KUALA LUMPUR, May 14 — US-based multinational technology company Cisco Systems Inc. will use its Malaysian plant to test a pilot project that aims to make its operations more cost-effective by making every aspect of its production connected to the internet.

Speaking to the Wall Street Journal, Cisco senior vice-president John Kern said the firm has been installing thousands of sensors in a plant in Malaysia to monitor and reduce energy consumption.

He said with the system in place, Cisco’s worldwide production sites will help reduce energy consumption by 20 to 30 per cent translating into tens of millions of dollars in cost savings.

“In 60 to 90 days, we’re hoping to prove it,” he was quoted as saying.

Kern said his company has been looking at broader supply chains as a part of its efforts to spread the idea of “Internet of Things”, the term for the web-enabled connections that can allow devices to transmit data on energy consumption or productivity.

Cisco had established a US$4 million fund (RM13 million) for the programme in which employees brainstorm and test projects to make the company more productive.

Kern said the projects cover a wide range of supply chain issues and managing the pilot project in Malaysia would only cost less than US$700,000, a small investment for the US$47 billion company.

It is understood that most of the test projects will fail, he said, but those that succeed can provide innovative solutions and major savings.

Cisco’s Consulting Services group was said to have already begun working with logistics provider DHL on a project to send real-time data on warehouse operations.

Manufacturing operations, with their many pieces of equipment in motion, can also benefit from the continuing streams of information, Kern said.