Placing automation in movement

MALAYSIA’S financial system has lengthy been reliant on low cost labor with a lot of its main industries like plantation, manufacturing, development and providers using a excessive variety of migrant employees.

However with the tightness within the labor market and an growing shift in direction of automation over the past two years, firms are choices to mechanise elements of their operations to scale back their reliance on guide labor in addition to to extend effectivity.

This will, maybe, be seen extra evidently within the manufacturing sector.

In accordance with Xteven Teoh, founder and managing director of automation resolution firm XTS Applied sciences Sdn Bhd, there’s a rising urgency for firms to maneuver up the worth chain with innovative expertise to pave the best way for extra native champions that may assist ship a contemporary and aggressive manufacturing sector.

Automation, within the context of producing, is the usage of expertise to automate programs or manufacturing processes. The tip purpose is to drive larger effectivity by both growing manufacturing capability or lowering prices.

Xteven Teoh qtcht

Counting on low cost labor to assist develop the manufacturing trade is more and more not viable, notes Teoh, as regional international locations equivalent to Indonesia and Thailand are catching up as low-cost manufacturing hubs.

Nonetheless, he acknowledges that it’s not essentially simple for native producers to automate, given that almost all of them have moderately small operations right here.

Factories in Indonesia, for instance, are sometimes bigger scale and extra appropriate for automation.

“Some factories, particularly amongst SMEs in Malaysia, could not have the dimensions to automate their operations,” says the founder.

He opines that Malaysia is extra suited as a regional distribution and logistics hub moderately than a big scale manufacturing base. That is additionally as a result of the nation faces labor constraints and has a comparatively small home market.

Nonetheless, this should not cease native SMEs from pursuing automation and digitalisation to modernize their enterprise.

Primarily based in Puchong, Teoh says XTS was based in 2010 with the purpose of providing options to SMEs who’re more and more seeing the worth in deploying technological options to unravel among the lengthy standing issues within the manufacturing sector.

To assist improve adoption price, XTS can be trying to present extra reasonably priced options via leasing choices by working with equipment-leasing firms like ORIX Leasing Malaysia to assist smaller firms automate.

By reducing the associated fee, it will assist ease the shift for firms which were leveraging cheaper labor prices.

Other than the manufacturing sector, Teoh can be concentrating on to maneuver in direction of offering options for warehousing operations, which he says is rising in tandem with the eCommerce increase. There have been fairly a variety of firms within the logistics sector which are beginning to spend money on automation.

Presently, XTS counts among the extra superior firms in Malaysia concerned in automation as its prospects together with Pentamaster Bhd and Genetech Bhd.

Whereas these firms are primarily within the semiconductor and electronics trade, Teoh says XTS gives options throughout totally different industries.

Notably, curiosity in automation, particularly amongst Malaysian SMEs, has seen a marked improve up to now two years. Nonetheless, he factors out that there are nonetheless a number of points that must be addressed for the adoption price to extend considerably.

One among these points is the query of provide of expertise and experience within the subject of automation and design.

Many SMEs say that they don’t have the precise individuals with data in automation and digitalisation to drive its implementation inside the firm. Moreover, with bigger firms keen to pay extra, small companies could lose out within the combat for related expertise.

In accordance with Teoh, there’s ample expertise within the nation to satisfy a lot of the industrialization targets throughout numerous sectors and corporations – offered firms and entrepreneurs can maintain them within the nation.

Else, they will leverage options suppliers like XTS.

With greater than 60 designers and engineers on board, Teoh says XTS can cater to firms’ calls for to scale up.

It is usually contributing to the event of experience within the subject by collaborating with Taylor’s and TAR Faculty to introduce programs in automation and robotic designs, and with agreements to simply accept college students for sensible coaching and internship at XTS.

One other concern that Teoh says requires some consideration is the necessity for information assortment and digitalisation of programs earlier than automation might be efficient.

The idea of Trade 4.0 (IR4.0) is commonly promoted as subtle automation programs with robotics and synthetic intelligence capabilities.

Nonetheless, to get there, the processes inside the operations must be synched with information.

“In any other case, will probably be simply one other machine pushed course of, which is definitely simply Trade 3.0.

“We’ve arrange a software program improvement arm to assist on this course of, to hyperlink the machines with the flexibility to generate actual time information to help SMEs to realize higher productiveness and effectivity,” says Teoh.

He explains that XTS capabilities additionally as a single system integrator and goals to assist SMEs clear up lots of the challenges they face of their quest for automation. A few of the widespread challenges confronted by small companies embrace gaining access to funding and navigating crimson tapes in making use of for the required approvals.

Whereas jobs supplied by multinational firms (MNCs) have confirmed to be profitable, Teoh says the outfit is extra keen to assist native firms, notably SMEs, to modernise.

Nonetheless, servicing massive firms and MNCs would deliver in additional assets for the corporate to scale.

Over the following 24 months, Teoh goals to get the corporate listed on Bursa Malaysia and is working with an adviser in direction of this finish.

“The purpose of the train is just not a lot about elevating contemporary capital, however it can present us with the required assurance and provides potential prospects the boldness in our potential to ship, which is presently missing for us as a non-public entity,” he says .

A public listed firm standing would additionally allow it to bid for bigger sized contracts and extra important jobs together with these from abroad. This may also assist it broaden its regional footprint.

XTS is already fielding curiosity from regional buyers from Singapore and Indonesia, although there is no such thing as a agency funding plan but by these exterior buyers.

The corporate expects to log in additional than RM25mil in income subsequent 12 months, and goals to breach the RM50mil mark by the point it goes public – barring any unexpected pandemic disruptions.

Over the long run, XTS hopes to develop its exports and abroad contracts to account for round 50% of its future income.

Teoh can be contemplating merger and acquisition strikes as he actively seems to be for methods to bolster its measurement and enterprise quantity.

For now, Teoh nonetheless owns the bulk stake within the firm together with a number of minority shareholders who had invested within the firm through the preliminary start-up stage.

Given the necessity for a significant shift in how companies function to grasp the nation’s purpose of attaining excessive revenue nation standing, Teoh believes XTS is nicely positioned to assist usher in a brand new period of industrialization for the nation.


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