Thursday, 26 May 2016

Perodua's successs paves the way for other local firms

The Perodua brand has been part and parcel of the lives of many Malaysians.
It has filled Malaysia’s need for simple and effective transportation, with 2.7 million cars produced to date, mostly within the small car market.
From the Kancil to its latest addition the Axia, those seeking for a reliable, affordable and practical option to travel have made Perodua their brand choice.
Perodua has maintained its position as Malaysia’s largest market shareholder, consistently holding between 29 to 33 percent between 2006 to last year.
It reported a 36 per cent market share in the first quarter of this year despite a market slowdown.
The company maintains an equity distribution between Malaysian and Japanese shareholders as an important factor to this success.
At the holding group level, Malaysian shareholders hold the majority equity. Within the group, Japanese majority is maintained within its manufacturing companies.
This distribution of equity creates a synergy of cooperation in the areas of technology development, process efficiency and human capital development within the Perodua ecosystem, from its new energy efficient plant, Perodua Global Manufacturing, to the lower tiers within its supply chain.
Since its establishment in 1993, Perodua took an incremental, yet continuous growth in its capabilities and products lines.
It undertook massive efforts in strengthening its supply chain, which comprise both local and multinational companies.
Great value was provided to the local ecosystem through a strong localisation drive – 95per cent of the Axias comprise parts produced locally.
To enhance the supply chain, Perodua led their vendors by example through Perodua’s Transformation Exercise, incepted in 2011.
They worked on changing mindsets and working cultures and their vendors were required to work towards leaner and more cost effective production practices.
Perodua also worked closely with their employees on basic productivity. For example, they instituted marching as methods to develop a culture of discipline, and developed 2S committees, responsible to ensure working areas are tidy and self-maintained, resulting in increased productivity among employees.
The after sales service was also a priority for the company. Perodua ensured that their service centres met customer expectations, and this was represented through their flagship 4S headquarters, called Perodua Sentral, located in Petaling Jaya.
Perodua is taking the next step – developing their own models. This new model, currently titled D36D, again will be a product of collaboration with Perodua’s counterparts, using shared platform technologies, but with an entirely new upper body design built by local engineers.
It also has several new energy efficient engines in the pipeline, which will be produced in its engine plant in Sendayan.
Liberalisation of the Malaysian automotive sector is a gradual, but inevitable process.
The recently signed Trans-Pacific Partnership Agreement, and the ASEAN Economic Community, will open up opportunities to a population of more than a billion people.
Malaysia needs to strive towards competitiveness, and this can no longer be done through commodity and cheap labour, but through the value added activities of high end manufacturing and services.

Perodua is a great example of how local companies can develop itself towards global success.
Through the National Automotive Policy 2014, it is hoped that the country can see more original equipment manufacturings and vendors taking the same bold steps, towards enhancing the competitiveness of the automotive industry.

Thursday, 19 May 2016

Vital for automotive player to reinvent marketing

In 2004, a 19 year-old Harvard University undergraduate launched a social networking site to connect profiles of the university’s students and staff. Little did Mark Zuckerberg realize, that this simple idea would change the way the world interacts. The rest, as they say, is history.
The advent of social media has made the modern consumer more informed than ever, due to the rapid dissemination of product information available at their fingertips. Vehicle purchase decisions naturally become a significant area of concern, as the purchase of a car is often the second most important life investment.
Engagement has become an important factor in social media, and marketers are now required to quickly respond to the evolving dynamics of comments and reviews of their products and services.
The faceless nature of online communication has also created an environment where cynicism and criticism become even tougher to manage. Trust in brand is driven not just by the marketer, but also through the power of discourse between consumers through the various social networks available today.
Marketing strategies changed from its traditional standards of the one way, mass communication seen through print, television and billboard advertising, to the inclusion of socially engaging content that required personalized experience for consumers through social media campaigns we are used to today.

