Thursday, 28 December 2017

INDUSTRY 4.0 2017 - A demonstration of national resilience

In January last year, the world met to discuss the future as seen through the Fourth Industrial Revolution, or Industry 4.0. In July last year, we started discussing its impact, and most importantly, its adaptation within the domestic industry.
In all fairness, nobody expected much after the subdued end to 2016. We celebrated the coming of 2017 with a reduction in vehicle sales, and many argued that we were in crisis mode.
However, we said in January that the automotive industry had developed, a higher level of resilience.
On the national front, we realised that economic uncertainty is no longer an excuse to dismiss strong foundations. Economic policies and budget implementations were designed to allow for greater economic resilience.
It may not have been the most popular way forward, but tax and incentive structures worked towards increasing our value on the global stage. We refused to handout fish but helped people to fish effectively.
This year was that year where we walked the talk and as an industry, continued the implementation towards a new era of global competitiveness.
Despite the economic uncertainty which had been looming since early 2015, exports of automotive parts and components are expected to hover closer to the RM12 billion mark by the end of this year, more than double the RM4.7 billion in 2014.
Energy Efficient Vehicle (EEV) penetration rate rose to 42.3 percent as at last month from 14.1 per cent in 2014. It is expected to surpass the 50 per cent mark by the end of the year, reflecting the growing support for energy efficient mobility.
Vendor Productivity also rose tremendously. In 2014, 315 automotive vendors were ranked at Level 3 or higher, with these figures expected to almost double by the time we hit 2018.
Taking things to a broader level, the progress seen in this year is a reflection of our national economic performance. The World Bank revised Malaysia's gross development product growth forecast for this year to 5.2 per cent, as stronger investments and private-sector expenditure increased - a reflection of strong economic foundations through solid economic policies.
The domestic economy was a key force in economic growth this year, with an average growth of seven per cent in the first half of the year. A clear sign of renewed consumer confidence of a recovering economy.
There is a saying, "Not everything that counts can be counted, and not everything that can be counted, counts". The economic figures mentioned above are important. They are indications of the results we have sowed.
For me, our bigger achievement goes beyond the figures we recorded. Year on year, we strive to improve on our past by looking towards our plans for the future. That often means questioning our current practices, despite how uncomfortable change may be. After all, success always tastes better when it is difficult and challenging to realise.
We chose to be competitive and we decided to achieve it outside our norms. We took bold steps towards our goals.
Despite heated debate, we finalised the strategic partnership between Proton and Geely. Admittedly, our nostalgic fondness of holding on made it a bittersweet milestone. However, we knew that to achieve global competitiveness, we needed to compete as a global player.
So far, we are seeing positive response from consumers and dealers in the brand. It will forever remain a Malaysian brand, built by Malaysian talent with the support of a global partner. There is absolutely no harm in learning from a more experienced teammate.
A key feature of this column was social upward mobility. We have always believed in living within our means, and to reach higher level means to increase the value of the "means". This means moving from the labour commodity thinking to making innovation our commodity of trade.
With tremendous support from the industry and government, we developed more career advancement and business enhancement opportunities. Through our Industry 4.0 implementation, more vendors will have access to advanced product and process design capabilities, and will create more high value jobs for Malaysians.
As we approach the end of 2017, I hope we breach 2018 with renewed spirit and re-engineered thinking. Creativity and innovation should be what defines our great nation, and we compete on our own grounds, with capability developed from within.
The key to not to run away from problems, but face them head on. Remember, one man's problem is another man's business or job opportunity. We are all here to solve the problems of others.
Next year, or the year following this one, will come with its own set of challenges.
Life is a gift for those who appreciate the challenges it brings - take them in with solutions that are fair, factual, innovative, and most importantly, elevate the value of our work in the eyes of our fellow countrymen, society and our Creator.
I wish all of you a happy 2018. May the resilience we have shown bring us closer to our goals in achieving global competitiveness.
The writer is the chief executive officer of Malaysia Automotive Institute.

