Re a dine s s A s s e s s m e nt I n dus t r y 4WRD ( M y i 4.0 -RA ) a n d

P r o duct i v i t y I m p r ov e me nt f o r E n t e r pr i s e ( S P P E) S c h e m e

M A L A Y S I A P R O D U C T I V I T Y C O R P O R A T I O N

1

E N T E R P R I S E P R O D U C T I V I T Y P R O G R A M M E F O R

C H E M I C A L I N D U S T R I E S

P E N A N G

2 8 A U G U S T 2 0 1 9

SECTORS NEED TO ELEVATE PRODUCTIVITY LEVELS - MPB

3

4

Productivity & Competitiveness:

Push Factors

Driving Transformation, Powering Growth

MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY

4

Building Workforce of the

Future

NATIONAL-LEVEL INITIATIVES Outline policy priorities to uplift national productivity

Driving Digitalisation and

Innovation (Industry 4.0)

Making Industry Accountable

for Productivity

Machine&

Equipment

Retails

SECTORAL-LEVEL INITIATIVES Outline explicit sector strategies to address sector-level productivity barriers

ENTERPRISE-LEVEL INITIATIVESOutline specific enterprise strategies to enhance operations related to productivity improvement

Forging a Robust Ecosystem

Securing a Strong

Implementation Mechanism

ICT

Productivity Metrics Toolkit

Enterprise Productivity Diagnostic

(EPD)

To be led by core government ministries

and agencies

Targets governance of productivity

policies impacting all economic sectors

To be led by management at enterprises

(including SMEs) with guidance from

sector Productivity Nexus

Targets productivity improvement at

enterprise level

To be led by key industry associations

and anchor enterprises for each sect

Targets acceleration of productivity

uplift, impacting large enterprises and

SMEs at sector level

Tourism

Agro-Food

Chemicals

E&E

Professional Services

Private Healthcare

5

INDUSTRY4WRD

6

Industry4WRD: National Policy on Industry 4.0

“I believe that the Industry4WRD: National Policy on Industry 4.0

would enable the manufacturing sector to move into Industry 4.0

and along the way contribute to fulfilling Malaysia’s commitment

to the United Nation’s Sustainable Development Goals (SDGs).”

YAB Tun Dr. Mahathir bin Mohamad

31 October 2018, MITI

“Industry4WRD is Malaysia’s response to Industry 4.0 and

beyond, that calls for transformation of manufacturing sector and

its related services to be smarter and stronger, driven by people,

process and technology”

7

The self RA registration is free of charge RM27,000 Per Assessment

(Maximum) Plus Other Fund (Soft Loan)

Pre Q Assessment Survey (RA)

Assessment Body (AB)

Intervention Plan

500 Companies 60 Companies

• Pre-qualification survey – 20 questions on applicant’s background and infrastructure they have for businesses in assisting in Industry 4.0

COST

Target

Intervention Fund Management System

Total Grant Allocation of RM45 million (2019 )

Online Self Registration Onsite Assessment by AB for Industry4WRD-RA ProgramMethod

Manufacturing & Manufacturing Related Services (Including LLC, MNC and SME)Sector

DATA PLATFORM FOR ALL MANUFACTURING COMPANIESPROFILING | RATING | REPORTING

• Onsite assessment based on the Industry4WRD-RA Framework (Advanced Manufacturing and ICT)

• RA Processes1) Training2) Understudy / Practical3) Certified Assessor

• AB for 500 companies:• Each AB team = min. 2

assessors

• Intervention is based on the Industry4WRD-RA report –future Industry 4.0 incentives

• To be undertaken by ABs’ and other registered Consultants & System Integrators

Reporting

• The fund to be managed by MIDA• To develop a system to manage the

Intervention Fund (IF) allocation starting from RA to Intervention Plan1) Reporting2) Dashboard

• Data comprises of: 1) Past2) Current3) Future

Dashboard

Industry4WRD – High Level Diagram INDUSTRY4WRD MAPPING – RA & INTERVENTION PROCESS

O V E R V I E W - I N D U S T R Y 4 W R D

8

INTERVENTION PROGRAM

60 SMEs

(RM 30m)

READINESS ASSESSMENT

500 SMEs

(RM 15m)

MIGRATION AND TRANSFORMATION OF

INDUSTRY4WRD PROGRAM

2019-2021

2019

Industry4WRD-RA Steering Committee (S. Dir. MITI)

Industry4WRD-RA Technical Committee (Dir MITI)

Secretariat(Industry 4.0 Unit, MITI)

Assessment Body A

Assessment Body B

Assessment Body C

Assessment Body D

Secretariat(MPC)

Main Responsibilities (TC)

• Create guidelines for selections of SMEs eligible for government-funded RA.

