Investigating the Relationship between Industry 4.0 and Productivity: A Conceptual Framework for Malaysian Manufacturing Firms

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Procedia Computer Science 161 (2019) 696–706

The Fifth Information Systems International Conference 2019 The Fifth Information Systems International Conference 2019

Investigating the Relationship between Industry 4.0 and Investigating the Relationship between Industry 4.0 and Productivity: A Conceptual Framework for Malaysian Productivity: A Conceptual Framework for Malaysian Manufacturing Firms Manufacturing Firms Simon Karl Hubert Backhaus, Devika Nadarajah* Simon Karl Hubert Backhaus, Devika Nadarajah* Putra Business School, Jalan Upm, 43400 Serdang, Selangor, Malaysia Putra Business School, Jalan Upm, 43400 Serdang, Selangor, Malaysia

Abstract Abstract Previous studies in Malaysia concerning Industry 4.0 focused mainly on cloud manufacturing, advanced robotics and intelligent Previous studiesField in Malaysia concerningwere Industry 4.0 focused mainly on onthe cloud manufacturing, advanced robotics and intelligent manufacturing. studies conducted focusing predominantly beverage and electrical equipment industry. Industry manufacturing. conducted were focusing predominantly on thepublications, beverage and industry. Industry 4.0 is consideredField as a studies new industrial revolution. In contrast to the previous theelectrical purpose equipment of this conceptual paper is to 4.0 is considered as a framework new industrial revolution. In contrast to the previous publications, the purpose of this conceptual paper is4.0 to provide a conceptual for further studies to be conducted in Malaysia identifying the relationship between Industry provide a conceptual forWide further studies to concerning be conducted in Malaysia identifying the of relationship Industry 4.0 key technologies and framework productivity. field studies Industry 4.0 and productivity Malaysianbetween manufacturing firms key technologies andpaper productivity. field concerningofIndustry of Malaysian firms are still lacking. The describesWide briefly thestudies key technologies Industry4.0 4.0and andproductivity ranks them according to themanufacturing absolute frequency are stillin lacking. The paperThe describes brieflyresearch the key technologies of Industry and ranks between them according to the absolute frequency stated the literature. developed questions concern the 4.0 relationship productivity and Industry 4.0 stated in the Productivity literature. The research questions concern the relationship productivity 4.0 technologies. is adeveloped key element of competitiveness for manufacturing firms.between Hence research aboutand theIndustry relationship technologies. Productivity is a keyand element of competitiveness for Malaysian manufacturing firms. Hence research about the relationship between Industry 4.0 technologies productivity is essential for manufacturing firms prior implementation of new between Industry 4.0 technologies and productivity is essential for Malaysian manufacturing firms prior implementation of new manufacturing technologies. manufacturing technologies. © 2019 The Authors. Published by Elsevier B.V. © 2019 The Authors. Published by Elsevier B.V. © 2019 The Authors. by Elsevier B.V. This is an open accessPublished article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/) This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/) This is an open access article under CC BY-NC-ND licenseThe (http://creativecommons.org/licenses/by-nc-nd/4.0/) Peer-review under responsibility of the scientific committee Fifth Information Systems International Conference 2019 Peer-review under responsibility of the scientific committee ofofThe Fifth Information Systems International Conference 2019. Peer-review under responsibility of the scientific committee of The Fifth Information Systems International Conference 2019 Keywords: Industry 4.0; Productivity; Conceptual framework Keywords: Industry 4.0; Productivity; Conceptual framework

* Corresponding author. Tel.: +60-39-769-1790; fax: +60-36-207-5410. E-mail address: [email protected] * Corresponding author. Tel.: +60-39-769-1790; fax: +60-36-207-5410. E-mail address: [email protected] 1877-0509 © 2019 The Authors. Published by Elsevier B.V. This is an open access under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/) 1877-0509 © 2019 Thearticle Authors. Published by Elsevier B.V. Peer-review under responsibility of the scientific committee of The Fifth Information Systems International Conference 2019 This is an open access article under CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/) Peer-review under responsibility of the scientific committee of The Fifth Information Systems International Conference 2019 1877-0509 © 2019 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/) Peer-review under responsibility of the scientific committee of The Fifth Information Systems International Conference 2019. 10.1016/j.procs.2019.11.173