This has altered how consumers respond to advertising. Traditional “interruptive” advertising content has changed to more engaging “organic” content. This dynamic shift has led to the new concept or “In-bound marketing”.
The traditional marketing methods, or “Outbound” marketing, gathers attention from the consumer by interrupting a consumer’s activity. TV advertising, for example, interrupts a program to introduce its products or services. Newspapers place advertisements next to their columns and articles to attract readers.
As content moved from traditional channels to the online domain, reading materials and videos became easily accessible. However, advertising did not gain this ease in access. Whilst content production had a higher barrier to entry via traditional channels, the world wide web allowed anybody to broadcast their content to the world, creating a blue ocean scenario that forced advertising prices to sell at a much lower cost.
The In-bound marketing approach became the next resort, as it targets marketing at points where a purchase decision is most likely to take place. At its core, advertising will not attract customers when they are not ready to make purchase decisions. Therefore, in-bound marketing targets consumers at the touch points where there the need, product selection, and buying decision takes place.
Advocators of In-bound marketing mention the need to build brand trust. Unlike outbound marketing techniques, in-bound trust building requires a personal journey for the target consumer. The ultimate end is that the customer is fully aware that the products they are buying come from experts in the product – therefore marketing is driven by content that instils trust in the event the consumer is ready to buy, such as blogs, instructional videos, etc.
Implementing successful inbound campaigns require a lot of planning, understanding and most importantly, massive and accurate data collection systems that allow marketers to predict consumer behaviour at the important touch points. It is therefore important that businesses grapple with the concept of Big Data, where large sales teams can make informed, cost effective in their marketing content development.
In order to remain competitive in today’s age of fierce competition, it is also important that the creativity of the sales team is harnessed and enhanced. Sales and after sales development programs are now a crucial element of development.
As we approach the liberalisation of the automotive sector in the coming years, it is pertinent for automotive companies to reinvent their marketing and sales strategies, as competitiveness cannot be gauged by strength of manufacturing alone. It takes years for consumers to develop trust for a brand, but it takes a second for trust to be broken.
The writer is the chief executive officer of Malaysia Automotive Institute.

Thursday, 12 May 2016

Motivating employees towards competitiveness

Citizens of the manufacturing sector are well accustomed to the 4Ms of manufacturing – man, machine, method, and materials. Any top corporate professional will emphasise the highest attention to man, and there is a very good reason to do so.
In essence, the 4Ms were coined to ensure that careful attention is given to each element’s functionality, readiness, and availability. Machines should always work properly, are regularly maintained, and capacity is available when needed. The same goes for the availability of materials as they have to be fit for use and kept in pristine condition when in storage.
The same needs are expected of human talent. However, unlike the other three, the management of people is as much an art form as it is a science. Steve Jobs once said, “It’s not about the money. It’s about the people you have, how you’re led, and how much you get it”.
Numerous articles and journals have been written on the subject of human resource management. HR managers in the automotive sector are well versed with the standard framework and methods, such as training needs analysis, workforce planning, recruitment, performance management, etc.
Despite the above, the underlying factor that company managers must monitor is employee motivation. This factor requires all managers, not just human resources, to master the art of employee relations.
Motivated employees are the main, if not key contributors to an organisation’s success. They ensure that results are achieved, and are in constant search of ways to improve results. Businesses also benefit from lower employee turnover, improved efficiency and higher productivity.
Furthermore, employee morale must not only be sustained during good economic times, but becomes extremely crucial when times are bad, to ensure longevity and sustainability of a business going through tough times.
The study of employee management requires a keen understanding of effective management-employee relations. Employees are motivated by many factors, which may include working culture, freedom to make important decision, the constant need for challenge, and also financial stability.
This makes it crucial to identify incentives that result in high motivation, which defers from employee to employee, making a company-wide motivation framework lie in the hands of direct superiors, and not just top management policies alone.
An important aspect is effective communication. The advent of communication technology, in particular social networks, has made the spread of information much easier. However, the management of online communication must overcome the dehumanization that arises from a lack of face to face contact with employees, which is vital for the personal development of an employee’s career.
Management style also plays an important role in employee motivation. Leaders are drivers of creativity, innovation and professionalism. Therefore, it is important for managers to identify the incentives needed to constantly motivate their subordinates to achieve desired results.
The upgrading of lifestyles since the turn of the century requires managers to revisit the way we manage behaviour. The days where traditional, hierarchical management styles may no longer be compatible with the personalities of today’s youth. Management styles must also adapt to remain competitive, and we have seen companies competing to become “best employers”, to ensure higher retentions and attracting the best talent.
The motivation of people is not just the industry’s responsibility to shoulder. As a nation, we must engineer our society towards success-oriented mindsets, and not be limited to measuring success by financial figures alone. This writer urges all stakeholders to create environments that value innovation, performance and professionalism as benchmarks of success, so that the incentives associated with motivation are accessible to all.
“Success is a journey, not a destination”.
The writer is the chief executive officer of Malaysia Automotive Institute