• Evaluate and recommend Assessment Body (AB) application to SC.• Consolidate and validate assessment reports and provide

recommendation/summary report to SC.• Recommendation to SC for communication plan

Members (Government & Industry)MITI, MIDA, MATRADE, SME Corp, DoSM, MDeC, CyberSecurity, MPC, NanoMalaysia, FMM, SMEA

FFunding

(MOF)

Industry4WRDCouncil

(YBM MITI)

RRegulatory

(MITI)

TTechnology

(MESTECC)

IInfrastructure

( KKMM)

SSkills

(MOHR/MOE)

Secretariat(Industry 4.0 Unit, MITI)

High Level Task Force(TKSU MITI)

Bi-Annual

Quarterly

Governance Structure of Readiness Assessment

Main Responsibilities (SC)

• Monitor implementation and report of RA & IP progress to TWG-R• Policy direction & risk management of RA & IP• Approve changes in target, achievement, cost of RA & IP• Selection of ABs & endorse of companies of RA & IP and• Endorse guidelines of Industry4WRD & IP proposed by TC.

Members (Government & Industry)MITI, MOF, MEA, MESTECC, MED, MPC, FMM, SMEA

A Verify/Validate companies applications and communications with companies and AB’s

BManaging the selection and qualification of the Assessment Body (AB)

C

DTo be involved in the Promotion / Outreach program

THE ROLE OF MPC AS A SECRETARIAT FOR INDUSTRY4WRD RA

CTo monitor assessment process by AB’s and analysis of RA reports

ETo be involved in other tasks related to other requirement by MITI/TC/SC, including the reimbursement?

Roles of MPC’s as Secretariat to TECHNICAL COMMITTEE

Provide indication on the level of readiness for an

organization in the adoption of Industry 4.0 elements

To identify areas of improvement in each dimension

To recommend further actions to improve efficiency and

productivity

To develop industries adoption baseline

Proposed as pre-requisite for future industry 4.0

incentives

Gaps

Improve

National baseline

Pre-requisite

The Myi4.0-RA is aimed to…

2

3

4

5Assess1

11

Industry4WRD - Readiness Assessment

A comprehensive programme to help firms assess their capabilities and readinessto adopt Industry 4.0 technologies and processes, using a pre-determined set ofindicators to understand their present capabilities and gaps

*The module for manufacturing related services (MRS) is expected to be included in RAby Q4 2019.

WHAT IS INDUSTRY 4.0

Source: Prof. Christian ROSER,KIT

Censor, Data

collection

IoT

Big DataAI

Robotics

Physical Space

Cyber Space

Connected Industry

Digital data & info exchange Advanced Technology Everything Real-Time

Connected & Collaborated Through Cyber Physical System

(CPS)

T H E I 4 . 0 E N A B L E R S

13

T H E B E N E F I T S

14

06 01

02

0304

05

INCREASE SALES/ REVENUE AND HIGH VALUE ADDED ACTIVITY

BEYOND HUMAN COMPETENCIES AND REAL TIME CYBER PHYSICAL SYSTEM

ELIMINATE WASTE AND HIDDEN COST

INCREASE PRODUCTIVITY AND

ELIMINATE DATA MANIPULATION

IMPROVE PEOPLE’S ATTITUDE & SKILLS

REDUCE FOREIGN LABOR & ON TIME

DELIVERY (OTD)

The Assessor

Training

Exam

Certified Assessor

Mock Audit /practical

The Company

Public announcement/ Awareness

Company register interest

Myi4.0-RA Technical/Steering Committee Review/Endorsement

Assessment process takes place

Prepare full report-Shift Factors, Band, Pain Points and Recommendation

Table to Myi4.0-RA Technical/Steering Committee Review/Endorsement

Inform AB’s & Details

Apply online atwww.miti.gov.my/

industry4wrd

T H E R E A D I N E S S A S S E S S M E N T ( R A ) P R O C E S S F L O W

Selections & Qualifying

Industry4WRD Readiness Assessment

Sales Turnover :

RM300,000 - RM50 Million

and/or employees :

5 - 200

60% Malaysian equity

Selection

CriteriaMANUFACTURING

MANUFACTURING RELATED SERVICES

Sales Turnover :

RM300,000 - RM20 Million

and/or employees : 5 - 75.

OWNERSHIPS

Focus Sectors

• Automotive• Transport• Textiles• Pharmaceutical• Metal• Food Processing• Services

The leading industry in Malaysia’s

manufacturing Sector, contributing significantly to the country’s exports and employment

Electrical & Electronics

One of the key areas for growth and development, focusing on high value-added and high technology

industry

Machinery & Equipment

One of the catalytic industries in the

country with rapid growth due to the

availability of oil and gas as feedstock

Chemical

Spans across an extremely wide

range of industries from rubber and latex, plastics, machinery and

engineering support and electronics

Medical Devices

A strategic sector with high growth potential in the

country’sindustrialisation and

technological development programme

Aerospace Other Sectors

18

C R I T E R I A M O D E L

19

Focuses on peopleand the entireorganisation.