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1. Introduction Industry 4.0, also named as the Fourth Industrial Revolution and Smart Manufacturing [1], is related to advanced manufacturing technologies [2]. Through Industry 4.0 the industrial production converges with information and communication technologies (ICTs). Relevant ICTs are Internet of Things (IoT), Cyber-Physical Systems (CPSs) and Internet of Services (IoS) [3]. Despite being initially mentioned at the Hannover Fair in 2011 [4] and used in line with Smart Manufacturing, Digital Manufacturing, Industrial Internet of Things, and the Fourth Industrial Revolution it is not yet widely researched in Malaysia. This is in contrast to other developing nations such as Brazil with an export-oriented manufacturing sector [5, 6]. The Malaysian manufacturing firms are competing with Southeast Asian countries such as Vietnam, Philippines, Thailand as well as China and India. The labor wages in the Southeast Asian countries and India are lower than in Malaysia whereby the degree of using Industry 4.0 technologies in China is higher [7]. Hereby Malaysia has the opportunity to increase the competitiveness of its manufacturing sector by embracing Industry 4.0. Productivity is a central factor in the manufacturing firms and is expected to have major and significant gains through Industry 4.0 [8, 4]. Contrary to the forecasted productivity gains through technologies the labor productivity in Malaysia is increasing at a slow rate [9]. The importance of Industry 4.0 has been recognized at the Malaysian government level. The Malaysian Industry Development Authority (MIDA) provides tax incentives and the Ministry of International Trade and Industry (MITI) came out with a national policy on Industry 4.0 in October 2018 [10]. In addition, Industry 4.0 has been included as a macro strategy to promote economic growth in the Eleventh Malaysia Plan [11]. The goals of the subsequent research should be to identify the key technologies which are most helpful for Malaysians manufacturing firms in terms of productivity improvements. This will help to direct the resources on governmental and industrial level to the most promising return of investment. An existing conceptual framework linking sustainability to Industry 4.0 includes Industry 4.0 technologies as a component of the framework. The framework further contains Industry 4.0 principles such as:  Interoperability  Virtualization  Real-time capability  Decentralization  Modularity  Service orientation as well as process integration subdivided into human-machine collaboration and shop floor-equipment integration. Hence a holistic approach not merely focusing on technologies is recommended [12]. Another framework based on quantitative studies subdivides Industry 4.0 technologies into three stages with frontend and back-end technologies. The first stage contains vertical integration through ERP, MES, SCADA, sensors, actuators and PLCs, energy management and traceability. In the second stage automation and virtualization are enumerated. The second stage is further grouped into automatic nonconformities identification, industrial robots, M2M communication, artificial intelligence for production and maintenance and virtual commissioning. The third and final stage names flexibilization contains flexible lines and additive manufacturing as its key technologies. The framework further categorizes Industry 4.0 technologies by their complexity level of implementation. Hence the implementation of Industry 4.0 in a manufacturing firm is recommended to be done in stages [13]. In contrast to the existing frameworks this conceptual paper provides a conceptual framework for further studies merely concerning the relationship between Industry 4.0 technologies and productivity of Malaysian manufacturing firms. 2. Literature review Generally, Industry 4.0 manufacturing systems are described in 2017 as a smart factory with IoT and CPSs as its core concept. Products are mass customized, and the quality control is described as self-predicting and being selfaware. The resource management is self-configured and self-optimized whereby the development priorities are the

