Enterprise
Managing IR 4.0 transformation
Behonce Beh 
IR 4.0 is all about automating business processes and data exchange
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Industrial revolution 4.0 (IR 4.0) may be the current buzzword but trying to make sense of the concept requires some form of guidance.

For starters, IR 4.0 in its very essence looks at the incorporation of automation and data exchange in manufacturing processes. It is, however, not limited to manufacturing processes alone, but extends to business processes that cut across sectors.

Be it agriculture, food and beverage (F&B), accounting, or even fisheries, there is a solution that could aid in improving efficiency and increasing yield.

Incorporating IR 4.0 may sound like a daunting task for many SMEs but it is important to realise there is a solution for every market vertical at every price point or scale.

“In today’s environment, most companies might already have an IT system in place that they have been using for years.

Nazeroll says it is high time SMEs update their IT solutions

“The drive towards IR 4.0 is for them to look at their existing processes and ask, how can I be competitive while improving efficiency in the way we do things,” explains Infor (Malaysia) Sdn Bhd country manager Nazeroll Kasim.

He adds it is high time for SMEs that have invested in enterprise resource planning (ERP) software to consider refreshing their systems and revamping their operations.

Infor is a global business applications software company. Nazeroll explains that its Malaysian customers from the manufacturing sector would often deploy digital solutions on an end-to-end basis as opposed to rolling them out in stages across different business divisions.

“It is uncommon for a manufacturer to roll out a finance application first and then opt for a system that manages its production workflow.

“Businesses that purchase ERP solutions often look to address their core business functions,” he says.

Nazeroll says ERP solutions have changed as they used to be sold as a basic system with customisation modules.

Customisation is expensive and features that are standard now were not offered in older versions.

“When the Goods and Services Tax (GST) was implemented in 2015, most ERP solutions were retrofitted with a GST module. Today, latest releases have the GST module as a standard,” he notes.

 

Demystifying digital business

IR 4.0 is about automation and data exchange. In a manufacturing context, this would mean introducing robotics and sensors to replace human labour for tasks that could be automated.

It could also extend to other areas such as finance where an automated system would be able to generate invoices or sales reports through the help of online tools; without having to bother the accounts clerk, say at 7am, for an overdue report.

Entrepreneurs who are not ready to take the plunge may start by trying freeware offered online. However, these are often limited in terms of features.

One of the many elements of IR 4.0 is connected devices. These come in a wide range of products from motion sensors and Bluetooth-enabled trackers to surveillance cameras.

A food processing plant, for example, may be connected to thermometers placed in strategic locations in the facility.

In the event of a drastic shift in temperature, the thermometers would alert the staff and suggest pre-programmed measures to take as changes in temperature can result in food contamination or loss of quality.

Beyond food safety, changes in temperature could signal other problems such as faulty air-conditioning.

Data generated from connected devices and systems can be used to analyse business trends or to forecast changes to the business operations such as how often an asset breaks down to the number of medical leave an employee takes over the course of his employment.

These data would then help entrepreneurs to make informed decisions on how to proceed with their business.

“The first question an entrepreneur needs to ask internally is what the objectives of the organisation are and what industry it is in.

“That way, he is able to see whether to embark on the digital journey upfront or, depending on capital, whether to start with a mix of solutions,” says Nazeroll.

Do be prepared for a three- to six-month implementation time frame should you choose to go the digital route. This period generally includes the time needed to train staff before going live.

Vallen Asia CEO Andrew Bennett says staff who are accustomed to the previous or existing system would often find it difficult to migrate to a new system.

Its business-to-business (B2B) distribution services have over 40 staff spread across three facilities in Penang, Selangor and Johor.

“It was a slight struggle for finance (department) as it had to integrate the new system with our bank’s system such as accounts payable. Those types of issues are generally time sensitive,” he says.

Not all staff members are sent for training with the software solution vendors. Super users identified by the company are sent for training three months ahead of the implementation.

 

Start with smallest unit

Once that was completed, they are sent back to their respective offices to train other users. Staff are incentivised via flexible working hours or shorter work days to accommodate the training schedule and modules.

Entrepreneurs who are not keen to embark on a complete overhaul of their IT solutions can consider starting with non-core business processes such as asset management.

“Always go with your smallest business unit for full implementation and then move to other units,” suggests Bennett.

He adds the successful implementation on a smaller scale can be used as a template to move on to other business units or even regional offices.

Nazeroll suggests that SMEs be prepared to invest anywhere between RM100,000 and RM150,000 for a digital business solution that caters for 20 users.

“The price depends on how many features you want to implement in your system and also the number of users,” he adds.

Depending on company requirements, they could choose to opt for subscription-based cloud applications with packages that consist of monthly or yearly charges as compared to a pricier on-premises licence purchase.



This article first appeared in Focus Malaysia Issue 278.