Emphasis on strategies towardshaving a right setof workforce

Focuses on management systemin running businessoperations, supplychain and productlifecycle.

Emphasis onsmart and strategicpublic-privatepartnerships, security,sustainability andproduct co-creation.

Focuses on theapplication ofintelligent, connectedand automatedtechnologies.

Measured at threedifferent layers of thebusiness: Shop floor,enterprise and facility

PROCESS

• The manufacturing system is so flexible that it can cater for mass customization with very short change over time and manned by 1 operator only. (SMARTLine: laminated product for pastry product), is equipped with IoT, SCADA System and Vision System with analytical capability for problem detection within the production line and give instant alert signal.

• Horizontal Integration-An integrated supply chain system has been implemented across the whole organization except the interface with the customers & suppliers.

TECHNOLOGY• All business management systems (ERP,

CRM, HRM, and Financial) within the enterprise are computerized and connected through internal network, but without analytical capability.

• Has performed Vertical integration by having all production process machines integrated to one MES system in the production shop floor

• Technology pillars adopted

o System integration

o Cybersecurity

o Big data analytics

o Internet of Things (IoT)

o Cloud

PEOPLE

Top Management Technology Savviness

• The management and technical personnel-in-charge are very technology savvy. A clear vision, direction and a documented strategy to adopt the I4.0 in its core business have been put in place.

• The entire team is aggressively driving the company towards having an intelligent production plant that fully self-managed, self-administered with virtually no human intervention in the near future.

Summary– Findings at XYZ Sdn Bhd

Snapshot of findings

SUMMARY – Recommendation at ABC Sdn BhdPROFILE SCORE

HIGHLIGHT AND LOWLIGHT

Learner(49 %)

HIGHLIGHT

Management shows interest to excel and move forward, willing to take time to learn more about the i4.0 concepts

A lot of new opportunity can benefit the organization once i4.0 concepts being adopted including adopting a new business model in digital sales and marketing and improving the overall business operation management

LOWLIGHT

Pain points are mainly related to the operational issues (raw material, machine unplanned downtime and Human issues-skill, discipline and mind-set)

PAIN -POINT

1. Higher downtime and lack of automation during process changeover.

2. Manual production planning

3. Real time production performance monitoring is not visible.

BEST PRACTICES BY THE INDUSTRIES

1. Quick change system with automated machine

2. ERP, MES and 3D Experience Platform

3. Dashboard monitoring system with ANDON

OPPORTUNITIES

1. Implement vertical and horizontal integration.

2. Human Capital dan Development Plan-Training on i4.0 at all level

Industry4WRD RA Profile and Scoring

Process Technology

People

READINESS PROFILE SCORE GENERAL DESCRIPTION

Conventional 0% - 20% Operation remains “as is” with no intention or initiative into Industry 4.0 adoption

Newcomer 21% - 40% Has interest to pursue Industry 4.0 but with none or very minimal efforts or initiatives

Learner 41% - 60% Has interest to pursue pilot line Industry 4.0 adoption in operation, with existence of planning and strategies, efforts or simple and patches of initiatives being implemented. Ready for some system adoption

Experienced 61% - 90% Has pursued small to medium scale Industry 4.0 adoption initiatives in operation, horizontal integration and ready for large scale system adoption

Leader 91% -100%

Has implemented large scale Industry 4.0 adoption initiatives (company-wide) and system integration

T H E I N T E R V E N T I O N P R O C E S S F L O W

23

Onsite assessment

Apply for

financial incentive

(MIDA, MIDF, BPMB,

SJPP/PROKHAS, etc.)

Evaluation Report by

Technical & endorsement at

Steering Committee

RE

AD

INE

SS

AS

SE

SS

ME

NT

BU

SIN

ES

S

INT

ER

VE

NT

ION

Development of Project Proposal-

ROI, Programs and Selected KPI

(OEE), Budget Costing,

implementation Plan

Company Received

RA report

Company Establish Project Team

and Seek Technology and

Solutions Provider

Carry Out Detail Study from RA

Recommendation

Project Implementation

Post Project Assessment

for Effectiveness

Evaluation

INDUSTRY4WRD GRANT

Problem

Outcome Solution

URL: http://www.miti.gov.my

URL: http://www.mpc..gov.myDownload: M Productivity Mobile App from Apple Store or Play Store

Readiness Assessment Online Applications

Industry4WRD Readiness AssessmentOnline Application

• Part 1 of 4 –• Company Profile

• Company’s main activity• Manufacturing

• Part 2 of 4 – Interest in Industry 4.0

• Part 3 of 4 – Technology Know How

• Part 4 of 4 – Term of Agreement

27

SPPE

• Enhancing SMEs towards more competitive in the productivity management system application and innovation program.