Thursday, 5 May 2016

Proton can leverage on its strengths to move forward

Widespread media coverage was seen in Proton National Bhd's recent plea for assistance, leading to the government’s granting of a conditional soft loan, and the establishment of the special task force to monitor its transformation.
This plan, to be led by Proton, aims to address structural issues and change perceptions on the brand – both at the domestic and global levels.
It is important for us to move beyond Proton’s recent sales performance and look at the ways to develop a framework for global competitiveness.
Objective capability analysis and the establishment of a competitive ecosystem is vital as Proton faces challenges faced by all carmakers today – survival within the global automotive market.
Since 1983, Proton has generated an ecosystem that spurred Malaysia’s industrial drive into the 21st century.The automotive industry has,in fact, positively affected the country,s economy in countless ways.
Besides component manufacturing and aftersales bases, the industry created the need for local ventures in material supplies, industrial design, tooling, machinery and hardware supply, even marketing and advertising.
Banks also needed to step up to finance businesses and fund consumers’ loans.
The national car project was not just about selling cars, but selling the aspiration for Malaysia to be an industrialised nation.
This has created a huge job market for Malaysians, either through direct involvement in technology based careers, or in supporting institutions that are related to the industry.
Looking three decades ahead, even the harshest of skeptics cannot deny Malaysia’s industrial achievements to date.
The latest Proton models, such as the Preve and Iriz achieved 5 star safety ratings, either at the New Car Assessment Programs (ASEAN NCAP and ANCAP).
These products of our local talents and vendors are a huge step for Proton to break into the export markets, as the safety standardsat proton are now on par with advanced countries - surpassing the safety requirements of our counterparts in the region.
Proton will also launch three new models in the immediate future, which is by any means a mammoth task. At the same time, it is currently developing new energy efficient engines, paving the way for more advances into our domestic technology pool.
Malaysia now sits in a strategic location due to our automotive manufacturing infrastructure.
Proton’s plant in Tanjung Malim has a modern infrastructure for the production of the latest vehicles which require modern manufacturing processes.
Although Proton’s internal achievements have been exciting, it has set forth plans to quickly remedy past weaknesses and risk averse processes, particularly in enhancing the customers’ after sales experience.
While working with its dealerships and service centres on after sales improvement, Proton has introduced many initiatives, such as pick-up and delivery services, mobile assistance, and online service bookings.
Certain service centres also operate seven days a week, to cater to the growing demands among its customers.
Through the National Automotive Policy 2014 (NAP2014), the government has implemented many initiatives to enhance competitiveness of the automotive industry. It is a wide policy to support the industry’s needs, from technology acquisition, human capital development, and after sales development.
The NAP2014 also places passenger safety at par with global standards, through the signing of the United Nations Economy Commission for Europe World Forum for Harmonization of Vehicle Regulations (WP29).
This will also make Malaysia a conducive market for vehicles with higher safety ratings, as consumer awareness of safety is enhanced throughout the country.
Moving forward, this writer urges all parties to judge the national car maker objectively. Proton, just like any developing carmaker, will have its up and downs in the pursuit of satisfying its customers.
We cannot force consumers to purchase our local products. However we hope consumers will follow the development of our national brands’ with an open mind, and make future purchase decisions based on true quality, and not perceived quality.

The writer is the chief executive officer of Malaysia Automotive Institute.