Weak infrastructure threatens Malaysia’s smart manufacturing ambitions

Epicor warns stronger connectivity, skills and support are vital for nationwide adoption.

Malaysia’s manufacturing sector is facing a decisive moment as global competition, rising ESG expectations, and accelerating automation reshape production standards. According to Ben Lim, Regional Director for Sales at Epicor, the urgency for smart transformation is mounting as manufacturers risk losing their competitive edge without decisive action.

With ESG requirements influencing procurement decisions and investor confidence, and with the ambitions of NIMP 2030 signaling a shift toward Industry 4.0, he warned that companies unable to embrace technology will face growing vulnerability. “Manufacturers that fail to embrace AI automation, digitalisations basically risk losing relevance in global or regional supply change,” Lim said.

Labor shortages and rising costs are further accelerating the need for automation. Lim noted that digital tools now play a crucial role in maintaining productivity “without just solely relying on manual labor.”

Scaling isolated smart manufacturing pilots into nationwide adoption, however, demands strategic alignment. “We need clear frameworks and roadmap so that Malaysian manufacturers or companies can really tap on it and be a basis for them to craft out their own smart manufacturing roadmap,” he said.

Skills development remains essential. “Smart manufacturing depends on data analytics, IoT and automations. These are skills that many traditional manufacturers lack honestly,” Lim said. He called for nationwide training programs and partnerships with universities to build a future-ready workforce equipped with hands-on experience.

Ultimately, leadership mindset is the biggest determinant. “Some companies still view smart manufacturing as a cost center rather than an investment for future growth,” he said, adding that demonstrating ROI is key to shifting this perception.

Still, infrastructure and workforce gaps remain significant barriers. Industrial parks in secondary cities often lack robust connectivity. “Connectivity is needed for real time data exchange,” Lim said, noting that manufacturers must invest out of pocket to upgrade.

Fragmented and outdated systems further impede progress, with many firms relying on manual processes and spreadsheets that make integration “clearly impossible.” Cybersecurity is also underprioritised.

But the most pressing challenge, he emphasised, is the widening skills mismatch. With manufacturing accounting for 17% of national employment, the talent gap is restricting innovation and competitiveness.