• Ability to feature best practices and long-term productivity achievements

OBJECTIVES OF SPPE

28Malaysia Business Excellence Framework

1. UNDER MPB INITIATIVE- ENTERPRISE LEVEL, STARTED IN 2017- 2021

2. INTERVENTION GRANT FOR SMEs IN PRODUCTIVITY IMPLEMENTATION IMPROVEMENT PROGRAM

3. EACH SMEs ALLOCATED WITH RM40,000 WITH TRAINING & CONSULTATION PACKAGE

4. COMMITMENT FEES OF RM2,000-RM5,000 PER COMPANY

O V E R V I E W - S P P E

ITEM/YEAR 2017 2018 2019 2020 TOTAL

NO. OF SME s 125 150 150 175 600

ACTUAL 123 152 171 - 446

BEST PRACTICES 12 15 15 18 60

ALLOCATION RM 5m RM 6m RM 6m RM 7m RM 24m

Intervention ProgramCases and Other Remarks

5S/QE Focusses on Quality Environment 5S program- Seiri, Seiton, Seiso, Seiso dan Seiketsu.

Process Improvements

•Innovative & Creative Circles/ Team Excellence•Six sigma process improvement •Kaizen and Others

LEAN Management Reduced wastage at the work place

Quality System or Standard:

ISO/GMP/FSMS/ HACCP

•QMS ISO 9001:2018•EMS ISO 14001:2012•OHSAS 18001•Standard GMP/HACCP/ ISO 22000 and Others

TPM

Total Productive Maintenance refers to machine/asset maintenance for the improvements of OEE (Overall Equipment Effectiveness)•Level 1-6

PLWSProductivity-Linked Wage System – system that measures wages based on productivity

Others

•IT development system or Digitilisation•High Performance Companies Through Process Improvement, Business Management and Accounting

SPPE INTERVENTION MODULES

PHASE 1 ACTIVITIES

1 SMEs Qualifications and Engagement2 Productivity Culture Team Building3 Pre-Diagnostics and Business Excellence Assessment

PHASE 2

4

Interventiona. Base Line Study (PGM) & Action Plans a. Training- Core Competenciesb. Consultation and Advisory Visits

5 Monitoring 6 Life Long Learning Engagement Program- Bench Marking

PHASE 37 Post-Diagnostic- BEF Reviews8 Selection and Sharing of Best Practices

6-1

0 m

on

ths

Scoring Interpretation

SCORE BAND INTERPRETATION

800 and above Excellent Refined adoption of BEF and demonstrated

significant impact on performance and exceeding

many international standards and benchmarks700 - 799

600 - 699

400 - 599

200 - 399

Below 200

Best in Class

Good Practice

Achiever

Practitioner

System

Implementer

Initial Adopter

Integrated adoption of BEF with significant impact

on business performance

Aligned adopted BEF and able to link to major

business performance

Adopted BEF with sporadic achievements

Early adopter of BE with necessary systems/

standards implemented

Getting started with relevant health check

assessment

EARLY

STAGE

MATURE

STAGE

INTERMEDIATE

STAGE

REGISTRATION

IDENTIFICATION/SELECTION

CONTRACT

INTERVENTION/EXECUTION

CLOSURE/MONITORING

POST DIGNOSTICS

PROCESS FLOW- SPPE/MPB

PRE-DIGNOSTICS

SELECTION OF BEST

PRACTICES

PHASE 1

PHASE 2

PHASE 3

SHARING

APPROVAL- TC

ENDORSEMENT - SC

CONSULTANT SELECTIONOFFERING & PROPOSAL

33

Components of Pre & Post Diagnostic – PGM/BE

Productivity Gain Measurement

Elements of BE:1.Leadership2.Planning3.Information4.Customer5.People6.Process7.Results

35

Sekreteriat SPPE-MPB

Perbadanan Produktiviti Malaysia (MPC)

Lorong Produktiviti Off Jalan Sultan,

46200 Petaling Jaya, Selangor Darul Ehsan.

Tel: 03-7955 7266 Faks: 03-03-7957 8068

PIC.:

Zainudin Elias (zainudine@mpc.gov.my)

Abdul Malek Mohamad Aripin (malek@mpc.gov.my)

Further information…….

36

MINISTRY OF INTERNATIONAL TRADE

AND INDUSTRY

MPC Industry4WRD Unit