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construction of CPS and IoT. Key technologies identified are big data analysis, Internet of Things and Cyber-Physical Systems [14]. Recently key technologies have been added to the three core technologies which are cloud computing, simulation, augmented reality, additive manufacturing, horizontal and vertical system integration, autonomous robots, cyber security and Internet of Services. The wide set of technologies is expected to lead to an increase in efficiency, agility, and flexibility of the production processes ending up in cost reductions [6, 8]. Cloud computing is utilized in manufacturing firms as  Infrastructure as a Service (IaaS): Computing resources are in the cloud infrastructure  Platform as a Service (PaaS): Applications running on a cloud infrastructure  Software as a Service (SaaS): Applications reside and run in a cloud infrastructure [15] In the age of Industry 4.0 extensive field tests and acceptance tests are partially replaced by virtual simulation optimizing the product design. Augmented reality is expected to be influential in the sections training, design, manufacturing, operations, service, sales, and marketing. Additive manufacturing eliminates the need of traditional machining and creates parts layer-by-layer or drop-by-drop. An interconnected ecosystem throughout relevant sections is enabled through real-time data sharing along with horizontal and vertical system integration. In contrast to the previous use of robots in static manufacturing lines autonomous robots enable customized production being quickly reconfigurable. Due to the connection of devices through the internet cyber security has been added as a key technology of Industry 4.0 at the device, network, and plant level. This is essential as Internet of Services uses the internet to provide product life-time related value-added services [4]. In addition to the technologies described above artificial intelligence is mentioned as central for predictive maintenance and planning of the production [13]. 2.1. Impact of Industry 4.0 on productivity The first industrial revolution was characterized by mechanization as well as discovering water and steam power kicking off in the 1780s. The second industrial revolution enabled mass production and assembly lines through the usage of electricity starting in the 1870s. The third industrial revolution took off in the 1970s featuring computers and automation. All these industrial revolutions lead to enormous productivity gains [16]. Numerous industrial revolutions have been identified in the literature to be disqualified as an industrial revolution afterwards, for instance the solar technology [26] and sustainable manufacturing [18]. The Fourth Industrial Revolution would be the first industrial revolution identified prior implementation. Therefore, it is vital to measure the productivity gains through Industry 4.0 technologies prior identifying Industry 4.0 as the Fourth Industrial Revolution. The studied conceptual frameworks concerning Industry 4.0 identify the technologies as independent variables and the respective dimension such as quality, productivity, operational efficiency and side effects as dependent variables. Aside of increased productivity other expected benefits such as optimizing automation processes and improving product customization are categorized as expected benefits [6]. Besides that, the positive side effects of Industry 4.0 on sustainability is developed as a framework [12]. A conceptual framework for the implementation of Industry 4.0 in multinational companies (MNCs) has been developed. The focus is on the unique challenges of integrating Industry 4.0 in the business functions research and development, optimizations of assets, corporate planning and supply chain of a MNC [19]. Going from MNCs worldwide to emerging economies it has been identified that the gains from Industry 4.0 for firms depends on the readiness of the organization in terms of technology, organization, management and strategy, employees, intra-organizational communication and inter-organizational cooperation [20]. Productivity is defined as output per unit input. It can be increased by raising the output per unit input or through reducing the input per unit output. Productivity of a nation is directly related to its competitiveness [21]. Out of the conceptual framework the following research questions have been developed:  Which Industry 4.0 technologies have a significant positive impact on productivity of Malaysian manufacturing firms?  Which Industry 4.0 technologies have a significant negative impact on productivity of Malaysian manufacturing firms?  Which Industry 4.0 technologies have no significant impact on productivity of Malaysian manufacturing firms?