Thursday, 21 December 2017

STRATEGIC WORKFORCE PLANNING - Commoditising creativity and innovation

In the old order of manufacturing, the higher rungs of upper management were reserved for the most creative in the crop.
The traditional line that determined individual positions on the rungs of the corporate ladder was that those who were able to roll out ideas stayed at the top, and others stayed on the shop floor to heed the commands from the higher floors.
This meant that designs, specifications and corporate planning were mostly discussed among a select minority, while the majority were left to only wonder why they had to do things in a certain way.
The most competitive nations or organisations at that time were those with or had access to cheap labour. In order to maintain this competitive edge, many governments from the countries with lower standards of living used their cheap labour as a commodity.
However, the commoditisation of cheap labour posed a few risks.
Firstly, foreign direct investment have to be managed in order to ensure knowledge transfer of which filure would leave a nation in a dilemma to maintain competitiveness by keeping living standards low.
Secondly, a high dependence on cheap labour commodity desensitised a large portion of the workforce - simply put, a workforce that is highly dependent on instruction can suffer when there is a lack of direction, and will also be risk-averse to newer and unfamiliar business and job opportunities of higher value.
Perhaps, in a time where most business operations are labour intensive, the separation mentioned above bears little risk.
Today, things need to move in a different approach. In a time when artificial intelligence poses a likely disappearance of numerous future jobs, we need to rethink the strategic workforce planning.
For example, the emergence of accounting software - one that automatically calculates your profit and lost, balance sheet, taxes and payroll - is taking over most of the accountant's job. To remain relevant, accountants can no longer play a submissive reporting role, but must possess the creativity and acumen of an entrepreneur from a financial standpoint.
For this reason, organisations must instil and inculcate creativity and innovation in their entire workforce. We can no longer specify everything, while business direction is important, the world has become interconnected and we must build a dependable workforce that can independently deliver tasks with their own creativity and innovation.
The most advanced nations today are those who own creativity, and outsource non-creative tasks to labour commodity markets. The reason is simple - creativity is the new hot commodity.
While it is easy to lament the rising cost of living, we must not forget that the cost of living of advanced nations are much higher, perhaps fivefold, than that of our nation.
It's simple - we must live within our means. A cup of Starbucks is cheap in the United States, but for us to have similar purchasing powers, we must look at changing the "means". We must look at opportunities to enhance our value, so that we live within much better means.
Let us create space to be creative. As individuals, it is important to be fair to facts and decisions. The best results usually come from those who have analysed all sides of the coin.
To business leaders, allow and encourage new ideas and management freedom, judge your team by their results and not their time.
If you succeeded in achieving this challenge, please accept my heartiest congratulations. However, if you need help, the government is ready to help your team with creative and innovative needs.
The writer is the chief executive officer of Malaysia Automotive Institute.

Thursday, 14 December 2017

AGE OF INFORMATION - Working together towards nation's development

The current age of digital broadcasting allows anyone to voice an opinion at the click of a button.
While it is a celebration of the expansion of our democratic rights as citizens, the sheer volume of information has changed the landscape of how we perceive certain issues.
On social media, the news sent to end users are based on algorithms that depend on trending information, giving significant advantage to sensationalist marketing techniques and those with significant online presence and influencer capabilities.
The age of information poses the highest levels of misinformation ever seen.
To progress through the current uncertain economy, we must allow ourselves the space to move out of headline-based reading to look at issues holistically, and address the issues more specifically.
Last year, we recorded a gross national income per capita of US$9,850 (RM40,188), inching closer to within 19 per cent of the US$12,235 set by the World Bank as high-income nation status.
Overall, the median household income for all groups of bottom 40, middle 40, and top 20 increased last year by 6.6, 6.9 and 6.2 per cent, respectively, versus 204.
MasterCard also predicts that Malaysia is expected to record the highest ratio in outbound travel in relation to the total number of households with 198.7 per cent by 2021 from 178.4 per cent last year.
These are a few of many indications that Malaysia's economy is creating opportunities for income generation.
Agreed, there are problems that need to be addressed as any economic uncertainty will cause public anxiety about cost of living, business bottom line and career opportunities.
However, unnecessarily negative outlooks are counterproductive when taken in a general sense.
Sensational angles have the power to alter perceptions - mismatching symptoms to root causes that have nothing to do with the problem at hand.
Generalist approaches to complex matters kill any chance to address real concerns as solution need to be specific to the nuances of the problem.
To fairly address the economic situation, it is important to recognise those who are truly in need of assistance based on factors, such as geolocation, career prospects and education levels, in order to better understand barriers of access to opportunities that offer upward economic mobility.
While there are valid grouses that require addressing, some problems can also be self-inflicted.
While household dept to gross domestic product ratios have eased last year, a worrying trend of bankruptcy cases is emerging among the middle class - 60 per cent of insolvency cases are among aged 25 to 44 over the last three years.
In order to climb the economic ladder, it is important for us to be mindful of our expenditure.
In order to further enhance our standard of living, something we all want - we must put ourselves in situations that provide us the opportunity to move up.
Numerous government programmes have been instituted to bridge income gaps and move those less fortunate.
Quality job prospects and ample business opportunities have been created to spur economic growth and elevate the lives of Malaysians as a whole.
However, this elevation is not possible if these opportunities  are not met with competitive spirit, prudence and resilience to lifestyle fads.
Let us look at problems specifically and objectively. Itis often easy to dwell on popular perceptions.
However, true responsibility lies in working together towards our nation's development.
We all have different means and resources available to us, it is important to use them wisely to elevate and influence others towards true  progress.
the writer is the chief executive officer of Malaysia Automotive Institute

