The purpose of this study is to examine the key challenges currently prevalent in the Machinery and Equipment (M&E) sector of Malaysia and to offer an integrative Industry 4.0 strategic roadmap. The Environmental Scan 2016 and 2018 provides a basis for the identification of the challenges in the M&E sector of Malaysia. The study further investigates the challenges by analyzing the responses of four major stakeholders in a Focus Group Discussion. The findings reveal that the M&E sector suffers from very low automation adoption. This study is among the first few to analyze the challenges in the M&E sector and lay out a strategic roadmap encompassing the role of each stakeholder at every phase of the transition toward Industry 4.0. The proposed method of transitioning through targeted incentive schemes will help academics and practitioners in developing concrete and workable action plans to conduct the transition process.