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2.2. Relationship between Industry 4.0 and productivity in various countries The productivity of a manufacturing firms in context to Industry 4.0 is analyzed citing examples from the developed countries New Zealand and South Korea and from the developing countries Brazil, China, India and Malaysia. In New Zealand a survey distributed to members of the New Zealand Manufacturers and Exporters Association (NZMEA) resulted in 43 qualified responses from Small and Medium Enterprises (SMEs). Through Industry 4.0 36% of the respondents indicate that they expect to reduce their manufacturing costs as a result of increased productivity. Only a small portion of two respondents indicate that the do not expect any benefits of implementing Industry 4.0 [22]. In Korea advanced ICTs are a central part of Industry 4.0 technologies. The relationship between utilizing ICTs and productivity growth has been researched from 1996 to 2015 in South Korea. 18.8% of the productivity growth from 1996-2005 and 14.3% from 2006-2015 has been related to ICT investment specific technologies. A direct relationship between productivity growth and ICT investment has been identified throughout the study period. A weakening investment in ICTs in the period from 2006-2015 has been related to declining productivity growth of the manufacturing industry [23]. Another study conducted in Korea opposes the opinion of the majority of researchers. Industry 4.0 is not characterized as an industrial revolution, it is a meso revolution. This is rooted in the coexistence of companies using Industry 4.0 and traditional technologies and in its smaller scale compared to the past three industrial revolutions. Therefore, no direct relationship between a manufacturing firm’s productivity and Industry 4.0 has been identified [24]. Quantitative studies conducted in 2016 in Brazil identify a relationship between Industry 4.0 technologies and productivity. A large-scale survey conducted by CNI in 2016 with 2225 respondents from Brazilian manufacturing firms indicates that Industry 4.0 increases operational productivity. Computer-Aided Design integrated with Computer-Aided Manufacturing, digital automation with sensors and big data collection and analysis have been identified as having positive effects on operational productivity. Flexible manufacturing lines as well as Manufacturing Execution Systems (MES) and Supervisory Control and Data Acquisition (SCADA) systems did not lead to measurable operational benefits [6]. In China the term Industry 4.0 is not used for China’s manufacturing firms. Made-in-China 2025 is promoted instead of Industry 4.0. The technologies described are identical as well as the goal to improve productivity. The focus is on developing collaborative industrial robots and IoT, IoS, Internet of Media (IoM) and CPSs. The Industry 4.0 technologies are expected to improve the firm’s productivity, however an empirical evidence is not provided [7]. In India Industry 4.0 is addressed through the "Make in India" and "Skill India" campaigns. Industry 4.0 technologies play a central role in increasing technological depth, value addition and enhancing the competitiveness of India’s manufacturing sector. A positive relationship between Industry 4.0 technologies and competitiveness has been identified. A link between productivity and Industry 4.0 has not been established [25]. In the Malaysian context smart grid communication and information technologies with regards to Industry 4.0 will generally increase the productivity through increased flexibility of the manufacturing resources. By implementing the smart grid with Industry 4.0 technologies the productivity of human is expected to increase [26]. Primary data in Malaysia have been collected in 2017 relating cloud computing in manufacturing firms to inter alia productivity. 188 respondents describe cloud computing overall as helpful to achieve gains in job performance and to increase his/her productivity [27]. Providing a bibliometric analysis and detailed overview of Industry 4.0 in contrast to [24] Industry 4.0 is described as the Fourth Industrial Revolution. The focus is on interconnected technologies, Smart Manufacturing, CPSs and IoT. Industry 4.0 has been published in 33 papers in the Journal Productivity Management indicating that there is a relationship between productivity and Industry 4.0 [16]. Past research has been conducted concerning several industries and a couple of Industry 4.0 technologies in Malaysia. It does not provide the necessary overall picture helping industry players making a profound investment decision in the most promising technologies.

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3. Background and rationale Caused by various definitions of Industry 4.0 and related technologies in total 30 technologies are listed in the literature as Industry 4.0 technologies. Furthermore, the relationship between applying the particular technology in Malaysian manufacturing firms and productivity gains through those technologies is not clear. Alarming results from a survey conducted in Brazil describe additive manufacturing as having significant negative operational benefits [6] despite being mentioned as a key future manufacturing technology [28]. Industry 4.0 technologies are described and named differently in various studies [20]. Table 1 names all Industry 4.0 technologies mentioned by 20 authors. The numbering is also used in Table 2 whereby the number represents the respective technology listed in Table 1. Table 1. Industry 4.0 technologies described in the literature. No

Technology

No

Technology

No

Technology

1

Computer-Aided Design and Manufacturing

11

IIoT (Industrial Internet of Things)

