearheading the formulation a national policy on Industry 4.0

Infrastructure & Ecosystem

Funding & Incentives

Talent & Human Capital

Technology & Standards

SME

Where are we on IR 4.0 Journey

Policy PaperWIP

Talent Ecosystem

Industry Consultation

Awareness

Government initiated

Development

What’s the progress with Industry?

The Multinationals are leading the pack whilst the SMEs are still struggling

Why1.Lack of resources both capital & talent 2.Lack of Awareness3.Don’t know where they are in the industrial revolution

continuum…..

IR 4.0 Digital Initiatives Clusters and Complexity

Source: McKinsey

What’s is needed to drive IR 4.0?

Content

Demystifying the 4th Industrial Revolution

Industry 4.0 and Digital Transformation

Industry 4.0/Digital Transformation: The Malaysian Context

Way forward

Top 5 Challenges

Employee Pushback Lack of Expertise to Lead IR 4.0 Initiatives Organizational Structure Lack of Overall Strategy Limited Budget Lack of Talent

IR 4.0 Readiness - Assessment

Sample Industry 4.0 Readiness Assessment Template

Top 10 Skills to be relevant in Industry 4.0

Categorisation of Skills

Change in Demand for Core-Work Related Skills

Important Qualifications & Skills for Industry 4.0

Creation of a Robust Vocational Education & Training

22

28th MSC Malaysia Implementation Council Meeting

THANK YOU