For Datuk Seri Mustapa Mohamed, Minister in the Prime Minister’s Department (Economy), businesses must explore opportunities for digital transformation in Malaysia, as they are critical to the country’s economic recovery efforts and can help contribute to its long-term economic resilience. The MyDIGITAL plan intends to make Malaysia a technologically advanced and digitally-driven country, as well as a regional leader in the digital economy by 2030, he added.

Additionally, the digital economy is projected to contribute 22.6{aa282f308afcc222aaa21b0478c79e01a8fedd01972e2180867097bd93930f22} to Malaysia’s GDP and generate 500,000 new jobs by 2025. Cloud services were also highlighted in the MyDIGITAL program, with a focus on a ‘cloud first’ strategy at both the federal and state levels, which will help facilitate the adoption of cloud technologies in the country.

Earlier this year, SAP Malaysia Managing Director Kok Cheong Hong has already expressed support for the initiative and described it as a major “breakthrough yet realistic” digital vision. Hong believes this approach serves as a motivation for local businesses, particularly small and medium-sized enterprises (SMEs), to embrace dynamic consumption, establish resilient infrastructure, and utilise cloud solutions to boost efficiencies and productivity.

“Public-private plural partnerships are also important to help drive SME readiness, which in turn further encourages innovation and flywheel digitalisation effect for all concerned,” Hong remarked.

SAP Malaysia Emphasises the Need for Digitalisation among SMEs

Furthermore, Hong put the spotlight on the significance of the SME sector today as many businesses are still lagging in terms of technology use. According to the 24th Malaysia Economic Monitor: Weathering the Surge report, SMEs in the Southeast Asian nation have been underperforming both in terms of output and productivity levels when compared against peer countries. It has also been found that the COVID-19 pandemic has widened the productivity gap. With this, SAP Malaysia seeks to raise awareness for SMEs before increasing uptake on digital platforms.

“Businesses that are adopting a ‘wait and see’ attitude towards digitalisation could be left behind – and may even become irrelevant. Many solutions that were once the exclusive domain of large corporates have been scaled in capacity – and price – and are now within reach of local SMEs,” Hong stressed.

The likes of glove maker Aspen Glove Sdn Bhd and renowned spice manufacturer Baba Products Malaysia Sdn Bhd have already embarked on their digital transformation journeys towards becoming intelligent enterprises through SAP upgrade projects centered on automation and innovation to enhance productivity and cost-efficiency.

Aspen Glove’s ​​industry used to be labour-intensive but after implementing SAP solutions, it has now automated the processes end-to-end. It has selected SAP S/4HANA Cloud, Private Edition for its latest glove manufacturing plant that operates 96 production lines. On the other hand, Baba Products had migrated from its previous all-manual, paper-based operations to the SAP S/4HANA platform, which was supported by Direct Store Delivery with CRM, SAP Payroll, and SAP SuccessFactors.

“Hence, Aspen Glove is able to revolutionise the quality, customisation and speed of delivery to meet the customer demands of today,” Hong noted.

The SAP Malaysia MD further explained that businesses can become intelligent enterprises by first digitising processes where they can “do more with less”, create best-in-class customer experiences, establish sustainable supply chains, and innovate new business models and revenue streams.

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In 2017, Malaysia’s Ministry of International Trade and Industry (MITI) spearheaded the development of Industry4WRD, a national policy on Industry 4.0 aiming to transform the manufacturing sector and related services. According to MITI Deputy Minister Datuk Lim Ban Hong, the program has succeeded in creating the necessary support ecosystem for helping the industry through targeted strategies, particularly in small and medium-sized enterprises (SMEs), which account for 98.5{aa282f308afcc222aaa21b0478c79e01a8fedd01972e2180867097bd93930f22} of all manufacturing firms. He added that the policy serves as a “key catalyst” to ensure that the Malaysian economy remains resilient, leading to a more inclusive economy based on shared success.

“Industry4WRD will drive the nation’s digital transformation agenda in the manufacturing sector and related services to be smart, agile, and resilient driven by people, process, and technology,” the MITI Deputy Minister maintained.

Meanwhile, SAP Malaysia Managing Director Hong Kong Cheong also weighed in on the growing importance of utilising technology for SMEs to survive and thrive against competitors on a global scale. He noted that SAP’s priority is centred on the readiness of SMEs for Industry 4.0 and helping them embrace cutting-edge digital solutions, as well as the shift towards intelligent technologies on the cloud.

“The SME landscape is especially crucial as many still lag in technology adoption within their business operations,” he said.

Aligning with the Malaysian government’s aspiration to spearhead the rapid digital transformation in the manufacturing industry, Hong noted that the focus on automation and innovation by glove maker Aspen Glove Sdn Bhd paves the way for enhancing productivity and cost efficiency in the sector. Headquartered in the country’s leading Science City, Kulim Hi-Tech Park, the organisation has chosen SAP S/4HANA Cloud, Private Edition for its latest glove manufacturing plant that will be running 96 production lines.

Leveraging SAP ERP on Cloud to Drive Aspen Glove’s Innovation

Moreover, Iskandar Basha Abdul Kadir, Managing Director at Aspen Glove, explained that innovation needed to transcend into the whole organisation to be able to compete and be relevant to what the company does daily. He said Aspen Glove needed to distinguish itself from its competitors given that the company is a new player in the industry.

“The production lines have to be automated, the planning system needs to use ERP (enterprise resource planning), and here is where we implemented SAP. This industry used to be a very manual industry, but now we have automated the processes end-to-end, where the capability is available,” he further detailed.

Iskandar Basha went on to say that SAP and its partner ecosystem had demonstrated strong glove industry knowledge and manufacturing best practices, allowing the company to focus on its main goals rather than just ERP system maintenance, as well as shortening the sales cycle and assisting in business decision-making. Aspen Glove’s digital transformation strategy focuses on how they leverage tools including SAP’s solutions to create an online, real-time system that allows information to be disseminated to as many people as needed and decisions to be made as quickly as possible. The company’s success has always hinged on customer feedback, according to Iskandar Basha.

“We want our customers to only desire and choose our products, that’s the benchmark we are aiming for. In order to achieve that, we are at the forefront with regards to offering gloves that are better than those from the best producers,” he stressed.

With its Industry 4.0 initiatives, Aspen Glove has effectively progressed beyond smart manufacturing in the factory, connecting production with end-to-end process execution across the supply chain, according to the SAP Malaysian MD. Hong concluded:

“Hence, Aspen Glove is able to revolutionise the quality, customisation, and speed of delivery to meet the customer demands of today.”

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