21

Embedded systems

2

Integrated Engineering Systems

12

Augmented reality

22

Production

3

Digital automation with sensors

13

Autonomous robots

23

Energy management

4

Flexible manufacturing lines

14

Cyber security

24

Cyber-Physical Systems

5

Simulations/analysis of virtual models

15

Digital certification and currency transactions

25

Internet of Service

6

Manufacturing Execution Systems/SCADA

16

Computing

26

Smart Factory

7

Big data collection and analysis

17

Programming language

27

Machine learning

8

Digital Product-Service systems

18

Protocols and architecture

28

Mobile computing

9

Additive manufacturing

19

Information Communication Technologies

29

Artificial intelligence

10

Cloud services for products

20

Intel

30

Communication Network & Infrastructure

Table 2 has been developed to compare the key technologies described under the frame Industry 4.0 in 20 papers. The list of authors has been obtained by a key word search in ScienceDirect. The key words were Industry 4.0 technologies. Table 2. Industry 4.0 (key) technologies described in the literature. Auth ors

1

1 0

1 1

1 2

1 3

1 4

1 5

1 6

1 7

1 8

1 9

2 0

2 1

2 2

2 3

2 4

2 5

2 6

2 7

2 8

2 9

3 0

Dale nogar e et al [6]

X X X X X X X

X X X

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Alcác er & CruzMach ado [29]

-

X -

-

X

-

X -

X

X

X

X

X

X

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Frank et al [13]

-

-

-

X X X X

-

X X

X

-

X

-

-

-

-

-

-

-

-

-

X

-

-

-

-

-

-

-

Chiar ello

-

-

-

X -

-

X -

X

-

-

-

X

X

X

X

X

X

X

-

-

-

-

-

-

-

X

2

3

4

5

X

6

-

-

7

X

8

9

6

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Auth ors

701

1

2

3

4

5

6

7

8

9

1 0

1 1

1 2

1 3

1 4

1 5

1 6

1 7

1 8

1 9

2 0

2 1

2 2

2 3

2 4

2 5

2 6

2 7

2 8

2 9

3 0

Zhon g et al [31]

-

-

-

-

-

-

X

-

-

X

X

-

-

-

-

-

-

-

-

-

-

-

-

X

-

-

-

-

-

-

Herm ann et al [3]

-

-

-

-

-

-

-

-

-

-

X

-

-

-

-

-

-

-

-

-

-

-

-

X

X

X

-

-

-

-

Ahue ttGarz a& Kurfe ss [32]

-

-

-

-

-

-

X

-

X -

X

-

-

-

-

-

-

-

-

-

-

-

-

X

-

-

X

-

-

-

Pedo ne & Mezg ár [33]

-

-

-

-

-

-

-

X -

X

X

-

-

X

-

-

-

-

-

-

-

-

-

X

X

-

-

-

-

-

Fahe em et al [26]

-

-

-

-

-

-

X

-

-

X

X

-

-

X

-

-

-

-

X

-

-

-

-

X

X

-

-

-

-

-

Kolb erg & Zühl ke [34]

-

-

X

X -

-

-

-

-

-

-

-

-

-

-

-

-

-

X

-

-

-

-

X

-

-

-

-

-

-

Lu [8]

-

-

-

-

-

-

X

-

-

X

X

-

-

-

-

-

-

-

X

-

-

-

-

X

-

-

-

X

-

-

Vaid ya et al [35]

-

X -

-

X -

X

-

X X

X

X

X

-

-

-

-

-

-

-

-

-

-

X

-

-

-

-

-

-

Muh uri et al [16]

-

X -

-

X -

-

-

-

X

X

-

X

-

-

-

-

X

-

-

-

-

X

-

X

-

-

X

-

Cerut i et al [36]

-

-

-

-

-

-

-

X -

-

X

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Teluk darie et al [19]

-

X -

-

X X -

-

-

-

X

-

-

-

-

-

-

-

-

-

-

-

-

X

-

-

-

-

-

-

Caste loBran co et

-

-

-

-

-

-

X

X

-

-

-

-

-

-

-

X

-

-

-

-

-

-

-

-

-

-

-

et al [30]

-

-

-

X

X

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Auth ors

7

1

2

3

4

5

6

7

8

9

1 0

1 1

1 2

1 3

1 4

1 5

1 6

1 7

1 8

1 9

2 0

2 1

2 2

2 3

2 4

2 5

2 6

2 7

2 8

2 9

3 0

Mitta l et al [38]

