Friday, 30 January 2015

Good work culture enhances carmakers’ competitiveness


PHENOMENAL successes attained by automotive giants are largely attributed to the work culture that is developed within their respective companies.
The employees of these companies are self-motivating and are largely self-directing, guiding themselves towards achieving the organisational objectives. This is their culture.
It is believed success of Toyota is due to the company being Japanese and that the Japanese culture is the driving force.
On the contrary, despite the Japanese cultured workers being gentle and obedient, experts' study found that Toyota tolerates and even creates "contradictions" in many aspects of its organisational operations. Employees are encouraged to contradict opinions and ideas at all levels.
Ethical contradictions among employees, whom are constantly faced with challenges and problems, create new ideas and thus drive Toyota's continuous improvement philosophy. The success of the Toyota Production System (TPS) is largely attributed to Totoya’s culture of contradictions.
Toyota sells cars in more than 170 countries, operates some 580 companies around the world and has more than 50 factories outside Japan.
Employing more than 330,000 workers around the world, Toyota, therefore is not entirely Japanese and with such diverse operations, it is the “Toyota Way” corporate culture that holds these operations together.
Volkswagen, Toyota’s rival, has a 513,000 –strong workforce that handle its global operations. The company is not only diverse in its manufacturing operations but more uniquely very diverse in its model range.
Audi, Sear, Skoda, Bently, Lamborgini, Ducati, Porsche, Bugatti, MAN and Scania are among the companies in Volkswagen’s stable.
Contrary to the Toyota ways, Volkswagen is less obsessed with its production lines and production methodologies. However, its group of companies remains efficient and productive and its total production has been able to surpass that of Toyota’s in recent years.
Volkswagen’s focus in largely on cost-saving through parts sharing between models and this has helped it to preserve, and continue to inculcate a culture of permanent innovation and a willingness to take risks among its workforce.
Its workers’ diligence and attention to detail are among its most sought-after and promoted values.
To help achieve these values improvement in “work-life balance” is being cultivated and is believed to be the motivating factor if its workplace efficiency.
It has established a culture that discouraged emailing and smartphone communication between employees during non-working hours.
Studies have shown that no less than 40 per cent of experienced high-level businessmen and managers suffer from burnout syndrome, due to prolonged working hours. Volkswagen pays close attention to this.
Malaysia’s automotive industry, employs some 550,000 workers, and is by size almost similar to both Toyota and Volkswagen. It is as diverse as Volkswagen, but does not share the privilege of having one leader.
As such, the national automotive culture is unfounded. Over the years, Malaysian industries have tried to emulate the Japanese work culture.
A Lean Production System (LPS) is widely practiced, which undoubtedly improves product quality and manufacturing efficiency, but adopting the practice as the normal working culture of a local car maker is still some distance away.
If the LPS trained personnel leaves the company, the practice simply fizzles off.
An advanced arsenal and complex strategy does not guarantee an army’s success on the battlefield. Its soldiers’ discipline, courage, morale and ability to wield the arsenal well is the key to victory.
The same can be said of the national automotive industry. A skilled and cultured automotive workforce is the determining factor of its competitiveness.
An excellent automotive work culture need to be inculcated in workers that are entering the diverse local automotive industry.
This calls for educators and trainers to emphasise more on building a solid work culture in their syllabi, and perhaps local anthropologists and sociologists to formulate and build a dynamic work culture for our fledgling automotive workforce.
The Malaysia Automotive Institute is slowly working towards this with its various training programmes.

Wednesday, 7 January 2015

Local car industry should be ready for AEC formation


Ten Asean member countries have cemented their agreements to commence the formation of the "Asean Economic Community (AEC)" on December 31 this year.
It is certain the outcomes of AEC formation would significantly impact the economic activities in all the Asean nations and one of which is the promise of bigger market opportunities for businesses.
Four primary objectives of AEC are - to create a single market and production base, competitive economic Asean region, equitable economic development among member nations and Asean integration into the global economy.
There exist both skepticism and optimism among communities within the various business sectors as to the possibility of further delay in the launching of the AEC.
However, the primary concern is the readiness of the business community to adapt to the new business landscape of the AEC, irrespective of "when" it is implemented, but "if" it is implemented on the target date.
AEC will create a vibrant and competitive single market with more than 600 million people with a gross domestic product (GDP) in excess of RM7.5 trillion, transforming the region with free movement of goods, services, investment, skilled labor and freer flow of capital.
Henceforth, business communities in all sectors must be concerned with the free movement of goods that will present both market and production opportunities as well as threats to their businesses.
Eleven priority sectors were selected for the initiation on the AEC set to achieve the four primary objectives prescribed above, and automotive is one of them.
The basis for their selection are based on their comparative advantages in natural resources, labor skill and cost competitiveness and their value-added contribution to the economy of Asean.
Local automotive community, especially the vendors, may derive the opportunities of bigger demands for parts and components by automotive original equipment manufacturers (OEMs) within the AEC.
On the other hand, they may face direct competition from vendors in other member countries for similar parts and components required locally.
Lower tier manufacturer supplying specialized or half-finished parts and components to local assembling companies may have better business opportunities as the companies are expanding their markets to other member countries.
In all quality produce and lower cost is the key parameters for the local automotive businesses to participate or to survive in the promising markets to be offered by the AEC launching.
Hence, the focus set in the National Automotive Policy 2014 to enhance the competitive advantage, both efficiency and productivity, of local vendors and OEMs were a strategic endeavor to ensure their ability to participate and to compete in the future AEC market irrespective when it is implemented.
Supply of quality and highly skilled manpower is vital to achieve high level of efficiency and productivity among the local vendors.
Towards this end, under full support of Ministry of International Trade and Industry, Malaysia Automotive Institute in the couple of years was aggressively implementing on-the-job training programmes for young graduates and school leavers to develop their careers in automotive professions.
Apart from developing local talent in automotive arena, the initiatives are viewed to safeguard the possible diminishing of employment opportunities for the local workforce to the skilled and talented workers moving into the country due to free movement of labors among member countries under the AEC agreement.
Local automotive industries now have less than a year, should the target date hold promise, to review and to take cognizance of the coming AEC launching.
Survival of the nation automotive sector will largely dependent on strategic preparation by the vendors and the local OEMs alike.