Are we anywhere near Industry 4.0 adoption?

DESPITE the strong call from the government, various trade associations and industry experts for SMEs to embrace new technology and transform their operations in the era of Industry 4.0, the fact of the matter is, not many people really know what Industry 4.0 is all about. Not the policy makers, industry leaders, or the academicians, and certainly not the SMEs.

Industry 4.0 has become an “in” word. Its usage in speeches gain attention and wins applause.

But where are we really at when it comes to its execution and transformation?

Let’s do a little audit.

Before we talk about Industry 4.0, let’s first take a look at what Industry 3.0 is. Industry 3.0 means that our industries are fully computerised and have fully automated manufacturing systems. Are we even there yet?

What then, is Industry 4.0? It is a combination of Big Data, Artificial Intelligence (AI), deep learning, being fully computerised, and having fully automated robotic manufacturing systems.

A flashback to 1994, when I was working in my first job, reminded me that we were indeed already in the Industry 3.0 environment. We made medium density fibreboards (MDF) in Malaysia and exported our products to 40 countries.

I have been fortunate enough to have been exposed to Industry 3.0 for the past two decades in my manufacturing career. We had systems with fully automated functions such as locating and grabbing stock pallets with the press of a button.

But how many manufacturers today are actually functioning in the Industry 3.0 environment? Are we even at Industry 2.0, which is about being fully computerised with semi-automation? How about Industry 1.0, which is basically merely about mass production?

Perhaps we are only at Industry 0.4, where we still have backyard cottage industries using manual methods to produce products without proper branding and labelling.

Many small businesses have yet to be fully computerised and most of our SMEs, maybe even some of the big corporations, are still heavily reliant on manual labour.

We are obvously still far away from Industry 3.0.

In December 2017, I was one of two Malaysians invited to the greatest event that I had ever been to – the 4th World Internet Conference at Wuzhen, Hangzhou.

I was rubbing shoulders with IT geeks, namely, great Chinese Internet players such as Baidu’s Robin Li, Alibaba’s Jack Ma, Tencent’s Pony Ma, and Apple’s Tim Cook, Sundar Pichai from Google, Cisco’s Chuck Robbins, Kaspersky’s Eugene Kaspersky, and the Father of Internet, Robert Kahn. There were over 1,500 industry players at the three-day event.

But, guess what? No one was talking about Industry 4.0. Instead, they all spoke at length about AI, Big Data and the 5G network.

The event itself was a technological wonder. AI facial recognition was used for checking-in and -out at the hotel and the event venue, AI Robot Security Guards roamed the area, AI Robot Cleaners handled the cleaning. There was even an AI Medical team on hand!

This means that without AI and Big Data, Industry 4.0 is just an unrealistic dream. AI is like the dough of the pizza.

The trend of Industry 4.0 is a call from Germany since 2014. We are not denying that it is an important trend for the industry. Even world giants like Siemens, B. Braun and Adidas have responded well to this trend.

The full-fledged integration of end-market demand with big data analysis, cloud computing storage and AI precision marketing led to the robotic custom-made production, packaging and logistic manufacturing system known as Industry 4.0.

But we are far from this kind of smart manufacturing environment.

China, as the world’s production mill with an economy of scale capability, has been implementing AI into operations phase by phase since 2008. They have mixed their pizza dough with the right ingredients to craft their competitive advantage.

The necessity to create a terrorism prevention system for the China Olympics back in 2008 had spurred the Chinese vertical and horizontal integration of AI face recognition for national security reason. Thereafter, the tested technology was adopted widely in the commercial and private sectors.

In conclusion, do not get overwhelmed with the blind call of Industry 4.0. Adopting AI 1.0 seems to be more relevant to Malaysia at the moment.