-

-

-

-

-

-

X

-

X -

X

X

-

-

-

-

-

-

-

-

-

-

-

X

-

-

-

-

-

-

Wag ner et al [39]

-

-

-

-

-

X X

-

-

X

X

-

-

-

-

-

-

-

-

-

-

-

-

X

X

-

-

-

-

-

Jabbo ur et al [40]

-

X -

-

-

-

-

-

X X

X

-

-

-

-

-

-

-

-

-

-

-

-

X

-

-

-

-

-

-

Kam ble et al [12]

-

-

-

X X -

X

-

-

X

X

X

X

X

-

-

-

-

-

-

-

-

-

X

-

-

-

-

-

-

Abso lute frequ ency

1

6

2

5

1 3

2

9

1 2

1 7

5

4

5

2

2

1

1

5

1

1

1

1

1 4

4

2

1

1

1

1

al [37]

7

4

Only the top ten named (key) technologies are defined and listed in Table 3. The criterium to be named as a key technology is to have at least five entries in Table 2. ICT is already represented by IIoT, big data and CPS, due to that it is not mentioned as a key technology. Table 3. Top ten Industry 4.0 technologies described in the literature. No.

Technology

Definition

1

IIoT (Industrial Internet of Things)

Real-time capable, intelligent, horizontal, and vertical connection of people, machines, objects and ICT systems to dynamically manage complex systems [41]

2

CPS (Cyber-Physical Systems)

Converging the physical and digital worlds by establishing global networks for business [42]

3

Big data collection and analysis

Extract information from huge amounts of data to make informed decisions [43]

4

Cloud services for products

Application of cloud computing in products, extending their capabilities and related services [44]

5

Additive manufacturing

Counterpart of traditional chip removal machines, like lathe or milling machine, eg. 3D printing [36]

6

Simulations/analysis of virtual models

Analysis of virtual models through Finite Element Analysis, Computational Fluid Dynamics whereby models simulate properties of implemented models [45]

7

Integrated Engineering Systems

IT support systems are integrated in product development and manufacturing to exchange information [46]

8

Augmented reality

A computer graphics technique where virtual symbols are superimposed to a real image of the external world [36]

9

Flexible manufacturing lines

Digital automation with sensors in manufacturing processes, for example by using RFID or through creating Reconfigurable Manufacturing Systems (RMS) [47]

10

Cyber security

Protection of Internet connected systems, such as data information, hardware and software from cyber-attacks [48]

8

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The independent variables displayed in Table 3 are the top ten Industry 4.0 technologies researched from the literature. Profound research is still lacking concerning the extend of a positive or negative relationship between productivity and Industry 4.0 technologies. 4. Research rationale The thought process is visualized in Fig. 1. It summarizes the outcome of the Tables 1, 2 and 3 with regard to the developed research questions. What are the most frequently named Industry 4.0 technologies in the literature? Perform a literature review in ScienceDirect using the key words Industry 4.0 and technologies. Rank the technologies according to their absolute frequency. Develop the high-level research question: What is the specific impact of each technology on the productivity? Huge population of Malaysian manufacturing firms: propose to perform quantitative studies to identify the relationship. Fig. 1. Thought process of Industry 4.0.

Elaborating more on Fig. 1 first of all the most commonly described Industry 4.0 technologies have to be identified and ranked according to their frequency. Afterwards the significance of each technology under the frame Industry 4.0 has to be researched. The proposed research method is conducting quantitative studies by distributing questionnaires. The respondents should be qualified personnel of Malaysian manufacturing firms as they already experienced the implementation and effects of the new technologies first hand. Out of Fig. 1 the research methodology is visualised in Fig. 2. Conduct extensive literature review to identify Industry 4.0 key technologies. Perform reflective analysis and rank Industry 4.0 technologies by absolute frequency. Collect primary data through distribution of questionnaires. Analyze data to identify the relationship between each technology and productivity. Develop recommendations for practice. Fig. 2. Proposed research methodology.

