DIGITAL TRANSFORMATION WITH CISCO FOR MANUFACTURING INDUSTRY

SPEECH BY CHOW KON YEOW, CHIEF MINISTER OF PENANG

DIGITAL TRANSFORMATION WITH CISCO

FOR MANUFACTURING INDUSTRY

30 APRIL 2019

Mr Naveen Menon,
President, Cisco ASEAN

Mr Albert Chai
Managing Director, Cisco Malaysia

Mr Bidhan Roy
Managing Director – SMB, Emerging Markets & Distribution Cisco, Southeast Asia

Ms C.L. Lee
Malaysia Manufacturing Operations, Senior Manager, Cisco

Members of the media,

Distinguished guests,

Ladies and gentlemen.

 

A very good afternoon to all of you.

Last year, the Penang State Government established a visionary transformation plan called “Penang2030” to guide the evolution of the state for the next 10 years. Grounded by the foundation of “A Family-Focused Green and Smart State that Inspires the Nation”, the initiative is further branched out to a four-pronged approach focusing on increasing liveability, upgrading the economy, empowering the people and investing in built environment. One of the main branches – upgrading the economy – is led by the “Made in Penang” approach that has an emphasis on preparing local manufacturing industries for the digital age.

Penang is one of the more developed states in Malaysia. It is also home to multinational companies including ones from the U.S. like Cisco. According to a study by the company, the Malaysian manufacturing sector could see a US$30 billion dollar growth if we adopt Fourth Industrial Revolution technologies.

The Fourth Industrial Revolution is characterized by an intelligent and connected ecosystem of people and machines. It is underpinned by five emerging technologies being used across the manufacturing value chain. These technologies are Internet of Things, Artificial Intelligence, 3D Printing, Advanced Robotics and Wearables.

Modernizing the manufacturing industry will create productivity gains and additional revenue streams through new products and quality improvements. In fact, according to a study by the World Economic Forum, Malaysia is among the 25 countries well positioned to benefit from Fourth Industrial Revolution technologies.

Penang needs to be competitive in the digitalized era. And we will do so through the various efforts that have been implemented to make Penang a leader in the Fourth Industrial Revolution and dominate the global manufacturing industry. A huge focus is in the manufacturing sector.

Manufacturers in Penang have introduced Fourth Industrial Revolution technologies such as automation and digitalization initiatives. This will drive innovation-led growth in key industries and enable Penang to be a fully smart state by 2030.

The Penang State Government has partnered with companies like Cisco to form strategic initiatives to develop a robust digital ecosystem. Together we plan to move towards a knowledge-intensive and high value-based manufacturing in Penang.

Penang has a population of nearly two million people. If we embrace technology and innovation, we have the potential to build a strong digital leadership. It is everyone’s responsibility to ensure that Penang is ready for the digital future and remains relevant and competitive. 

The Penang State Government is committed to move away from low-skilled dependency particularly for the manufacturing sector. There are several training courses available to prepare the next generation of tech-savvy workforce, as we take the leap into smart factories.

The Penang Skills Development Centre promotes and facilitates the National Empowerment in Certification and Training for Next Generation Workers (NECT-Gen— Industry 4.0) initiative which prepares the workforce for the Fourth Industrial Revolution. Training focuses on five Fourth Industrial Revolution pillars: Big Data, Cloud Computing, Internet of Things, Cyber Security and Vertical Integration.

Adopting new technology to ensure companies be more efficient and productive will be in tandem with global trends. Cheap labour is unsustainable in the long run and prone to human errors thus reducing the quality of products produced. A prime example is China that is moving towards digitalization on a large scale despite the abundance of cheap labour in the country. The adoption of Fourth Industrial Revolution technologies in manufacturing organizations will increase efficiency and promote zero-defect outputs.

As the benefits of Fourth Industrial Revolution technologies adoption impacts directly to companies, the private sector on their own accord should invest in digitalization efforts. Industry efforts already exist but more concerted efforts from industry leaders need to be seen. One such shining example is Cisco – to date the Cisco Networking Academy initiative has engaged and certified 73,900 Malaysians to meet the digital standards of the future.

Malaysian businesses that want to thrive in the fourth industrial revolution age, need to consider training to improve their workers’ skills as an investment not an expense. Upskilling is an essential step to ensure that companies remain significant in the Fourth Industrial Revolution era. The workforce needs to be trained to work alongside machines in roles that will be partially automated.

Penang is aptly positioned to embark on this digital journey. The robust infrastructure and organizational enablers in Penang will play an essential role in accelerating Fourth Industrial Revolution technologies adoption.

The manufacturing landscape industry here operates in a dynamic environment and is built with the support of multinational companies.

We urge manufacturers to adopt an experimental and iterative bifocal approach as they seek to solve immediate problems with a long-term vision and develop a road map for transformation to set themselves up to succeed in the digital era.

Every manufacturing organization needs to constantly reinvent itself. The adoption of Fourth Industrial Revolution technologies should be considered as part of the transformation process. To ensure sustainability in the long run, digital transformation must be done with the aim of solving important business issues faced in the manufacturing process. Global trends show that companies that are not confined to the traditional way of doing things and utilize technology to its advantage have a higher chance of remaining relevant and successful in the long run.

The Fourth Industrial Revolution represents a big turning point for the way people in Penang live and do business. Its impacts permeate all aspects of our lives.

The time is now for manufacturers in Penang to seize the opportunities to become lighthouses for digital manufacturing and leapfrog onto the global stage or risk being left behind.

Thank you.