Thursday, 7 December 2017

AUTOMOTIVE INDUSTRY - Matching growth with changing trends

Consumer confidence in the automotive industry seems to have rebounded this year compared to last year, which was mired by economic uncertainty due to the appreciation of the US dollar.
Even though dollar levels are arguably still not ideal, it seems to have not hampered industry growth as a whole - particularly due to strong economic principles that have been created since the the 2014 launch of the National Policy which developed specific focus on competitiveness and the gradual liberalisation of the industry.
These setbacks did not hamper the creation of employment within the industry - 87,382 new jobs were created since the policy was introduced, of which 39,819 jobs were created through the Human Capital Development programmes undertaken by Malaysia Automotive Institute.
Exports of automotive parts and components rise to RM11.2 billion last year, with August figures indicating a higher performance this year. Total industry volume figures until last month had shown slight improvement in domestic sales compared with last year.
The manufacturing sector in Malaysia has shown its best growth since the beginning of the year, as indicated by Nikkei Malaysia's manufacturing purchasing managers' index.
Malaysia has developed its foundation to remain resilient in tough times.
Despite facing one of the toughest foreign exchange challenge since its last economic crisis two decades ago, economic indicators are pointing to a faster rebound rate - a clear signal of economic fundamentals leading to stronger resilience.
However, as times change, so do trends and norms. The fundamentals of today may not be the same as tomorrow, requiring us to quickly shift to ensure that businesses cater to future demands, backed by human capital and technology that can deliver to such demands.
It is for this reason, numerous programmes have been developed by the government to ensure such a transition takes place efficiently.
One of the key realisations is Malaysia's shift from dependence on commodities towards participation in higher yield global value chain.
As far as the manufacturing sector is concerned, this commodity dependence has traditionally thrived on cheaper labour costs.
Current trends, however, indicate the quality of the job market must begin to revolve around skilled, creative and innovative labour pools.
The advent of the fourth industrial revolution will in essence force labour intensive sectors into the lower rungs of economic yield, should there be no change in operational thinking.
Without oversimplifying the matter at hand, the early symptoms would be a slow response to automation.
A shift towards this has been implemented by the government in its recent budgets, moving towards Technical and Vocational Education and Training (TVET), 2U2I initiatives and apprenticeship programmes within the public technical universities and agencies.
This change in education mindset is expected to alter the path of formal education to include automation-oriented skills and knowledge and prepare graduates for immediate relevance in the job market.
Such a shift must also be planned together with the operations systems of the industry.
While there is a clamour for more qualified and relevant graduates within the workforce, it is important for industry players to create the space for such careers to thrive and progress.
In summary, we have demonstrated the Malaysian spirit of resilience - the setbacks that we have faced have taught us lessons to become stronger.
Let us keep this positive outlook and move forward and create an ecosystem for all of us to stay relevant and remain competitive.
The writer is the chief executive officer of Malaysia Automotive Institute.