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The last step of developing recommendations for practice mentioned in Fig. 2 requires a large-scale survey which shall be oriented to the survey conducted by CNI in Brazil. This is vital to provide sector specific recommendations [49]. 5. Final thoughts Research in the field Industry 4.0 in conjunction with the productivity of Malaysian manufacturing firms has been proposed. Studies on governmental, industrial and educational level in Malaysia are still lacking. To ensure that a guidance is provided for practitioners in the industry and decision makers in the Malaysian government further research is required. Through extensive research informed decisions can be made promoting the identified suitable technologies. The paper provides future researchers with the research rationale to conduct further studies on Industry 4.0 in the context of Malaysian manufacturing firms. Industry 4.0 and comparable concepts have been identified as significant in a huge number of papers published in developed and recently also developing countries [50, 6, 4]. As an outcome of studying the relationship between productivity and Industry 4.0 the identified key technologies shall receive a prioritized resource allocation. On industry level the key technologies shall be implemented gradually once a readiness assessment of the specific company has been conducted. Depending on the company’s specific pain points to be solved by technology the respective set of Industry 4.0 technologies is assigned. The stages of implementing Industry 4.0 technologies are recommended to start with small scale pilot projects depending on the company’s needs. On governmental level a large-scale survey is recommended to extract the opinion of the industry practitioners concerning their experience in implementing Industry 4.0 technologies. Thus Industry 4.0 will increase the competitiveness of the Malaysian manufacturing sector and lead the way for Malaysia to become a developed nation according to the eleventh Malaysia plan. The developed conceptual framework is limited to the relationship between Industry 4.0 and productivity in the Malaysia manufacturing sector. The relationship between Industry 4.0 and product quality along with sustainability are excluded. However, research is conducted and further suggested in these fields as well. The second limitation is to disregard other aspects such as undertaking the process integration, quality of the service of the equipment providers and the maturity level of Industry 4.0 technologies influencing the achieved productivity gains. Acknowledgements The authors gratefully acknowledge the valuable comments and suggestions received from the reviewers which have helped them to improve the paper significantly. References [1] Kagermann, H., J. Helbig, and W. Wahlster. (2013) “Recommendations for Implementing the Strategic Initiative INDUSTRIE 4.0: Securing the future of German Manufacturing Industry.” Final report of the Industrie 4.0 Working Group, Forschungsunion. [2] Oliff, H., and Y. Liu. (2017) “Towards Industry 4.0 Utilizing Data-Mining Techniques: A Case Study on Quality Improvement.” Procedia CIRP 63: 167-172. [3] Hermann, M., T. Pentek, and B. Otto. (2016) “Design Principles for Industrie 4.0 Scenarios” in System Sciences (HICSS), 49th Hawaii International Conference 49: 3928-3937. Available from: doi:10.1109/HICSS.2016.488. [4] Drath, R., and A. Horch. (2014) “Industrie 4.0: Hit or Hype?” IEEE Industrial Electronics Magazine 8 (2): 56-58. [5] Qin, J., Y. Liu and R. Grosvenor. (2016). “A Categorical Framework of Manufacturing for Industry 4.0 and Beyond.” Procedia CIRP 52: 173-178. [6] Dalenogare, L. S., G. B. Benitez, N. F. Ayala, and A. G. Frank. (2018). “The Expected Contribution of Industry 4.0 Technologies for Industrial Performance.” International Journal of Production Economics 204: 383-394. [7] Li, L. (2018) “China’s Manufacturing Locus in 2025: with a Comparison of “Made-In-China 2025” and Industry 4.0.” Technological Forecasting & Social Change 135: 66-74 [8] Lu, Y. (2017). “Industry 4.0: A Survey on Technologies, Applications And Open Research Issues.” Journal of Industrial Information Integration 6: 1-10. [9] Mahidin, Dato’ Sri Dr. Mohd. U. Press Release Labour Productivity of Third Quarter 2018. Department of Statistics Malaysia [Accessed 19th Feb 2019]. Available from: https://www.dosm.gov.my/v1/index.php?r=column/pdfPrev&id=N01nWlBBTHpRd0ZYK2lrVmlNNmpFZz09. [10] Ministry of International Trade and Industry. (2018) Industry 4wrd: National Policy on Industry 4.0.

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